Paul Krugman is angry again. If you’ve followed his column over the last few decades, that’s not exactly breaking news. But the latest Paul Krugman article today hits a different chord. He’s not just talking about interest rates or the velocity of money. He’s looking at a map of the North Atlantic and shaking his head.
Basically, Krugman thinks the White House has lost the plot on Greenland.
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Yesterday, the news cycle exploded with reports of President Trump renewing his demand to purchase Greenland. When Denmark said no (again), the response was a fresh threat of sweeping tariffs. Krugman, writing on his Substack and in his latest commentary, didn't hold back. He called the move a "howl of frustration" from a leader who realized he can't just send in the Marines to take what he wants.
The Economic Math of a Frozen Purchase
Krugman’s core argument isn't just about the politics. It’s about the money. He points out that the U.S. doesn't have a "Greenland fund" just sitting around. In his view, the idea of using tariffs as a tool for "economic coercion" to buy a territory is fundamentally broken.
He’s spent the last week dismantling "Trumponomics 2.0." Just a few days ago, on January 12, he published a piece titled "The Ignominious Death of Drill, Baby, Drill." In it, he argued that the administration’s energy strategy is a "crude delusion." Why? Because the math doesn't work. The breakeven price for shale oil in the U.S. is around $62 a barrel. With prices hovering just below that, the private sector isn't biting.
Krugman sees the Greenland obsession as an extension of this same fantasy-based policy.
Why Tariffs Aren't the Magic Wand People Think
Most people think tariffs are a tax on other countries. Krugman has spent years trying to explain that they’re actually a tax on us. In his latest analysis, he highlights a few specific ways this Greenland tariff threat could backfire:
- Supply Chain Chaos: Small businesses are already reeling. Krugman noted in late December that small firms cut 120,000 jobs because they can't pivot as fast as the big guys.
- The "Unpredictability" Tax: He told Newsweek recently that a stable tariff wouldn't cause a recession, but a "random fucking tweet" (as one investor put it) changing policy every day kills investment.
- Diplomatic Suicide: Greenland is part of NATO. Threatening your own allies with economic war to steal their land? Krugman calls that "Venezuelifying" the United States.
It’s a mess. Honestly, the way he describes it, the administration is trying to run a 19th-century colonial empire using a 21st-century economy that relies on complex, fragile global links. You can’t have both.
The CFPB: A Surprising Olive Branch?
Interestingly, the Paul Krugman article today and his recent Substack posts aren't 100% negative. He actually agreed with one of Trump’s ideas: capping credit card interest rates at 10%.
Wait, Krugman agreeing with Trump? Sorta.
He says the goal of helping people with debt is valid. However, he thinks the President is going about it the wrong way. Instead of a legislative cap that Congress will never pass, Krugman argues Trump should just stop trying to kill the Consumer Financial Protection Bureau (CFPB).
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"No legislation would be required," Krugman wrote. If the administration just let the CFPB do its job, they could end "abusive credit card practices" and "exorbitant late fees" tomorrow. It’s a rare moment of practical advice in a sea of heated rhetoric.
The Fed and the "Mad King" Narrative
We have to talk about the Federal Reserve. Krugman is deeply worried about the pressure on Jerome Powell. He recently criticized the rise of Kevin Warsh as a potential Fed Chair replacement. Krugman views Warsh as a "political operator" who would prioritize Republican interests over the actual health of the economy.
He’s framing this as a battle for the "institutional credibility" of the United States. If the Fed becomes just another arm of the White House, the "inflation conspiracy theories" Krugman warns about might actually become reality because no one will trust the numbers anymore.
What This Means for Your Wallet
If you’re reading the latest Paul Krugman article today and wondering if you should sell everything and hide under a rock, take a breath. Krugman is a polemicist. He’s often right about the long-term trends, but the "imminent collapse" sometimes takes longer than he predicts.
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Still, his warnings about small businesses are worth noting. If you run a small company that relies on imports, the "Greenland Tariffs" or the broader trade war are real risks. Large corporations have the lawyers and the "political connections" to navigate this. You probably don't.
Actionable Steps Based on Krugman’s Analysis
- Watch the Oil Breakeven: If oil stays below $62, don't expect a massive domestic drilling boom to save your energy costs, regardless of what the White House says. The math isn't there.
- Audit Your Supply Chain: If your margins are thin, the volatility of "policy by tweet" is your biggest enemy. Look for domestic alternatives where possible, even if they're slightly more expensive, just for the stability.
- Credit Card Debt: If a 10% cap does happen, or if the CFPB gets teeth again, look to refinance your high-interest debt immediately. Don't wait for a "deal" that might get tied up in court for years.
- Stay Skeptical of "Gold and Liquid Gold": Krugman is famously bearish on the "liquid gold" (oil) and "hard gold" narratives. He believes in productivity and institutions. In a world of hype, betting on solid companies with real cash flow is usually the safer bet than betting on a "Greenland Purchase" windfall.
The bottom line is that Krugman sees a massive disconnect between political theater and economic reality. Whether he's right about the "Mad King" or not, the data on small business job losses and oil breakevens suggests that the "profit-and-loss arithmetic" is starting to catch up with the headlines.
Keep an eye on the Fed. If Powell gets ousted or the Greenland tariffs actually land, the "unpredictability" Krugman fears will become the new market baseline. Be ready for it.