NO ADVERTISING, GOVERNMENT OR CORPORATE FUNDING

  • Latest News
  • Pitch a Story
  • Work with a Journalist
  • Join the Blog Squad
  • Afghanistan
  • Africa
  • Asia
  • Baltimore
  • Canada
  • Egypt
  • Europe
  • Latin America
  • Middle East
  • Russia
  • Economy
  • Environment
  • Health Care
  • Military
  • Occupy
  • Organize This
  • Reality Asserts Itself
  • US Politics
  • The US Fiscal Deficit: Scare Stories vs Reality 2


    Pollin: It will take a powerful movement to push for better economic policy -   February 6, 2010
    Members don't see ads. If you are a member, and you're seeing this appeal, click here

    Audio

    Share to Facebook Share to Twitter



    What a hidden gem - Jack
    Log in and tell us why you support TRNN

    Bio

    Robert Pollin is Professor of Economics at the University of Massachusetts in Amherst. He is the founding codirector of the Political Economy Research Institute (PERI). His research centers on macroeconomics, conditions for low-wage workers in the US and globally, the analysis of financial markets, and the economics of building a clean-energy economy in the US. His books include A Measure of Fairness: The Economics of Living Wages and Minimum Wages in the US and Contours of Descent: US Economic Fractures and the Landscape of Global Austerity.


    Transcript

    The US Fiscal Deficit: Scare Stories vs Reality 2PAUL JAY, SENIOR EDITOR, TRNN: Welcome back to The Real News Network. I'm Paul Jay, and we're joined again by Bob Pollin. He's the cofounder of the PERI institute, which is the Political Economy Research Institute. Thanks for joining us.

    ROBERT POLLIN, CODIRECTOR, POLITICAL ECONOMY RESEARCH INSTITUTE: Glad to be here.

    JAY: I should add again you're at the University of Massachusetts in Amherst. So in your article there's a lot of big "ifs". You're saying for this stimulus to work, number one, they have to take on military spending. They have to have a real reform of the costs of the health-care system and a serious tax on Wall Street. And you also talk about taxing the rich would be a fairly quick way to deal with some of the deficit problems.

    POLLIN: Yeah.

    JAY: But I think it's pretty certain there's very little political will on the part of the Democrats and zero interest on the part of Republicans for passing any of this. So it's not being just pessimistic to say it's unlikely any of this is going to happen. Maybe, maybe some savings if they really do pull out of Iraq. I don't personally believe much is happening in Afghanistan. I mean, all that's been announced is some troops may start leaving, I think in 2011, but that doesn't mean anything unless there's some major deal with the Taliban. So let's say there's no big movements on this. So then what?

    POLLIN: An economic recovery by itself, by definition, means more revenue coming in to the government, because an economic recovery means people have jobs, it means businesses are getting money in, and property taxes are rising, so you're getting government revenue increasing. And so that in itself will make up most of the gap in the fiscal deficit, even if there are no tax increases, even if there's no cut in the military.

    JAY: Okay, another big "if": is there going to be that kind of recovery? Like, why should one believe there's going to be?

    POLLIN: Okay. Of course, nobody knows. I mean, there was a big jump in GDP this past quarter—5.7 percent—but that could stop.

    JAY: And people are suggesting that so much of that's about the stimulus.

    POLLIN: Just inventories having run down, so the businesses didn't buy any inventories, so now this last quarter they had to restock. So whether there's going to be a sustainable recovery, that's where we get back to the deficit. We do need more deficit spending to push spending into the economy to create jobs. The government has to take the lead, and that will help push the economy back into growth.

    JAY: So what did you think of Obama's State of the Union speech, what he's saying he's going to do?

