March 29, 2020
What Will Cause The Next Recession – Joseph Stiglitz On Trump’s Protectionism

What Will Cause The Next Recession – Joseph Stiglitz On Trump’s Protectionism


There are several problems
facing the global economy. I think it’s fairly clear that there
is going to be a gross slowdown that the economy was given what is
now generally called a sugar high by the combination of a tax reform
bill in December of 2017 and then the expenditure increases in January
2018 creating a very large increase in the deficit when the
deficit was already very large and that provided some short term
stimulus to the economy. It was not well-designed and the
money didn’t go into long term investment it went
into share buybacks. The result of all that is
it didn’t provide the foundations of sustainable growth. There are several problems
facing the global economy. Europe. remains very weak. Part of the reason has to do
with some fundamental flaws in the euro. Their political problems. Italy has not had growth and the
euro doesn’t have — give it a framework within which
to restore growth. So you’re really having
near stagnation in Europe. Meanwhile China is
also having problems. What I describe what’s going on
is that they alternate putting their foot on the accelerator and then on
the brake because the only way they goose their economy
is through debt. I don’t see the basis
of stable growth in China. The third obvious concern is
Trump’s protectionism and we’re talking about China. We’re talking about a trade
war with Europe over automobiles. We’re talking about sort of the global
rules based system which he has systematically attacked. The WTO this year will wind
up without having an effective appellate body because the United States refuses
to allow new judges to be elected. So the WTO which was the
basis of the rules based global system is is going
to be facing difficulties. So all these are significant
headwinds confronting the global economy and we’re part of
the global economy. So we will feel some of the
bumps that we ourselves have created. Many of us who were critics of
the WTO and I think correctly didn’t really appreciate the virtues of the
WTO until we actually confronted the reality of a
world without rules. You can’t imagine how any
economy American economy could operate without the rule of law it’s sort
a the foundation of our economy of our society. We talked about the
rule all the time. The same thing
actually applies internationally. You need a rule of law. It’s much more bare bones rule of
law and that’s what the WTO provided. Some of the rules
were not well designed. There were rules that were written
by the advanced countries for their corporate interests. And that’s really been my. complaint. that to to a large
extent the rules were dictated by American and European corporations. For instance access to drugs. They made it more difficult to
get access to lifesaving drugs drove the prices of drugs up and it
seemed so unfair that we had an international regime which allowed
the advanced countries to subsidize their agriculture
goods like cotton. Billions of dollars going to a
few thousand maybe twenty five thousand rich American cotton farmers
putting deeper into poverty tens of millions of people in Africa to
India and to me I found that abhorrent. And so that’s
what I criticized. Manufacturing is not going to come
back to the United States. We’re not going to recreate the golden
era of capitalism the 1950s or 60s. Even if China didn’t export
as much manufacturers goods to us we’re not going to make mostly
apparel in the United States. We’re going to be importing it from
Vietnam or Bangladesh and to the extent that manufacturing goes back
the United States would process which is called on-shoring. It’s going to be robots. It’s not going to be jobs in
the Midwest isn’t jobs in South Carolina. So in the end for all
the rhetoric Trump is not delivering . Manufacturing jobs have come back
a little bit as our economy recovers from that long
and great recession. Some of those jobs are coming back
and I think there’s more that we can do to bring them back. But the basis of that is going
to be research is going to be strengthening our universities. But these are the things that
Trump is trying to undermine. He’s trying to defund research to
defund the policies that actually bring those jobs back in a sustainable
way and make sure that the industrial jobs that are brought
back are really good jobs. What Trump did was to recognize that
we have not managed the process of structural transformation
of our economy. We were going from a manufacturing
economy into a service economy into an innovation economy and
the process of deindustrialization associated both with globalization and
with technological change is a difficult process and we left a lot
of people without help to move into the new economy. You see it in so many dimensions. We didn’t give them the education
that they needed but Trump University is not the kind
of education they need. They need real education and we’ve been
cutting back on the kinds of real education they need. So while he grass you might say
that the despair you grasp the concerns he’s a populist in the
sense there are no real solutions that he’s offering and
actually made things worse. I’m not a big UBI person. I understand that there are some
advantages to providing a single program guaranteeing a basic income to
everybody but to me the basic responsibility of our society of our
government is to make sure that there’s a job for everybody who’s
able and willing to work. And if we had a job with decent
