NO ADVERTISING, GOVERNMENT OR CORPORATE FUNDING
DONATE TODAY

  $197,544


  January 3, 2013

Rich Should Be Happy with Cliff Deal


Gerald Epstein: President Obama did not have to make this deal, it's a debacle being called a win
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



You are an inspiration. Thanks for everything you are doing. - Brenton
Log in and tell us why you support TRNN


biography

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.


transcript

Rich Should Be Happy with Cliff DealPAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I'm Paul Jay in Baltimore. And we're now going to be joined by Gerry Epstein, who's codirector and cofounder of the PERI institute in Amherst, Massachusetts.

Thanks for joining us, Gerry.

GERALD EPSTEIN, CODIRECTOR, PERI: Thank you, Paul.

JAY: So the fiscal cliff deal—what do you make of it?

EPSTEIN: Well, I think it's a debacle on the part of the Obama administration and for progressives and for workers and for families. It's a real disaster. First of all, the main point, I think, is that we shouldn't be having to sit here talking about this; we should be talking about what are we going to do about the employment cliff or the climate-change cliff. But instead we're talking about this fiscal cliff, which is a manufactured crisis. But now the way it's being resolved is creating real harm.

JAY: And so in what way?

EPSTEIN: Well, first of all, as Jon Weisman pointed out in The New York Times today, the Republicans and the wealthy should be having a second New Year's celebration. That is, they're making permanent, virtually, all of the Bush-era tax cuts. They're absolving—they're eliminating taxes permanently on most estates below $5 million, and they're keeping the capital gains tax and dividend rate very low, 15 percent, for those earning less than $400,000 a year, and a modest increase up to 20 percent for more. So in a sense they've been trying the Bush-era tax cuts forever.

And for working families, either their taxes are getting raised, the increase in the payroll tax by two percentage points, which is a disaster in and of itself, and any other kind of things that they've put in the bill for working families are temporary. Either they expire after one year, or they have to be reconsidered again after five years, whereas the wealthy tax decreases are permanent.

JAY: Now, one of the things the Obama administration's pointing to as a victory is the extension of the unemployment benefits. Isn't that worth something?

EPSTEIN: Well, it's not worth the billions of dollars that they gave away to the top—almost the top 1 percent, top 2 percent of households. It's not worth, really, distorting the tax system for. Yes, there are some good things that happened, including the extension of the unemployment, the extension of some subsidies for students, and so forth.

But what Obama has done is given away all of his leverage. So now what we have is a fight that's—two fights that are going to be coming up—over the debt ceiling, and then over the budget in March. And Obama has very little leverage if he wants it, if he wants to use it.

So the Republicans are—came away with a huge victory, and then they're just going to keep coming back for more.

JAY: Now, the Obama administration, Democrats are saying, hold on, it really was our victory, 'cause we didn't give in on any of the big cuts to the social safety net or Social Security or Medicare.

EPSTEIN: Well, they haven't so far, but the Republicans are going to be coming back for more. And the major corporations that were putting pressure—. Let's face it. This was a corporate deal, a wealthy people's deal. They were putting massive pressure on the Republicans, on Boehner and the others, to cut this deal. But now they're going to shift sides and start pushing for all these entitlement cuts. So a big part of the equation that was in there fighting for some deal, the corporate interests, the business roundtable, the Chamber of Commerce, and so forth, they're going to switch sides at this point.

JAY: Yeah, 'cause they didn't want the paralysis going into the new year. On the other hand, now they want to go back to the cuts that they always wanted.

EPSTEIN: That's correct. And this deal with the increase in the payroll tax rates is going to be a drag on the economy, as Keynesian economists have been arguing for decades. Those kinds of tax increases will cut into spending much more than tax increases on the very wealthy. And some economists are estimating this will put a drag on economic growth by as much as one percentage point.

JAY: Now, President Obama is arguing he had no choice. What—do you think he had a choice?

EPSTEIN: Well, I think—yes, I think a lot of people, Jamie Galbraith and many others, Krugman, argue that they should have gone over the cliff. Then Obama would have had a lot more leverage, and he could have picked and chosen what kinds of things that he wanted to put back on the table, and including raising of the debt ceiling. And he didn't do that, and now it's not at all clear where he's going to get his leverage from. So, yes, he had a lot of choice, and he made, I think, the wrong decision.

JAY: Alright. Thanks for joining us, Gerry.

EPSTEIN: Thank you.

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

End

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



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

latest stories

Are You Watching But Not Donating?
The Crisis of the Left in Canada
The FARC Explains Why They Are Laying Down Their Arms After Decades of Struggle
South China Sea: Which Side Are You On, India?
Activists Deliver 700,000 Signatures to EpiPen Manufacturer
US Taxpayers Are Subsidizing Mylan's Profits
Time is Running Out - Help Us Expose the Koch Brothers' War on Climate Science
He Faced 26 Years in Prison, But Still Stood Up to Police Brutality
Brazil's Defiant Rousseff Takes the Stand, But Will Democracy Survive?
How Zero Tolerance Policing Destroyed Black Communities in Baltimore
The Empire Files: Chevron vs. the Amazon - Ending Corporate Tyranny
Fighting for Whose Freedom? Police Unions, Veterans, and Colin Kaepernick
Corporate Media Casts Fog Over Wikileaks to Protect Clinton
India's Achilles' Heel: Caste
Chuck D and B-Real Are Making America Rage Again
Colin Kaepernick's Protest Brings Attention to Racism in National Anthem
This Political Scientist Says You Should Vote for the 'Lying Neoliberal Warmonger'
How EU Policies Have Fueled Economic Stagnation
Max Blumenthal on Je Ne Suis Pas Charlie
Is 'Our Revolution' the Way To Build Transformative Politics?
Chinese Foreign Minister's Visit Brings No Reset of India-China Relations
Former CIA Deputy Director Publicly Advocates for Bombing Syria's Assad
Why the G20 and Other Efforts to Address Tax Havens Are Failing
Islamophobia and the Politics of Empire - Deepa Kumar on Reality Asserts Itself (3/5)
Architects and Organizers of BDS Reflect on Global Success, Fate Within Canada
Sanders Launch of 'Our Revolution' a Step Forward and a Step Backwards
Paramilitaries Pose Threat to FARC-Colombia Peace Deal
Lack of Accountability Has Made Baltimore an Overpoliced Panopticon
Standing Rock Sioux Tribe Awaits Court Ruling On Dakota Access Oil Pipeline
Turkey's Incursion into Syria Will Escalate Conflict with the Kurds

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