    POLLIN: If you tick down all the things that he says he's going to do in terms of categories, he said a lot of the right things. And the very first thing he said: we're going to keep building the clean-energy economy. And, you know, in the interest of full disclosure, I am doing work with the Energy Department on implementing the green parts of the stimulus, and there's a lot of really interesting, exciting things there. He said we are going to provide credit for small businesses. The problem is he's talking too small. The number he said for the small businesses was $30 billion. Well, small businesses over the last quarter actually were paying down their debt. They didn't borrow at all. Meanwhile, the banks are sitting on $840 billion in cash reserves. Now, if you put, say, $700 billion of the $840 billion back into the economy, that alone would move the economy back into very healthy growth. So the question is: how do you get that money? The federal government has to use its powers, including its ownership of AIG, its ownership of Fannie Mae and Freddie Mac, to push credit into the hands of businesses and getting them to invest.

    JAY: There's something else that could drive the recovery, which is a direct jobs program, which he seems ideologically opposed to, the idea that the government should actually hire people the way that it was done in 1930s.

    POLLIN: Well, I mean, again, he did say that, in my view. There's another thing: he really emphasized investments in energy conservation. Great—it's a fabulous idea. I'm all for it. But why don't we start with the government? I mean, the government has, according to some rough calculations I did, about $400 billion worth of buildings that they own that could be retrofitted. Now, you make up the spending in three years. You get the energy savings. You make it up entirely. So over a three-year period, there's no deficit at all, because you've made up for your spending in lower energy costs. So why not start there?

    JAY: So why not? Why aren't they doing it?

    POLLIN: 'Cause it seems too bold. I mean, Obama actually even said energy conservation is sexy. He went to Home Depot and he said people should come here and start buying the caulking equipment, 'cause it's sexy, 'cause saving money is sexy. He said that. This has been his emphasis. And whether it's sexy or not, it's a really good thing to do, and it does create a lot of jobs, especially in construction, where there's two million construction workers that have been idle due to the recession.

    JAY: But instead of more stimulus, really, in the sense that the kind of money he wants to do for small business he's just going to pull out of what the banks are repaying, so it's not really kind of new stimulus money. And then, on the green program, if you take the example of high-speed trains, it sounds great, big investment in high-speed trains, but the critique of it is that it's little bits of money all over the country, 'cause it looks politically good, but no real model of how high-speed trains could actually work that could then be replicated, so you wind up with kind of something that's just good rhetoric. And I guess that's the question is what's in the state of the union, great-sounding rhetoric, when the real substance, like what's really—of the State of the Union message, what's going to be passable, easily passable in the Congress, it's going to be the freeze on spending. So you can wind up with a freeze and not a heck of a lot of stimulus, and add to that no EFCA, like, no Employee Free Trade Act, so nothing on the side that—something that might increase wages. So where do you end up with all that?

    POLLIN: What you need is a left movement to push the progressive Democrats to have some power over Obama. And it may happen, especially after the election in Massachusetts, where now the message is very clear: if the Democrats keep coming off as the weak, establishment, pro-Wall Street party, they're very likely to get wiped out in another ten months, especially if we're at 10 percent, 9 percent unemployment.

    JAY: I mean, the ball, one would think, is really to a large extent in the hands of the trade union leaders. I mean, if anyone has some leverage with this White House—there wouldn't be a President Obama if it hadn't been for the unions, but at the moment they seem still very, very reluctant to even distance themselves [inaudible]

    POLLIN: Well, Trumka did go talk to Obama, and he got that feature of the health-care bill out of that, where we're going to tax the programs that a lot of workers fought for to get, which were good health-insurance coverage, and he got that taken out. So that's one example.

    JAY: So if Obama were to ask you, "Quickly, what are the things I should do?" what would they be?

    POLLIN: I'd say, everything you said in your speech other than the freeze on spending, do it. But now let's figure out that means, yes, clean-energy investments, credit for small businesses, support for state and local governments, education, health care, public safety—all great ideas. Unemployment insurance. Excellent. Let's do all those things. But now let's get serious about how big you have to make these programs, and then where do we get the money in terms of, yes, the fiscal deficit, but to force the financial system to start lending. So they're borrowing at zero percent from the Fed, essentially, and they're just sitting on it.

    JAY: Well, we'll see whether he does any of this.

    POLLIN: Yeah.

    JAY: Thanks for joining us.

