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Are big tax cuts and a soaring stock market good for working people? Paul Jay hosts a discussion with Robert Pollin, Stephanie Kelton, and James Henry

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PAUL JAY: Hi, I’m Paul Jay and this is The Real News on President Trump’s economic message in his State of the Union address. Before we take on what President Trump said, let’s talk about the most important thing he didn’t say — and here is Bernie Sanders on that.
BERNIE SANDERS: Now I don’t understand how a president of the United States can give a State of the Union speech and not mention climate change. No, Mr. Trump. Climate change is not a hoax. It is a reality which is causing devastating harm all over our country and all over the world and you are dead wrong when you appoint administrators at the EPA and other agencies who are trying to decimate environmental protection rules and slow down the transition to sustainable energy.
PAUL JAY: The climate crisis is the existential threat, and America has elected a climate denier as president, and the cooperate media is almost silent about it. All right, now let’s talk about what Trump did say. Tax cuts, a booming stock market, infrastructure program, America First trade agreements, President Trump says all these leads to economic growth. Will historic highs in the stock market and more wealth in the pockets of the investor class as they sometimes like to be called, lead to more investment in the real economy or just more speculation and casino capitalism. Is President Trump delivering on his promise to the working class of more jobs and higher wages? Well here is what the president said in his State of the Union speech on the economy.
DONALD TRUMP: Since the election, we have created 2.4 million new jobs including 200,000 new jobs in manufacturing alone, tremendous moments. After years and years of wage stagnation, we’re finally seeing rising wages. Unemployment claims have hit a 45-year low. It’s something I’m very proud of. African American unemployment stands at the lowest rate ever recorded. And Hispanic American unemployment has also reached the lowest levels in history. Small business confidence is at an all-time high, the stock market has smashed one record after another, gaining $8 trillion and more in value in just this short period of time. The great news for Americans; 401(k), retirement, pension, and college savings accounts have gone through the roof. And just as I promised the American people from this podium 11 months ago, we enacted –
PAUL JAY: All right here is a clip from Senator Bernie Sanders responding to President Trump.
BERNIE SANDERS: President Trump talked tonight about the strength of our economy. Well on that point, he’s right. Official unemployment is 4.1% which is the lowest it has been in years and the stock market in recent months has soared. That’s the good news. But what President Trump failed to mention is that his first year in office marked the lowest level of job creation since 2010. In fact, according to the bureau of labor statistics, 254,000 fewer jobs were created in Trump’s first 11 months in office than were created in 11 months before he entered office. Further, when we talk about the economy, what’s most important is to understand what is happening to the average worker. And here’s the story that Trump failed to mention tonight.
Over the last year after adjusting for inflation, the average worker in America saw a wage increase of — are you ready for this? — four cents an hour, or 0.17% or to put it in a different way, that worker received a raise of a little more than a dollar 60 a week. And as is often the case, that tiny wage increase disappeared as a result of soaring healthcare costs. Meanwhile, at a time of massive wealth and income inequality, the rich continue to get much richer while millions of American workers are working two or three jobs just to keep their heads above water. Since March of last year, the three richest people in America saw their wealth increase by more than $68 billion. Three people, a $68 billion increase in wealth. Meanwhile, the average worker saw an increase of 4 cents an hour. Tonight-
PAUL JAY: Now joining us to discuss … President Trump’s State of the Union first of all is Stephanie Kelton. She is a professor of Public Policy and Economics at Stony Brook University. She is also the former chief economist on the U.S. Senate Budget Committee and economic advisor to the Bernie 2016 Presidential campaign. She joins us from Setauket, New York. Also joining us is James Henry. James is an investigative economist, a lawyer, a global justice fellow at Yale University and a senior advisor at the Tax Justice Network. And joining us is Robert Pollin. He’s a distinguished professor of economics and co-director of the Political Economy and Research Institute at the University of Massachusetts Amherst. Thank you all for joining us.
ROBERT POLLIN: Thank you for having me Paul.
