Trump's DOJ and FBI Leaders Clash in 'Blame' Over Epstein Fallout

21:45Paul Krugman:Now, I am reporting describing that side.

22:16There is another side. There's a question about whether or not he can deliver affordability. The policies that he's outlined are not policies that are good for New York. I'm very concerned about Mr. Mamdani's policies and the economic impact that they will have. I don't think they work. And whether Mamdani's particular policies will work to do that. That was the focus. He really struck me as a politician native to this era of concerns.

22:45Paul Krugman:One outlet, Politico, says Domini will have a tough time paying the tab And beneath the sheen of what they call that populist platform Is a, quote, morass of necessary state approvals That threaten his plans Reviews that suggest he could be underestimating the cost Even as he calls to tax more and spend more And ambitious proposals could actually cost Tens of billions more than he says So, let's bring in on this Friday two experts with a lot of experience to have this conversation. We've set aside the time. Richard Farley is what you might call a Wall Street Democrat. He is a Wall Street lawyer, has a lot of experience litigating and working in New York with those type of firms, with that business, and also the author of several books, including the apropos Wall Street Wars, the epic battles that Washington created, that they created the modern financial system, I should say.

23:37Paul Krugman:And Faz Shakur, who many remember as a top Bernie Sanders aide, he now runs the nonprofit media organization More Perfect Union, which isn't technically democratic socialism, but he's certainly worked with and around these policy proposals. Hey, welcome to both of you. Thanks for doing this. Thank you for having me. Faz, let's start with policy. What does democratic socialism mean if you're going to use it to run a large city, state, or even a country? simply put right now we have a age and a society that you know well already is you know governed by massive wealth and income inequality and in that period of time we are worried about the concentration of ownership at the top and the power that they have over the economy and the political system meanwhile people living paycheck to paycheck getting screwed by the outcomes and we could go through the outcomes i don't need that i'll spare you the time and energy but You could look at housing and transportation and healthcare.

24:37We could spend the whole show talking about healthcare, but the outcomes are terrible and getting worse for working class Americans. And that working class dynamic is not just people without a college degree making under $100 ,000 a year. That dynamic is now people who are$250 ,000,$500 ,000 anesthesiologists who are going to be replaced by AI. The concerns of the greater wealth and power by a few over everybody else is really the core issue of the day.

25:04Paul Krugman:So Richard, you're not a MAGA right-winger. You care about a lot of causes that include liberal causes, civil rights, but you've generally felt that Wall Street and business can be quite good. What's wrong with, what do you oppose in what FAS or Mamdani is saying? Well, I think FAS identified the issues very well. The question is which policies are going to mitigate these issues. And I think that the laws of supply and demand are not going to be repealed. And if you have a housing affordability issue, the answer is to build more housing. And government can do that by allowing the private sector, by reducing costs and expense and regulation, and by providing tax incentives and other things, and by eliminating rent control to make it much more easy for additional housing units to be built and better housing, just to take housing as an example.

25:59So I don't think we quarrel over the issues and the problems. I think the solutions may be an area where we have some disagreement.

26:08Paul Krugman:And on that, let's put up some of the budget, the sort of spending proposals that he has in New York. Of course, this could be in other cities. You could pro-route it. Look at it. It's more spending. Are you OK with any of this, Richard, or you think most of this ultimately won't work? Well, let's go through it very quickly. I think freezing rent is going to increase the housing affordability issues because you will get less housing. I think the buses, again, it's going to cost probably another 800 million to a billion. I'm not quite sure that the answer to that is to effectively pass that cost on to all New Yorkers.

26:45Because remember, that's a state issue with, you know, with the MTA. In terms of free child care, and I think he's proposing it through age six, I think the$8 billion is probably on the low side. I think that could be a very large expense in the budget. And we have to figure out how we're going to pay for all this. And it's very easy to say—

27:07Paul Krugman:Okay, let me bring in Faz. I get that. That makes sense. Faz? We're in the richest country in the history of the world, the richest city in the richest country. I think we've got some money. And the question is whether that money is doing anything to improve the standard of living for people who are trying to afford a place to live, whether they can afford to transport themselves to their jobs, whether they can afford childcare. care. So I would agree. And there's probably areas, a lot of areas of agreement, I assume Richard and I could find around building affordable housing and the need to change some of the zoning and conversions of units.

