Will Obama Use International Economic Appointments to Push Stimulus?

Will Obama Use International Economic Appointments to Push Stimulus?

PAUL JAY: Welcome to The Real News Network.
I’m Paul Jay in Baltimore. And welcome to this week’s edition of The PERI Report with
Gerry Epstein, who now joins us from Amherst, Massachusetts. Gerry is the cofounder/codirector of the Political
Economy Research Institute in Amherst. He also teaches economics there. Thanks for joining us, Gerry. GERALD EPSTEIN: Thank you, Paul. JAY: So what are you thinking about this week? EPSTEIN: Well, the State of the Union Address
is coming up tomorrow night, and we’re all thinking about what President Obama’s going
to do in the next four years. And there’s one positive thing, I think, he
has been saying recently, which I’ve been thinking about, the idea that economic growth
and development doesn’t come from the top down, from the so-called givers, but it comes
from the middle out and the bottom up. I think this is a good thing. This is something
that many of us have been arguing for for a long time now. And the question is: what
can he do about it? And, of course, he’s kind of boxed in because of the conservative Democrats
and the control of the House by the Tea Party Republicans. But there’s actually quite a
bit he can do globally. You know, there’s a lot of criticism globally
about the monetary policy of the Federal Reserve keeping interest rates so low. Now the Bank
of Japan has been doing it, the U.K. banks, central bank in Europe and United Kingdom.
They’re talking about currency wars. And this is something we’ve seen before. We’ve seen
this in the 1920s and 1930s when in the Great Depression all these central banks were lowering
interest rates and there was competitive devaluations, and it didn’t lead to any global reflation. And John Maynard Keynes said, well, the
answer to this is global coordination of more expansionary fiscal policy, job-creating government
expenditure. Now, of course, President Obama can’t do this on his own, but what he can
do is really push the IMF, the World Bank, other global bodies to adopt a much more reflationary
fiscal policy, much more policy to redistribute income to the middle class, the poor. And
he can do this without approval from Congress and the Senate. The way he can do this is
partly by his appointments, his appointments at the IMF, his appointments at the World
Bank, what he tells his appointments, the people he appoints there to do, to push. And
I think this could make a very big difference on the global scene. JAY: But he would have to want to. Is there
any indication that he would want to? I mean, I take your point that in a sense he doesn’t
have the excuse that the House won’t let him do it, although one could go back to when
the Democrats did control the House, he still didn’t do nearly what you, I think, thought
he should have. But even now, is there any sense he would want to? EPSTEIN: Yeah, well, that’s a good question,
and this is a place to test. We know that with Geithner, Timothy Geithner–who’s leaving,
thankfully–didn’t want to do this. He was the bankers’ guy, and his policy was just
to try to keep the banks afloat and happy. And now, with him gone, Obama has a new chance,
and he has a new chance to show whether he’s serious about this, even in an arena where
he actually has some clout. So there are appointments coming up at the
United Nations Conference on Trade and Development. He has appointments coming up in the Treasury
Department [incompr.] help set IMF policy. The United States is the most powerful country
in the IMF. We know there has been some change at the
International Monetary Fund, the IMF. My colleague Ilene Grabel has been writing about productive
incoherence and how with their right hand they’re trying to loosen their strictures
on capital controls, but as Mark Weisbrot at the Center for Economic and Policy Research
has shown, with their conditionality policy they’re still imposing neoliberal policies. So there is a way in which, at the IMF, for
example, if Obama wanted to, he could start really pushing this new policy that he claims
that he wants, growing from the bottom up, from the middle out. And pretty soon, with
the appointments he makes and what they start doing there, we can see whether Obama is serious
or not. [crosstalk] serious, and I agree there’s reason to be skeptical, but let’s push him
and see. JAY: But couldn’t he have done this over the
last four years? EPSTEIN: Well, he could have done this, but
I think he has changed some. He has seen that the policies of the last four years that have
been totally focused, in the financial realm, at least, on protecting the banks didn’t really
pay off for him. I mean, look at what the banks did in the last election. They put all
of their money, all of their clout, all of their political muscle against him. And if
I were him, I’d be pretty pissed off, and I would see that that’s a losing proposition.
So let’s see if he changes his tune a bit in realms where he still has some power. JAY: Okay. So what’s the next appointment
that would be a litmus test of this? EPSTEIN: The next appointment would be an
undersecretary in the Treasury Department who’s in charge of international economic
policy. And if he were to pick a progressive economist to do that, play that role, then
that would be a good sign. JAY: Okay. Well, we’ll see when that happens,
and then we’ll come back to you and find out. It seems to me that, as I said, he could have
done this in the last four years. And I’m not sure if there’s reason to think he isn’t
essentially just a neoliberal, you know, politician and actually isn’t in favor of these things. EPSTEIN: Yeah, no. I think there’s a lot of
evidence that what you’re saying is true. But I think those of us in the progressive
area can really try to hold his feet to the fire now and push him in these directions
where he can’t have excuses about being blocked by Congress. JAY: Okay. Well, we’ll see. Thanks for joining
us, Gerry. EPSTEIN: Thanks, Paul. JAY: And thank you for joining us on The Real
News Network.


  1. I don't need to hear the speech. We face more loss of personal freedoms, a worsening economy & more wars abroad. Mr. Soetoro is an empty suit.

  2. Paul, your guest is living must live in fantasia. Obama doesn't run shit. He gets told what to do, and he licks the toes of those who tell him to do it. He's all talk, and will go down in history as a the hope and promise that fooled a good portion of the US population into it's own self destruction. And when they're done with him, he'll end up in the same place as the rest of us. Maybe even worse.

  3. Wow!! These guys are our best and brightest?? Either this guy is insanely naive or he is a cheerleader for the establishment. No matter what the president does regardless of how brazen they come up with an "oh well, maybe next time or later, or congress won't let him blah, blah, blah. Incredible!! smh

  4. Obama will be remembered as the bankrupter of America. Others will call him "Mr Drone". Drones remind me of the Gestapo during ww2 executing hostages and families together with the "terrorists" as they called the resistance against Nazi invasion.

  5. No one trust U.S anymore! (Never Forget, Never Forgive) that was the massege to the Afghans and iraqis after that inside job 911 attack!

  6. this guy is a total fraud, unfortunately there is so much garbage in this country they will vote for someone who will give them free stuff: food , clothing, shelter , money i.e. govt. largesse. This is economy is getting worse and worse and the only thing this idiot can think to do is to print more money, tax more and spend more. A total economic moron, but he "sho do give a good speech, sho nuff do" utterly pathetic! Will go down as the worse president in history, total clown.

  7. Jack Lew replaced Geithner. He said the banks didnt cause the financial crisis. How is Obama showing he wants to take another path by appointing Lew. Obama is just all talk. He says what people wants to hear but he won't.

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