PAUL JAY: Bob, first question to you. The most visible sign of what Trump calls “great progress” is the historic rise of the stock market, even though there was a 400-point drop just before the State of the Union speech, the Dow [Jones Industrial Average] is up more than 8,000 points since Trump was elected in 2016. The Dow closed at a record high more frequently in 2017 than in any other year in its history, breaking the mark of 69 record-high set in 1995. So is a booming stock market good for workers? Is it a sign that Trump policies are working?
ROBERT POLLIN: Well first of all we have to understand that yes, the stock market is at a historic high. And the other part of that is the critical thing. The critical measure is what we call the earnings to price ratio. That is, how much have prices in the stock market gone up relative to the underlying profitability affirmed. The underlying price to earnings ratio is also at a historic high. It’s at a higher point now than it was in 1929 right before the historic stock market crush. It’s at a higher point now than it was in 2007 before the –
PAUL JAY: Bob explain just a little bit more what this ratio is and why it matters.
ROBERT POLLIN: The ratio is the stock price, which is what you quoted before — the Dow Jones or the Standard and Poor — relative to the profits of the firm. So for example, the average historic ratio is … would yield an average return for stocks at about 6%. So you would buy a stock and you expect a 6% return. Right now, if you buy a stock at today’s average price, you get about a 2.2% return. What that tells us is that the only way people are going to make any money in the stock market now is if the price keeps going up in a speculative way, because the underlying profitability is not there. Or — and this is even implausible — through more tax cuts for the rich and squeezing the working class more, the companies somehow get more profits and they raise that ratio from an average 2.2% return to something closer to the historic return.
So basically the stock market now reflects two things. It reflects the rise of inequality and it reflects a speculative bubble. I don’t know when the bubble is going to burst, but the stock market is on a completely unsustainable trajectory. We have not repealed the laws of economics that have been going on for hundreds of years. This stock market will not be sustained, and when stock price collapses, then we will see how sustainable the Trump policies are.
PAUL JAY: James, the rise in the markets — does it have anything to do with reflecting real growth in the economy? Or is this just a lot of capital with nowhere else to go, so it goes into the market and it keeps going up because people just keep guessing it’s going to keep going up and they keep pouring money into it?
JAMES HENRY: Well, I think a substantial amount of the increase in the market has been the expectation about the dramatic cut in corporate taxes, especially for the largest multinationals like Apple and Google and Pfizer. They’ve been given not just a payday but the largest tax cut in history and more than 83% of this goes to the top 1% when you run the numbers. In fact, it’s even worse than that. These giant companies had about $2.6 trillion offshore. I just published an article this week in the American Interest showing why the effective tax rate on that offshore wealth is about zero, once you take into account the long installment plan they have.
So it’s no accident that these companies in particular have experienced 50% rise in stock prices over the last year. Apple’s up by about 60% since the Trump election. But I don’t think that’s going to continue, and the issue is now I think the market is getting very —
Paul jay: But hang on a second. Why is Apple up 60%? Netflix is up those kinds of numbers, Amazon is close. I mean it was only a few months ago you could buy six, seven months ago I think you could buy Apple at about $98.
JAMES HENRY: Yeah it’s now 170, 66 as of today. So it’s a substantial appreciation. Well I think there’s a number of factors and Apple’s a successful company, technology company, but basically they have about 67% of their revenues now are offshore and the current, and the tax bill that was just passed by the Trump administration effectively abolished taxation for the offshore income from U.S. companies. That’s a gigantic windfall profit to Apple going forward. Furthermore they’ve got a … as I just said, essentially a zero tax repatriation tax on the $2.6 trillion offshore. Apple has about $252 billion offshore and it’s able to basically do whatever it likes. It could actually leave the money offshore. It doesn’t have to invest it, it doesn’t have to actually bring it back to the United States, all it has to do is pay the repatriation tax. And that is given that they have eight years to pay it at a very … and no interest charged to them on the tax.
