In retrospect: Donald J. Trump

On January 20th, 2017, Donald J. Trump took power as president of the United States. He had openly campaigned on carnage. He ran for president promising to give the rich more, to bring back torture, to wage a war against immigrants, and to build his wall. He was gleeful in pledging to make America’s healthcare system even worse. He promised to bring back torture, to fill Guantanamo back up, to kill the families of suspected terrorists. He said he would ban Muslims from entering the United States. He encouraged police to be more brutal, has given aid and comfort to Nazis and white supremacists. He openly promised to wage war against women and their bodies, to pummel the environment, to benefit the already ultra-rich. He is corrupt to the bone, has been for a very long time, and he’s proud of it. He brought into his inner circle a dangerous cabal of neo-fascists, white supremacists and, more recently, neoconservatives.

And what now?

Trump’s Crony Capitalists Plot a New Heist

The Treasury secretary floats a plan to hand $100 billion in capital gains tax savings to his moneyed friends. It’s almost certainly illegal. 

By The Editorial Board

It seems that last year’s $1.5 trillion tax-cut package, despite heavily favoring affluent investors and corporate titans over workers of modest means, was insufficiently generous to the wealthy to satisfy certain members of the Trump administration. So now Treasury Secretary Steven Mnuchin offers an exciting plan to award an additional $100 billion tax cut to the richest Americans. 

Specifically, Mr. Mnuchin has directed his department to explore allowing investors to take inflation into account when calculating their capital gains tax bill. (Instead of determining how much value a stock had gained by subtracting its selling price from its original purchase price, investors would first adjust the purchase price to reflect what it would be in inflation-adjusted dollars.) Fans of the move argue that it would benefit the wide swath of middle-class Americans who own stocks, along with all those older Americans whose homes have appreciated in value over the decades. And, indeed, many middle-class Americans could wind up with a sliver of savings. But not all investors are equal. 

Independent analyses say that a whopping 97 percent of the savings from Mr. Mnuchin’s plan would go to the highest 10 percent of income earners. (For the severely math challenged, that would leave a paltry 3 percent to be divvied up by the remaining 90 percent of the country.) Two-thirds of all savings would go to the top 0.1 percent of income earners.

 

So in rough dollar terms, the administration is looking to hand $66 billion-plus to the ultrarich like — just to name a few — Mr. Mnuchin, who did very, very well during his years at Goldman Sachs (and already has a net worth estimated at $252 million); Wilbur Ross, the loaded secretary of commerce (estimated net worth: $506.5 million); Betsy DeVos, the even richer secretary of education (about $1.1 billion); and, of course, the extended Trump-Kushner clan. (To be sure, Ivanka Trump could use a financial pick-me-up to help take the sting out of having to close down her clothing brand.)

Thus die the final vestiges of this president’s pretty little narrative about being a populist hero. 

Hard-core economic conservatives and anti-tax activists have long pushed to index capital gains taxes for inflation under the dubious argument that it would bolster the overall economy. Unsurprisingly, this crusade has failed to catch fire in Congress, where even anti-tax lawmakers can be skittish about so blatantly playing to the plutocrats.

But here’s where Mr. Mnuchin’s plan is so politically inspired. He hopes to cut Congress out of this deal altogether by declaring it a regulatory matter and allowing Treasury to unilaterally redefine the term “cost.” No need to subject this process to the messiness of the legislative process when it is so much more efficient to claim jurisdiction for oneself and change the meaning of words to suit one’s purpose. Behold Trumpian logic at its purest. 

One potential sticking point is that Mr. Mnuchin’s proposal may not be, strictly speaking, legal. Congress has never authorized the Treasury Department to interpret tax law in the bizarre way the secretary is advocating. And the last time such a possibility was floated, in 1992, President George Bush’s Justice Department shot it down with extreme prejudice. The department’s Office of Legal Counsel went so far as to issue a 23-page opinion laying out in excruciating detail why the Treasury Department does not have the legal authority to index capital gains for inflation by means of regulation. 

So there’s that.

But the Trump administration isn’t one to fret about legal niceties when pursuing its pet projects. It much prefers to plow forward and let the court challenges shake out as they will. You win some. (Think travel ban, eventually, after multiple revisions.) You lose some. (Snatching migrant kids from their families at the border.) But as the adage goes, it’s easier to ask for forgiveness than permission. 

Mr. Mnuchin may well figure that the risk is worth the potential gain for himself, his wealthy friends and, more broadly, members of the Republican Party’s donor class who might very well show their gratitude by channeling some of their tax savings into party coffers. Besides, a case like this could take a while to wend its way through the courts, and who knows how many millions could be saved in the meantime. 

