Krugman on Understanding Inequality

 On Paul Krugman's substack, he has seven posts on Understanding Inequality which are paywalled.

Inequality has been a intrinsic economic interest of mine as well as social economic change, however peaceful, evolving, or violent it might be.  You can read Saez, Zucman, Piketty, Stiglitz, as well as others and they are all struggling with multiple interacting variables which change in real time.  I wish I had had the opportunity to study with James Tobin.

Consequently, understanding economic inequality causes and consequences is an unending project requiring different inquiries and perspectives.

Paul Krugman is adding his voice in a mainstream format for everyman to think about inequality and his seven posts, not paywalled, can be found  at the CUNY Stone Center.  When you follow the redirect and page down on Krugman's page you will come to Selected Work where you will choose News and Commentary.  There you will find the posts listed down from the seventh.

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Trump Savings Account Rules, Limits, and Deadlines

The Trump Savings Account is limited to children born between 1/1/25 and 12/31/28 to maximize the political brand advertising.

Contributions cannot begin until July 4, 2026. Annual contributions must be made by 12 /31 of each year.

Contributions by parent, guardians, and other individuals are not tax deductible and create a non-taxable basis when withdrawn. Contributions by employers, federal government, or charitable gifts are create a taxable basis when withdrawn.  Investment earnings are taxable when withdrawn. There are annual limits.

At age 18 it becomes an IRA with mixed basis assets.

The accounts must follow typical IRA format and investments are limited to mutual funds and etfs tracking a qualified index with a fee no larger than 0.1% of total assets.

For a concise explanation of the ten things you should know about Trump Savings Accounts, here is a  Morningstar article.

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When Incompetent People Have Power: Paul Krugman's Hannah Arendt"s Law

Since we wrote our Monday post on E.J. Antoni being nominated as commissioner of the BLS and as an example of an unqualified person being picked by an incompetent person who thinks they are smart, there has been a flood of economists critical of his qualifications. In that post we shared a video, via the economist Lars P. Syll, which explained why incompetent people think they are smart which has been named the Dunning-Kruger Effect.

Economists are very concerned about this appointment, because the economic data produced by the BLS is internationally recognized as a gold standard of credible economic data used by business, economists, and government to make vital decisions as we wrote in a post on August 2nd.  The Antoni appointment and President Trump's refusal to accept real world data directly threatens the credibility of US government data and the international credibility of the United States government.

Among other economists, Paul Krugman has added his voice in a Substack post and used a quotation from Hannah Arendt's book on Totalitarianism to formulate what he calls "Arendt’s Law: Totalitarian and wannabe totalitarian regimes only hire incompetent hacks."  Krugman's Arendt's Law could very well be a subatantive corollary to the Dunnung-Kruger Effect.

 Trump has attacked the Federal Reserve, Law Firms, Judges, Universities, governmental cultural institutions, private sector economists, and corporate CEOs as well as militarily occupied US cities.  He has no intention of stopping until he controls what we see, hear, learn, say, and do and will tolerate no questioning much less resistance to his chaos tariffs economic march towards failed state authoritarianism.

Just as he will not accept jobs data, he will not accept CPI showing the beginning of tariff cost pass through to consumers from businesses, which is why he demanded Goldman Sachs fire their economist for a report that two-thirds of the cost of tariffs will pass to consumers by the end of this year indicating a year end inflation rate of 3.2%.

When challenged or threatened, Trump provokes and diverts attention as he has done with the Epstein Files Diversionary Occupation of Washington, DC, which he today said he will continue with or without Congressional approval after thirty days as required by law.  Federal law enforcement and the National Guard will not find the over 300 gigabytes of Epstein files on the streets of Washington, DC, when they are in the DOJ ready to be released with victim names only redacted at the snap of a finger ---which will never come. What is in the DOJ Epstein pedophilia files which makes Trump too afraid to release them?  If he is only casually mentioned several times with no indication of knowledge or involvement, what does he have to fear?

Trump's Epstein files diversion and how it fits in his cascading deconstruction of American constitutional government, rule by law, and history has been noted by the American historian Heather Cox Richardson.

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On Why Incompetent People Think They Are Smart & New BLS Commissioner Nominated

President Trump has made a selection to be the new commissioner at the BLS.  He will nominate E .J. Antoni who is an economist who has a history of making a living being consistently incorrect in his economic analysis and pleasing his employers.

Considering that the BLS economic data is used by business, markets --- such as the TIPS market, government --- such as setting Social Security annual adjustments, it has an internationally recognized credibility which is not appreciated by the current President who prefers data and information which must please him or else, because he knows better what reality is than anyone else.

When incompetent people think they are smart, it is known as the Dunning-Kruger Effect.  Here is a 25 minute video explanation of the Dunning-Kruger Effect.  It will explain what we currently see happening to our downward spiraling democracy much less what we see happening as we live in this economy.

