Nobel winning economist Joseph Stiglitz on Trump, tariffs and democracy - Transcript
CBC News · Posted: Mar 18, 2025 12:17 PM EDT | Last Updated: March 18
Last week Jayme had the opportunity to interview Nobel Prize winning economist, and former staffer and advisor to Presidents Bill Clinton and Barack Obama, Joseph Stiglitz. Stiglitz also worked as the chief economist at the world bank, is a bestselling author many times over and remains one of the towering economic thinkers of our time. He has long been a sharp critic of neoliberalism, and trade policies like NAFTA that he believes privileged the rich and corporations, but disenfranchised workers. This was a wide ranging conversation and dealt with Trump's tariff war, the threats towards Canada and the recent arrest and attempt to deport a Columbia student who helped lead protests against Israel's war in Gaza last year. The conversation was recorded in front of an audience. It was part of a conference put on by McGill's Media Ecosystem Observatory and the Max Bell School of Public Policy.
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JOSEPH STIGLITZ: Nice to be here.
JP: I wonder if we could begin with the moment that we find ourselves in today, especially here in this country. Canada has spent the last two months or so in varying levels of panic over a trade war with our closest ally. And what is your reaction to Trump's economic and trade policy regarding Canada? Is it something that you had ever conceived of an American President doing?
JOSEPH STIGLITZ: I couldn't conceive of a normal American president doing, but Trump is not normal. And I think one of the things we all said during his first administration is we can't normalize his kind of behaviour. But in the second administration, he's gone way over the top. So, take the issue of tariffs alone. Most economists would say he totally misunderstands the role of trade policy. In particular, one of his motivations is a concern about trade deficits. He thinks the trade deficits are a reflection of other countries taking advantage of the United States.
Anybody that takes an elementary macroeconomic course knows that the multilateral trade deficit, the difference between our exports and imports, is related to the disparity between aggregate domestic savings and aggregate domestic investment. And if you don't change those numbers, you don't change the multilateral trade deficit. So, all the tariffs may change who we buy what from, you know, and where we sell what. But it doesn't change the multilateral trade deficit.
The irony is that his own policies with respect to, for instance, increasing the deficit so he can give a trade, a tax cut for the billionaires and for the corporations, almost surely will increase the multilateral trade deficit. So, from a pure economic point of view, it's non-sense. And then, he has this further idea which causes some amusement that we ought to have the Department of External Revenue rather than the Department of Internal Revenue, having foreigners pay our taxes rather than Americans paying. Well, I think it's a great idea if you could get foreigners to contribute, if you want to send a cheque in to the U.S. government. I mean, obviously all Americans would welcome that. But the fact is that for the most part, tariffs are paid by American citizens. They increase the price, they increase inflation. And the timing couldn't be worse because we're just getting over an inflationary episode. And to put this inflationary pressure back on, it's really crazy.
https://www.cbc.ca/radio/frontburner/nobel-winning-economist-joseph-stiglitz-on-trump-tariffs-and-democracy-transcript-1.7486651