27:45My point would just be that at the end of the day, the way we measure these outcomes, which, by the way, have been worse and worse outcomes, you have to start with that. I mean, are we starting with the premise that for the past 30 or 40 years, things have gotten worse for working class New Yorkers? It is more unaffordable. So if you start with that premise, We can't stay status quo. Now, I'm oriented around the nature of as we build affordable housing, what is the price point? Can we get people with two kids living in the city so that they can work at Pfizer? I'm less worried about the Pfizer C-suite.

28:15I'm worried about the Pfizer clerk and the janitor. Can they still stay in this?

28:19Paul Krugman:And let me because we're rooting this around Mom Donnie. Let me play a little more what he said on MSNBC about his plans. Take a look. municipal grocery stores i proposed a pilot one in each borough that's five in total a total cost of 60 million free buses costs about 700 million dollars a year universal child care around let's say 6 billion ideas of taxing the one percent and the most profitable corporations to fund a more affordable life for all are things that actually have quite a bit of support within the legislature i believe that this is both feasible and necessary but i'm going to meet with business leaders about this?

28:54Richard? Yep. I don't think New York residents are undertaxed. I'll start from that premise. And I also think at some point, we don't know what that is, when you raise taxes beyond a certain point, moving jobs and people moving outside of the city, which they can easily do, is going to have a real risk of exodus and net loss of tax revenue. Now, we also have to look at where we are. Now, we have the big, beautiful bill, and no one really knows what impact that's going to have on revenues coming in from the federal government. New York State has its own issues with respect to the budget. Healthcare outside of New York City is a real crisis in New York State because of the expense and the loss of the tax base upstate.

29:42So at this point in time, Is this really the time for New York City to be taking on more municipal obligations? And I think it's very concerning.

29:55Paul Krugman:Let me take that to FAS and put up the maps of some of the other countries, because most of our viewers are all over the country, not in New York. And the party, the Democratic Party is debating this at an AOC Bernie level outside of New York. And when you look at the economic growth there, FAS, what is the core message you think of folks like Sanders or MomDani, if this were nationalized for America, that we could have decent growth like these countries and a more livable life? How would you present it to the rest of the country? Well, firstly, I mean, very basically, we need to raise a living wage, the minimum wage for a living wage.

30:32But that seems very core, that people should be able to, they're going to be working class people, they should be able to get by, they're going to be able to afford a place to live, afford child care. Those price points of these things has become unaffordable in a city that's dominated by greater concentration of the elite. And if you allow the system, as we're talking about here, the fear that the billionaire class could flee the city, well, what about the millions and millions of people who need to live in the city? That's the orientation we want to start with. Billionaires have already fled New York City.

31:01If you look under Mayor Adams, about$9 to$10 billion have left the city. Now, the question is, can we afford to bring the vibrancy of New York City back such that it doesn't just become a city of extreme wealth and the people who are the very elite. And if you're going to do that, the vibrancy of people being able to purchase affordable groceries, affordable housing, affordable childcare should take front and center. And having places of both residence and commerce, how do you cater to that kind of people? I always hear the fear of like, well, the elite are going to be so mad. Well, yeah, the elite are doing just fine.

31:35What about the like 60 % of people living paycheck to paycheck? Let's have them as our top concern.

31:41Paul Krugman:And it goes that orientation also goes to why so many national Democrats are watching this closely thinking about, OK, Trump promised a whole different agenda. He talked about populism, even if he didn't deliver it. And there is some energy, particularly among younger voters for this. Richard and Fazz have agreed to stick around. We wanted to give this the time it deserves. We're going to fit in a break. You know why we have those breaks, Fazz? Those companies, you know, they sell the ads, you know, the whole system we're in. But all jokes aside, we'll be back with these two to finish the conversation and discuss the politics of a counter mag of populism when we come back.

32:21The era of big government is over, but we cannot go back to the time when our citizens were left to fend for themselves. Our responsibility begins with balancing the budget in a way that is fair to all Americans. We move into the era of balanced budgets and smaller government.

32:41Paul Krugman:President Clinton, leading the Democrats to smaller government. Now there is energy in New York with Bernie, with AOC for larger government and democratic socialism as at least part of the solution. We've been having this debate. This is closing arguments. 60 seconds. Richard, what should the National Democratic Party do with this interest in democratic socialism? Look, you saw in the clip that Laura Gillen, who is in a suburban seat in the New York metropolitan area, is running away from Mondami. I think, likewise, Pat Ryan and Tom Suozzi are also going to be very concerned if he gets elected.