I mean that’s a great deal that most American taxpayers would love to have, to have eight years to pay your tax bill. So all in all, I think the stock market to a great extent you see the large cap stocks. Not only Apple, with Wal-Mart and Pfizer and General Electric that have taken advantage of this sort of offshoring of profits in the first place are now the ones with the strongest price rises.
That’s I think a substantial contributor to the gap that we’re seeing between the U.S. economy in general and the stock market. Growth has been basically stable at around two 2 to 2.5%. Europe has recovered and China is strong. I don’t think Trump wants to take credit for the European economy or for China’s economy, but basically U.S. growth was recovering from the recession and has recovered nicely and we’re happy for that.
But the issue is going forward, a lot of people are saying this really is at the top of a cycle. So it’s not likely to continue. The stock market is maybe ahead of itself.
PAUL JAY: Stephanie, from the old movie Greed is Good, Trump’s essentially, I think, trumpeting the success of the stock market and some of the other kinds of things that are going on with Apple and otherwise. Part of his speech was talking about Apple reinvesting so many billions in America and all that, but it seems to be a part of his message is bubbles are good and none of this matters, all this economic activity is good for working people and wages are going up and takes credit for all this. Is this rise in the stock market and all this wealth that seems to be pouring around some people, is that good for everybody?
JAMES HENRY: On the Apple — $350 billion, this is a classic case of Trump’s overstatement almost being out of touch with reality. I mean, the actual investment that Apple’s talking about making over the next five years in their recent press release was $30 billion. The $350 billion was a figure for their purchases from U.S. suppliers, it has nothing to do with investment. And furthermore the $30 billion is going to under the new tax bill going to be 100% depreciable. They could write it off against their income, so they’ll end up cutting their domestic income tax to the bone. That’s another reason the stock price is rising. It’s all taxation, it isn’t substantive sustainable economic growth.
PAUL JAY: So let me ask you that question. I mean is the bubble good for people? The markets are roaring, the rich are getting richer and that seems to be Trump’s message, it’s an old trickle down message I guess. But this is going to lead to higher wages and more jobs?
ROBERT POLLIN: Well we actually haven’t seen that and keep in mind that the stock market going up has been going up now for several years, it’s reached a new peak. But what I was saying before is that the evidence is there’s only two things that can sustain the stock market at this point. One, is further speculation which will end badly, and the other is further redistribution such as what we were just talking with respect to taxation. So we have to keep squeezing more to get some profitability to sustain the stock market. As I said, at present the average stock is generating relative to the price that you purchase, your average return today is 2.2% and that is about a third of the six percent historic average, so —
PAUL JAY: Bob that’s if you buy it today but if you bought it six, eight months ago, you’ve got a windfall, a year ago.
ROBERT POLLIN: Right, so the point is, is the number going to be sustainable? How many people want to buy stocks and get a 2.2% return? The only thing that could give you a better return is if the price keeps going up and you don’t have to count on the profitability of the company, you count on the fact that other people are going to buy the stock to get the price going, that’s a classic bubble. The bubble is going to burst. In terms of the working people, what we have seen as Bernie Sanders said, our real wages did rise for the non-supervisory workers this past year by four cents an hour. And this is after nine years of recovery. We are at the end of the site, we have not repealed the business cycle. We are at the end of a business cycle, there’s been effectively no real wage gains over the course of this recovery, and the recovery is going to end.
So that’s why what we have really built in with Trump is a machine for continuing redistributing income upward and basically taking money out of the working class through continued wage stagnation, plus redistribution through the tax system. Because as Bernie Sanders also said, what is going to happen with taxation is the … most households are going to see over the next 10 years, they’re going to see their taxes go up, not go down. Whereas the top 1% are going to see massive windfall tax gains.
PAUL JAY: So to pick up on that question — wages have gone up some, not very much. But Trump claims they’re going to go up because of his trade policies. He’s going to have America first trade policies, and so on. Are Trump’s policies going to lead higher wages and more jobs?
