The coronavirus relief package signed by President Trump Wednesday provides unemployment benefits and free coronavirus testing to millions of Americans suddenly out of a job, but guarantees paid sick leave to less than 20% of American workers. Earlier this month, Trump signed into law an $8 billion coronavirus response package and has laid out the first details of a third, $1 trillion economic package and invoked the Korean War-era Defense Production Act to allow the government to direct industrial production. For more on those bailouts and who benefits, we speak with Joseph Stiglitz, Nobel Prize-winning economist, Columbia University professor and chief economist for the Roosevelt Institute. He served as chair of the Council of Economic Advisers under President Bill Clinton and as chief economist of the World Bank. His latest book is “People, Power and Profits: Progressive Capitalism for an Age of Discontent.”
Transcript
This is a rush transcript. Copy may not be in its final form.
AMY GOODMAN: This is Democracy Now!, democracynow.org, The War and Peace Report. I’m Amy Goodman. President Trump Wednesday signed a coronavirus relief package providing unemployment benefits and free coronavirus testing to millions of Americans suddenly out of a job. The aid package guarantees paid leave to less than 20% of American workers. It does not apply to companies with 500 or more workers, and workplaces with fewer than 50 workers can request to opt out. On Wednesday, the White House also ordered the suspension of evictions and foreclosures through April. On Wall Street, the Dow Jones plummeted 7% at midday, triggering an automatic halt to trading for the fourth time in the last two weeks. The market crash has wiped out nearly all stock market gains since President Trump took office in 2017. Earlier this month, Trump signed into law an $8 billion coronavirus response package. At a White House press conference Wednesday, Trump laid out the first details of a third, $1 trillion economic package and invoked the Korean War-era Defense Production Act to allow the government to direct industrial production.
PRESIDENT DONALD TRUMP: In a sense, a wartime president. I mean, that’s what we’re fighting. … You have to close parts of an economy that six weeks ago were the best they’ve ever been. We had the best economy we’ve ever had. And then one day you have to close it down in order to defeat this enemy. … We’ll be invoking the Defense Production Act just in case we need it. In other words, I think you all know what it is, and it can do a lot of good things if we need it, and we will — we will have it all completed.
AMY GOODMAN: The person in charge of the bailouts [is] Treasury Secretary Steven Mnuchin, formerly of Goldman Sachs. He ran OneWest Bank after the 2008 financial crisis and oversaw so many foreclosures, he was called the “foreclosure king.”
Well, for more on these bailouts and who benefits, for more on the legislation that has been passing and for what’s happening in the world today in this pandemic, we’re joined by Joseph Stiglitz, Nobel Prize-winning economist, Columbia University professor, chief economist for the Roosevelt Institute, served as chairman of the Council of Economic Advisers under President Bill Clinton and as chief economist of the World Bank. His latest book, just coming out, hopefully, depending on what this world looks like, is People, Power and Profits: Progressive Capitalism for an Age of Discontent.
We thank you so much for joining us, Joe. And I just want to let our viewers and listeners know you’re joining us from your home, because here in New York and all over the country we’re being told that it is safest for people to isolate. Before you talk about the bailout, just talk about your thoughts right now on what’s happening in this city, New York, and the world.
JOSEPH STIGLITZ: Well, this is a time of crisis. In the 2008 crisis, Rahm Emanuel, who was the chief of staff of Obama, said, “You shouldn’t let a crisis go to waste.” But they did let that crisis go to waste. We needed to reform our financial system. We needed to reform our economy. And we didn’t. The money went to the big banks, and we didn’t get the money to the people who really needed it. So, the question is, as your very — as your excellent clip from Naomi Klein said, “What will we do with this crisis? Will this reinforce the ugly tendencies we’ve had for growing inequality, for corporate welfare, or will it actually succeed in reforming our economy?” You know, it’s remarkable. Just a little while ago, people said we couldn’t afford this program helping college students with immense debt, or we couldn’t afford providing healthcare for everyone. And all of a sudden, the president is talking about a $1 trillion, $2 trillion bailout. We always could have afforded these things. It was just our prioritization was wrong.
AMY GOODMAN: I wanted to go to the Treasury Secretary Steve Mnuchin describing the administration’s proposed economic relief package.