Beyond pure greed and a desire to suck up to the 0.1 percent, it’s hard to see any real-world logic behind this move. As political messaging goes, it seems flat-out bonkers to position Republicans as the party of the superrich — especially during a critical midterm election campaign with control of both houses of Congress on the line.

But at this point, President Trump may have decided that it doesn’t much matter what economic policies he pursues so long as he can keep the base distracted and fired up with his relentless culture warring. (Build the wall! Lock her up! Gorsuch! Kavanaugh! Stand for the anthem or be fired!) In early 2016, candidate Trump famously boasted that he “could stand in the middle of Fifth Avenue and shoot somebody” and not lose any voters. Since becoming president, he has been given little cause by his base — or by Republicans in Congress — to doubt his political infallibility. As such, with Mr. Mnuchin’s proposal, as with so many other moves undertaken by this administration, Mr. Trump’s thinking may boil down to little more than, “Why the heck not?” 

This may strike some as a depressingly cynical reading of what is being proposed. What, you thought their motives were pure?

Welcome to feudalism, America: How the 1 percent is systematically destroying the middle class

As wealth continues to consolidate at an alarming rate, working stiffs are ever more indebted to the rich

Sean McElwee

The idea of a property-owning democracy has long roots in American political thought. In their book, "The Citizen’s Share," Joseph R. Blasi, Richard B. Freeman and Douglas Kruse argue that the Founding Fathers wanted everyone (well, everyone who was white and male) to own a small slice of property. Both Madison and Washington praised the relatively equal distribution of property in the United States (compared with Europe). Thomas Jefferson wrote, “It is not too soon to provide by every possible means that as few as possible be without a little portion of land. The small landholders are the most precious part of a state.” Indeed, the concept is still popular today, even on the right.

James Poulos writes, “Without an ownership society, where citizens are prudent stewards of broadly distributed private property, freedom tends to become what it was in revolutionary France — an abstract ideal that can easily arouse destructive political feelings that know no bounds.” But new data suggests America may no longer be such a society, and that has worrying implications for democracy.
 

The idea of a property-owning democracy is no longer the reality in the United States. Edward Wolff finds that the wealthiest 10 percent own 90.9 percent of all stocks and mutual funds, 94.3 percent of financial securities but only 26.5 percent of the debt. For the middle class, their home makes up 62.5 percent of their limited wealth. (The bottom 40 percent have negative wealth.) The Gini coefficient for net worth has increased from 0.803 in 1962 to 0.871 in 2013. (By way of comparison: A Gini coefficient of 1 means that 1 person owns all of the wealth.) As the chart below shows, financial instruments and wealth are far more unequally distributed than income.

The United States is no longer more equal than European nations, but actually deeply more unequal. The chart below shows that the United States has the most unequal distribution of the wealth of any Organisation for Economic Co-operation and Development (OECD) member country examined. Across the OECD, the bottom 60 percent own about 13.3 percent of the wealth. (The bottom 40 percent own only 3.3 percent.) In Canada, the bottom 60 percent own 12.5 percent of the wealth, and the bottom 40 percent own 2.2 percent. In France, the respective numbers are 11.6 percent and 1.8 percent. And in Britain, they are 16 percent and 4.7 percent.

In the United States, however, the bottom 60 percent own a mere 2.5 percent of the wealth and the bottom 40% own negative 0.4 percent of the wealth.

As wealth and stock ownership has become more concentrated, good jobs that lead to a middle class lifestyle are increasingly eroded. Unfortunately, not enough people seem to be noticing.

Indeed, the Wall Street Journal recently reported that “apps do your chores” -- but the unfortunate reality is that workers, not “apps,” are doing those chores. The workers are called “contractors,” instead of employees, meaning that they don’t get the protections full-time employees do. And examples of exploitation are piling up.

A startup called CrowdFlower Inc. -- which, according to WSJ "breaks down digital jobs, such as data entry, into tiny tasks performed by millions of workers" -- was recently sued for paying some of those workers between $2 and $3 an hour. Industry leader Uber, meanwhile, has been criticized for exaggerating the wages of its contractors.  This practice is becoming widespread. A recent study finds that 53 million Americans are doing some sort of freelancing work. Of those, 40 percent are full-time independent contractors, meaning they have no other source of income.

The rich are driven by two main desires: First, to make sure they have more money; and, second, that someone else does the work. There is literally no job the rich are not lazy enough to outsource.

