• 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
  • Does Obama Economic Policy "Just Need More Time"?

    Jerry Epstein: The basic policies must change or recession and high unemployment will continue -   September 13, 12
    Members don't see ads. If you are a member, and you're seeing this appeal, click here


    Share to Facebook Share to Twitter

    You are, simply, the best! - Per Bengtsson
    Log in and tell us why you support TRNN


    Gerald Epstein is codirector of the Political Economy Research Institute (PERI) and Professor of Economics. He received his Ph.D. in economics from Princeton University. He has published widely on a variety of progressive economic policy issues, especially in the areas of central banking and international finance, and is the editor or co-editor of six volumes.


    Does Obama Economic Policy PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I'm Paul Jay in Baltimore.

    The basic message coming out of the Democratic Party convention is that President Obama is leading the country down the right path to recovery, and what he needs is more time to continue the journey, and if allowed to do so, he will solve the problems, starting with unemployment.


    BARACK OBAMA, U.S. PRESIDENT: I never said this journey would be easy, and I won't promise that now. Yes, our path is harder, but it leads to a better place.


    JAY: Well, that was Thursday night. Friday morning, jobs numbers came out, and amongst other disappointing news for the country, and I guess also for President Obama, is the following. Hourly pay fell in August, manufacturers cut the most jobs in two years, and the number of people in the workforce dropped to its lowest level in 31 years. The government also said 41,000 fewer jobs were created in July and June than had been estimated.

    So is this evidence that this path, this method is working?

    Well, now joining us to talk about all this is Gerry Epstein. Gerry is the codirector of the PERI institute in Amherst, Massachusetts. He also teaches economics there. Thanks for joining us.


    JAY: So, Gerry, what do you think? All President Obama needs is more time. In other words, the basic policy direction is correct.

    EPSTEIN: The basic policy direction has to be changed. And, look, if you look at the Democratic convention, you compare it with what we heard out of the Republican convention last week, one can say this: Obama and the Democrats are at least going in broadly the right direction, whereas Romney and the Republicans are going to take us back to the 19th century, and along the way are going to destroy the whole New Deal and all the political power gained by progressives and unions and common people since that time. But if Obama keeps doing what he has been doing, if he doesn't take some radically—radical new measures and just stays on exactly this same path, we're not going to solve this problem.

    JAY: So, I mean, his argument is is that he's going to boost American manufacturing, he's going to boost exports, and because he does all of this, it's going to lead to more job growth and a rebirth of American manufacturing. They give the—GM as the shining example: they saved the auto industry, and now they're going to save the rest of the economy. So why don't you buy that?

    EPSTEIN: Well, first of all, he didn't talk about any specific policies or tools that he would implement to actually bring that about. If you want to increase exports, that's the question of the whole global economy—first of all, a question of the whole global economy expanding. And if you see what's going on in the rest of the world—in Europe, in China, elsewhere—there's stagnation, relative stagnation and crisis for the most part. So that's not under President Obama's control, number one.

    Number two, aggregate demand, the demand for goods and services by households who are still indebted, who still don't have jobs, is dissipating. It's going down by the week. The only thing that can substitute for that is more government spending. And unless President Obama is willing to attack that, is willing to say, look, we have to expand government programs, we have to do something about the mortgage crisis and keep people in their homes and wipe away their debt, we have to have an infrastructure and a green-oriented jobs program, we're not going to get out of this crisis. The market, even with a little bit of nudge here and there, is not going to do it.

    JAY: Well, in fact, he seems—still seems wedded to what he said at the very beginning of his presidency when it came to jobs and economic crisis, which was that the recovery has to be carried out through the private sector. And there's not a single mention of a kind of public jobs program, which a lot of people have been talking about as the only way to have some immediate impact on the situation. And as we've talked about and we've talked about with Bob, your colleague there, Bob Pollin, it's not that there isn't cash out there. The banks are sitting a trillion and a half cash. The corporations are sitting on mountains of cash. But they're not going to invest it. But he doesn't talk about any of this.

    EPSTEIN: No, he doesn't. And I think he's still under the sway of advisers and business people who try to convince him, and apparently have, that the deficit is a major problem. And, in fact, in this context, that's not the major problem. So he's got to be a lot—he's got to get some backbone, as Joe Biden put it in—was it Joe Biden or [crosstalk]

    JAY: Biden said he had a spine of steel. But I guess the question is: spine of steel for whom?