TREASURY SECRETARY STEVEN MNUCHIN: We’ve put a proposal on the table that would inject a trillion dollars into the economy. That is on top of the $300 billion from the IRS deferrals. Now, let me just say, this is a combination of loans. This is a combination of direct checks to individuals. This is a combination of creating liquidity for small businesses. … I think Congress right now should be concerned about the American workers and small business. You know, interest rates are incredibly low, so there’s very little cost of borrowing this money. And as I’ve said, in different times, we’ll fix the deficit. This is not the time to worry about it.
AMY GOODMAN: So that’s Treasury Secretary Steve Mnuchin, formerly called the “foreclosure king.” Talk about what he is laying out right now.
JOSEPH STIGLITZ: Well, the one part that is good is sending checks to everyone. I think the amounts that they’re talking about are inadequate, and it’s not just a one-time thing. If, as many epidemiologists say, this is going to last for several months, there will have to be a second and third and fourth conscious of those checks. If we don’t do that, people whose income is collapsed, people who are left unemployed — remember, we have the worst unemployment system of any of the advanced countries — all these people who are not going to be able to pay their bills, and we’ll have a cascade of problems. And while it’s a good thing that the Trump administration has ordered federal agencies to stop evictions and foreclosures, it doesn’t apply to the private sector banks. And their evictions and foreclosures may well go on. And that’s where most of the evictions and foreclosures will occur. So we need to get that money into the system, and we need to get the money to ordinary individuals. So that part, I think, is good. It needs to be taxed at the rate that individuals normally pay, so that in a year from now, two years, when we return to normal, those at the top who’ve gotten money and didn’t need it, that money will go back to the Treasury. So, this ought to be treated as ordinary income. And a significant part of that money that was going to the top should be recuperated.
But the other part is really not the way we ought to be going. The part of giving money to the airlines or the cruise ships. Yeah, the airlines had a huge bonanza from the tax bill of 2017. And rather than use that money to build up buffers in times of emergency, they had billions and billions of share buybacks. So, if we give them money, we have to make sure that they satisfy certain conditions, conditions corresponding to the environment, to governance, to labor. And we need warrants. That’s a way of making sure that the American taxpayer is protected against the risk.
And then there are whole set of things that the bailout — that the package doesn’t address. Our state and localities are going to be facing a very difficult time. Their revenues are plummeting. They don’t have the luxury of running deficits. Most of them have what are called balanced budget frameworks. So, if their revenues go down, there’s going to be a cutback in education, in health, in the basic ingredients of making — that ordinary people need so much. So, a higher priority than bailing out the cruise ship companies is helping the states and localities. So we need a massive revenue-sharing program between the states and localities.
AMY GOODMAN: So, you know, one of the voices that we don’t hear, or the voices overall that we don’t hear at the White House, as we see this stream of CEOs surrounding Trump or the conversations he’s having in the last few weeks, are the people, the workers directly affected. I wanted to bring in Sara Nelson, a clip of the president of the Association of Flight Attendants union.
SARA NELSON: We have told Congress that any stimulus funds for the aviation industry must come with strict rules. That includes requiring employers across aviation to maintain pay and benefits for every worker; no taxpayer money for CEO bonuses, stock buybacks or dividends; no breaking contracts through bankruptcy; and no federal funds for airlines that are fighting their workers’ efforts to join a union.
AMY GOODMAN: So, that’s Sara Nelson, head of the flight attendants’ union. Joe Stiglitz, if you can talk about what is actually happening here, and what would a bottom-up bailout actually look like? What would it mean if the workers were guaranteed everything from the paid leave — it keeps on being repeated, “Now workers will have paid medical leave,” but we hear that it’s well less than 20%, and that was reduced and reduced over the weekend through negotiations with Mnuchin.
JOSEPH STIGLITZ: So, first let me say, the Trump proposal is another instance of trickle-down economics — give money to the corporations, and maybe, maybe, it will trickle down to ordinary citizens. And we know from the past it’s not going to happen. The 2017 tax bill did not lead to more investment, did not lead to significantly higher wages. It led to bigger — almost a trillion dollars of share buybacks.