    POLLIN: Thank you.

    JAY: Thank you for joining us on The Real News Network.

    DISCLAIMER:

    Please note that TRNN transcripts are typed from a recording of the program; The Real News Network cannot guarantee complete accuracy.


    More Info


    Comments

    Our automatic spam filter blocks comments with multiple links and multiple users using the same IP address. Please make thoughtful comments with minimal links using only one user name. If you think your comment has been mistakenly removed please email us at contact@therealnews.com

    Comments


    Latest Stories


    S.A. Platinum Miner's Struggle Challenges ANC Leadership
    Manning Determined to Fight Back After Army Upholds 35-Year Sentence
    Hundredth Anniversary of the Ludlow Massacre
    The Bundy Ranch Standoff Demonstrates Values Shared by Corporations and the Far Right
    The Resegregation of American Schools
    The Modern History of Venezuela, Why Still So Much Crime? - Edgardo Lander on Reality Asserts Itself (7/9)
    What Role Has Russia Played in Eastern Ukraine?
    Can Johns Hopkins Afford to Pay A Living Wage? (2/2)
    University Sit-In Targets World's Largest Private Coal Company
    The Modern History of Venezuela and the Need for a Post-Oil Economy - Edgardo Lander on RAI (6/9)
    Can Johns Hopkins Afford to Pay A Living Wage? (1/2)
    One Percent of Environmentalists Killings Lead to Convictions
    Investigation Finds Former Ukraine President Not Responsible For Sniper Attack on Protestors
    The Modern History of Venezuela from 1973 to the Caracazo Massacre - Edgardo Lander on Reality Asserts Itself (3/9)
    Ukraine Transitional Gov't Moves Militarily To Reclaim Seized Buildings
    IPCC Report Flawed By Narrow Focus on Carbon Emissions
    The Modern History of Venezuela: The Bolivarian Revolution - Edgardo Lander on Reality Asserts Itself (5/9)
    Obama Signs Directives to Reduce the Gender Wage Gap
    Eastern Ukraine Lacks Political Representation in Kiev
    Demystifying the Role of Mitigation in the Most Recent IPCC Report
    Hypersurveillance State Won't Prevent Another Boston Marathon Bombing
    The Modern History of Venezuela from 1973 to the Caracazo Massacre - Edgardo Lander on Reality Asserts Itself (3/9)
    Univ. of Maine Faculty Reinstated After Students Protest Against Cuts
    The Modern History of Venezuela from 1908 to 1973 - Edgardo Lander on Reality Asserts Itself (2/9)
    IMF Will Address Global Inequality, Says Managing Director Christine Lagarde
    Raising Big Banks' Leverage Ratio Good, But Not Nearly Enough
    TRNN Replay: Austerity Road to 19th Century
    Has Palestinian Maneuvering Revived Peace Talks?
    Late Jackson Mayor Lumumba's Son Wins Primary to Replace His Father, Runoff Election Ahead
    Quebecers Reject PQ and Elect a Liberal Government Representing Big Business
    TRNN Debate: Decriminalization vs. Legalization
    The Beginning of the Chavez Era - Edgardo Lander on Reality Asserts Itself (4/9)
    "Off With His Head": Court Upholds Obama's Power to Kill
    Workers at Nation's Top Hospital Strike For Fair Wages
    From Exile to Radicalization in Venezuela - Edgardo Lander on Reality Asserts Itself (1/9)
    Rwanda 20 Years Later: Genocide, Western Plunder of Congo, and President Kagame
    Ukrainian Protesters in the East Demand More Autonomy From Kiev Government
    Hunger Strikers Demand President Obama Halt His Record 2 Million Deportations
    Indian Parliamentary Elections - A Primer With Vijay Prashad
    West Looks to Carve Up Ukraine & Privatize Industries Held by Kleptocrats
    Where Are Israeli-Palestinian Peace Negotiations Headed?
    The Multiple Kingdoms of Saudi Arabia (5/5)
