The following is a lightly edited transcript of the November 13 episode of the Daily Blast podcast. Listen to it here.
Greg Sargent: This is The Daily Blast from The New Republic, produced and presented by the DSR network. I’m your host, Greg Sargent.
We’ve now learned that Donald Trump will appoint Stephen Miller as his deputy chief of staff for policy, and has picked Tom Homan, his former head of ICE, as his new “border czar.” South Dakota Governor Kristi Noem will be Trump’s Homeland Security secretary. That’s a trio of anti-immigrant hard-liners, and these choices suggest that Trump is very much going to act on his threat to carry out mass deportations. Paul Krugman of The New York Times has a great new column arguing that these mass deportations, if carried out, will cause a large spike in inflation and produce other terrible consequences. How will Trump voters react to that? How will Trump himself try to make it all disappear? Today, we’re talking to Paul Krugman about all this. Great to have you back on, Paul.
Paul Krugman: Great to be back on, if not the circumstances.
Sargent: Indeed. Stephen Miller will be high up in the White House, and he’s the primary architect of Trump’s agenda of mass deportations, carried out with giant camps and possibly the military. Tom Homan, the incoming “border czar,” has confirmed that mass deportations will be attempted. You wrote that this could have a catastrophic effect on grocery prices in addition to other prices. Can you talk about all that?
Krugman: Yeah. There’s a lot that people don’t understand about the role of immigrants in the U.S. economy. It is something like maybe 8 million undocumented workers in the United States, something like 5 percent of the workforce. You say, OK, that would be pretty bad if we lose that, but how bad could it be? And the answer is that they are not evenly distributed. There are certain occupations that are really very heavily immigrant, certain jobs that are very heavily filled by immigrants, many of them undocumented. Those include in particular ... top of the list would be food. Agricultural workers, about three quarters are immigrants and probably about half of them are undocumented. Meat packing is probably between 30 and 50 percent undocumented immigrants. So the whole food supply chain is reliant on people who are going to be rounded up and put in camps.
Sargent: That seems like a problem when you describe it that way. I’ve got to think that Trump voters in particular could very well feel these impacts very acutely. They’re getting scammed here, aren’t they? What’s the impact going to be on so-called Trump country?
Krugman: Grocery prices are a real flash point. Affluent Americans spend a relatively small share of their budget on food, but less affluent spend a lot on food. Most people have no idea—how does that stuff get to your table? What’s the process by which food gets grown and processed and sent to supermarkets? People have very low information about all of this and they have no idea that what sounds like a good thing, Let’s get rid of these illegal immigrants and give the jobs to Americans—well, it ain’t going to work that way or isn’t going to work smoothly. And it’s going to be a pretty big shock to people’s cost of living and the way they live.
What we learned from this election is that lots of people have very low information about, first of all, what Trump was proposing, and secondly, what it means. I’ve been seeing now repeated focus groups after the election with Trump voters who are shocked to find out that tariffs are taxes. And they’ve been deliberately misinformed by Trump people. Vance keeps on saying that all the jobs are going to immigrants and if we can get rid of the immigrants, those will be more jobs for Americans. That workforce isn’t there. We have essentially full employment among native-born Americans. There is no reserve of Americans to take these jobs, by and large jobs that native-born Americans would be very reluctant to take. People have absolutely no idea—a quorum of people who voted in this election have absolutely no idea of what’s coming down the pike.
Sargent: There’s no doubt about it. To return to a point you raised earlier, one of the central tenets of Trumpism and MAGA is this zero-sum assertion that if immigrants are working here, they must be taking jobs from Americans. We’ve been through a recovery that proves the direct opposite, but that didn’t appear to sink in for a lot of people. I’ve got think that if deportations do cause major disruptions, there’s at least a chance the American people reconsider the zero-sum mindset on a fundamental level; maybe come to understand that it isn’t just addition and subtraction—immigrants here means no jobs for Americans—that they complement each other, that immigrants help the economy, that they’re in large part responsible for our successful recovery to the degree that it is success. Can you talk about that? Is that too optimistic?
