The Chaos Monkeys Have Already Taken Over the Zoo by Paul Krugman

The peddlers of misinformation are high on their own supply Read on Substack

(Thanks to BruceDesertRat who comments here, for linking this really useful Substack!)

Well, I was going to post about proposals for bank deregulation, but I think that can wait for a bit. The news of the moment is the looming prospect that the federal government will shut down over the weekend.

We’ll have to see how much damage this does, but it’s already clear that assuming the worst happens — and it’s hard to see how it won’t — this will be the dumbest shutdown ever. I’d say that the incoming Musk administration (so far Musk, not Trump, appears to be calling the shots) is trying to hold itself up for ransom, but it doesn’t even rise to that level. This isn’t like 1995, when Newt Gingrich shut down the government in an attempt to extract cuts in Medicare and Medicaid — a move that seemed (and was) a foolish act of petulance, but at least had a ghost of motivation.

No, Musk is demanding — apparently successfully — that Republicans in Congress renege on a deal they had already agreed to, a continuing resolution that would keep the federal government going for the next few months. Why? Because, Musk says, of the outrageous provisions in that CR.

Except none of the items Musk is complaining about are actually in the bill. No, Congress isn’t giving itself a 40 percent raise. No, the bill doesn’t fund a $3 billion stadium in Washington. No, it doesn’t block future investigations into the Jan. 6 committee. No, it doesn’t fund bioweapons labs.

I have an embarrassing admission to make. I thought that Muskaswamy’s obvious problems with getting DOGE going would have inspired, not humility — never that — but at least a bit of caution. That is, I imagined that Musk would by now have at least an inkling of two things.

First, finding big-ticket examples of government waste is hard, because the government mostly spends money on things people want. Here’s a nice chart from the Center on Budget and Policy Priorities, showing where the money goes:

Yes, the federal government is an insurance company with an army.

Second, you shouldn’t trust claims about the budget coming from Some Guy on the Internet. You might have imagined that the world’s richest man could have a couple of fact-checkers on retainer to help ensure that he isn’t making clearly stupid assertions. But nooo.

In a barrage of posts on X Musk pushed misinformation about a more or less routine, place-holding bill that was basically a way to keep the ship of state afloat until Trump takes charge. Maybe this was in part a power play, an attempt to make Republicans in Congress show fealty to a man who clearly imagines that he’s the real president — and Trump, by meekly endorsing Musk’s position, did in fact convey the impression that Musk is leading the guy who is supposed to be in charge by the nose. But this political theater will have real consequences, for America, for Trump, and for Musk himself.

Musk has asserted that shutting the government down for a month would do no harm. And it’s true that Social Security, Medicare and Medicaid funding — which is where the bulk of the money goes — will continue. But many services people rely on will be disrupted, especially if the shutdown goes on for more than a month, which seems all too likely given Republicans’ razor-thin House majority and the dominance of misinformation in many members’ thinking.

Maybe Musk himself doesn’t expect to experience any hardship, but put it this way: I’m glad that I won’t need to renew my passport any time soon, that I don’t expect to be trying to get through airport security for a while, and especially glad that I don’t rely either on food stamps or on small business loans. For all of these things have been disrupted in past government shutdowns.

Do Musk and Trump know any of this? Almost surely not.

Beyond the specifics, my guess is that antics like the potential shutdown will do much more damage to the Musk/Trump administration than they realize. (There’s also this other guy — JV Dance or something? — but he clearly doesn’t matter.)

First, since the election financial markets have clearly been betting that Trump will do very little of what he promised during the campaign — that we won’t really have a trade war, just some minor trade skirmishes, that we’ll have symbolic deportations rather than a mass roundup of immigrants, and so on. Markets have, in effect, discounted the disastrous consequences that would follow if Trump honored his own promises.

But a government shutdown in response to completely false claims about what’s in an innocuous short-term funding measure suggests that the peddlers of misinformation are high on their own supply. Trump may really believe that foreigners will pay tariffs, that U.S. trade deficits subsidize the rest of the world, that there’s a reserve army of American workers available to fill the gaps deportation would create. I don’t want to put too much weight on the latest market fluctuations, but it is starting to look as if investors are questioning their own complacency.

Second, many, probably most people who voted for Trump believed that he really is the character he played on The Apprentice — a highly competent manager. The other day I said that Trump was elected by low-information voters; this wasn’t a slur on Americans’ intelligence, it was a reference to survey results showing that Trump’s edge depended entirely on support from voters who don’t pay much attention to politics:

How will these voters react if, as seems all too likely, the second Trump administration is instead marked by rolling chaos?

Anyway, it’s pretty remarkable. Inauguration Day is still a month away, yet the chaos monkeys have already taken over. (snip)