Because they cannot figure out the location of their post office, they need “Shyp.” With “Luxe,” they can get a person to park their car for them. And with “Saucey,” they can save themselves a trip to the liquor store. In a recent article for  The New Yorker, Patricia Marx describes some of the more absurd tasks that were included on TaskRabbit, including “Lego sorting,” locating “a reptile handler who is in legal possession of a rattlesnake” and finding a fake wedding ring that looks just like a real one.

It is not of insignificant concern that the rich may cease to be capable of performing the basic tasks necessary in the modern economy. The result is something like the dystopia described in the recent science-fiction film "In Time," except that the rich elongate their lives by making the poor do their mundane tasks.

Robert Kuttner writes of TaskRabbit:

To get an assignment, an aspiring Rabbit offers to do the chore for less money than he or she thinks other prospective Rabbits are bidding. That’s what makes it a metaphor for the new economy, a dystopia where regular careers are vanishing, every worker is a freelancer, every labor transaction is a one-night stand, and we collude with one another to cut our wages.

Together these trends should be worrying: The vast majority of Americans own no assets, but are instead laden with debt. The social safety net is being shredded by plutocrats and their political henchmen. Conservatives say workers should instead get benefits from their (preferably privately owned) employers. But those companies are supporting workers less and less: Defined benefit pensions are a thing of the past, and even basic retirement plans are in decline. And that’s just for those who are lucky enough to have jobs with benefits. Many workers are misclassified, or are never employees to begin with, meaning they must manage for retirement and health insurance without all the benefits the government funnels through the employee-employer relationship.

As Matt Bruenig notes, in the United States,

"employers often handle sickness (health insurance, subsidized by federal government), old-age insurance (401k and defined-benefit pensions, subsidized by federal government), survivor's insurance (life insurance, subsidized by federal government), family benefits (paid leave and health insurance for children), unemployment (severance, though more typically rely heavily on public unemployment insurance), on top of providing socially adequate levels of cash income."

That is, government has funneled important social benefits through corporations. This not only makes a corporate job more cushy than otherwise, it also makes freelance work more precarious.
Christopher Mims notes that, “Uber isn’t the Uber for rides — it’s the Uber for low-wage jobs.” A large portion of Americans now have two choices: Become servants to the rich for minimal wages, or starve to death. The idea that low-wage work is merely a short-term part of the rung towards a better life is also largely illusory: Upward mobility has been destroyed.

America has fallen into neo-feudalism: A wealthy capital-owning class exists behind a servile class with no assets, and only a life of drudgery ahead of them. The master-servant relationship will only further degrade social trust and civic values. Americans can’t see themselves as equals in the political sphere when large portions are consigned to wait upon the whims of new aristocracy. Conservative politics relies on the middle class making a devil’s bargain, believing they have more in common with the rich than the poor. It won’t be long before that facade crumbles.

It’s a Myth That Corporate Tax Cuts Mean More Jobs

By SARAH ANDERSON

“The arithmetic for us is simple,” AT&T’s chief executive, Randall Stephenson, said on CNBC in May. If Congress were to cut the 35 percent tax on corporate profits to 20 percent, he declared, “I know exactly what AT&T would do — we’d invest more” in the United States.

Every $1 billion in tax savings would create 7,000 well-paying jobs, Mr. Stephenson went on to say. The correlation between lower corporate taxes and more jobs, he assured viewers, runs “very, very tight.”

As Congress prepares to take up tax legislation this fall, including an effort to reduce the corporate tax rate, this bold jobs claim merits examination. Notably, it comes from the chief executive of a company that’s already paying comparatively little in federal taxes.

According to the Institute on Taxation and Economic Policy, AT&T enjoyed an effective tax rate of just 8 percent between 2008 and 2015, despite recording a profit in the United States each year, by exploiting tax breaks and loopholes. (The company argues that it pays significant taxes, at a rate close to 34 percent in recent years, but that includes deferred taxes and state and local levies.)

Despite the enormous savings AT&T has realized, the company has been downsizing. Although it hires thousands of people a year, the company, by our analysis at the Institute for Policy Studies, reduced its total work force by nearly 80,000 jobs between 2008 and 2016, accounting for acquisitions and spinoffs each involving more than 2,000 workers.

The company has also spent $34 billion repurchasing its own stock since 2008, according to our institute report, a maneuver that artificially inflates the value of a company’s shares. This is money that could have gone toward research and development or hiring.