President Trump is convinced --- or trying to convince everyone --- that the data is wrong if it does not show the "great job" he is doing and how he has made the US economy the "bestest ever" --- just look at the price of beef and the trillions of dollars added to the federal deficit by his Big Beautiful (The Big Con) Budget Bill to benefit the top 10% of the very rich.  After all President Trump has personally enriched himself during his presidency to the tune of $3.4 billion by monetizing the Presidency for his personal benefit.

When Herbert Hoover did not like the BLS reports after the 1929 stock market crash from 1930 through 1932, when the BLS jobs report showed a quarter (approximately 12 1/2 million people) of the working population was out of work, and he forced the BLS Commissioner to retire, because President Herbert Hoover knew there was better information Hoover preferred.  Hoover went on to lose the 1932 election.

Incompetent people who think they are smart like other incompetent people who make them look smart no matter what. 

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2026-2027 FAFSA and the Obstruction of Educational Opportunity

 The new 2026027 FAFSA application is available to a limited number students as a beta test with release to all in October.

The new "Budget" bill significantly lowers and limits loan amounts to the point where education cannot be fully funded which may eventually create less college applicant competition for children of wealthy families who may not be as academically or intellectually gifted.  

This will be particularly true for medical school applicants.

Here is the official government student aid web page (for as long as the Department of Education is allowed to continue existence).  Here is the form.

With the deconstruction of the US Department of Education, it is obvious that opportunity to education, which began with Lincoln's Land Grant colleges and given a revolutionary boost after World War II with veterans educational benefits allowing many veterans to become the first members of their families to attend college and contribute to the making of a postwar growing economy, is being aborted and obstructed.

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Trump's Economic March Towards Failed State Authoritarianism

 In our prior post, we commented on the President's irrational firing of the BLS Commissioner and his creating international economic concern about the credible reliability of United States economic statistics going forward if they must have his personal approval.  The BLS is staffed with hundreds of professionals working in separate groups following written guidelines for gathering information over time to create accurate information and necessary revisions as more information comes in over extended time.

His economic "advisor" Kevin Hassett continues to attempt to give him political cover by denying his economic education and continuing his history of providing politically convenient economic opinions which fail factual documentation.

Combined with The President's Chaos Tariffs, which are pushing the United States back to the 1920's economy, and his dictatorial attacks on the independent Federal Reserve, which would push the United States back to 1929 when the stock market crash led to a reform of the Federal Reserve to make it less political and more economically rigorous.

See these links:

Trump's tantrum 

Trump's paranoia  

Trump's authoritarian need to control information 

Trump's desperation and need to deny reality and truth 

Trump's making of a failed state and authoritarianism 

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Reliable, Credible Governmental Statistics or Chaos and Anger?

    The BLS July jobs report came in with only 73,000 jobs and significantly reduced May and June.  The data was seasonally adjusted as it normally is periodically and became aligned in a more logical trend with the private sector ADP jobs reports.

    In a Presidential tantrum when confronted with undesirable reality, His Royal Highness fired the Commissioner of Labor Statistics laying the pathway away from certainty past uncertainty and to international doubt that United States economic governmental statistics can be statistically reliable.  Welcome to the disbelief regime of Banana Republic.

    The economy in the first half of this year has slowed to approximately 1.5%.  President Tantrum has shot himself in the foot in denying the economic reality and statistical data that might actually convince the Federal Reserve to start lowering interest rates in the coming months --- just as he has been autocratically demanding without justification.  

    Tariff reality is making its economic appearance in the data and the cards will continue to fall into the rabbit hole of tariff uncertainty and Presidential chaos.  Will it cause enough fear and doubt to cause the AI tech stock market bubble to burst?

    President Tantrum has us all following the White Rabbit down the rabbit hole to present ourselves to His Royal Highness dressed as the Queen of Hearts dancing amidst chaos and anger shouting "Shoot the Messenger! Off with Reality's heads!  Don't they know how long you have to run to stay in the same place?"

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Using Social Security for Immigrant Coercion is Illegal

Homeland Security had the Social Security Administration place over 6000 social security numbers of immigrants, which are normally issued under authorization of Homeland Security, who are living in the United States in the Death File.   The intent is to force the immigrants to leave the United States.

This is an illegal act of coercion which also results in providing inaccurate consumer information under the Fair Credit Reporting Act and could result in civil liability actions.

Obviously, despite Homeland Security undocumented assertions to the contrary, these are not criminals, since they would be involved in Constitutional due process legal actions, but immigrants who have or had work authorization.

Undocumented immigrants, who work and who cannot collect Social Security or retirement benefits, have an ITIN number rather than a Social Security number, which facilitates the employer in making payments of Social Security taxes which amount to roughly $20 billion dollars a year in cash flow which helps finance Social Security.

While coercion is a fundamental tool of organized crime, Homeland Security has created an illegal multi-billion dollar No-Win with substantially negative immediate economic and longer term economic growth problems, which would result in serious consequences in an organized criminal entity.

 

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