pay for everybody able and willing to work then the concerns about
UBI wouldn’t be there. We will still need of course
to have social protection systems for the disabled for you know a whole
set of people who can’t work but that should be the core of a
program that provides a system of social protection for our society. It’s especially important for two reasons I
think and I may be a little old fashioned on this. I think there’s a certain dignity
from work younger students say oh there can be a lot of dignity
from meditation and from other ways of spending time. But I think for most people there will
be a real desire to work and this will be a
big challenge going forward. We don’t know exactly when driverless
cars and trucks are going to arrive. We know that even high
tech jobs like radiologists are not immune. Computerized radiology is actually
better than most humans. So there’s a lot of areas where
machines in one way or another will be not only stronger can do
data processing faster but actually can learn in certain limited domains and
even be creative in certain ways. So this is going to be one of
the big challenges of the next quarter century. I titled my book
people power and profits. It was trying to say the only
balance is going to be mass movements people engaged in politics because in the
end the way our economy and the way our society functions is
determined by rules that are set publicly. There is a real concern
that the problems of inequality that I’ve been so concerned with for
so long will be getting worse. And part of the reason
is the problems of unemployment that it could give rise to but also
part of it is the ability of A.I. in the new technologies to
be more efficient in exploitation. They can target prices at
exactly what each person pays. It actually undermines the basis of
a market economy as we’ve known it in the past a price
system where your standard courses in economics. It’s about how prices make
sure that the marginal benefit of a good is the
same for all individuals. The marginal cost is the same in
all uses of production but with the new technologies everybody’s paying
a different price. Every firm is paying a different
price and it actually undermines the efficiency of the market economy and
it takes we call economist called producer surplus surplus from individuals
and adds it to the profits of some of the
wealthiest people in the country. Over the last 40 years
corporate power profits have been driving the rules. We’ve become a more corrupt politics
more money driven politics and we’ve lost the balance
in our politics. Not surprising given that we’ve lost
the balance in our politics we’ve lost the balance
in our economics. There’s been an erosion or evisceration
of worker power over the last 50 years. We have to get the
rules of globalization right. They’ve contributed to the weakening
of worker bargaining power. We have problems in our corporate
governance where CEOs are taking a larger and larger share of the
corporate pie and dancing themselves at the expense of their
workers and of investment. And that’s one of the reasons why
investment rate is so low and our overall growth rate is so low. Now when it comes to
the particular problem of innovation. I think we have to realize at
the core of our innovation system is government funded basic research
and government funded education programs. And those are absolutely
essential for making a dynamic economy. The irony is that while the
basis of all the innovation our economy is government funded. too little of the proceeds
go back to the public. So there has to be a better
sharing of the proceeds of the innovation and that may be done through
taxation and may be done through adjustment of our
intellectual property regime. There are many ways to do it. It may turn out to to
vary across industry and over time. But what is very clear is there
has to be a better system of sharing of these proceeds. I’ve been a great advocate of
moving to an electronic payments mechanism. There are a
lot of efficiencies. I think we can actually have a
better regulated economy if we add all the data in real time
knowing what people are spending. It would enable the Federal Reserve
to actually set interest rates in a much more efficient way. We would have I
think better macroeconomic management. It also would curb some of
the illicit economic activities and it disturbs me a great deal. The attention that was
given to crypto currencies. because those were moving things off
of a transparent platform into a dark platform. We know about the role of
real estate and money laundering. We know from the paradise papers and
the Panama Papers the extent of this money laundering. We know from research in recent
years for instance the work of Gabriel Zucman the large percentage of
global wealth that is held in these dark havens. So if we want a more
efficient economy without these illicit activities I think we’re going to have
to move to more of an electronic payments mechanism and we will have
to figure a way out to have the transparency of electronic
payments mechanism without the dangers of the surveillance
and the surveillance state. We have a very good currency. So far the currency has been
run in a very stable way. There is no need for anybody to
go to a cryptocurrency you know in our standard courses in economics we
talk about the attributes of a good currency and the US
dollar has all those attributes. The crypto currencies do
not have those attributes. I actually think we should
shut down the crypto currencies.

