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Economist Yanis Varoufakis: Puerto Ricans Deserve an Escape from “Permanent Debt Prison”

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As the White House finally agrees to release FEMA disaster aid with more flexibility to try to help rebuild Puerto Rico’s devastated power grid and other infrastructure, we speak with economist Yanis Varoufakis, former Greek finance minister, about the history of the island’s debt crisis and what to do as it recovers from Hurricane Maria.

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This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: President Trump and Republicans in the House have unveiled a long-promised proposal to reform America’s tax code, that experts say is really more of a tax cut for the rich. The bill introduced Thursday would permanently lower the corporate tax rate from 35 percent to 20 percent and also repeals the inheritance tax on multimillion-dollar estates. An analysis by the Joint Committee on Taxation says the bill is heavily weighted toward business, which would receive about two-thirds of an estimated one-and-a-half trillion dollars in cuts. The White House praised the legislation as providing “the rocket fuel our economy needs to soar higher than ever before.” President Trump later said the legislation is a, quote, “big, beautiful Christmas present in the form of a tremendous tax cut.”

PRESIDENT DONALD TRUMP: The process is complicated, but the end result will not be that complicated. It’s going to be—people are going to pay less tax by a lot. Companies are going to pay less tax by a lot. That’s a big difference. And companies are going to start rebuilding, and they’re going to stay here, and they’re going to expand, and they’re going to build new plants in this country. They won’t be going to other countries like they have been for many, many decades.

AMY GOODMAN: President Trump said he wants lawmakers to pass a tax reform bill by Thanksgiving. But Democrats have vowed to oppose the bill. House Democratic Leader Nancy Pelosi called it a “shell game.” As lawmakers look for revenue to offset proposed tax cuts that will cost trillions of dollars, they’ve looked at repealing tax breaks for things like medical expenses, moving expenses, student loan interest and adoption.

Well, today we look at how the world’s elites benefit from global capitalism, with economist and former Greek Finance Minister Yanis Varoufakis. He was the chief negotiator of Greece’s bailout with the European Union and International Monetary Fund. His new book is titled Adults in the Room: My Battle with the European and American Deep Establishment. Varoufakis served as finance minister in Greece in 2015, before resigning from the Syriza government. He later launched the Democracy in Europe Movement 2025, known as DiEM25. His forthcoming book is titled Talking to My Daughter About the Economy.

Yanis Varoufakis, welcome back to Democracy Now! It’s great to have you with us.

YANIS VAROUFAKIS: It’s great to be here, Amy.

AMY GOODMAN: Well, as you sat here watching this report of our trip to Puerto Rico and you see this rural doctor saying there’s this joke, he says, going around Puerto Rico, that the U.S. would trade with the European Union—would sell off Puerto Rico to the European Union; the European Union would give Greece to the United States—you said that’s not a joke.

YANIS VAROUFAKIS: Like with all excellent jokes, they are far too close to reality for comfort. It was actually a statement that was said half-jokingly by Wolfgang Schäuble, the German federal finance minister, the finance minister of the most powerful country in Europe, that was responsible, personally, for the process—and it was a process, not just a policy—of austerity and bank bailouts, which effectively put the European periphery, with Greece the most obvious case, into, if you want, the dustbin of modern capitalist history, and created circumstances that are not as extreme as those in Puerto Rico, but himself—it was quite interesting—isn’t it?—that he’s making this comparison between Puerto Rico and Greece, which is an apt comparison, because, you know, they have a fiscal board effectively banning democracy and creating a government of bailiffs, which is precisely what Dr. Wolfgang Schäuble did in my country. And the reason why I was elected was to end that.

AMY GOODMAN: According to Schäuble—Bloomberg, Schäuble said, “I offered my friend [U.S. Treasury Secretary] Jack Lew these days that we could take Puerto Rico into the euro zone if the U.S. were willing to take Greece into the dollar [union]. He thought that was a joke.” So, what about, though, Puerto Rico right now, as you watch it? I mean, you’re generally in Athens. Well, you travel the world. You’re here now in the United States. You see the devastation, the utter devastation, of Puerto Rico, yes, by the storm, but playing on this fault line of the total indebtedness of Puerto Rico right now and the U.S. control, imposing this control board that controls all that happens in Puerto Rico, the finances.

YANIS VAROUFAKIS: Well, The Grapes of Wrath tells the story. You only need to read Steinbeck and apply to the case of Puerto Rico. The whole point of the New Deal, of FDR’s New Deal, was to stop this process of, after a binge of the financial sector that goes wrong, and you have the collapsing pyramids of debt that it creates, to shift, cynically—

AMY GOODMAN: The 1929 Depression.

YANIS VAROUFAKIS: Yes—to shift cynically the burden and to liquidate the little people, to shift the burden of the financiers onto the weakest of shoulders. That was the whole point of the New Deal and all the institutions that the New Deal created, like the FDIC, like Social Security and so on. Puerto Rico is part of the same monetary union. Its people are supposed to be U.S. citizens. And yet they are not—they were never part of this New Deal. And you have the whole—

AMY GOODMAN: And they cannot vote for president of United States.

YANIS VAROUFAKIS: The whole force of evil that was imposed upon the little people in 1929, 1930, under the Hoover administration, being imposed upon a small island nation, that has also been devastated by this terrible hurricane, which is not completely unconnected to the policies on the environment that Mr. Trump is so keen to keep promoting.

AMY GOODMAN: Explain.

YANIS VAROUFAKIS: Well, climate change. I mean, we—there is absolutely no doubt anymore that the degree of devastation wreaked by hurricanes in this part of the world is intensifying as a result of severe climate change. And it is remarkable that we have in the White House a climate change denier, who, while removing all the benefits of the New Deal from the people of Puerto Rico, at the same time exposes them to the great vagaries of climate change, the very phenomenon that he denies its existence.

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Yanis Varoufakis on Global Capitalism & How Trump’s Tax Plan is Class War Against the Poor

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