    Do the Afghan Presidential Elections Signify Progress?
    Republican Presidential Hopefuls Pay Homage to Billionaire Casino Tycoon Sheldon Adelson
    Will Extremist Lieberman Become Israel's Next Prime Minister?
    Why do the Saudis Want the US to Attack Iran? (4/5)
    Immigrant Advocates and Families Tell President Obama 'Not One More'
    Elections, Pipelines, and Protests - The Canada Panel
    Chris Hedges on "Israel's War on American Universities"
    Baltimore Residents Decry Lack of Affordable Housing
    Yellen Talks the Talk But Will She Walk the Walk?
    Hopkins Hospital Workers Speak Out against "Poverty Wages"
    Will Venezuela's New Floating Exchange Rate Curb Inflation?
    The European Central Bank's War on Wages is Pushing Europe's Economy to the Brink
    Supreme Court Decision Opens Floodgates for More Campaign Cash
    Charles Keating, the Financier Behind the Savings and Loan Scandal, Dies at 90
    Saudi Arabia and the al-Qaeda Monster (3/5)
    Maryland Residents Voice Opposition to Natural Gas Fracking Export Facility
    Supreme Court Ruling Gives Wealthy Individuals More Influence Over Elections
    What are the Saudis Afraid Of? - Madawi Al-Rasheed (2/5)
    Baltimore's MICA Adjunct Professors Set to Vote on Unionization
    Boycott of Israel Moving to Next Level?
    Hypocrisy Dressed Up as "Realism" Justifies American Alliance with Saudi Dictatorship
    Immigration Reform in the Shadows of Cesar Chavez's Legacy
    Leaked Senate Report Shows Use of Torture As "Ineffective"
    UN Report Says Climate Change Will Threaten Food Production Worldwide
    The Hypocrisy of US Calling for Enforcement of International Law
    How the Ecuadorian Economy Grew in a Global Recession
    'Shadows of Liberty' Trailer
    Kristina Borjesson on Why CBS Shut Down Her investigation into Flight 800 (2/8)
    Glen Ford on Racism in the American Media (3/8)
    Paul Jay on What Drives Corporate Media and What Drive The Real News (4/8)
    Creating a New Media Paradigm After Citizens United (5/8)
    Should The Left Engage with the Mainstream Media? (6/8)
    What Is the Financial Backing For The Real News? (7/8)
    Standing up to Character Assassination (8/8)
    Oligarchs, Fascists and the People's Protest in Ukraine
    TRNN Debate: Is Obamacare In the Interest of Workers?
    Too-Big-To-Fail Advantage Remains Intact For Big Banks
    Obama and the Saudi Agenda
    TRNN Replay: Investigating the Saudi Government's 9/11 Connection and the Path to Disilliusionment - Sen. Graham on Reality Asserts Itself pt 1
    The Iraq War's Real Legacy
    Petitions with 100,000+ Signatures Call for Snowden's Passport to be Reinstated
    We Need to Harness People Power - Andy Shallal on Reality Asserts Itself (4/4)
    BC Pipeline Fight and Quebec Elections - The Canada Panel
    Jonathan Schell - 1943-2014: Board Member of TRNN on Why We Need The Real News
    Teachers on Strike from the UK to Argentina
    Connecticut Poised to Become First State with $10.10 Minimum Wage
    Oil Spill Threatens Wildlife and Local Economy
    DC School Test Scores Up, But Poor Black Kids Are Doing Worse - Andy Shallal on RAI (3/4)
    Obama's Proposal To End NSA Bulk Data Collection Won't Protect Privacy
    How Google, Apple & The Biggest Tech Companies Colluded to Fix Workers' Wages
    An American Should be One that Questions Their Government - Andy Shallal on RAI (2/4)
    What's Driving Putin & Obama's Posturing on Ukraine?
    Hundreds of Students & Faculty Occupy College Campus to Fight Cuts to Public Higher Ed
    Due Process 'Impossible' In Harsh Death Sentencing Of Over 500 Muslim Brotherhood Members