100 thoughts on “What Will Cause The Next Recession – Joseph Stiglitz On Trump’s Protectionism

  1. MOST of the rules were rigged and dictated by American government and companies. The world will pay you back with your sh*t behavior, you'll get a taste of your own medicine

  2. Nothing here but a dinosaur talking about the virtues of the good ole USD. Hopefully he and the dollar will meet a quick death and make way for Crypto currencies to take over. The old way is broken, doesnt work and is ready and needs to die and those baby boomers that hold on to the ways of the past need to do future generations a favor and by dying. I have an idea…lets stop spending money of prolonging the lives of US citizens over age 72….I know sounds crazy but think about it…..most of the taxes collected are spent taking care of the elderly …let us this capital to build a stronger future and not preserving the past

  3. Your ideas and suggestions I will to except that but please don't expect that new technology blockchain and bitcoin will stop. Cryptocurrency are the next big things and also for new generation. Of course, bitcoin will NOT fit you. Thank you very much sir

  4. If you want to stay tuned in to what crypto currencies offer that the fiat dollar doesn’t…
    Follow @BigTCurrency on Twitter.
    Stay educated my friends!

  5. The trigger of next recession: Deutsche Bank does not have in its possession Trump's personal tax return!? This bank has obviously not reformed enough! Why should a crooked bank be allowed to operate in the USA? Oh Well, maybe: Val Broeksmit, the son of senior executive Bill Broeksmit might have already delivered the tax returns? JPMorgan is wise enough not to pick ripe or rotten tomatoes.

  6. Define defund research, apparently all the University's here in Georgia are not being squeezed by Trump's programs? You need to be more specific. Stop speaking in a generalization. We know there will be recession but It will occur when the next democrat arrives in the White House. It will be bad.

  7. what will cause the next recession?,that is the easiest question to answer, gov and corporations that planned it,next question please?

  8. To start out with,this guys a noble prize winner,and so was pres.obama,he was awarded it for being stupid.for years ,receiveing a noble prize,means nothing after giving one to obama,id rather recieve a nice watch,a real one not a china knockoff,instead of noble prize,wonder if they have that option,?ill have to google it.

  9. this guy is an old skoooool IDIOT, in a few years his entire family will be using Bitcoin and he be 10ft under ground.

  10. Stiglitz is a complete moron. Between suggesting that CEO pay is coming at the expense of workers (when in reality it would make less than $1 difference in monthly salary for the vast majority of large companies if their CEO took an annual salary of only $1), and his asinine comments on cryptocurrency being a flood of "dark money" into a realm akin to the money laundering exposed by the Panama papers (which exposed government-connected crony money-laundering and couldn't have less to do with cryptocurrency, which is actually highly transparent compared to both cash and the traditional banking system), it is 100% clear that nobody should be listening to him.

  11. He’s living under a rock if he doesn’t see the the need for UBI. Most jobs don’t pay enough these days to provide for a sustainable living. Many people need to work multiple jobs to make ends meet and that trend is only going to get worse.

    I know many people that work full time that need to work other jobs just to keep their heads above water. Also rental prices across the nation have drastically outpaced the average mortgage rate.

    If your working full time in America there’s absolutely no reason why you should be poor living pay check to pay and need to work multiple jobs.

  12. No need for cryptocurrency???? He’s obliviously in the wrong side of history. That’s just like saying there’s no need for the internet during its inception…..

  13. The problem is, we all have a job already and its not to make money and live in luxury. Our job is to protect, to learn and to know the Truth. Anything else is secondary. You don't have the right to enjoy life and steal it from someone else.

  14. Economics is a form of Brain Damage. Its not a Science and its all controlled by the ruling class. We have a Pyramid economy and this fool is fast asleep. Money is not alive. It has no value

  15. America's housing market will be what hits us hard next..banks approving loans for homes being priced 3 to 5 times the homes value by greedy overpriced housing..home flippers and realtors are to blame as well.. totally irresponsible greedy fools

  16. Listening to this guy confirms what a threat crypto is to the world banking system. Elites who want to control everything and everyone using MSM channels to try to trick the population into supporting stupid choices. I used to be fooled by these type of things but no more. Hope lots more people are catching on too.

  17. Recession is inevitable in a debt based economy. It's time to return to precious metals and put an end to the banking system that has destroyed so many lives..

  18. The 1929 Stock Market Crash was a result of the 1913 illegal establishment of the privately owned Federal Reserve Bank. The "Crash" was the first of many "Crashes" or euphemistic term used, Recession both caused by the FED and the Banks that were conspirators in the deception.

