-I have to ask you this. As an economist, I imagine
people all the time — friends, family —
ask you to give them investment advice, ask you
to predict the future. -Yeah.
-Yeah. And what do you tell them
when they ask you that? -I tell them I don’t know, and nobody else knows either.
[ Laughter ] -And you have a Nobel Prize
for this, and yet, that is the basis of it.
-Yeah. -Yeah.
-Most of the time, it’s — you know, it’s
just not that easy, right? -What is it about economics that makes it so hard
to predict? -Okay, first of all,
think about weather. Weather prediction is,
you know, so-so because it’s an incredibly
complex system, but at least it’s physics.
-Right. -And economics is all of that
plus it’s about people. So it’s just —
it’s just inherently — most of the time —
you know, once in a while, we can see something
that’s really clear, i.e. housing bubble. Okay, that was crazy, and something bad was going to
happen when it burst. But most of the time,
it’s this enormous system. You know, there’s a rule,
everything in the economy affects everything else
in at least two ways. And so, being able to tell you
whether GDP growth will be 1.5 or 2.5 percent
next year, nobody can do that. -The president seems pretty
confident that he can tell you exactly
how it’s going to go. -Uh, yeah. Uh…
[ Laughter ] -We’ll get to him.
We’ll get to him. -We’ll get to him, okay. -So this —
“Arguing with Zombies,” you’ve talked in your columns
over the years about these zombie ideas,
meaning that they are ideas that will not die in regards
to economics. And the two that keep
coming back are climate change denialism,
and more importantly, cutting taxes for the wealthy. -Yeah, not more importantly
but more commonly. So the big political zombie
in America is the belief that cutting taxes
on the wealthy is magic and will pay for itself. And it has a success rate of
exactly zero after many — but nonetheless, is basically
official doctrine for the Republican Party. -Now this is a situation
where President Trump and the Republican Congress
cut taxes for the wealthy, they went out on television, they told us
it would pay for itself. It has not paid for itself. If anything, the deficit
is ballooning. And yet, it doesn’t seem
as though they will pay any political cost
for this. -Yeah. And that’s a lesson,
I think, for everybody. You know, we’ve had
a long history now, several decades in which
Democrats, when in power, try to be all responsible
and get no credit for it. And Republicans just gleefully
run up huge bills, and I got to say,
maybe, you know, next time there’s
a Democratic president, she or he should be prepared to run some deficits
for a good cause. -Yes. Well, that would be
the difference, right? The idea is that
with progressive ideas, you can run deficits
and actually use that money to pay for things like
social services, as opposed to putting it back
in the pockets of the rich. -Yeah, I mean, think —
Trump has added about $300 billion
a year to the deficit. We can actually put
a fairly precise number on that. Think of what America would
look like if President Obama had been allowed to spend
$300 billion a year on infrastructure, right?
-Yeah. -$300 billion a year. We would be — you know,
we wouldn’t be stuck in that one tunnel under the
Hudson River all the time. -Right.
-And so — And what we’re doing now
is we’re running these big deficits for no —
you know, to basically just to cut taxes
on corporations, and the corporations aren’t
even using the money. They’re just using it
to buy back stock. So the deficits themselves don’t
do a whole lot of harm, but think of what we could be
doing with that money. -Things that would actually
be multi-generations ahead still paying benefits.
-Yeah. I mean, the funny thing, the tax cuts don’t pay
for themselves. Child nutrition, child —
health care for children, those do pay for themselves,
because they lead — in the long run,
they lead to healthier, more productive adults who
end up paying more taxes. So it’s actually —
we’ve got the wrong — you know, we’re doing voodoo
on the wrong front here. -Do you think —
how many billionaires, how many Republicans
in good faith believe this idea that tax cuts will pay
for themselves? -That’s a hard question to
answer because people are really good at double think.
-Yeah. -Right? People manage to
convince themselves, even if something
is patently false, most people don’t manage — most people don’t go around
saying to themselves, you know, twirling
their mustache, and saying, “I’m being evil.” Though I think some of them do. -Yeah, yeah, yeah.
-Mitch McConnell probably does. -I could name five.
Yeah, yeah, yeah. -But the — but the — I think that pretty much
they know — at some level, they know
that it’s false. They have to know
that it’s false. It’s just — there are
no success stories. And so, it’s just — but it’s
tremendously convenient. -Has this — you talk about
how this was something that was very much the case
during the Bush presidency, but it has mutated
into something far more bold than it was then.
-Yeah. I mean — well, you know,
each successive Republican president
magically has managed to make his predecessor look
good in the rearview mirror. So we look now
at the Bush years, and the thing was that Bush — a little business about lying us
into war and that sort of thing, but aside from that,
they were — -It’s just that thing.
Yeah, yeah, yeah. -They were a little —
yeah. They were a little bit careful. They didn’t actually make
outlandish claims about tax cuts paying for themselves. They came up with other
rationales. You know, the government’s
collecting too much money, or we just won a war,
so, great, let’s cut taxes. They weren’t as blatant. So the — the zombification
of the Republican Party has been an ongoing process. And it gets a little bit worse with each successive