Companies buy back their stock for various reasons — to take advantage of undervaluation, to reward stockholders by increasing the value of their shares or to make the company look more attractive to investors. And there is another reason. Because most executive compensation these days is based on stock value, higher share prices can raise the compensation of chief executives and other top company officials.

Since 2008, Mr. Stephenson has cashed in $124 million in stock options and grants.

Many other large American corporations have also been playing the tax break and loophole game. Their huge tax savings have enriched executives but not created significant numbers of new jobs.

Our report analyzes the 92 publicly held American corporations that reported a profit in the United States every year from 2008 through 2015 and paid less than 20 percent of their earnings in federal income tax.

We chose this particular tax threshold because, as Mr. Stephenson mentioned, House Republicans are proposing to reduce the federal statutory corporate tax rate to 20 percent, down from the current 35 percent. President Trump wants an even deeper cut, down to 15 percent.

If claims about the job-creation benefits of lower tax rates had any validity, these 92 consistently profitable firms would be among the nation’s strongest job creators. Instead, we found just the opposite.

The companies we reviewed had a median job-growth rate over the past nine years of nearly negative 1 percent, compared with 6 percent for the private sector as a whole. Of those 92 companies, 48 got rid of a combined total of 483,000 jobs.

At the companies that cut jobs, chief executives’ pay last year averaged nearly $15 million, compared with the $13 million average for S&P 500 companies.

Instead of tax-rate cuts for these big corporations, the coming tax debate in Congress should focus on making wealthy individuals and big corporations pay their fair share.

American multinationals hold $2.6 trillion in profits “offshore,” on which they would owe $750 billion in federal taxes if the money was repatriated. In most cases, these foreign profit stashes are merely an accounting fiction. Companies retain full access to these funds for use in the United States and could, if their executives so chose, use them to create jobs here.

Ordinary Americans have to pay all the taxes they owe each and every year. Offshore corporations should be required to do the same.

Beyond closing loopholes, we need to explore new ways to raise revenue fairly, including a tax on Wall Street speculation.

Most of us already pay a sales tax on gasoline, clothes and other basics. Why should hedge fund investors and other Wall Street traders pay no tax at all when they engage in short-term buying and selling of millions of dollars’ worth of stocks and derivatives? A fee of just a small fraction of 1 percent on each Wall Street trade would encourage longer-term investment while generating huge revenue for real job creation.

At a town hall this month at AT&T headquarters in Dallas, Mr. Stephenson urged his employees to call Congress and demand a corporate tax cut.

The message policy makers really need to hear? Stop peddling the myth that “tax relief” for big companies will be good for the rest of us.

The GOP tax bill may be the worst piece of legislation in modern history

By Fareed Zakaria

If the Republican tax plan passes Congress, it will mark a watershed for the United States. The medium- and long-term effects of the plan will be a massive drop in public investment, which will come on the heels of decades of declining spending (as a percentage of gross domestic product) on infrastructure, scientific research, skills training and core government agencies. The United States can’t coast on past investments forever, and with this legislation, we are ushering in a bleak future.

The tax bill is expected to add at least $1 trillion to the national debt over the next 10 years, and some experts think the real loss to federal revenue will be much higher. If Congress doesn’t slash spending, automatic cuts will kick in unless Democrats and Republicans can agree to waive them. Either way, the prospects for discretionary spending look dire, with potential cuts to spending on roads and airports, training and apprenticeship programs, health-care research and public-health initiatives, among hundreds of other programs. And these cuts would happen on top of an already difficult situation. As Gary Burtless of the Brookings Institution points out, combined public investment by federal, state and local governments is at its lowest point in six decades, relative to GDP. 

The United States is at a breaking point. In August, the World Bank looked at 50 countries and found that the United States will have the largest unmet infrastructure needs over the next two decades. Look in any direction. According to the American Road & Transportation Builders Association, the United States has almost 56,000 bridges with structural problems (about 1,900 of which are on interstate highways), and these are crossed 185 million times a day.

Another industry report says that in 1977 the federal government provided 63 percent of the country’s total investment in water infrastructure, but only 9 percent by 2014. There’s so much congestion in America’s largest rail hub, Chicago, that it takes longer for a freight train to pass through the city than it takes to get from there to Los Angeles, according to Building America’s Future, a public interest group.

There is no better indication of the U.S. government’s myopia than the decline in funding for research. A recent report in Science notes that for the first time since World War II, private funding for basic research now exceeds federal funding. Research and development topped 10 percent of the national budget in the mid-1960s; it is now less than 4 percent. And the Senate’s version of the tax bill removed a crucial tax credit that has encouraged corporate spending on research, though the House-Senate compromise version will probably keep it. All this is happening in an environment in which other countries, from South Korea to Germany to China, are ramping up their investments in these areas. A recent study found that China is on track to surpass the United States as the world leader in biomedical research spending.