Krugman: The first thing to say is, look, this has been a revelation. Wearing my old professional hat as an economist, there was a huge rethinking of the economics of immigration that has taken place over the past couple of decades. [We] used to say that immigrants are relatively low formal education, they must be competing with Americans that also have relatively low formal education and therefore depressing their wages. And it took some time for it to sink in that immigrants just take very, very different jobs. They just bring a different set of skills, a different set of preferences. There’s very little head-to-head competition. In fact, immigrants are really complements to American workers, even American workers without college degrees.
That’s the reality. Whether people will grasp that, I don’t know, but they certainly will grasp that Trump said he was going to bring prices down and instead they’re going up. His two big policy goals, policy obsessions, are deporting immigrants and tariffs. Both of those are going to do a lot to raise prices of food and some other things, but the most immediate flashpoint is going to be grocery prices.
Sargent: We face a bit of a communication problem as well in the following way: As you said, Vance is at the forefront of arguing that immigrants are taking American people’s jobs, but that’s actually a proxy argument. It’s Trump MAGA’s way of saying something else but in a more respectable sounding set of tones, right? Trump is clearly communicating with the MAGA base the idea that immigrants are bad, that they’re destructive, that they’re destroying the culture from within, that they’re poisoning the blood of the U.S. They need to be able to soft pedal that to swing voters, right? Because swing voters don’t like the talk about blood dilution and blood poisoning—it’s a white nationalist at its worst. So they try this other argument about jobs. We try to rebut it on the substance, but they’re communicating something else under the surface, aren’t they?
Krugman: Well, it depends on the audience. A lot of Latinos voted for Trump believing that he’s going to reduce the cost of living. They’ll presumably be really shocked when it turns out that he does the opposite, and also when people they know get rounded up, which is going to be another thing that they haven’t really taken on board. For Trump, clearly it is not that he really is concerned that immigrants are taking American jobs. For him, it’s all really blood and soil. And he doesn’t really care whether they’re legal or not. It’s just they’re scary Brown people basically.
For a fair bit of the base, that’s true as well, but not all of it. And he couldn’t have won if it was only that. For somebody like that, some of his stuff is almost ... There had been books and classes on how to lie with statistics, and it uses a lot of bogus numbers, which anyone who knows anything about the subject can tell you, Look, that’s a really, really misleading set of numbers you’re putting there. But that’s too complicated. If you’re explaining, Well, the reason we haven’t been adding all that many jobs for native-born Americans is because us baby boomers are dropping out of the workforce, most of the younger workers coming in are immigrants, you’re losing.
Sargent: In your piece, you write that if inflation does rise as a result of these policies, Trump will simply say the data is faked. I’d like to broaden that idea and suggest that, with MAGA loyalists distributed throughout the government in key places, we’re likely to see a very deep corruption of government information. We’re looking at manipulated data supposedly showing how bad immigrants are, contradicting what economists are saying, maybe even data manipulated to make Trump’s economic performance look better than it is. Can you talk about what this corruption of government info might look like in broader terms?
Krugman: This is, by the way, [what] standard autocratic regimes are known for. In some ways, among their first targets are statistical agencies because they want the numbers to say what they want the numbers to say. I’ve been at conferences in Asia where the Chinese government announces that the economy grew 5.3 percent. And everyone at the conference asks not “why did the Chinese economy grow by 5.3 percent?” but “why did the Chinese government decide to say that it grew by 5.3 percent?” The numbers are our political statements, not reality. And if I were a federal employee at the Bureau of Labor Statistics, I would be extremely frightened; quite quickly they’re going to be in the line of fire.
