As his stalls and his party braces for potentially major losses in the 2026 midterm elections, President Donald Trump has spiraled into a level of "political bankruptcy" that economist Paul Krugman, winner of the 2008 Nobel Memorial Prize in Economic Sciences, warns could produce "horrifying" consequences.

Writing on Monday in a Substack post published just over two weeks before Election Day on Nov. 3 and highlighted by Alternet, Krugman — who left his longtime New York Times opinion column in December 2024 to publish independently — argued that Trump, with nothing left to lose and little need to maintain the appearance of governing, is preparing to "pursue his true desires" and "wreak havoc."

As an example, Krugman pointed to recent reports and analysis concerning Trump's war with Iran. While some outlets have suggested the president may resume bombing after the midterms, Krugman noted that a prominent analyst has made a convincing argument that Trump will ramp up ahead of the elections — an assessment Krugman warned could be accurate.

"That analysis of Trump's political position is something I recognize from financial economics," he wrote. "You see, it's a well-understood proposition that the owners of businesses that are on the verge of going bust often engage in destructive behavior. And Trump is about to go bankrupt — not financially (he's made billions through corruption) but politically. So he, like a failing businessman, has strong incentives to wreak havoc."

In Krugman's view, Trump is preparing to do something desperate to reverse his fortunes, taking an approach often called "gambling for resurrection." As the economist explained, "When a company is on the edge of failure, it makes sense for the company's owner to make highly speculative, even crazy investments that are highly likely to fail but might, just might, make enough money to pull the company back from the brink. After all, for the owner it's heads he wins, tails his creditors lose."

Krugman argued that all indications point to Trump's party heading for defeat in the midterms, and that while a normal president might be able to live with a Congress controlled by the opposing party, "there has been so much corruption and malfeasance over the past two years that Democratic control of Congress, and the subpoena and investigative power that will bring, will have catastrophic consequences for Trump and everyone around him. So Trump has an incentive to do something, anything, that might shake up this election."

While renewing attacks on Iran would likely hurt more than help the GOP's midterm chances, Krugman wrote that Trump is so focused on "saving his own political skin" that he might nonetheless roll the dice on escalation.

Yet in Krugman's estimation, "Trump's impending political bankruptcy will have even worse consequences" than restarting the war, with implications extending well beyond the midterms. "What may be about to happen — indeed, is already happening — is what we might call policy looting: Trump using his remaining power to take actions that are both deeply unpatriotic and deeply unpopular but fit his own preferences and prejudices," he wrote. "Once the midterms are over, Trump, with nothing left to lose, will be free to be his worst self — a malignant narcissist who instinctively supports authoritarians and is preoccupied with revenge against anything and anyone that threatens his fragile grandiosity."

Krugman cited Trump's shifting public stance on Ukraine and Russia as an example. "It has long been obvious that Trump loves dictators and despises democracy, and that he has special affection for Vladimir Putin and hatred for Volodymyr Zelenskyy," he wrote. "However, as long as there was some chance of limiting the damage in the midterm elections, Trump was cautious about explicitly taking Putin's side. Over the past few weeks, however, Trump has grown ever more open about supporting Putin's attempted war of conquest — buying Russian diesel, canceling sanctions, and most recently by attempting to sabotage Ukraine's defenses by degrading its access to Starlink."

Domestically, Krugman argued, the change is evident in the fact that "Trump has increasingly stopped pretending that he cares about illegal immigration or immigrant crime, and is veering into flat, open racism — so far specifically directed against Somalis, but it won't stop there."

"Anyone who believes that Trump will become more cautious, more moderate in the aftermath of midterm defeat just doesn't understand the new political reality," Krugman concluded. "The truth is that political bankruptcy will free Trump to pursue his true desires. And those desires are horrifying."