When I came to America in the 1980s, I was struck by how well the government functioned. When I would hear complaints about the IRS or the Federal Aviation Administration, I would often reply, “Have you ever seen how badly these bureaucracies work in other countries?” Certainly compared with India, where I grew up, but even compared with countries such as France and Italy, many of the federal government’s key offices were professional and competent. But decades of criticism, congressional micromanagement and underfunding have taken their toll.

Agencies such as the IRS are now threadbare. The Census Bureau is preparing to go digital and undertake a new national tally, but it is hamstrung by an insufficient budget and has had to cancel several much-needed tests. The FAA lags behind equivalent agencies in countries such as Canada and has been delayed in upgrading its technology because of funding lapses and uncertainties. The list goes on and on.

There are genuine problems beyond underfunding. The costs of building American infrastructure are astronomical. But during the Depression, World War II and much of the Cold War, a sense of crisis and competition focused America’s attention and created a bipartisan urgency to get things done. 

Ironically, at a time when competition is far more fierce, when other countries have surpassed the United States in many of these areas, America has fallen into extreme partisanship and embraced a know-nothing libertarianism that is starving the country of the essential investments it needs for growth. Those who vote for this tax bill — possibly the worst piece of major legislation in a generation — will live in infamy, as the country slowly breaks down.

The Reich Report about the Republican tax plan and analyze its effects on the middle class, interest rates, and the debt.

Rich People Just Care Less

By Daniel Goleman

Turning a blind eye. Giving someone the cold shoulder. Looking down on people. Seeing right through them.

These metaphors for condescending or dismissive behavior are more than just descriptive. They suggest, to a surprisingly accurate extent, the social distance between those with greater power and those with less — a distance that goes beyond the realm of interpersonal interactions and may exacerbate the soaring inequality in the United States.

A growing body of recent research shows that people with the most social power pay scant attention to those with little such power. This tuning out has been observed, for instance, with strangers in a mere five-minute get-acquainted session, where the more powerful person shows fewer signals of paying attention, like nodding or laughing. Higher-status people are also more likely to express disregard, through facial expressions, and are more likely to take over the conversation and interrupt or look past the other speaker.

Bringing the micropolitics of interpersonal attention to the understanding of social power, researchers are suggesting, has implications for public policy.

Of course, in any society, social power is relative; any of us may be higher or lower in a given interaction, and the research shows the effect still prevails. Though the more powerful pay less attention to us than we do to them, in other situations we are relatively higher on the totem pole of status — and we, too, tend to pay less attention to those a rung or two down.

A prerequisite to empathy is simply paying attention to the person in pain. In 2008, social psychologists from the University of Amsterdam and the University of California, Berkeley, studied pairs of strangers telling one another about difficulties they had been through, like a divorce or death of a loved one. The researchers found that the differential expressed itself in the playing down of suffering. The more powerful were less compassionate toward the hardships described by the less powerful.

Dacher Keltner, a professor of psychology at Berkeley, and Michael W. Kraus, an assistant professor of psychology at the University of Illinois, Urbana-Champaign, have done much of the research on social power and the attention deficit.

Mr. Keltner suggests that, in general, we focus the most on those we value most. While the wealthy can hire help, those with few material assets are more likely to value their social assets: like the neighbor who will keep an eye on your child from the time she gets home from school until the time you get home from work. The financial difference ends up creating a behavioral difference. Poor people are better attuned to interpersonal relations — with those of the same strata, and the more powerful — than the rich are, because they have to be.

While Mr. Keltner’s research finds that the poor, compared with the wealthy, have keenly attuned interpersonal attention in all directions, in general, those with the most power in society seem to pay particularly little attention to those with the least power. To be sure, high-status people do attend to those of equal rank — but not as well as those low of status do.

This has profound implications for societal behavior and government policy. Tuning in to the needs and feelings of another person is a prerequisite to empathy, which in turn can lead to understanding, concern and, if the circumstances are right, compassionate action.

In politics, readily dismissing inconvenient people can easily extend to dismissing inconvenient truths about them. The insistence by some House Republicans in Congress on cutting financing for food stamps and impeding the implementation of Obamacare, which would allow patients, including those with pre-existing health conditions, to obtain and pay for insurance coverage, may stem in part from the empathy gap. As political scientists have noted, redistricting and gerrymandering have led to the creation of more and more safe districts, in which elected officials don’t even have to encounter many voters from the rival party, much less empathize with them.

