FT News Briefing The Wolf-Krugman Exchange: Trump’s ‘vibecession’
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Nov 30, 2025 
In this discussion, Paul Krugman, a Nobel Prize-winning economist and CUNY professor, delves into the complexities of the U.S. economy under Trump. He and Martin Wolf explore the concept of a 'vibecession,' where low consumer confidence looms large despite steady spending. They scrutinize the impacts of tariffs on business investment and recruitment. The conversation also touches on the unsettling effects of AI on hiring, inequality, and the health of American democracy amidst growing authoritarianism.
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AI Boom Feels Oligopolistic
- The AI boom is concentrated in a few giant firms and doesn't feel inclusive to ordinary Americans.
- That concentration and perceived unfairness dampen public enthusiasm despite strong tech investment.
Inflation Left A Lasting Sense Of Betrayal
- Inflation from 2021–23 left people feeling 'cheated' despite wage gains, especially for lower-paid workers.
- Housing price rises outpaced wages, producing persistent affordability anger.
Tariff Price Effects Are Still Passing Through
- Only part of tariff price effects have hit consumers so far; more pass-through is coming.
- Businesses found ways to avoid higher effective tariffs, delaying full consumer impact.