I support TRNN because it is the closest expression of the ideal of a free press I have seen. - Daniel
Log in and tell us why you support TRNN
Robert Pollin is professor of economics at the University of Massachusetts Amherst. He is the founding co-director 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 latest book is Back to Full Employment. Other books include A Measure of Fairness: The Economics of Living Wages and Minimum Wages in the United States and Contours of Descent: US Economic Fractures and the Landscape of Global Austerity.
PAUL JAY, SENIOR EDITOR, TRNN: Welcome back to The Real News Network. I'm Paul Jay in Baltimore. And we're continuing our discussion with Bob Pollin about his new book, Back to Full Employment. And he joins us again from Amherst, Massachusetts, where he is codirector of the PERI institute. Thanks for joining us, Bob.ROBERT POLLIN, CODIRECTOR, POLITICAL ECONOMY RESEARCH INSTITUTE: I'm glad to be on, Paul.JAY: So we're going to kind of jump to the big picture and what should be done. There's a lot more in the book breaking down many parts of the various arguments. And, you know, we'll give you a link to where you can get the book. But we're going to cut to the strategic vision.And just before we get there, although we heard some of what we're about to hear in President Obama's election campaign in 2008, we didn't see very much of it after 2008, and that was that the engine for driving a transformation of the American economy, both in terms of ending the recession and dealing with global warming and climate-change issues and such, would be to reshape the way American manufacturing works and turn it into an engine of green economy. Obviously the big opportunity for that was the essential nationalization of General Motors. But instead of giving General Motors that kind of mandate, they more or less went back to making cars as they were, but with lower wages, and maybe a little more efficiently, a little bit higher standards on carbon emissions, but not something transformative.So, Bob, in your book, you talk about what should be done and it should be something transformative. And based on our earlier conversations, you're talking about, well, what wouldâif a government came to power that actually had as an objective full employment, what would they do? And you're kind of laying out what some of those policies would look like. So, then, what does this green economy look like?POLLIN: I think that the stimulus program of 2009 that we've talked about before incorporated a green stimulus feature, a clean energy program that actually could have been transformative. It was orders of magnitude more ambitious than anything that had ever been attempted or even thought about in the U.S. It was on the order of $100Â billion to promote energy efficiency, solar energy, wind energy, geothermal energy, public transportation, and so forth. So the roadmap was there. Now, it did not get enacted in the way that I would have liked, even though, full disclosure, I was a consultant on this project, but the basic features of the model are there.And the reason why the green economy is such an outstanding model in terms of moving forward is that, in my view, it combines two things. Number one, obviously, it addresses the problem of climate change. It addresses the issue of having to dramatically reduce greenhouse gas emissions over the next 20 years. The other thing is that in the process of transforming the economy such that it relies much more heavily on efficiency and renewable energy, you also will create millions of jobs. The reason you create millions of jobs is that investing in the green economy is about three times more efficient in terms of creating jobs. It creates three times more jobs per dollar of expenditure than retaining our existing fossil fuel economy structure. Again, that is in the book. The green economy will create about 17 jobs per $1Â million of expenditure, the fossil fuel economy about five. So that'sâin my view, it's the combination of the two things, that it'll help us solve the climate change crisis and as a result will also be a major engine of job creation.JAY: Now, in the book you talk about some otherâyou know, they're not so much strategic as short-term fixes, but they lead to a strategic idea of how things might be done, and that is, you talk about canceling a certain amount of mortgage debt. I think it's especially for people whose houses are now worth less than their mortgage.POLLIN: Right.JAY: Some people have suggested canceling student debt, which between those two things would be a major stimulus. So let's talk about those first two. Certainly on the housing side the critique would be that do you then start another housing bubble.POLLIN: Well, the housing bubble was started because we had an unregulated financial market and you had, you know, hundreds of billions of dollars in Wall Street looking for a high return. If you eliminated all household mortgage debt right now, it doesn't mean that you necessarily have to create a new housing bubble. That's why when I talk about industrial policies to advance manufacturing, to advance a green economy, I see those as an alternative engine to relying on another bubble generated by Wall Street. So we could haveâwe can dramatically reduce debt. That would, of course, effectively put money back in the hands of people to spend, because then they don't have to use it to cover their debts and they can't get out of their houses, they can't move, they can't go look for a job someplace else 'cause they're stuck in their houses because their houses are worth less than their mortgages. We have to clean that up. So that's why in the book I see that as part of the solution for moving us out of the ditch, the recession ditch that we're in.JAY: And part of the argument there, I guess, would be is the banks should do this because they're the ones that created this housing market crash, not the people living in these houses, so why should the people living in these