"Useless Economically": Paul Krugman Slams Trump and Vance for Supporting Bitcoin
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"Useless Economically": Paul Krugman Slams Trump and Vance for Supporting Bitcoin
Renowned economist Paul Krugman believes: Bitcoin has already had billions of years in the technological era, yet remains economically useless.
Navigating Web3 tides with focused insightsAuthor: Andrew Throuvalas, Decrypt
Translation: DeThings
Paul Krugman speaking in Rio de Janeiro in 2023. Photo: A.PAES/Shutterstock
Renowned economist Paul Krugman remains unimpressed by Bitcoin, and he’s increasingly frustrated by the Republican Party’s latest enthusiasm for the asset.
In an article published Monday in The New York Times, Krugman criticized JD Vance, Donald Trump’s pick for vice president, calling him a paranoid embodiment of Silicon Valley’s “tech bros” with whom he shares a passion for cryptocurrency.
“The truth is that Bitcoin was launched 15 years ago—eons in tech time—and remains economically useless,” Krugman wrote. Money laundering and ransomware are among the few exceptions proving its utility.
Publicly, Vance appears to be a strong crypto bull. In 2022, he revealed holding between $100,000 and $250,000 worth of Bitcoin—a sum that would be significantly higher today if he still holds it. According to Politico, in June this year he began circulating draft legislation aimed at reforming cryptocurrency regulation to be more industry-friendly.
More broadly, Republicans—including Trump—have made their pro-crypto stance clear this year as the election season approaches. At the Bitcoin 2024 conference in Nashville, Trump claimed Bitcoin’s value could one day surpass gold and promised to establish a “strategic Bitcoin reserve” if elected president.
The politician also echoed one of Bitcoiners’ favorite talking points: rampant government spending and money printing are fueling out-of-control inflation and “threatening the dollar.”
Krugman, however, belongs to the Keynesian school of economics, which advocates government spending and active management of the money supply to stimulate economic growth. This is partly why he sees cryptocurrencies as largely useless except for evading regulations, calling them “largely Ponzi schemes” that don’t actually hedge against inflation.
The economist is now highly skeptical of Trump’s sudden embrace of cryptocurrency, especially since the former president once shared Krugman’s own anti-crypto views. He described Trump’s proposal for a Bitcoin reserve as “a government bailout for an industry mired in scandals, environmental destruction, and wildly fluctuating value.”
He also mocked the Republican Party’s pledge in its 2024 platform to “end the Democratic Party’s illegal and un-American crypto crackdown.” “I’m sure only a tiny fraction of voters have any idea what this is even about,” Krugman wrote.
Yet Democrats appear to be showing signs of internal panic, precisely because holders of digital assets may represent a crucial voting bloc—despite the party not having engaged enough with the crypto industry.
“Crypto and blockchain technology have significant potential to influence victories above and below the ballot,” more than two dozen Democrats wrote in a letter Friday to the Democratic National Committee. “We urge you to take a forward-looking approach to digital assets and blockchain technology.”
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