Lawrence: Trump predicts a ‘1929-style result’ if Trump returns the tariff money he illegally took

PAUL KRUGMAN IS BACK BY POPULAR DEMAND, EVEN THOUGH ONE PROMINENT VIEWER WITH NO INFLUENCE OVER THIS PROGRAM ATTACKED PROFESSOR KRUGMAN AFTER HIS LAST APPEARANCE HERE. DONALD TRUMP LEVELED AN INSULT AT PAUL KRUGMAN, FAR WORSE THAN ANYTHING EVER SAID ABOUT A NOBEL winning economist, but not as bad as many of the things Donald Trump has said about me. Professor Krugman will be given an opportunity here tonight to reply to Donald Trump's insult, if he dares. But we begin our discussion with some of the economic news of the day. Core inflation, which excludes food and energy prices, rose by 3.1% last month, the fastest annual pace in five months.

The New York Times reports the July data which was released by the Bureau of Labor Statistics provides a clear sign that businesses are being affected by tariffs. Some have begun to pass along

those related costs more readily to their customers after a prolonged period of muted price gains. The economy is weaker because of tariffs, said Stephen Stanley, chief US economist at Santander. Businesses are being very cautious. They're not investing. They're not hiring. He added, noted that consumers were also pulling back in the face of higher prices.

And predictably, at 10.24 a.m., Donald Trump tweeted, quote, tariffs have not caused inflation or any other problems for America other than massive amounts of cash pouring into our Treasury's coffers. 100% of the tariff cash pouring into the Treasury comes from the United States of America. And only the United States of America. No foreign country has ever paid and never will pay a tariff imposed by this country. And there is only one president in the history of the United States who publicly insists

that he doesn't comprehend that simple fact about tariffs. Every penny of the $130 billion that the United States Treasury has collected in tariffs so far this year has been paid by Americans. American companies and individuals who have imported foreign goods into this country. They have paid those tariffs at the port of entry here in the United States. And they paid the tariffs directly to the federal government officials who collect those tariffs from Americans who pay them

at the ports of entry here in the United States. And so if a federal court of appeals and the United States Supreme Court agree with the United States Court of International Trade, the experts on tariffs, and rule that those tariffs are illegal and unconstitutional, all of the tariff money that has been collected might have to be refunded and would go to Americans, which makes Donald Trump's lawyer's letter to the appeals court hearing the case against his tariffs all the more absurd. The United States Court of International

Trade, which is the federal court that specializes in international trade, unanimously ruled that the Trump tariffs are illegal and unconstitutional. That case is now on appeal. And Donald Trump's Justice Department lawyer actually told the appeals court today in writing, quote, if the United States were forced to pay back the trillions of dollars committed to us, America could go from strength to failure the moment such an incorrect decision

took effect. So that's Donald Trump's lawyer lying and telling the court that trillions of dollars have been committed to the United States. That's a lie. And telling the court that if the $130 billion in tariff money illegally collected by Donald Trump has to be returned to Americans, that would be a problem. Donald Trump cut the taxes of the highest earning Americans by a trillion dollars, gave them a trillion dollars.

The Trump lawyer's letter to the appeals court said, the president believes that a forced dissolution of the agreements could lead to a 1929-style result. In such a scenario, people would be forced from their homes, millions of jobs would be eliminated, hardworking Americans would lose their savings, and even Social Security and

Medicare could be threatened. That's the Trump prediction for giving Americans back the $130 billion that Donald Trump illegally took from them. It's a tiny amount of money within the context of the full American economy and the federal budget of the United States of America. The Wall Street Journal mocked the ridiculous Trump letter to the court as, quote, a doomsday tariff letter.

Today, today's report on inflation by the Bureau of Labor Statistics was the first since Donald Trump fired the commissioner of the Bureau of Labor Statistics for telling the truth. Yesterday in an interview with Fox, Donald Trump's choice to lead the Bureau of Labor Statistics, E.J. and Tony said,

until it is corrected, the BLS should suspend issuing the monthly job reports, but keep publishing the more accurate, though less timely, quarterly data. That is the single most absurd and reckless thing ever said by anyone chosen by a president to lead the Bureau of Labor

Statistics. Our next guest, Nobel Prize winning economist Paul Krugman, writes in his sub stack that Hannah Arendt's book, The Origins of Totalitarianism, explain why Donald Trump promotes the incompetent. Professor Krugman writes, Hannah Arendt explained why totalitarians, I know Trump isn't a full-on dictator yet, but he's clearly a wannabe, promote the incompetent.