And so, as you say, what we need is a bottoms-up approach. And what she was pointing out is that if you give money to these industries, they aren’t going to necessarily behave well. And you see that so clearly in the fight that the big companies fought against paid sick leave. And let me say why that’s really important. It’s not just helping the workers; it’s helping all of us, because if they don’t get sick leave, they’re going to go to work. And if they go to work, it will help transmit the disease. So, we need a system that people can say, “If I’m sick, I don’t need to go to work.” And the decision of the Trump administration to fight having universal sick leave is another example of their contributing to the spread of the virus and making the pandemic all the worse.
AMY GOODMAN: Joe Stiglitz, can you talk about what this looks like globally? And what is happening with this pandemic, laying bare the growing wealth inequality in the world?
JOSEPH STIGLITZ: Well, what we’ve created over the last 50 years is a highly globally integrated economy. There are some other aspects of this economy that we’ve created. We created economy without resilience. I illustrate that by the cars today that don’t have spare tires. You save a little money in not having a spare tire. The fact is that when you get the flat tire, you realize what a mistake that was. Not having a spare tire makes — in short run, it looks like you’ve saved a little money; in the long run, you really suffer. And we’ve created a whole economic system that is extraordinarily fragile — just-in-time production with no inventories. And as we’ve created this system, where you try to squeeze every ounce out of the — of waste out of the system, you’ve also squeezed ordinary workers. And that is what’s contributed to this growing inequality. And those two are the same — you know, different sides of the same coin.
So, our growing inequality and our increased fragility are issues that — hopefully, the lessons that we learn from this crisis is we need to construct a different kind of capitalism, a different kind of economy, that I call in my book “progressive capitalism,” but it recognizes that the market doesn’t work very well in addressing the major problems our society faces — resilience, inequality, climate change, you name it. They haven’t done a good job on it.
AMY GOODMAN: I wanted to go back to what’s happening here. You have Whole Foods CEO John Mackey under fire after he sent out an email to employees saying workers could donate accumulated paid time off to fellow workers with medical emergencies or a death in the family during the pandemic. Your thoughts, Joe Stiglitz?
JOSEPH STIGLITZ: Well, this is an example of encouraging charity from others. Why don’t these people at the very top say, “Well, at this moment of crisis, we’re all in it together. I’m going to cut off my multimillion-dollar pay. I’m going to go make a major sacrifice, and I’m going to give everybody paid sick leave, paid family leave. I’m going to show that from the top down. And, of course, I hope that you will be equally generous”? But it should start from the top. And that’s what’s so bad about both the administration and the example that you just gave. Leadership should start from the top by example. And obviously, we’re not getting that in this country.
AMY GOODMAN: Can you talk about how it works when they say people will get unemployment — the reports of people trying to apply online, the server is crashing repeatedly because so many people are out of work — and how thousand-dollar checks will be sent out, how you ensure if there is a law that says your employer has to give you paid medical leave, how you enforce this?
JOSEPH STIGLITZ: Well, I mean, you’ve put your finger on a major problem that has not gotten sufficient attention. Because of the devastation of our administration, of our government, that has occurred in recent years — you know, they disbanded the White House pandemic task force; they defunded the Centers for Disease Control, which is the basis of getting us information and developing our response to a crisis like this — we are less able to respond. And that means it’s almost a fantasy to believe that we can get checks out in two weeks.
That’s why some of the other things I talked about are so important. We have to make it absolutely clear that nobody is going to be evicted, there’s going to be no foreclosure, not only on the part of the government, but on the part of the banks, landlords. People can’t have their utilities cut off, because those checks won’t be there, and there’s a lot of Americans living on the edge. Data I talk about it in my book about the fraction of the population, a very large fraction of the population, that has reserves of less than $500 or $1,000. They’re living from paycheck to paycheck. And right now there are no paychecks. So, this inability to respond is going to be a major problem.
And then the other point that you made has gotten a lot of attention more recently, that even companies that have said that they have sick leave policy, when employees ask for the sick leave, they get punished. And so, we have to set up administrative mechanisms that say, “We will hold the companies that don’t grant their workers these benefits — we’re going to hold him accountable.” Of course, with the president saying, “I’m not responsible,” you might ask, “What does that mean?” But what that means is that there needs to be significant fines on any company that deprives any worker of his basic rights, including the right to sick leave.
