One of the foremost economists in the U.S. is now sounding the alarm over President Donald Trump’s decision to fire the head of the United States’ premier economic data institution over an unflattering jobs report.
In a Friday interview with MSNBC host Ari Melber, Paul Krugman — the former New York Times columnist who also won the Nobel Prize for Economic Sciences in 2008 — plainly warned that Trump’s controversial move to fire Bureau of Labor Statistics (BLS) commissioner Erika McEntarfer puts the United States on the same path as authoritarian countries like Argentina and Venezuela.
Krugman said that the sluggish July jobs report — which showed anemic growth of just 73,000 non-farm payroll jobs — wasn’t a signal of a bad economy by itself, arguing that it’s normal for jobs numbers to fluctuate month to month based on both internal and external circumstances. However, Krugman said that firing McEntarfer over the report was highly abnormal and will likely cause significant shock in financial markets.
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“This agency, the Bureau of Labor Statistics, is not a household phrase. But it is absolutely critical. Basically, everything that we know about what’s happening to the economy in the last couple of months comes from the BLS,” Krugman said. “… It’s critical for all of us to understand what’s happening, but also how the government itself makes decisions. It’s how the Federal Reserve makes decisions. If you start to corrupt those numbers, if you start to report those numbers as being what makes the president look good instead of what’s actually happening, then bad things start happening.”
“If you ask me, how does someplace like Venezuela get to hyperinflation? How does someplace like Argentina get hyperinflation? … they start ordering the statistical agencies to report nothing but puppies and rainbows,” he continued. “And so they go plunging ahead … If they ever do admit that maybe we have a problem here, you’re up at 80% inflation, right? This is the playbook. We’ve seen it many, many times. And now, I have to say faster even than I expected. It’s come to America, right?”
As Krugman mentioned, Argentina attempted to obscure inflation data following an economic crisis at the onset of the 21st century that led to inflation hitting 41%. As the University of California-Los Angeles’ Anderson School of Management reported, the Argentinian government ended up firing the statistician in charge of calculating the Consumer Price Index and then made up numbers on the spot. Krugman opined that Trump’s latest move is eerily similar.
“I don’t think they’re going to be producing fake numbers by next month, but they might be, and it’s certainly where Trump wants them to go,” Krugman told Melber. “So we’re going to be back in Argentina in the days when they were faking the statistics … I mean, we are in banana republic territory now.”
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Watch the video of Krugman’s segment below, or by clicking this link.
– YouTube www.youtube.com