Totalitarianism in power invariably replaces all first-rate talents regardless of their sympathies with those crackpots and fools whose lack of intelligence and creativity is still the best guarantee of their loyalty."

Arendt also explained in advance the Trump administration's extraordinary hostility to research, the extraordinary speed with which it is destroying America's scientific base. The consistent persecution of every higher form of intellectual activity by the new mass leaders springs from more than their natural resentment against everything they cannot understand.

Total domination does not allow for free initiative in any field of life. Joining us now is Nobel Prize winning economist, Paul Krugman, he is distinguished professor at City University of New York's Graduate Center and a former New York Times columnist who is now posting his work on Substack. Professor Krugman, thank you very much for joining us again tonight.

And before we get to Donald Trump's upset with you, let's just go to this issue as presented to the appeals court today by Donald Trump's lawyer contending that if the Trump tariffs are ruled illegal and unconstitutional, if that ruling holds, we would be sent into some kind of 1929-like disaster.

Yeah, I mean, it's crazy. The amount of money, the federal government is a huge thing, so the amount of money is not that large. It will be a bureaucratic mess, because what's happened is that Donald Trump has imposed tariffs using emergency powers, using powers that are only supposed to apply when we're suffering an economic emergency. Sorry about the cat in the background.

And the—which clearly we aren't, and Trump himself says things are great, the economy is booming. So by his own admission, the conditions for him to impose those tariffs don't exist. The trouble is the money has been collected, and legally it has to be given back, but finding relevant people, sending, you know, cutting the checks to all of the importing firms, you know, some of this is Walmart, some of it is export-import businesses, some of the small

businesses that ordered stuff and paid tariffs, that would be a complete nightmare. But, you know, that's Trump's problem. That's not a problem for the American economy. That's a problem for Trump and his band of incompetence.

Well, the Treasury does know how to do it. It does issues millions of tax refunds every year. They're set up for it. They've never had to do it because no president has ever done anything this crazy. Today, the Treasury Secretary Scott Besant actually said that the, this is a quote, the

amount of money that's coming in here, I think the more deals we've done, the more money coming in, it gets harder and harder for SCOTUS to rule against this. So there's the Treasury Secretary saying that collecting, you know, $130 billion in tariffs makes it really hard for the Supreme Court to actually uphold the Constitution.

Yeah, we've stolen a lot of money. It would be such a pain to have to give it back. So the Supreme Court must rule that it's legal. That's amazing.

They are presenting in their argument to the court, which is really stunning. It's one thing for Donald Trump to go out there and lie to reporters, which he does every single day about tariffs. But now they're lying to the court about this notion that there are trillions of dollars in what they call deals that the court cannot unwind when the court is actually going to find that no such deals exist.

Yeah, well, that's going to be an interesting question. I mean, I don't trust this court, by the way, but if the court does its job, there are no deals. There are no, I mean, we know what a trade deal looks like. A trade deal is a signed agreement that is passed by the US Congress

and signed by the president and is also signed by foreign countries. You know, we've done many of them over the years. Trade deals normally run to hundreds or thousands of pages. They specify everything. They have the force of law.

This is just the Trump administration saying we have a deal. In many cases now, the foreign countries which we've supposedly made deals have said, we didn't agree to that. You know, the Europeans't agree to that. The Europeans are going to give Donald Trump $600 billion in a slush fund. The European Commission says, no, we didn't agree to anything like that.

So these are fantasy deals. And the idea that the Supreme Court is going to overrule the clear meaning of US law, and they might, I mean, given this Supreme Court. But the idea that they should ignore clear US law on the basis of Trump's fantasies about the deals that he's made with other countries,

that's really something. That's not the America I grew up in.

So we have Donald Trump's choice to run the Bureau of Labor Statistics saying, no need to issue monthly data on this economy?

Yeah.

So, first of all, that's illegal. It turns out that monthly reports on jobs are not an optional choice by the Bureau of Labor Statistics. The law says that it must issue reports every month. So this would be just another clear violation of law to stop issuing those reports. And of course, nobody, you know, nobody thinks that they are seriously

worried about problems with the data. This is all, you know, one way to let Trump keep on boasting about how great the economy is, is to prevent the release of data that shows that it isn't. And that's basically what this is about. It's again, it's amazing. It's again, it's amazing. They keep on, I keep on being astonished