Social distance makes it all the easier to focus on small differences between groups and to put a negative spin on the ways of others and a positive spin on our own.

Freud called this “the narcissism of minor differences,” a theme repeated by Vamik D. Volkan, an emeritus professor of psychiatry at the University of Virginia, who was born in Cyprus to Turkish parents. Dr. Volkan remembers hearing as a small boy awful things about the hated Greek Cypriots — who, he points out, actually share many similarities with Turkish Cypriots. Yet for decades their modest-size island has been politically divided, which exacerbates the problem by letting prejudicial myths flourish.

In contrast, extensive interpersonal contact counteracts biases by letting people from hostile groups get to know one another as individuals and even friends. Thomas F. Pettigrew, a research professor of social psychology at the University of California, Santa Cruz, analyzed more than 500 studies on intergroup contact. Mr. Pettigrew, who was born in Virginia in 1931 and lived there until going to Harvard for graduate school, told me in an e-mail that it was the “the rampant racism in the Virginia of my childhood” that led him to study prejudice.

In his research, he found that even in areas where ethnic groups were in conflict and viewed one another through lenses of negative stereotypes, individuals who had close friends within the other group exhibited little or no such prejudice. They seemed to realize the many ways those demonized “others” were “just like me.” Whether such friendly social contact would overcome the divide between those with more and less social and economic power was not studied, but I suspect it would help.

Since the 1970s, the gap between the rich and everyone else has skyrocketed. Income inequality is at its highest level in a century. This widening gulf between the haves and have-less troubles me, but not for the obvious reasons. Apart from the financial inequities, I fear the expansion of an entirely different gap, caused by the inability to see oneself in a less advantaged person’s shoes. Reducing the economic gap may be impossible without also addressing the gap in empathy.

Economist Joseph Stiglitz: Trump's Budget Takes a Sledgehammer to What Remains of the American Dream

AMY GOODMAN: On Tuesday, the Trump administration unveiled its $4.1 trillion budget. The plan includes massive cuts to social programs, while calling for historic increases in military spending. The budget proposes slashing $800 billion from Medicaid, nearly $200 billion from nutritional assistance programs, such as food stamps and Meals on Wheels, and more than $72 billion from disability benefits. The plan would also completely eliminate some student loan programs. It would ban undocumented immigrants from receiving support through some programs for families with children, including the child care tax credit. On Tuesday, Senator Bernie Sanders of Vermont slammed Trump’s budget.

SEN. BERNIE SANDERS: This is a budget which says that if you are a member of the Trump family, you may receive a tax break of up to $4 billion, but if you are a child of a working-class family, you could well lose the health insurance you currently have through the Children’s Health Insurance Program and massive cuts to Medicaid. At a time when we remain the only major country on Earth not to guarantee healthcare to all, this budget makes a bad situation worse in terms of healthcare. In other words, this is a budget that provides massive tax breaks for billionaires and corporate CEOs, and massive cuts to programs that tens of millions of struggling Americans depend upon.

When Donald Trump campaigned for president, he told the American people that he would be a different type of Republican, that he would take on the political and economic establishment, that he would stand up for working people, that he understood the pain that families all across this country were experiencing. Well, sadly, this budget exposes all of that verbiage for what it really was: just cheap and dishonest campaign rhetoric that was meant to get votes, nothing more than that.

AMY GOODMAN: That was Senator Bernie Sanders of Vermont. The ACLU, NAACP and Planned Parenthood have all come out criticizing the budget. Some conservatives are also criticizing the budget. Republican Congressman Mark Meadows of North Carolina told The New York Times, "Meals on Wheels, even for some of us who are considered to be fiscal hawks, may be a bridge too far," unquote.

The budget also calls for an historic 10 percent increase in military spending and another $2.6 billion to further militarize the U.S.-Mexico border, including $1.6 billion to build Trump’s border wall. In a rare proposed benefit for families, the budget allocates $19 billion for six weeks of paid parental leave for new families—a project that’s been spearheaded by his daughter and senior White House adviser, Ivanka Trump. The budget projects 3 percent economic growth, which economists say is widely unrealistic.

Unlike previous presidents, Trump is unveiling his proposed budget while he’s abroad. David Stockman, former budget director for President Ronald Reagan, said, quote, "This budget is dead before arrival, so he might as well be out of town," unquote.