33:22And I also think it's a gift to Nicola Loda and Mike Lawler, who will probably go from competitive districts to very safe seats. This is a gift to the national Republicans on a silver platter. Faz? Politically, I hope that for all the wobbly Democrats out there, you see that Zoran is bringing into the Democratic tent a whole hell of a lot of people who didn't vote in 2024. He's exciting people, young people in particular. He's expanding the opportunity of Democrats to win if you give him a shot. Zoran is a very talented and smart person. He has a view of the political economy that understands the role of the state has to address the condition of working class people.

34:04But he's somebody to be reasoned with, to talk to. And I think the more we demonize and we play scare tactics, all we do is lend less credibility that the Democratic Party can stand up to powerful elites for working class people. Zoran's doing it. I hope more people give him a chance to succeed.

34:22Paul Krugman:Yeah, look, there's been a lot of interest, intrigue and hype, criticism, etc. about this topic and this race. Both of you have conducted yourself with precision and examples and logic and reason. Imagine that in political debates. Maybe we need more of this and less of the candidates. I want to thank you both. I would agree with that. Appreciate you guys. Yes, and thanks for having me, Ari. Absolutely. Thanks to both of you. We come back with longtime author, New York Times columnist, professor, now Substack writer, economist Paul Krugman. Next.

35:13seven-day pass for game-packed weekends, a full monthly plan, or a full season pass, Sling gives you total control over how you watch. Get instant access to live football without paying for unwanted channels. Sling lets you do that. Visit sling.com to learn more. Celsius Spritz Vibe Summer Edition is here. Meet the new sparkling limoncello twist flavor, inspired by the vibrant, refreshing flavors of summer in Italy. With crisp limoncello flavor and a subtle twist of sweetness, it's the perfect way to bring a little Italian-inspired energy wherever the season takes you. Whether you're soaking up the sun, chasing your next adventure, or making the most of every summer moment, Spritz Vibe Summer Edition is ready to refresh your routine.

35:55Go find your Spritz Vibe before summer ends. Nothing beats tradition, like weekly game nights at mom's house, and Tostitos, crafted with masa made the traditional way, starting with whole corn kernels, with flavors worth gathering around, like a hint of lime and Mexican street corn, and no artificial colors, flavors, or preservatives. That's the Tostitos way. Bring Tostitos to your next game night, and you'll be winning either way. Tostitos. Tradition matters.

36:29The one big ugly bill that has been jammed down the throats of the American people represents the largest assault on Medicaid and health care in American history.

36:44Paul Krugman:That's new from Seager Jeffries today. We're joined now by Paul Krugman, the Nobel Prize winning economist, longtime author, writer, and now the editor, publisher, and writer of the Paul Krugman Substack newsletter, which has gained quite a following. Welcome back. Are there? These health care cuts are massive. if you put aside the legal and constitutional questions facing this administration, which are huge. I wonder if healthcare cuts might be the most significant short-term immediate impact, damage on working people and the biggest issue of the year. What do you think? Oh, sure. I mean, look, the United States is, you know, we're alone among wealthy countries and not guaranteeing healthcare for everybody.

37:29So we start out with a system that is already, treats ordinary people worse than our counterparts in the rest of the world. But at least it had gotten better thanks to the expansion of Medicaid, thanks to the Affordable Care Act. And now you're taking a hatchet to that. And this is going to not just mean that many millions of people are going to lose health insurance. It's going to ramify through the system. There's going to be a lot of hospitals closing because people can't afford to go there. are kind of ironically, the worst impacts are going to come in areas that voted for Donald Trump, rural areas, because those are, you know, there's no risk that those of us in New York City are going to find that there are no nearby hospitals left.

38:13But in a lot of the country, there will be. This is just incredibly cruel and incredibly ignorant about how people live. That's what strikes me in these arguments. They keep on saying that people should get off Medicaid and get a job as if, you know, every job comes with health benefits. That's not the America I know.

38:33Paul Krugman:No, I mean, it's such a funny talking point. Funny bad, not funny ha-ha, because everybody could be not involved in politics at all. Everybody knows that all kinds of gigs and jobs, you get hardworking jobs, labor jobs, building stuff, helping with a house, helping with a move, gig economy, task rabbit, waiting tables, one of the first jobs I had. you don't have health care. So then you say, okay, what do we want to do with those folks? To your point, I want to play you something out in the discourse. You always used your New York Times perch, and now you're writing, which is reaching many people, as I said, to call it like it is.