STEPHANIE KELTON: Well, that’s the $64 million question. I’ve been going around the country a lot in the last year giving a talk broadly to do with Trumponomics and asking this very question. Can Trumponomics extend the recovery? Is this economic program likely to deliver on the sorts of promises that President Trump has made to the American people, communities in the Rust Belt, those who’ve been struggling, “Help is on the way,” this is what he told workers. We’ve been talking about this four-cent-an-hour pay increase that workers have enjoyed over the course of the last year, that’s obviously going to do a lot to boost the incomes of people who are struggling and who helped to put Donald Trump in the White House. But, look I think one of the things that’s being underplayed, to some extent anyway, is the impact, the potential impact of these tax cuts.
If you look at the analysis that was done by the Joint Committee on Taxation, which is one of Washington’s score-keeping groups that looked at Trump tax cut proposal, they said everybody across the income distribution, every decile that we look at, is going to see, on average, some increase in their take-home pay as a result of the Trump tax cuts. So whether you’re in a bottom 10% or the top 10%, you’re likely to feel somewhat better as a result of the tax cuts.
Now, we know that the cuts are skewed overwhelming towards those at the very top, more than 80% of the benefits go to people in top 1%. But that doesn’t mean that people in the bottom 10 and 20 and 30 percentiles aren’t going to feel a little bit better. And what concerns me, I think, is that Democrats are underestimating the extent to which people who for the last eight years didn’t feel much in terms of the recovery at all, are going to get some small benefit — however, you know, unequal in terms of the way it’s distributed, and they’re going to feel a little bit better.
I think the big question is what happens in terms of business investment, that’s where we have not seen what we need to see, to generate the kind of job growth and wage pressure and so forth. I don’t think that what Trump has done with the tax cuts, with repatriation, with the cooperate income tax, I think it’s pretty obvious to most economists that what we’re going to see are businesses ploughing those profits back into, share buy backs, mergers and acquisition, they’re going to pay dividends, they’re going to do the kind of things that boost the stock markets. So those three people the Bernie Sanders talked about, who saw their wealth increased by $68 billion, so they are going to feel a lot better.
But broadly speaking, I don’t think this is an economic program that’s designed to do much for the middle class and those at the bottom, and I don’t think is going to deliver in the sense that Donald Trump promised.
PAUL JAY: Well, Bob, the second act of all of this being predictive, I think it’s pretty obvious, is how they’re going to pay for this tax cut? And it seems to be they’re going to next go after Social Security, other parts of the social safety net, even though Trump promised he wouldn’t go after Social Security. But that’s certainly one of the dream objectives of the Republicans, to privatize it, and go after Medicare and such. So there may be a bit of a tax decrease for ordinary people for a little while, but they’re going to fail in other places.
ROBERT POLLIN: That’s right. So, the tax cuts to the extent they’re generating more take-home pay. That also means there is less revenue coming into the government. And so, where do we get the adjustments to cover the loss of revenue? And I think Trump has been pretty vague on it, but I think Paul Ryan and the Republicans in Congress have been much more clear that they want to attack social welfare spending.
You know, there’s really only a couple big pots of social welfare spending, one of them is Medicare/Medicaid and the other one is Social Security. Now, Trump is being punitive and also saying that they are talking about cutting for example, emergency food support, home heating support, those things will almost certainly be cut, but they don’t really generate big savings. So, really the solution is that they’re going to — the solution as the Republicans as you said, Paul, have been talking about for a long, long time — is to attack healthcare spending and secondarily Social Security. That’s really what’s coming, and Trump has prepared that through, including tonight, talking about, you know, “We’re repealing Obamacare. So we’ve repealed the mandate for health insurance.” Well, people stood up and cheered, and what that really meant is that there now millions more people that don’t have health insurance. I don’t see that as a big achievement.
The next thing we are going to do is we’re going to cut support for people who get healthcare through Medicare and Medicaid. The alternative of course is to start seriously talking about Medicare For All.
PAUL JAY: James, the infrastructure plan, on the face of it, a lot of people have called for an infrastructure plan. Sanders, many progressive economists have called for a big infrastructure plan. So what do you make of Trump’s infrastructure plan?