Well, for more, we go to Joe Stiglitz, Nobel Prize-winning economist, Columbia University professor, chief economist for the Roosevelt Institute. He’s the author of numerous books, most recently, The Euro: How a Common Currency Threatens the Future of Europe.

Joseph Stiglitz, welcome to Democracy Now!

JOSEPH STIGLITZ: Nice to be here.

AMY GOODMAN: Can you respond to the budget that’s just been revealed?

JOSEPH STIGLITZ: It’s like everything else: It’s made up. You could say it’s a collection of lies put together. It doesn’t make any economic sense. I don’t think anybody who’s looked at it has—can fathom the economics. I mean, you mentioned one thing, the 3 percent growth rate, which is the largest deviation in estimate relative to the CBO on record. You know, when I was chairman of the Council of Economic Advisers, we wanted to be responsible, and we always were conservative and were very careful, getting the views of everybody, wanted to make sure that our numbers were reasonable. He’s made no pretense to be reasonable.

In fact, what’s striking is, while he assumes that there’s going to be more growth, if you look at the budget, it’s designed to reduce growth. He cuts out support for science, for R&D, which is the basis of productivity growth. He cuts out support for job retraining, so when people leave one job, they can be trained for the next job. He cuts out support for Pell grants, so those who have low income can get the education so they can live up to their potential. All these are things that actually lower economic growth. So I would say this is not a growth budget, this is a no-growth budget.

And then he has the numbers, you know, the gall to have things like—you know, just mind-bending. He says he’s going to—elsewhere, he said he’s going to eliminate the estate tax. And his budget says that he’s going to raise several hundred billion dollars’ more money from an estate tax that is zeroed out. Now, you can make a statement that if we lowered the estate tax a little bit, maybe people will be induced to die more, and maybe we’ll get more revenue. You could make that kind of statement. But one thing you don’t need a Ph.D. is, zero times any number is zero. So if you have a zero estate tax, no matter how many people are dying and how wealthy they are, you’re going to get zero revenue.

And remember, what he’s doing, he’s cutting out the estate tax that benefits 0.2 percent of the economy—of our society. You know, you have to have an estate of more than 10 million, if you’re a married couple, in order to pay anything on the estate tax. And meanwhile, he’s cutting benefits for ordinary Americans—education, health, as you mentioned, food, nutrition. It’s not just the system of social protection that we’ve created, but even the bottom safety net that is—catches people when they’re in trouble.

AMY GOODMAN: Let’s go to Donald Trump two years ago, speaking—this is May 21st, 2015—to the right-wing outlet The Daily Signal.

DONALD TRUMP: I’m not going to cut Social Security like every other Republican, and I’m not going to cut Medicare or Medicaid. Every other Republican is going to cut. And even if they wouldn’t, they don’t know what to do, because they don’t know where the money is. I do.

AMY GOODMAN: So, he has said, when he was campaigning—actually, he was campaigning against other Republicans when he made the point, "I’m not going to cut Medicare, Medicaid or Social Security." I mean, we had endless choices of clips to choose from. Joe Stiglitz?

JOSEPH STIGLITZ: He lied. He is cutting Medicaid, the largest cut to Medicaid, even beyond what was in his repeal and replace, that didn’t get very far. These are even bigger Medicaid cuts. In terms of so Social Security, one important part of Social Security is disability payments.

AMY GOODMAN: SSDI.

JOSEPH STIGLITZ: And, you know, that’s really important. People do get to say, well, they have auto accidents, they get sick, they get cancer—you know, all kinds of things that make them unable to work.

AMY GOODMAN: They get hurt at work.

JOSEPH STIGLITZ: They can’t work. And he’s cutting that. It’s an important part of our Social Security, of security that people—we provide, as a society, as a basic system of social protection. He’s cutting back on those expenditures. So, all I can say is, you look at that clip, and what he’s doing today is just the opposite.

AMY GOODMAN: So you’re talking about cutting—I mean, already the proposed budget from the House was massive when it came to cuts, something like $880 billion in Medicaid cuts. He’s suggesting $616 more billion—$616 billion more, which would basically gut Medicaid.

JOSEPH STIGLITZ: That’s right. And remember, it’s not just for poor people. It’s a major problem for our elderly, who have to go into old age homes, hospice, you know, all—so, it is an extraordinarily important program. Another way of seeing the massiveness of these cuts is that, if you look at what we call a non-defense discretionary—that is to say, you take out Social Security, you take out Medicare, and you take out military—he’s proposing a 40 percent cut in all these programs. And remember, these programs have been cut year after year for the last 25 years, under both Democrats and Republicans, so it’s not like there’s a lot of fat on this. These are already fairly lean. And what he’s doing is just taking an ax to them, a 40 percent reduction.