The last time around, back during the Obama years, when there was a lot of inflation truthers claiming that the inflation numbers were being manipulated to make it look like there was less inflation than there was. Such accusations are always projections—it’s what they would do, not what was actually happening. We turned to various kinds of private sector independent measures of inflation, many of which were originally developed by economists in places like Argentina, where manipulation of the data was standard so they developed their own ways to measure. We’re going to be having to do that. My guess is by sometime next year, we’re going to be having to look at proxies for what’s actually happening to the economy, possibly for what’s actually happening to crime, because the official numbers are going to be corrupted.
Sargent: Yeah. And you’re going to see the corruption of information to carry out a large-scale demonization campaign against immigrants as well. We already saw Trump campaign pretty relentlessly on this invented idea of migrant crime, which is absolutely a despicable notion. If we were to generalize about another group that way, no one would tolerate it. But because it’s immigrants and because it’s Trump, everyone just shrugs. We’re going to see government information being corrupted in order to create a bigger impression of migrant crime. I’m talking about people at the agencies flagging particular crimes, and then the White House press operation blaring it out. Something like that.
Krugman: Look, I’m in New York right now. I’ve been out for the afternoon running various errands. In MAGA mythology, I should be afraid to leave my apartment. It should be an urban hellscape where you get murdered if you try and buy a loaf of bread. And the reality is New York is, in fact, one of the safest places in America. But what will happen eventually is that—I don’t quite know how it will work because crime data are initially supplied by local police agencies, but the FBI summaries of that will probably be corrupted quite soon.
Just in general, if what we are actually going to be seeing is inflation, quite a lot of inflation, we’re going to be seeing enormous pressure to report that, first of all, things were worse. The retrospective description of what America was like in 2024 is going to bear no resemblance to the actually pretty good state of the nation right now. Also, we’re going to be seeing a lot of pressure to not admit things that are going wrong.
Sargent: Yes. You can actually see another alternate scenario as well. Let’s just imagine for the moment that Trump doesn’t actually get that far with deportations because he is going to face serious resource constraints to doing that—blue state governors resisting uses of the National Guard and so forth. Meanwhile, we’re poised for a period of growth. The Biden investments are spurring major new green manufacturing projects across the country. I’m going to go out on a limb and predict that Trump is going to take credit for all of that, and say that his anti-immigrant agenda is producing this boom. That seems like a really undesirable situation politically. What do we do?
Krugman: This has happened before, right? Not so extreme as this one, but Obama laid the foundations for a pretty strong economy during Trump’s first term. Bill Clinton basically balanced the budget, preparing the ground for George W. Bush to blow it on tax cuts. It’s a recurring theme. Although, I have to say, maybe I’m being too cynical or insufficiently cynical, the idea of really deporting immigrants—not just claiming, We have built a wall, but actually doing the thing—seems to be something that is really close to Trump’s heart. That seems to be something he really, really wants to do.
I think about Stephen Miller; he doesn’t just want to go after low-wage migrants from Latin America. He wants to go after high-skilled executives in Silicon Valley because this idea is that there are these jobs and they should be going to Americans. I would be surprised if they actually back off on this. They’ll go quite a ways, and business community will scream. A lot of people in business believe that this is all going to be a Potemkin deportation, that it’s not really going to happen, but they’re probably wrong about that.
Sargent: I just wonder how far they can actually get even if they fully intend to do it. It seems to me like you really need an enormous amount of money to substantially ramp up the removals. I don’t know whether he’ll get it from a Republican Congress. It seems to me there’ll be some legal problems with trying to repurpose military funding. Look, the last thing I want to do is be at all complacent. I think we’re looking at a terrible situation. I just wonder if they are going to run into some trouble.
Krugman: What is this thing you call legal obstacles? It’s not clear to me that rule of law is going to apply at all in the years ahead. It’s very likely that they’ll just find ways to do it. Of course, the costs are ... If you try to do these draconian policies in any remotely humane way, they’re very expensive. Well, the obvious next sentence follows, right? If you’re really prepared to be quite brutal, and basically build tent cities in the desert, maybe not so expensive.