    Has Anglo-American Capitalism Run Out of Steam?
    Being the "Other" in America - Andy Shallal on Reality Asserts Itself (1/4)
    TRNN Debate: Should Baltimore 'Ban The Box'?
    How Fallujah Became the Iraqi Government's New Battleground
    Why I Decided to Blow the Whistle on the NSA
    NASA Climate Predictions Show Serious Threat To Humanity
    Professor Who Teaches Israel-Palestine Conflict Accuses College of Violating His Academic Freedom
    CIA and NSA Wrongdoing Requires Independent Investigation, Says Former Church Committee Staff
    Are Tuition Breaks Enough To Combat High Student Debt And Low Graduation Rates?
    Industries Across the U.S. Are Stealing Wages From Their Lowest Paid Workers
    Who In Ukraine Will Benefit From An IMF Bailout?
    NSA Recording All International Calls From U.S.
    Israel "Making Lives Miserable" for Africans, Hoping They 'Self-Deport' (2/2)
    BP Gets Green Light to Drill in Gulf, But Has Safety Improved?
    Residents Still Not Drinking Tap Water Two Months After West Virginia Spill (1/2)
    Libya's Descent Into Turmoil Three Years After NATO Intervention
    From Pipelines to Peladeau - Canadian Report
    Israel "Making Lives Miserable" for Africans, Hoping They 'Self-Deport' (1/2)
    Congressional Progressive Caucus Budget Strikes Back Against Austerity
    Libya Three Years Later - Chaos and Partition
    Why Was Gaddafi Overthrown?
    Should Ukraine and West Accept De Facto Crimea Joining Russia? (2/2)
    Tony Benn Saw Socialism as the Culmination of Democratization
    Why Didn't Bush/Cheney Attack Iran and Can Obama Make and Sell a Deal? - Gareth Porter on Reality Asserts Itself (3/3)
    After Late Mayor Lumumba is Laid to Rest, What's Next for Jackson, Mississippi? (2/2)
    Crimea Referendum: Self Determination or Big Power Manipulation? (1/2)
    Sen. Graham: President Must Side with Openness About CIA and 9/11
    Manufacturing a Narrative for War - Gareth Porter on Reality Asserts Itself (2/3)
    Protesters Hit the Streets of Brooklyn to Demand $15 Minimum Wage
    Hammer: 'Moral Bankruptcy' Behind Massive GM Recall
    White House Withholds Thousands of Documents from Senate CIA Probe
    I Grew Up Believing in Time Magazine's Version of America - Gareth Porter on RAI (1/3)
    Western European Banks Vulnerable to Ukrainian Sovereign Debt Crisis
    TRNN Debate: What's Driving Inflation in Venezuela? (2/2)
    CIA vs. Senate: Who Is Obama Protecting?
    Will Tipped Workers Get Excluded Again From Minimum Wage Hike?
    TRNN Debate: What's Driving Inflation in Venezuela? (1/2)
    After Late Mayor Lumumba is Laid to Rest, What's Next for Jackson, Mississippi?(1/2)
    TRNN Replay: A Look at Who's Poised to Become No.2 at the Fed
    How Right-Wing Nationalism Rose to Influence in Ukraine (2/2)
    Netanyahu Attacks Boycott As Campaign Enters New Phase
    Moving Towards a Police State - Michael Ratner on Reality Asserts Itself (7/7)
    Fighting Reagan's Secret, Illegal Wars - Michael Ratner on Reality Asserts Itself (6/7)
    Puerto Rican Independence Movement and Cuba Further Radicalized Me - Michael Ratner on RAI (5/7)
    The Butcher of Attica - Michael Ratner on Reality Asserts Itself (4/7)
    MLK and a Radicalizing Moment in American History - Michael Ratner on Reality Asserts Itself (3/7)

    RealNewsNetwork.com, Real News Network, Real News, Real News For Real People, IWT are trademarks and service marks of IWT.TV inc. "The Real News" is the flagship show of IWT and Real News Network.

    All original content on this site is copyright of The Real News Network.  Click here for more

    Problems with this site? Please let us know

    Linux VPS Hosting by Star Dot Hosting