Interview with Noted Economist, Richard D. Wolff: Part One

have said that a ‘proper’ Keynesian stimulus should be much larger and thus the deficit should be much larger than the one that is currently being used to solve the problem. You can then see the power of the conservative or ‘Austerity’ approach as they are constantly shrinking or [blocking] the growth of the stimulus ‘Keynesian’ package to anything like the proportions that the ‘Keynesians’ wish. In 2013, the combination policy is shifting towards less Keynes and more Austerity as evidenced by the pay-roll tax and the sequester of government spending cuts. Needless to say all of these combinations, [regardless of stripe] have in fact failed. We do not have a broad-based recovery but rather a recovery for the few.

Bank balance sheets have recovered much of the territory lost since 2008/2009 and the Stock market has come a good way back from the depths of 08/09. For the mass of people, [however], nothing of that sort has occurred. Unemployment in the U.S., which was 4.8% in 2007, and reached 10% in 2010 is now at 7.7% which means it’s not even halfway back to what it was in 2007. If you look at the people who kept their jobs they have fewer benefits, less job security and more debt for their children to go to college. By any basic measure of economic well-being the mass of people are still in a depressed crisis stage here in the sixth year of this downturn.

In conclusion, we have a systemic crisis and we shouldn’t even be surprised that policies that avoid even questioning the system, let alone proposing changes to it, have not been effective in overcoming it.

Going by your analysis, what will the future look like for the upcoming generation if things continue down the current path?

The short answer is terrible. Again, I’m not telling the [youth] anything that they don’t already know. Our students here in the U.S., have been going into debt to get a college education on a scale that we have never seen before. It is absolutely unique.

The other thing that is as impressive is the awful job market they face after the debts and the four to five years they spend getting their degree. In other words, their job prospects and their income earning prospects are such that they place the [youth] at a level of very pinched economic circumstances and that’s if they get a job.

So yes the prospects are very grim and virtually nothing is being done to help this situation. No programs have been created worth anything to ease the burden of student debt and nothing has been done to dramatically improve the job situation.

To give you one example of what could have been done, but what isn’t being done, would be to take the 1930’s – the last time we had a meltdown on the proportions we have today. Here’s what Roosevelt, the President at the time did. He declared on the radio in 1934 words to this effect, ‘If the private sector is unable or unwilling to provide jobs for the mass of Americans numbering in the millions who now need or want to work then there is no alternative but for me to use the power of the government to provide useful, gainful employment. In between ‘34 and ‘41 he did that, creating at least 12.5 million jobs. Either way, the point is made. He created jobs for millions transforming their lives, transforming their ability to maintain their mortgage payments to keep them in their homes, transforming the lives of students going to college to look for an education.