AMY GOODMAN: So, this whole issue that Naomi Klein raises of disaster capitalism, of, in this moment of upheaval, that it depends who moves forward fastest and most strategically in moving forward with their ideas, your thoughts, as we move forward in this election year — unclear even if this election would be held in November — Trump amassing the kind of powers that he is? And, even still, I’m wondering if you could comment on his position right now — on the one hand, supporting giving $1,000 to each American — and I’m not exactly sure what that means, who gets it and who doesn’t — and you combine that with his ultranationalist politics — kids in cages, the wall, the racist “Chinese virus” language that he uses. Can you comment on this kind of economic populism?
JOSEPH STIGLITZ: Well, I think the point that this crisis makes clear is that we’re all in it together. The virus doesn’t discriminate. Just like the virus doesn’t have a nationality, the virus doesn’t discriminate on the basis of nationality, of race, of religion. And so we’re all in this together. So this is a moment — it should be a moment of national unity.
And as Naomi pointed out, there are two directions we can go. We could either exacerbate the divisions, or we can say there’s another direction. One of the reasons I wrote my book, People, Power and Profits, on progressive capitalism, was to lay out that alternative agenda, to make it clear that we — there are a lot of ideas about how to transform our society into the kind of society that deals with the problems that we’re facing — the problem of inequality, climate change, the moral turpitude that we’ve seen, so pervasive in the financial sector, Dieselgate, in the drug companies, in the food companies. There is an alternative. And so I actually think we have the ideas with which to respond. And they’ve been articulated in the primary contest, many of these critical ideas.
So, my hope is that as Americans realize how badly things have gone, how the kind — that this crisis, we didn’t turn to the private sector to solve it. We turned to the government. We realize that we have to do this collectively, that if we’re all on our own, it won’t work. The private sector did not provide the masks, did not provide the tests on its own. And a failed government — and the Trump administration is a failed government — didn’t work. But there is a different kind of government that can work, and we’ve seen that in a number of countries, where things are going much better. So, we can see that if we pull together, there is an alternative, and one which will protect us against this disease, but also — also — can create a society with greater shared prosperity and address the climate crisis.
In Part 2 of our look at President Trump’s response to the coronavirus pandemic, Nobel Prize-winning economist Joseph Stiglitz says Trump’s push for a payroll tax, for example, “would be undermining the fiber of our economy. … It doesn’t help now, and it really hurts going forward.” Stiglitz served as chair of the Council of Economic Advisers under President Bill Clinton and as chief economist of the World Bank. He is now a Columbia University professor and chief economist for the Roosevelt Institute. His latest book is “People, Power and Profits: Progressive Capitalism for an Age of Discontent.”
Transcript
This is a rush transcript. Copy may not be in its final form.
AMY GOODMAN: This is Democracy Now!, democracynow.org, The War and Peace Report. I’m Amy Goodman, as we bring you Part 2 of our conversation with the Nobel Prize-winning economist Joe Stiglitz. The death toll from the coronavirus pandemic sweeping the globe is nearing 9,000 with over 221,000 confirmed cases, as governments around the world increasingly shut down economies and lock down cities to slow the spread of the disease. We’re going to continue now to look at the economic fallout from the coronavirus pandemic, and particularly President Trump’s response to it, what has led to this point. The early denial of the pandemic, he kept saying, “Who would have thought?” He disbanded his pandemic team on the National Security Council, defunding health agencies. But then, now he says he always said it was a pandemic. Well, on Wednesday, the Dow Jones plummeted 7% at midday, triggering an automatic halt to trading for the fourth time in the last two weeks. The market crash has wiped out nearly all stock market gains since President Trump took office in 2017.
For more, we’re continuing with Joe Stiglitz, the Nobel Prize-winning economist, Columbia University professor, chief economist for the Roosevelt Institute, chair of the Council of Economic Advisers under President Bill Clinton, chief economist of the World Bank, his latest book, People, Power and Profits: Progressive Capitalism for an Age of Discontent.
I don’t think most everyday people in this country are focused on the stock market right now. And also, so often the stock market, which has been rising so much in the past few years, doesn’t reflect what’s happening to people on the ground in the bid economy, if they have a job at all — on the gig economy, or if they have a job at all. But can you talk about and explain in lay terms, Joe Stiglitz, what exactly has happened with the stock market? And is this similar to the Depression of 1929, the Crash?
