GOOD GRIEF CHARLIE BROWN. TRUST ME. KICK IT!

By Paul Krugman

When writing posts, I like to have a clear focus and offer a tightly argued thesis, backed by data. This, however, won’t be that kind of post. If I had to summarize the state of affairs right now, I would quote Charlie Brown: “Aaugh!”

Here’s where we are as a nation right now:

1. We may be in the middle of a trade war. Or maybe not

2. We’re in the middle of a constitutional crisis. No maybe.

3. We may be in the midst of a sort of digital coup, which might as a side consequence cause large parts of the federal government to cease functioning at all.

The unifying theme here, I guess, is that the federal government has been taken over by bad people who also are also stunningly ignorant.

Start with the maybe/maybe not trade war. The Trump administration was, to all appearances, ready to impose 25 percent tariffs on Canada and Mexico last night. This would have been self-destructive (and also a violation of past agreements) even if our neighbors didn’t retaliate. And both made it clear that they would retaliate. These are real countries, with real patriotism and pride, and they weren’t ready to be bullied.

And Trump folded. OK, supposedly the tariffs are only on hold for a month, but some wags are already joking that “tariff month” will become the new "infrastructure week."

And supposedly both Mexico and Canada made some concessions in return for the tariff hold. But there’s really nothing there; neither country is doing anything it wouldn’t have done without the tariff threat. The U.S., on the other hand, agreed to crack down on weapons shipments to Mexico. Trump will spin this as a victory; low-information voters and some intimidated media outlets may go along with the lie. But basically America backed down.

So is Trump the classic bully who runs away when someone stands up to him? It definitely looks that way.

Let’s be clear, however: this isn’t a case of no harm, no foul. By making the tariff threat in the first place, Trump made it clear that America is no longer a nation that honors its agreements. By caving at the first sign of opposition, he also made himself look weak. China must be very pleased at how all this has played out.

And as I argued the other day, the now ever-present threat of tariffs will have a chilling effect on business planning, inhibiting economic integration and damaging manufacturing.

Still, the trade war didn’t happen, at least so far. But the constitutional crisis is in full swing.

Elon Musk, after spending the weekend denouncing the U.S. Agency for International Development as “evil,” a “viper’s nest of radical-left marxists who hate America,” and a “criminal organization,” announced that the agency was being shut down. Now, Musk isn’t the president ~ at least I don’t think he is; he isn’t even a government official.

But Donald Trump has confirmed the move, which is illegal and unconstitutional. No qualifying language, no “might be” or “some say” evasions, please. Congress passed a law establishing USAID as an independent agency, and the president can’t abolish it unless Congress passes new legislation to that effect.

It seems almost beside the point to ask what this is about, but still: What’s this about? If this is supposed to be about saving money, here’s the role of USAID in the federal budget:

Source: Congressional Budget Office, Congressional Research Service

So why is Musk such a hysterical enemy of the agency, whose main purpose is providing humanitarian aid? There may be some backstory here, in which USAID somehow once interfered with a Musk project. And Musk is surely banking on public innumeracy: abolishing an agency sounds as if it will save a lot of money, and few voters understand how small $40 billion is in the federal context.

But my guess is that in Musk’s worldview the mere fact of trying to help people in need makes you a radical-left Marxist who hates America.

My final point is a bit trickier, because we don’t yet know how it will turn out. Musk associates have been given access to the U.S. Treasury’s systems that control all federal payments, from grants to nonprofits to Social Security checks to salaries of federal workers.

The potential for mischief here is immense. The courts may have told the Trump administration that it can’t freeze spending mandated by Congress, but Musk’s people, who haven’t shown much reverence for the law, might well just ignore the courts and not cut the checks.

And they could go beyond cutting off programs the Musk/Trump administration doesn’t like. Imagine that you’re a federal contractor who has made campaign donations to Democrats; suddenly the government stops paying what it owes you and brushes off inquiries by saying that they’re working on the problem. Or you’re a federal employee who, according to somebody in your office who has a personal grievance, has expressed sympathy for DEI; somehow your regularly scheduled salary payments stop being deposited into your bank account. Or even imagine that you’re a retiree who canvassed for Kamala Harris, and for some reason your checks from Social Security stop coming.

Don’t say they wouldn’t do such things. We’ve seen these people in action, and of course they would if they could.

For the moment they probably can’t. The federal payments system is immensely complex, and like most government infrastructure has been financially squeezed for decades. So it’s cobbled together, much of it running on old hardware and even older software, kept functioning thanks to old hands and institutional memory. The 20-somethings Musk is deploying to take over, locking out those old hands and pushing aside the people who know how the system works, almost surely don’t understand enough to politicize payments right away.

As Nathan Tankus, the go-to expert on these matters, says.

I 100 percent believe that the primary barrier to Elon Musk gaining control of the Treasury payments system is COBOL.

For readers mystified by the reference, COBOL is a very old programming language that was once pervasive in the business world but in which hardly anyone under 60 knows how to program –  yet is still widely used in government. (During Covid, the state of New Jersey put out a frantic call for people who knew COBOL to implement expanded unemployment benefits.)

But this observation raises another concern. What if the Musk people – Muskovites? – try to muck with systems they don’t understand, believing that they’re super smart and can master everything with the help of a little AI? It’s not hard to imagine the whole federal payments system – including, by the way, servicing of federal debt – crashing.

So much damage — to U.S. credibility, to the Constitution and the rule of law, and possibly even to the very functioning of the government. And Trump only took power 2 weeks ago.