    EPSTEIN: That's right. Well, he's got to get his backbone and say, look, if we want to get this economy going, we have to take some leaves out of the book of Franklin Delano Roosevelt and the New Deal, modernize them, and have some direct spending by the state and local governments to hire back teachers and hire firefighters and police officers, invest in infrastructure and green transition. The magic of the market is gone, and it's not going to come back until we get the government much more involved in these projects.

    JAY: And there's another good report from AP on what's happened with public-sector jobs. AP writes that "When you count the 7,000 public-sector jobs lost in August, governments at all levels—federal, state and local—have slashed 670,000 jobs since the recession ended in June 2009. By contrast, private companies added 3.5 million jobs. It's the first time since World War II that governments have shed jobs this deep into an economic recovery. At this point—three years and two months—into the nine previous postwar recoveries, government jobs had risen an average 8 percent"—gone up 8 percent by this time. "This time they're down 3 percent." And again, President Obama more or less buys into this need for more efficient government and all the rest. And in other words, there's support indirectly, if not directly, for the cutting of public-sector jobs.

    EPSTEIN: Well, I'm not sure he—this part of his program really supports that. But he needs to have the guts to say we have to have revenue sharing from the federal government to the states so that they can hire back these important public servants.

    But let's not forget what the republic—about what the Republicans would do if Mitt Romney is elected and takes control and the Republicans take control of the House and the Senate. They are going to slash more jobs, they're going to slash unions, they're going to make massive tax cuts to the wealthiest and do very little to create jobs for the rest of us. They've completely ignored the issue of climate change, and in fact will move in the other direction, to accelerate it.

    So, yes, I agree that Obama must get much stronger on these economic issues, indeed, much more radical. But to my way of thinking, American voters have an easy choice, but in a very difficult situation. The easy choice is: they can't vote for Romney, 'cause Romney is going to take us back and risk throwing the economy into another Great Depression. But it's a difficult situation, because unless Obama really changes his policies, the Democrats aren't going to be able to solve the problem either.

    JAY: Yeah. I guess the issue is to have eyes wide open in a lousy choice, but to have eyes wide open about—.

    EPSTEIN: Well, the issue is more than that. We the progressives have to really get more backbone also and really push hard to push Obama from the left, as we've been trying to do. But we have to redouble our efforts to do that. We know what to do economically. We have lots of programs coming out of PERI, coming out of other organizations, and we just have to keep the drumbeat going and just push as hard as we can on these.

    JAY: Well, I guess part of the issue is is that in the first two years of the Obama administration, when they actually had control and didn't have the same kind of paralysis as afterwards, there was very little. There was, you know, a big stimulus, but it was clearly understood that stimulus would only last so long. And even President Obama, once that stimulus was over, gave up on the idea of more stimulus and bought into the idea of deficit reduction.

    EPSTEIN: That's right. And what the Obama administration and the Democrats should do is just what they have been doing about so-called Obamacare. They're embracing it. If you watch the convention, they started talking about all of the important things that Obamacare can do. Now, of course, one doesn't need to necessarily agree with that. But when it comes to the stimulus program and the government expenditure and government programs to build infrastructure, etc., they have to take that on again, too, and they have to say, look, this is what we need; the Republicans have tried to destroy the possibility of doing this again; they try to block it at every turn; but we have to go back to this.

    JAY: But maybe part of the problem is that there is a sort of instinct amongst ordinary people—and I personally think it's correct—that stimulus is not enough. You know, you can—eventually, every stimulus program's going to come to an end, and if wages don't go up, if there aren't policies that actually change demand that in a way will have a long-term effect, then it's going to be right back in the same situation. And there's again—like, in the last election we heard about the Employee Free Choice Act, we heard about things would make it easier for unorganized workers to get organized. Not a word of it in this convention.

    EPSTEIN: That's right. And so we have to talk about inequality, about creating better jobs, raising wages, making it easier for unions to organize. All of these things are important. Regulate the banks and force them to make productive investments rather than speculation. We know the whole list of things that need to be done. And so unless Obama and the Democrats are willing to go there while they're moving in the right direction relative to the Republicans, they're not at all on the right path.

    JAY: Right. Thanks very much for joining us, Gerry.

    EPSTEIN: 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


    Latest Stories

    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), 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