  19. Stregething school an better jobs an construction an. Clean ocean an make our contry grow like china catch up an plle will follow the leaders shownthen the dedication they need an lead them we can only grow from there I said I'd start ofever we would make /he houses formmentally I'll another ones not able I said I would work I jus want to recover we need to advance more > will give u guys my days to share I'll show u guys to figure out wat ever u need answers for

  20. We dnt have to contrusction building houses pple will work to build an how many jobs we can give to clean we can use my tech to buy it all I will let use it share it together an jus let memhave acces 4154251928the rich can stay rich an they stay the same an I'll let u guys have all the ,money I said this jus make it accessible tonally

  21. No taxes if u take it frm me tho we need to helpin I have not touch a dollar of this so if anys missing it was stolen

  22. This guys a globalist that’s what most ppl don’t understand there against there own country they’re super rich so they know they’ll sit at the top of the world in any situation this guys telling u the jobs aren’t coming back because they don’t want that they want post industrialization

  23. Take a look on these Pukes webpage. CNBC … almost every single article is about taking down trump. Unbelievable!

  24. UBI can not replace work, it's not intended to. What it can do is help people get out of debt, establish savings, afford to care for their children or eldery parents.

  25. American Flag: Red = loss of salvation, life is in the blood; White = conquering of the True Faith of the Most High Yahuah and His Tent, thus Hebrew/Ibri American/Amaracan Indians, then Helenizing them, then making them slaves in their own land, thus the Trans-Atlantic Slave Trade in reverse courtesy of Christopher Columbus shipping them from the Caribbeans to Europe to West Africa, and then to all over the Roman World, stealing of their Scriptures starting in Europe, thus the German AshkeNAZI Jews to then whoever wanted to convert to the already apostate Hebrew/Ibri faith mingled with the European pagan worship = Christianity.

    Blue = night, then dawn comes just as Mashiach Yahusha arose from death, and the silver stars who are Abrahim Yahshaq Yahqob/Jacob seed, those glittering stars that fade under the oppression of his master Yawan/Javan, thus Greece/Rome, 400 years of captivity.

    And these Menstruous Women (religions) birthing monsters (more absurd religions), thus the Church + the State (Scarlet Beast Kingdom/4th Beast Kingdom), these will fall and the new wine (apostate Hebrew/Ibri faith) will FAIL. No one will be able to withstand the WRATH of the Most High Yahuah, coming via we the Hebrew/Ibri Remnant Elect/2 Witnesses with Mashiach Yahusha as our Head, iron rod in hand and a breath of brimstone fire to destroy this great wicked evil in these end times…. judging and smiting.

  26. His, Joseph E. Stiglitz's, body language is lying and he is part of the Revised Roman Empire to keep it afloat like jetsam and flotsam drifting in the sea (Gentiles) as long as they can try and endure the Most High Yahuah's Judgments upon these great wicked evil nations…

  27. the dollar is a good currency? yeah, relative to all the other crap in the world. it is like saying i'm michael jordan relative to players with no legs, or wheelchairs. the federal reserve note, which we call the dollar (and is not, as the dollar is a set weight of gold or silver, according to the 1792 coinage act) has lost something like 97-98% of its value since 1913, when the federal reserve act was passed into law. is that stable value? i didn't think so. the entire system is a sham, and a scam, and we need foundational fixes, like removing ourselves from the system.

  28. Stiglitz, i think, is a pretty good man, but he may have been threatened, a lot of the stuff he said, expecially at the end, is total lies. "the dollar has performed well" is a total lie, and then he talks about robots and autonomous vehicles, which is also bs, as this is the agenda of the new world order, and we don't have to go along with it. screw these parasites, as we should do what we want, as we are the ultimate bosses our nation.

  29. we don't need social protection systems if we had a revival back to God, as the Christian Way fixes everything. "just weights and measures", "we are our brother's keeper", etc… Our God is YHWH, not government!

  30. The main theme here is that he is anti trump and he is bias.
    Why does he say that trump doesnt support research or what it has to do with TRUMP UNIVERSITY

  31. China laughs at your trade "rules of trade law" pal…And Trump never said we would return to the level of manufacturing we used to have..But simply put lets bring back jobs..well its happening and a beautiful thing. He also said ok fine go over seas if you must but but don't think you will import your product back here tariff free. That is not unreasonable.

    You call taking on the outrageous tariffs and barriers the Chinese put on us ok? Trump fights back and you call it protectionist.

    I suppose you'd call trump getting our steel and aluminum industry back on its feet………protectionist?
    Did you get your Noble prize the same way Obama got his?

    I betcha.