Sargent: A big open question is: How willing people are going to be to break the law to carry out the Trump-Miller agenda? We really are in a situation where people are actually being recruited expressly for that. You have Steve Bannon and Kash Patel and people like that out there essentially saying, If you’re willing to push the envelope, we want you. And by push the envelope, they mean carry out illegal orders.
Krugman: Yeah. Just bear in mind that a lot of what may happen, beyond the deportations, may not require government actions. If you want to intimidate people, you don’t necessarily have to send in the military, which might refuse to obey orders. You can just do ... January 6 was basically tacit permission for MAGA extremists to go and do stuff. I wouldn’t be surprised to see quite a lot of that happening as well.
Sargent: Also, what you’re going to see is a fairly concerted whole-of-government effort, as sometimes the phrase is used, to really try to make the lives of immigrants here as unstable and unpleasant as possible.
Krugman: Look, what they would like is self-deportation, and they can certainly try to do that. I do think that that’s going to be harder. Among other things, where are people going to go? The idea that Latin American countries are going to cheerfully accept millions of people flooding back across the border is probably going to be a lot harder than they think. We aren’t the only people with agency here. Also, the anti-immigrant stuff, it’s not really about legality. It’s just about people who are non-Anglo. And a lot of the people have roots here. It’s not that they can just pick up and go back to their old life in Central America. They’ve been here for years. They have families. So this is going to be much, much harder to make happen than they think.
And maybe they back off, but ... I’ve been looking a little bit of a dress rehearsal for some of this in DeSantis Florida, where he’s done a crackdown. The results for Florida agriculture have already been disastrous. You might’ve thought that the business backlash would cause him to back off, but he hasn’t. So I would take all of this stuff very, very seriously.
Sargent: Yeah. You raise a really important point when you say that other countries may not want to take people back. One thing that people really don’t understand is that immigration policy is not unilateral. It’s multilateral; it requires diplomacy; it requires agreements between countries. And that is fundamentally anathema to Trumpism.
Krugman: That’s going to be the case also on my other hobby, tariffs and trade policy. Trump and company imagine that America, well, we’re a superpower, we can do what we want. They’re going to be utterly shocked to discover that the European Union is about as big a player in world trade as we are, that China has ways to retaliate. There’s a lot of belief that they could just go ahead and impose their will on the world. The world is a big place and we’re only one piece of it.
Sargent: Just to wrap this up, I want to return to your point about how shocked Trump voters are going to be. Can you talk about this? Trump voters are going to suddenly discover how badly they’ve been had, right? On prices, on the impact of immigrants, on all sorts of things, on tariffs. How badly scammed are they being right now? Will this be a shock to them?
Krugman: It will be a shock. Now, how they’ll react to that shock, I don’t know. Trump voters, many of them, really just have no idea. They’re only now learning, and some of them still haven’t, that tariffs are taxes. They have no idea how much of their food supply comes from immigrants; they have no idea really what Trump is planning to do. And they probably think that he can, through smart businessmen, just make prices go back to what they were four years ago, which is crazy. But they don’t know that. Now, whether they will actually blame Trump or manage to somehow say, George Soros is doing it ...
If we look at other autocratic regimes, some of the ones that Trump has admired, I always find it fascinating that they are far more interventionist in the sense of trying to order the economy around. Victor Orbán tried to deal with rising food prices in Hungary by imposing price controls, leading to a lot of empty supermarket shelves. There’ll be a lot of scapegoating attempts to make magic solutions, so it may take a little while before people really realize the extent to which they’ve been had.
Sargent: Paul Krugman, it’s always great to talk to you, even though in this case it was a lot more dispiriting than usual.
Krugman: OK, well ... take care of yourself.
Sargent: You’ve been listening to The Daily Blast with me, your host, Greg Sargent. The Daily Blast is a New Republic podcast and is produced by Riley Fessler and the DSR Network.