JAMES HENRY: Well the version that he has adopted here really owes its original design to a guy named Mussolini. If you read the April 1935 edition of Foreign Affairs Magazine, there’s a great article called “12 Years of Fascist Finance,” in which an Italian economist, Salvemini, goes into the mysteries of how Mussolini was able to put together a public-private infrastructure financing program that avoided expanding public spending and basically helped to build roads and infrastructure in Italy. But it was all kind of smoke and mirrors.
I think what we’ve seen from the UK which has adopted a similar kind of public finance initiative in the last six or so years under the Cameron and then the Conservative government, now May, has had a series of disastrous programs involving just the most egregious kind of gouging in which the public sector basically gives up its role of financing infrastructure development and turns it over to extremely lucrative private enterprise ventures that are aimed at profiting from the building of new infrastructure; schools, hospitals. And, there’s no question that there’s a crying need for that, but the rate of return on public investment is so high and relatives are cost to capital, it makes more sense for us to actually either tax people to — especially the rich — to make these investments or to borrow against the future and from these investments. The rate of return on public infrastructure is very high.
But I’m concerned as well with the fact that the Trump plan basically — in addition to enriching the private sector — is going to be distorting our public infrastructure. He’s not talking about building fast trains, he’s not talking about investing in solar energy plants or migration of climate change to take care of the environment. He’s certainly not talking about investing in any kind of public schools and hospitals. This is a guy who really is still wedded to the idea of roads and bridges and fossil fuel oriented infrastructure. So that’s a major distortion.
PAUL JAY: Right. Stephanie, if the infrastructure plan Trump envisions and frankly I think to a large extent it wasn’t so different from what President Obama envisioned, which is this private-public partnership and a lot of private role in it. If it’s going to be a public infrastructure plan, how does it get financed?
STEPHANIE KELTON: Well, that would be up to Congress. I was there in 2015. You mentioned Senator Sanders infrastructure legislation, he had a proposal for a trillion dollars of infrastructure investment at that time. If I recall correctly, the so-called “paid for” was closing tax loopholes and that kind of stuff. You know, it will be up to this Republican controlled Congress to figure out what to put forward if they were to put forward something more traditional that-
PAUL JAY: What I’m asking you is not what the Republicans might do, but what might an alternative be?
STEPHANIE KELTON: Oh well, would be for the federal government to fund investments in public infrastructure. And whether they do it through offsets that involve cuts to other parts of the budget, or whether they say that there’s going to be some sort of earmark … sorry about that … that there’s going to be some new taxes part of it, but they don’t have to do any of that. They can just put forward a clean bill, they can do this, they can vote on it. Are they likely to do that? Probably not. But does Congress have the ability to put forward an ambitious infrastructure investment program that isn’t fully paid for that adds to the deficit? Sure they could.
PAUL JAY: Bob, and we have a question from Facebook from Aiden Malooney. He says, “Bernie Sanders mentioned nothing about the military industrial complex and the perpetual war economy. I mean, doesn’t that have to be a major theme of an alternative budget, if you will, that instead of massive increases on the military side, wouldn’t one want to see massive decreases which would pay for a lot of this infrastructure and social safety net and stuff?”
ROBERT POLLIN: Yeah, that’s a great point and I’m glad … I forgot his name, but he brought it up on Facebook. Yeah so what Trump is … You know there’s really three big parts, as I said before. Healthcare is one big part, Social Security is another big part and the third big part is the military. And Trump is insisting on increasing the military, so the military budget is going up. It’s starting to get in the range of $700 billion. And so there are huge areas of cuts. And just to mention one and to slightly veer in that direction, I really strongly recommend the very important new book by Daniel Ellsberg about the “Doomsday Machine,” about our nuclear industrial complex and how extremely large it is and extremely dangerous it is. It increased under President Obama and that is an obvious place for tens of billions of dollars in cuts as the first place to cut within the military.
PAUL JAY: And in the speech tonight, Trump specifically mentioned an increase in spending on the nuclear arsenal.