  32. Protectionism is great we need to do more globalization doesn't work where are nationalist country and we need to remain that way what stop selling people the food that is being taken out of American smell as a collapse of farming in the midwest because of the lack of water that Center pivots don't work because the wells are dry this happened because of globalization it would have been one thing if we would have replaced energy with biofuels but instead we sold at a discount rate food that we couldn't afford to get rid of number 1 and number 2 cost more to raise subsidized than the price we got from abroad let's stop feeding the world and take care of ourselves stop buying things from foreign countries including energy make laws like they have in Japan and Europe that protects your own country from foreigners and on foreigners no more shut down the borders no one will be allowed in anymore there's already an ear overpopulation America you've got too many people you got a huge City the produce nothing but pollution let's end this problem by stopping most of the growth but not letting anyone in only our own children will be the only growth

  33. This guy likes a lot of socialists measures , tax funded education and research , interventionism etc. America became great in the gilded age due to the exact opposite, the government was much smaller back then, much less regulations and taxes. The mistake is assuming that if the government does not allocate money into research, then nobody is going to do it. what a fallacy, is quite the contrary, there are less private investment in research because the government is inefficiently assuming that role with tax money. Much more efficient would be to lower taxes for everybody and allow investors and entrepreneurs to do it, and the same is true with education. On top of that he likes price control of interest rates by the FED. Interest rates like every price should be free, only subjected to the laws of supply and demand like the rest of prices. He likes fiat money too, which is not real money like gold. The main reason for the existence of fiat money is to allow the government to became bigger and bigger by inflation.

  34. This is the guy who said before election , that Hillary had excellent economic plan and Trump had lousy economic plan, he is clueless.

  35. This is one of the types who advised Barack Obama….economic policy. This guy opens his mouth….and you see the "runs" out of his mouth.

  36. A work for EVERYONE who wants to work ? Sounds very good. Its not the reality. Where i live there are about 500 000 without a job. If they can fix the unemployment then why havent they ? The numbers goes up and down but basically its the same problem all the time isnt it ? The entire system is based on scarcity. https://youtu.be/lyzS7Vp5vaY?t=391 im just confused why you are concerned with inequality but you dont like basic income ? I dont know what to make of that.

  37. Basically he is saying (though he himself may not understand the implications of his own words) that the problem in the American economy arises from immorality: the immorality of, for instance, multimillionaire executives of companies taking for themselves the lion's share of a company's profits and throwing the rest of the workers mere survival crumbs. Keep that in mind whenever you see a big shot executive go on television and admit there is "income inequality"—to which they ought always to be responded to with: "But you could have directly addressed the issue by taking less for yourself and paying your employees more, so why didn't you?" When will they ever be confronted in this way?

  38. Imagine if universities profit model come from having a share of there students income that they generate over a period of time, if and only if they get employment in the area that they were trained by the university.

  39. Not Trump but China is undermining your research because they just steal and copy and the Chinese judges never do anything about it. And this has been happening for years.

  40. American education at this point cares more about indoctrating sjw leftist activist ideology and charging people severely for it.

  41. The general rule is that as economies total wealth increases inequality becomes greater. And when ecomies shrink inequalities can decrease but it doesn't happen necessarily. This is because human productivity, creativity, power and talents are also naturally spread out very unequally. But who cares it is not like the people at the bottom don't benefit from the jobs and products the succesfull create. I mean let's be honest what is the labor of a truck drivers or a line worker worth without a truck or a factory.

  42. I'll summarize for those who don't want to lose 15 minutes of their life to this tripe… Trump = bad, pay no attention to the lowest unemployment in 50 years, pay no attention to the lowest minority unemployment ever, pay no attention to the market's growth and the new wealth created for middle-class Americans in their retirement portfolios, pensions, IRAs and 401Ks. Pay no attention to wage growth… Trump = bad, cuz I said so…

  43. j'aime beaucoup ce mec , en politique ce serrai mon choix pour etre premier ministre en france parceque tout est justice avec lui mieux que de la servir sous le poids d'une epee.

  44. They gave this person a Nobel Prize for what, Stupidity. There is more criminal activity going on using the US dollar than any currency in the world. He call the US dollar safe when it about to collapse under the central banks world of printing money to steal wealth from main street and line the pockets of the JP Morgans of the world. You will see the result of this greed very soon as dollar and the credit and debt base system ends. You are not fooling anyone but yourselves. This will end badly for you and unfortunately for all the innocent peoples live you will destroy.

  45. Wait……this guy is a Noble (sic) Prize winning economist…..who praises the government controlled printing press toilet paper $ as 'good'…….but says a decentralized open source limited issue borderless non discriminatory currency like BTC should be shut down !?????……..LMFAO…….

  46. I noticed how Stieglitz never talked about the out of control: homeless in america, HIV , drug addiction, no good paying jobs in america.

    But joe sure is in a hurry to help China.

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