JOSEPH STIGLITZ: Well, the stock market reflects investors’ expectations about what is going to be happening in years to come. And when Trump became the president and gave this huge tax cut to the corporations, they celebrated. They had a big party. And they focused on the short term, not the long term, not the risks that Trump represented to our economy, to our world. They celebrated the additional money they had in the pocket. And that meant the stock market went way up. It was a shortsighted perspective.
Now that optimism has turned, has flipped into extreme pessimism. They know that the president is incompetent. They know that this is beyond the capabilities of the administration. We’ve seen this incompetence in the areas of testing and the response to the coronavirus. And quite frankly, they’re very worried, and rightly so, as the economy goes down. And one of the things about the stock market is it’s very risk-averse. It always thinks about, when things go bad, the worst possible scenario, just like when things are good, they think about the party going on forever and ever, just like they did before the crisis of 2008. So, what we’re seeing now is, as they focus on the worst-case scenarios, there’s a flight out of the stock market. And interestingly, there was a flight out of the bond market yesterday. People want cash. They’re not sure what’s going to happen to the market. And cash gives them a little bit more security than anything else they can have.
AMY GOODMAN: At this point — I mean, we played on Democracy Now! Naomi Klein’s brilliant analysis of disaster capitalism and what happens at moments like this, whose ideas win out because the whole country is in shock, essentially. But explain what it means. I mean, from the beginning, Trump didn’t want to admit, kept downplaying what happened with the coronavirus, saying, “Oh, there’s only 15, and that’s going to go down to zero. You know, this is going to end in the middle of April,” because he didn’t want to rock the stock market. What happens when it tanks? What happens now?
JOSEPH STIGLITZ: Well, there will be follow-on effects from the collapse of the stock market. But the stock market is reflecting a deeper problem. You know, if you go back to the Great Depression, the stock market helped bring on the Great Depression, but the stock market was a reflection of some deeper problems that our economy was facing. So it was both cause and consequence. The same thing is true now. The stock market is going down because the realization that the economy is going to be very constrained. People are not going to work. Businesses are shutting down. And at this point, to a large extent, this stock market is reflecting the economic reality that things are not going well.
But going forward, the fact that so much wealth has been destroyed on people’s balance sheet, people — retirement accounts have been wiped out — that will mean that when the economy recovers, when the disease gets under control, people may be not in position to spend in the way that they were before. And so, it could help prolong the economic downturn, unless we take appropriate measures.
And the kind of measures that the Trump administration has proposed are obviously not the right kinds of measures. Let me illustrate. He began by saying, “We ought to have a payroll tax cut.” A payroll tax cut isn’t going to get money into individuals’ pockets. It’s going to put in jeopardy the Social Security program, be underfunded. And so it’s not going to make people more confident about the future. It’s not going to allow them to spend. It just increases the potential of undermining our social safety net, particularly for our elderly. So, it will be undermining the fiber of our economy. So, that’s an example of the wrong kind of economic policy. It doesn’t help now, and it really hurts going forward.
AMY GOODMAN: I wanted to ask you about the billionaire hedge fund investor Bill Ackman, who went on television on Wednesday calling on President Trump to shut down the country for the next 30 days. He tweeted, “With exponential compounding, every day we postpone the shutdown costs thousands, and soon hundreds of thousands, and then millions of lives, and destroys the economy.” Now, he was speaking from isolation. He’s isolated himself so as not to threaten his father’s health, his elderly father. Talk about people like him and what it means to shut down the economy, and what it particularly means for gig workers, for restaurant workers. Yesterday we did a special on restaurant workers. We’re talking about perhaps up to 14 million people who are just now not out on the streets, because — or maybe some are, but in their homes, but they have no jobs to go to, no support.
JOSEPH STIGLITZ: So, what he’s putting his finger on is, we are facing a real problem, the spread of disease. Epidemiologists, anybody who understands epidemiology, would have realized two months ago that there was a great risk. And obviously Trump didn’t. He’s not surrounding himself with anybody with the competence to be able to do that. And that’s why he ignored the warnings.
But you don’t have to shut down an economy to bring it under control. Singapore has provided as a very good example where their economy has continued. They do testing. They do tracing. Whenever there’s a source of contagion, they identify it and make sure it’s contained, quarantined. So they’ve shown that you can bring the disease under control without shutting down the economy.