ROBERT POLLIN: Yeah, that’s disastrous. Everybody should read Ellsberg’s book and beyond in describing just how dangerous … I myself only vaguely understood this, so for example the scare that happened a couple weeks ago in Hawaii, those kinds of things can set off something and as long as Trump is taunting North Korea, these can set off a nuclear war and they are … our military, it turns out, has a tremendous amount of discretion in moving forward and utilizing nuclear weapons that could lead to total disasters. And so that’s a first place that we need to start cutting dramatically and eliminating nuclear weapons altogether.
PAUL JAY: And in fact the direction that Trump administration is going is the opposite. The new national security strategy is to position national security as getting ready for war with Russia and China. And I was just reading in one of the defense magazine the very detailed planning that’s going on in being prepared for an air and marine war with China and a ground and air war with Russia. And the question being raised is can the United States fight China, Russia, Iran and North Korea all at the same time? And planning needs to be made for that, which really means spending even way more on the military. I don’t think they really intend on doing any of this, but if they’re going to prepare for it, the amount of money they’re going to spend on it is crazy.
JAMES HENRY: Yeah, the war preparations are there and even if every single same person tells you, “Of course we’re never going to do it,” there are so many opportunities for things to go wrong and for miscommunications, and to set off some kind of nuclear accident. That, yes, focusing on eliminating nuclear capacity in the United States in total nuclear disarmament needs to be an issue around security, ethics and as well as the economics and budget.
PAUL JAY: Okay, just one more main topic. I mean there is a lot of stuff in this speech, we can’t do it all tonight. But let’s look at a clip from Trump on immigration. He spoke quite a bit about immigration. Mostly, he created a fear factor of immigrants who were coming in and killing people. And he had families up in the audience there who had lost their children, and linking the fear of the gangs. And then slipping in that, the issue of how immigrants are lowering wages and taking away people’s job. Here is a small clip.
DONALD TRUMP: Struggling communities, especially immigrant communities, will also be helped by immigration policies that focus on the best interests of American workers and American families. For decades, open borders have allowed drugs and gangs to pour into our most vulnerable communities. They have allowed millions of low-wage workers to compete for jobs and wages against the poorest Americans.
PAUL JAY: Stephanie, immigrants competing for against the poorest Americans and lowering wages and taking away jobs. What do you make of that as a contention?
STEPHANIE KELTON: Well, it’s completely in contrast to what the research shows, which is, the research suggests that adding immigrants and including immigrants and providing job opportunities for immigrants does not actually depress wages for American workers. So he’s making an argument that’s perfectly consistent with Donald Trump’s world vision and his views regarding the need to shut borders and limit immigration, but it’s exactly inconsistent with what the research actually shows.
PAUL JAY: What does the research shows on this? Because it’s seems logical that if people are coming and are not in the United States legally or willing to work for less than minimum wage that this would create a down work pressure on wages. In what way does the research show that that’s not the case?
ROBERT POLLIN: Do you want me to try, Paul, on that? Here is what we know and we can look at some simple examples. I think the best model of research on this was done to compare cities that have a high proportion of immigrants relative to cities that don’t. And that was done by David Card at University of California, Berkeley. I myself replicated Card’s work during the great recession.
So here is what we find, so if you compare, say, Miami, LA and New York which have very high proportion of immigrant workers, and look at the wages of low-wage workers who are natives in those cities, and compare them with cities that do not have a high proportion of low wage workers, such as Atlanta and Philadelphia, what is the difference in the wages for the native workers? And the answer is there is no difference.
And the reason is, there’s two basic reasons: the low-wage workers do not just come and take jobs. Low-wage workers actually also contribute to the economy. They buy things. They open up their own businesses. So they’re matching their supply of employment with spending and that’s why you see a vibrant immigrant community in a place like LA or Miami, and you don’t see depression for the low-wage workers in native workers in those cities.
And the second thing is once you have a vibrant immigrant community in those big cities, what you then see is more investment by immigrant families coming into those cities. So the facts are simply exactly the opposite of what Trump is talking about.