39:11Paul Krugman:That's hard for some people for some reasons. But in the new podcast sphere, you have people who aren't trained journalists or writers, but some of them are now saying, hey, okay, I rode this MAGA wave, but I didn't know it was going to be this. Maybe that's they were honestly under informed or whatever. Here's Andrew Schultz. He's got a big following. Take a listen. There'll be people that like they'll DM me back. You see what you see what your boy doing? You voted for this. I'm like, I voted for none of this. He's doing the exact opposite of everything I voted for. I want him to stop the wars.

39:44He's funding them. I want him to shrink spending. Let's do some money. He's increasing it.

39:51Paul Krugman:as someone at the intersection of policy and public communication what do you see there and what do you think should be done in the democracy or what should be said to folks um who may be evolving i don't know well yeah i mean it's a bit of a revelation you know we can it's frustrating because it's not as if democrats didn't try to tell people that this was what was coming, but all right, that's where it is. And it is, look, what's really important to understand is that these are wildly unpopular policies. The Republicans seem to think that because Medicaid is a means-tested program that is welfare, and therefore people must be against it and think it's only for people who aren't like them.

40:35But people have to realize Medicaid is astonishingly popular. I actually did a comparison. Medicaid is literally more popular than than apple pie. It's like plus 80 percent approval of Medicaid. It's a even Republicans overwhelmingly think Medicaid is a good thing because, you know, we're Americans. We believe that our fellow citizens should be able to receive essential health care. And now what they're trying to do is pretend, oh, we're only going to kick off the undeserving, lazy people who refuse to work. But of course, that's that does essentially those people don't exist there really isn't a large number of people receiving medicaid who shouldn't be uh so this is going to cut deep into the you know deep into the lives of tens of millions of americans practically everybody is going to know somebody who's suffering because of these cuts right and then they're the ones answering

41:31Paul Krugman:back as they were publicly trumped some of them are saying oh not this i didn't want this i think what you just said connects to a type of defensiveness there. As for the apple pie issue, professor, while apple pie is synonymous with America and fairly popular, as you say, it can get quite mushy. And so as compared to a cobbler or a blueberry, I think you have a 20, 25 percent holdout there, people who find it to be a mushier pie. I won't make you comment on that because this isn't an open-ended podcast, but I did want to ask you about the latest tariffs. You've been counseling people on how to make sense of it.

42:03Paul Krugman:Some of it is theater. Some of it's ineffective. But Trump is going after some of these countries. And you wrote about Brazil as well. What should we know? What you should know, first off, is that Trump is clearly breaking the law. People aren't saying this enough. But, you know, we have a system that gives presidents a lot of authority to set tariffs. And that's kind of unfortunate that, you know, there were judgments made that presidential discretion was a good thing. But the allowed reasons for tariffs do not include that you're mad at Brazil because they're putting the guy who tried to overturn an election on trial.

42:41That is not a legitimate reason for the U.S. president to impose a tariff. So this is a flat out lawlessness on the part of Trump. And it's also it's, you know, it it's also stupid. I mean, the idea that a country of 200 million people, which has, you know, they have their own pride, they have their own patriotism. And by the way, we're only their number three export market after China and Europe. The idea that we can bully them into basically, you know, abandoning democratic principles is is really stupid. The other one, the other big tariff announcement has been copper. And, you know, copper isn't everything.

43:19This raises the cost of manufacturing. It raises the cost of everything. And, yeah, if we keep high tariffs on copper, we will probably start to produce more copper in the United States. But I've been looking into this. How long does it take to get a new copper mine going? And the answer is at least 10 years. So this is not going to bring back the U.S. copper industry until, you know, several presidents have done the pint. So this is the point, it just makes U.S., everything else in America, costlier and makes our industry less competitive. Yeah.

43:50Paul Krugman:All a clear breakdown and good to know. Paul Krugman, thank you for joining us. Again, people can find Paul Krugman's newsletter by Googling Paul Krugman Substack. We'll be right back. Thanks for watching The Beat. You can always connect with me at remelber.com. I wish you a great summer weekend. I'll see you back here on Monday. Nothing beats tradition. like weekly game nights at mom's house and Tostitos crafted with masa made the traditional way, starting with whole corn kernels with flavors worth gathering around, like a hint of lime and Mexican street corn and no artificial colors, flavors or preservatives.

44:27That's the Tostitos way. Bring Tostitos to your next game night and you'll be winning either way. Tostitos. Tradition matters.