Now, to the extent that you need to restrain the economy to reduce contact, one can — one needs to address the issue of how are ordinary people going to survive. You know, it’s one thing for a well-off hedge fund to say, “Oh, shut down the economy. I have millions, maybe billions, in my bank account. I’m not gonna worry.” But for ordinary Americans, who have $500 or less in their bank account, no paycheck coming in puts them at great risks. So, I think the answer to that is this proposal of sending everybody a $2,000 check — the $1,000 is not going to be adequate — suspending all evictions, suspending all foreclosure, making sure that the credit card companies don’t charge the usury rates that they’ve been charging — say, going during the period of this pandemic, you can’t charge more than maybe 3, 5% interest rate; after all, the T-bill rate is down to zero — a suspension of student interest — interest on student loans. We will have to respond to the exigency, the crisis of the moment, in ways that make sure that those who are the restaurant workers, those who are low-income workers, wherever the sector they’re in, can survive with dignity and don’t have to be excessively stressed by how they’re going to live.
AMY GOODMAN: Reverend Dr. William Barber of the Poor People’s Campaign tweeted, “Congress must go back & pass another bill that covers all workers. They cannot leave out millions by exempting some low-wage workers from paid sick leave. These workers will not be exempted from the disease.” And he talks about the commitment to universal healthcare and many other things, what becomes possible in a moment like this. I mean, how does Congress get away with passing a bill, for example, for paid sick leave, though many people are just simply losing their jobs, for less than 20% of the American workforce?
JOSEPH STIGLITZ: I was shocked about that, quite frankly. I was really shocked, because this is not just a question of corporate selfishness in the usual way — you know, my profits versus the workers’ well-being. This is utter selfishness, because it’s my profits against the containment of the pandemic, because if these workers don’t have sick leave, paid sick leave, they’re going to show up at work. And if they show up to work, it will help spread the disease. But it also illustrates the extraordinary shortsightedness of our corporate leaders, because if customers know this, they’re not going to go to the store. The New York Times provided a real public service by listing the companies that are not providing paid sick leave. So those customers are on notice: Don’t go to those companies, because the workers there may be carrying the disease, because they have no choice. Whether they’re healthy or sick, they have to go to work. So, you know, it is really — to me, it’s shocking, the lack of empathy of these corporate leaders, that they pushed Congress not to — to exclude them from this paid sick leave, but that they aren’t providing it on their own, and their lack of concern for what is happening to our whole society and promoting this pandemic. To me, it’s unbelievable.
AMY GOODMAN: Former Labor Secretary Robert Reich said — he tweeted, “McDonald’s Burger King Pizza Hut Duncan Donuts Wendy’s Taco Bell Subway None give their workers paid sick leave. They should be required to post this sign on their doors: ‘Because we don’t give our workers paid sick leave, they may be sick when they serve you.’” Joe Stiglitz?
JOSEPH STIGLITZ: I agree with him. And I say The New York Times did a public service by telling us which, these company — the companies that are too dangerous to go eat at, their food. And I hope there’s a public outrage in saying, “We’re not going to eat at these places, because they’re too dangerous.”
AMY GOODMAN: I wanted to go back to the global issue, the effect of the pandemic on the poorest countries of the world. I mean, this has laid bare how interconnected we are. And yet we have, in this week, when we see that Iran is suffering a level of this pandemic and a level of deaths that is just horrifying, that Pompeo, the secretary of state, announces an increased stranglehold, economic stranglehold, on Iran. And you see, for example, with the CDC being cut, the pandemic task force, one of the roles of these health agencies is to be a medical sleuth when there is a pandemic, to send people out to other countries, because the U.S. was prized as, you know, one of the wealthiest countries in the world and could afford to find out what was happening and help. We have, it seems, certainly moved away from that role. But the effect of this pandemic, what it will mean for the poorest countries?
JOSEPH STIGLITZ: Well, first, let me say that, you know, the viruses don’t carry passports. They don’t obey any visa requirements. Global health is a global public good. And if there are these viruses festering in any country around the world, those viruses will go beyond that, that country. So, we are at risk if there is any hot spot in the world. So, this kind of viciousness that we saw from Pompeo is actually not in our self-interest. It’s nasty. It’s brutish. It’s a lack of humanity. But it’s also a lack of concern, lack of knowledge about the nature of global pandemics. So, in that sense, it was so shortsighted.
