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The End of Trickle-Down Economics? Joe Stiglitz on the “Transformational” $1.9T American Rescue Plan

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President Biden has signed the $1.9 trillion COVID-19 relief package, which Democrats are hailing as the largest anti-poverty bill in a generation. It includes stimulus checks to most adults, expanded unemployment benefits and an overhaul of the child tax credit. One study projects the law will lift almost 14 million Americans out of poverty, including 5.7 million children. “This is transformational,” says economist Joseph Stiglitz. “It says, 'We are actually going to live up — try to live up — to our aspirations.'”

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

AMY GOODMAN: President Biden signed the $1.9 trillion COVID relief package Thursday. Democrats are hailing the deal as the largest anti-poverty bill in a generation. One study projects the law will lift almost 14 million Americans out of poverty, including 5.7 million children. On Thursday night, President Biden gave his first primetime address, marking one year since much of the country shut down due to the pandemic.

PRESIDENT JOE BIDEN: I signed into law the American Rescue Plan, an historic piece of legislation that delivers immediate relief to millions of people, includes $1,400 in direct rescue checks, payments. That means a typical family of four earning about $110,000 will get checks for $5,600, deposited if they have direct deposit or in a check, a Treasury check. It extends unemployment benefits. It helps small businesses. It lowers healthcare premiums for many. It provides food and nutrition, keeps families in their homes. And it will cut child poverty in this country in half.

AMY GOODMAN: President Biden also announced he would direct state, local and tribal governments to make all adults be eligible for a COVID vaccine by May 1st. He also set a goal of July 4th for the country to, quote, “mark independence” from the virus.

PRESIDENT JOE BIDEN: I will do everything in my power. I will not relent until we beat this virus. But I need you, the American people. I need you. I need every American to do their part. And that’s not hyperbole. I need you. I need you to get vaccinated when it’s your turn and when you can find an opportunity, and to help your family, your friends, your neighbors get vaccinated, as well, because here’s the point: If we do all this, if we do our part, if we do this together, by July the 4th, there’s a good chance you, your families and friends will be able to get together in your backyard or in your neighborhood and have a cookout and a barbeque and celebrate Independence Day.

AMY GOODMAN: President Biden also used his primetime address to condemn the surge in hate crimes targeting Asian Americans.

PRESIDENT JOE BIDEN: Too often, we’ve turned against one another. A mask, the easiest thing to do to save lives, sometimes it divides us — states pitted against one other instead of working with each other, vicious hate crimes against Asian Americans, who have been attacked, harassed, blamed and scapegoated. At this very moment, so many of them — our fellow Americans — they’re on the frontlines of this pandemic, trying to save lives. And still — still — they’re forced to live in fear for their lives just walking down streets in America. It’s wrong. It’s un-American. And it must stop.

AMY GOODMAN: We’re joined now by Joseph Stiglitz, the Nobel Prize-winning economist, Columbia University professor and chief economist for the Roosevelt Institute. He served as chair of the Council of Economic Advisers under President Bill Clinton and as chief economist at the World Bank. His latest book is People, Power and Profits: Progressive Capitalism for an Age of Discontent.

Thanks so much for joining us, Joe Stiglitz. Can you start off by talking about the transformational aspects of this American Rescue Plan?

JOSEPH STIGLITZ: First, let me say it was enormously important that the economy be rescued, and that’s why that $1.9 trillion package was so important. But within it, it was designed to begin a transformation. And what you talked about earlier, the number of people who are being lifted out of poverty, is absolutely essential.

You know, the first act passed under the previous presidency, one of the few acts in the process of what is called reconciliation, was a tax bill in December 2017. And nothing — the difference couldn’t be clearer. That was a tax bill that helped the billionaires and the corporations. The money went to the top. This is a transformation with the money going to the people who really need it.

AMY GOODMAN: So, talk more about the significance of this. I mean, the reason it was able to be passed, with not one Republican joining in the House or the Senate, even though, astoundingly, they are starting to take credit for it — the Mississippi Senator Wicker, who tweeted out immediately how much money it was going to bring to restaurants and to keeping people on the payroll, which was one of the arguments for it, of course; he just didn’t mention he did not vote for it. But take us back to FDR, what this means — it’s only for a year — and if you think it could be carried out from there.

JOSEPH STIGLITZ: Well, I think it can be carried out, but to be permanent, it’s going to need a change in Congress in 2022. It’s very clear that the Republicans, at least for now, have come under the influence of extreme polarization and have become the party of Trump. And so, it’s all about polarization, not a single one supporting what is necessary just for the economy to recover. You know, so, even if you thought, “We don’t want to help the poor,” you need to have the economy recover. And everybody will benefit from it. So, while it moves a lot of people out of poverty, it was an essential bill for the economy to get back going again.

AMY GOODMAN: I mean, the child tax credit, on its surface, might look like just another tweak to the tax code, but it defines a profound shift in how we view society, confronting poverty much like the New Deal’s creation of Social Security and what that did for the elderly. Could this continue?

JOSEPH STIGLITZ: I believe it can. I mean, when you think about it, children don’t choose their parents. And if there is any concern about the future of the country, you want to make sure that the children, no matter who their parents are, can live up to their potential.

One of the things that I pointed out in my research is that the American dream is really a myth. The life prospects of a young American are more dependent on the income and education of its parents that in almost any other advanced country. It’s absolutely the opposite of the way we think about ourselves. And so, this is transformational. It says, “We are actually going to live up — try to live up — to our aspirations.”

AMY GOODMAN: You have also the $5 billion for farmers of color, for Black farmers, in debt relief. The Republicans are trying to make this the kind of poster child example of — well, they’re talking about reparations. But how key is this, Professor Stiglitz?

JOSEPH STIGLITZ: Well, this addresses a kind of legacy of discrimination that we’ve had. You know, when you’ve had a legacy of discrimination, you have to undo it. It’s not a question of reparations, although I think there’s a strong argument that can be made for reparations. But just for our society to go forward with a modicum of equality is going to necessitate dealing with some of the consequences of the discrimination of the past.

AMY GOODMAN: Is this the end of trickle-down economics?

JOSEPH STIGLITZ: I hope so. You know, I hope we’ve learned that — you know, as I mentioned earlier, the 2017 bill of Trump was, hopefully, the last gasp of trickle-down economics. The theory was, giving all that money to the corporations and the billionaires would lead to sustained economic growth from which everyone would benefit. What we saw in that bill was that the money overwhelmingly went to share buybacks, dividends, very little that trickled down to ordinary workers. That was a real demonstration that trickle-down economics didn’t work. And this is the antithesis of what Trump did. It’s building up the economy from the middle and the bottom.

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