PAUL JAY: James, you had an example?
JAMES HENRY: Well in case of Haiti and Central America, I mean the expulsion of Haitians who for the most part were employed in very productive jobs, is certainly not going to help 57,000 that are now being turned back to Haiti. They also have 25,000 U.S.-born children who will have to stay here or face the prospects of going back to Haiti. They’ve been sending remittances back to Haiti to support their families.
And the kinds of jobs that they’re willing to do, many of them are in Florida where I’ve been recently studying the community, are simply not jobs that ordinary Americans are interested in doing. They’re lower wage jobs. There’s no displacement that’s shown up for this category of people. So the idea that throwing them out of the country is suddenly going to empower American workers is just crazy. It’s going to actually create a huge burden on American tax payers who will have to support these 25,000 kids if they decide to stay here, and it’s certainly going to hurt the Haitian economy, which is still struggling.
So that’s just a very concrete example and we could extend that to El Salvador where there’s 200,000 people who have been thrown out, it would certainly be applicable to many of the DREAMers who will be expelled, the 670,000. So the hard edge of Trump’s immigration policy when it comes to expelling people is going to do nothing really for American workers. It’s just going to be consistent with what Stephanie was saying, sort of a self-blinding on the part of American citizens, I think.
PAUL JAY: Stephanie, final question. President Trump has surrounded himself and his cabinet with billionaires. He’s a billionaire. In spite of all his claims, he’s clearly part of the billionaire class, as Sanders uses the term. How on earth is he going to have policies that want to raise wages when that’s going to come right out of the pockets, profits, of him and his friends?
STEPHANIE KELTON: Well, I don’t know. I think it’s a good question. But I do think that part of him understands, and I think that he knows that he needs to deliver something tangible in order to be able to circle back in 2019 and point to this and say, “You see what I did for you. You see what I did for you.”
So there’s this tension between how much of any additional profits from a growing economy, suppose we get there, how much of the additional profits is he willing to sort of allow to shift back in favor of workers, so that we start rebalancing the distribution of income back a bit … I can’t say in favor of workers, but that we at least begin to remind ourselves that everything can’t go to the capitalist class. Everything can’t go to the billionaires.
So it’s a tension that I think we’re gonna watch this play out and these guys have got to recognize that they simply can’t take it all, as Bernie Sanders likes to say.
PAUL JAY: All right Stephanie, Robert, James. Thanks so much for joining us. We’ll dig all into this a lot more deeply. Thank you for joining us.
JAMES HENRY: Thank you.
STEPHANIE KELTON: Thanks, thanks Paul.
PAUL JAY: And thank you for joining us on the Real News Network and don’t forget in a couple of hours, depending where you’re watching this, there will be another panel. Sharmini Peries will be taking on Trump’s forum policy with guests Max Blumenthal, Norman Solomon, and Phyllis Bennis. Thanks for joining us on The Real News Network.

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Robert Pollin is Professor of Economics at the University of Massachusetts in 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.

Stephanie Kelton, Ph.D. is Associate Professor and Chair of the Department of Economics at the University of Missouri-Kansas City. She is also Editor-in-Chief of the top-ranked blog New Economic Perspectives and a member of the TopWonks network of the nation’s best thinkers. Her book, The State, The Market and The Euro (2001) predicted the debt crisis in the Eurozone, and her subsequent work correctly predicted that: (1) Quantitative Easing (QE) wouldn’t lead to high inflation; (2) government deficits wouldn’t cause a spike in U.S. interest rates; (3) the S&P downgrade wouldn’t cause investors to flee Treasuries; (4) the U.S. would not experience a European-style debt crisis. Follow her at

James S. Henry is an investigative economist and lawyer, a Global Justice Fellow at Yale University, and a Senior Advisor at the Tax Justice Network. Previously, James served as Chief Economist at the international consultancy firm McKinsey & Co. As an investigative journalist his work has appeared in numerous publications like Forbes, The Nation and The New York Times.