But there is a broader issue with developing countries and emerging markets. They don’t have the resources to deal with it. And we, as a country, need to help them. The world community needs to be ready to provide assistance. And the question is: How do we do that in the context where every country is going to be running very large deficits? Before the crisis, because of the [inaudible] tax bill that was passed in December 2017, where the benefits went to the billionaires and the corporations, we’re running a $1 trillion deficit. And Trump is now proposing to move that towards a $2 trillion to $3 trillion deficit. The result of this is, I’m afraid, going to be a lack of generosity. But interestingly, we have a mechanism already in place, if we invoke it, and that’s called the special drawing rights at the IMF. It’s basically, the IMF can act as a lender of last resort and could create money, in the same way that the Fed does within our country. And I think it’s time that we begin to think about invoking those powers to provide the money for emerging markets in developing countries.
AMY GOODMAN: Finally, your book is called People, Power and Profits: Progressive Capitalism for an Age of Discontent. How does progressive capitalism differ from Bernie Sanders’ democratic socialism?
JOSEPH STIGLITZ: Well, actually, it’s not that much difference. It’s words. I think what I try to do in my book, that’s a little bit different from what Bernie has emphasized in his campaign, is to try to diagnose this from a systemic point of view. Yes, there are important programs of the kind that Bernie has emphasized — healthcare for all, making sure that everybody has access to a university education without getting into enormous debt, having a secure retirement, ensuring that we do something — that we have a Green New Deal. All these are constituents. But we also need a systemic approach to realize that we have excessive monopoly power. And that’s why the word “power” is in the title. We’ve had excessive financialization. We’ve had mismanaged globalization.
So, what I try to do as an economist is to look at this from a systemic point of view and say, “How can we actually reform the market economy to make it serve all of our citizens? How can we actually make our economy stronger and more resilient?” And here I emphasized two almost obvious things, not obvious in Washington right now, but two obvious to me. But first, there needs to be an important role for government. We turn to government for social protection. We turn to government for developing the vaccine, for providing the finance for R&D. And that’s the second big idea. The reason our standards of living are higher than they were 250 years ago, the reason that we can respond by developing the vaccine, is the advancement of science, the advancement of our social organization, our ability to work together.
And one of my concerns is that the Trump administration has been so anti-science, so anti-the bases of our democracy, with checks and balances, separation of powers. And a modern society has to rest on these pillars of science and social organization. And unfortunately, they’re being undermined. And whether you call it progressive capitalism or democratic socialism, the fact is, these are the pillars that will enable us to work together, not only to combat this pandemic, but also to combat the climate change crisis and our inequality crisis and, I think, in a broader sense, our moral crisis, that we’ve seen so evident in our drug companies taking advantage of us in the opioid crisis, the childhood diabetes crises, the oil companies polluting our atmosphere, the cigarette companies trying to encourage addiction. We have a real problem in our — not only in our economy now, but in our — I would say, in our whole social fabric. And what I try to lay out in my book is this alternative vision, which I think is attainable, for a new form, a reformed form, of economy and society.
AMY GOODMAN: Finally ask, how are you protecting yourself and your family?
JOSEPH STIGLITZ: The way we’re protecting ourselves is basically self-isolation. And what we’ve done, actually, is keep in contact with our friends all over the world, finding out what’s going on, through Skype, through Zoom. Fortunately, the advances of modern technology mean that while we’re self-isolated, we’re not isolated from what is going on in the world, so that we can actually engage in lots of discussions, finding out how other countries and other places are dealing with the crisis, and debating the question of what is the best way for America to respond to this critical test.
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Joseph Stiglitz
Nobel Prize-winning economist, Columbia University professor and chief economist for the Roosevelt Institute. He served as chair of the Council of Economic Advisers under President Bill Clinton and as chief economist of the World Bank. His latest book is People, Power and Profits: Progressive Capitalism for an Age of Discontent.
— source democracynow.org | Mar 19, 2020
Stiglitz, there is no Progressive Capitalism. What ever do eventually it become fascism in 100 year intervals.