houses bear the burden of something they had no control of.POLLIN: Yeah. And on top of that, the banks were bailed out. And on top of that, the banks can borrow at zero interest rate right now. And on top of that, after they get their free money, they can be redeposit at the Fed with zero risk and earn 0.25Â percent just by doing that. So the system obviously is ridiculously rigged on behalf of Wall Street, on behalf of the banks. And, yeah, the political agenda has to be to fight against that.Having a full employment program as a positive alternative is a way to organize a lot of thinking, a lot of goals around something that will be good for people in the short and long run.JAY: Okay. Then let's then get back to the other strategic idea, which is this idea of an industrial policy. And we've talked a bit about this before, but it's worth revisiting, that there in fact is an industrial policy in the United States; it's just that it's being managed by the Pentagon. And what you're saying is there should be some thing similar, except managed by the governmentâI should say, not by the arms side of the governmentâand with the objective of employment and ordinary people's well-being.POLLIN: Yeah. Again, if you set as the overarching goal full employment at decent wages and everything that follows from that, you definitely need to incorporate industrial policies to rebuild manufacturing, to advance the green economy.And, yeah, to the argument that says, oh, you know, we're a free market economy, we don't believe in that kind of stuff, it never works, well, the answer is that it does work in the United States, it has worked in the United States. In some cases it's worked spectacularly well through the Pentagon. The Pentagon essentially created the internet through industrial policies, research, development, commercialization, incubation, all of these things that we say the U.S. shouldn't do, can't do, is antithetical to what we believe in the country. That's what created the internet in the first place. And that could certainly, for example, create a solar energy set of technologies that would make solar cost-competitive with traditional conventional energy like coal or nuclear power.JAY: Now, one thing you don't talk about in the book but we've certainly talked about beforeâbut it seems to me it's a big part of this equation on how you could get to a political alignment of forces that would come, you know, get elected, would run governments at federal and other levels. And if theyâI would have to think it's a new set of political forces that would take up the kind of policies you're talking about, but in addition to that, the issue of the banking system and who controls it, how it's regulated, but, to some extent, even more who owns it, in the sense that if you don't start challenging that tremendous concentration of political power that comes from concentrated ownership of these enormous banks, that you can't get to these other policies, that somehow you have to have a democratization of the banking sector as a piece of this puzzle.POLLIN: Right. Well, you know, we now have a new recruit supporting that position, which is Sandy Weill, who was the person that created the biggest banking behemoth as a result of deregulation, Citigroup. Just last week he decided that, well, having these gigantic megabanks is actually a bad idea and they need to get broken up. So this is becoming pretty conventional wisdom.Now, what exactly you do about it and how you do it is the huge question. Now you have Sandy Weill, you have other people like that also saying that the DoddâFrank, the regulatory laws that were passed in 2010, aren't going to be enough. They're too complicated, they're too favorable to business, and so forth. So yeah.Well, it seems to me that, you know, what we really need to do is at least start to think about part of the banking system having a public option, as you have talked about many times, competing with the private banks and serving as a utility. One of the simplest ways to do that is if you just had commercial banks that were effectively utilities, which is what they were under the old regulatory systemâthey took in deposits, they were very heavily regulated, the deposits are guaranteed, the interest rates that they could charge were limited. And so that at least is a first step in the right direction. But more generally, it's very clear that under the existing financial system, it's going to be extremely difficult to take seriously the kinds of goals I lay out in the book.JAY: So we get back to the political issue, which is there needs to be a different political alignment of forces who runs our governments if we're really going to see policies like this.POLLIN: Yup, absolutely. And that's why, you know, the aim of the book is to mobilize people that actually care about the well-being of working people, unions, people that are supportive of unions, because I think there's no way we're going to move forward unless there is an agenda that is very tied to the well-being of the overwhelming majority of the people that earn their living, that go to work every day, and their interests have to be attended to.I saw inâthere was an article in the paper yesterday where Romney is thinking about his slogan being a job for every American. Interesting. So his slogan is kind of the same as my book. Now, how he intends to get there is exactly the opposite. He's saying we need to deregulate even more, we need to give businesses lower taxes, less regulations, less union strength. So, you know, we can have a big debate as to how you get to full employment, and my alternative entails giving workers power, regulating the financial system, fighting for the green economy, and moving forward from there.JAY: Okay. Thanks for joining us, Bob.POLLIN: Thank you.JAY: And thank you for joining us on The Real News Network.
DISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.
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 firstname.lastname@example.org