The consequence of his proposal, I don’t think even he fully understands. For instance, we would lose the vote at the U.N. if he carried out his programs. I mean, so, basically, we’re—we’re saying to international—

AMY GOODMAN: What do you mean we’d lose the vote at the U.N.?

JOSEPH STIGLITZ: Well, because he’s cutting out all support for international organizations. And if we don’t pay our dues, our core dues, to the U.N., we lose our vote. And they’re an important source of our influence in international politics. So, you know—and this is a consequence of what he is proposing. There is no discussion of what the implications of this 40 percent cut in government. You know, there are some programs that can be cut. That’s clear. But he hasn’t gone pruning. He’s taken an ax and said, "Oh, I can get a balanced budget, if I make up numbers about growth and if I just pretend that I’m going to take a 40 percent cut from somewhere."

AMY GOODMAN: Let’s go to Mick Mulvaney, director of the White House Office of Management and Budget.

MICK MULVANEY: I think, for years and years, we’ve simply looked at a budget in terms of the folks who are on the back end of the programs, the recipients of the taxpayer money. And we haven’t spent nearly enough time focusing our attention on the people who pay the taxes.

AMY GOODMAN: Mick Mulvaney. Your response, Joe Stiglitz?

JOSEPH STIGLITZ: Oh, totally wrong. I mean, I was in the White House for four years. And we did a very, very careful analysis of the benefits and costs, how it would affect taxpayers and ordinary consumers, the rich, the poor, the middle class, when we evaluated the program. We were very, very aware that this was money that people had worked for, earned, and that, on the other hand, they need help in a whole variety of areas, help in sending their kids to college, in buying a home. You know, the—

AMY GOODMAN: This would drastically shrink low-income student loan program.

JOSEPH STIGLITZ: Oh, some of the programs would be wiped out. So, you know, the American dream, we’ve gradually understood, is really a myth, the fact that anybody can go from the bottom to the top. This is, what is remnant of that American dream, he’s saying, "I’m going to hit it with a sledgehammer."

AMY GOODMAN: Under Trump’s budget, the Environmental Protection Agency faces a 31 percent cut, the steepest cut of any agency or department across the government. Well, during a press conference on Tuesday, a reporter asked White House budget director Mick Mulvaney about the EPA cuts.

REPORTER: Can you characterize the treatment of climate science programs and cuts to those? And do you–do you describe those as a taxpayer waste, if you do cut them?

MICK MULVANEY: You tell me. I think the National Science Foundation last year used your taxpayer money to fund a climate change musical. Do you think that’s a waste of your money?

REPORTER: What about climate science?

MICK MULVANEY: I’ll take that as a yes, by the way.

AMY GOODMAN: There’s Mick Mulvaney. Joe Stiglitz?

JOSEPH STIGLITZ: Well, you know, of course, every government program has the worst thing. The financial sector and the private sector makes a mistake. Remember we had a crisis in 2008? That was a misallocation of trillions of dollars. So, I don’t want to pretend that every program is perfect. But if you get rid of environmental protection, we’re going to be suffering from dirty air, dirty water, toxic waste, that lower our health. And here’s the point. He wants faster economic growth. A less healthy America is not going to be as productive.

AMY GOODMAN: And the massive increase in military spending? I mean, you’ve written books about this, about the wars and what they cost us.

JOSEPH STIGLITZ: That’s right. And we’re fighting, we might say, a war on terrorism. But another aircraft carrier is not going to win—help us in the war on terrorism. You know, the Cold War, that fight with Russia, in the form that it was, ended a quarter-century ago, and yet we’re spending money as if it hasn’t ended. So we’ve been spending lots and lots of money on weapons that don’t work, against enemies that don’t exist. If he used that criteria that he said for shutting down a department, the Defense Department would have been shut down long ago. You know, the $1,000 toilet, the hammers that cost $100 or things like that—if we used the criteria of misspending, the Defense Department is illustration number one.

AMY GOODMAN: So we just have a minute right now. Republicans have joined with Democrats in condemning this, saying that this budget is dead on arrival. He has it released when he’s out of town. What actually happens here? You were a chief economic adviser in a White House, under President Clinton. What happens next? What happens to this budget?

JOSEPH STIGLITZ: Well, actually, the House Budget Committee starts putting together their own budget. You know, this will be a little bit in their background. It will give a little bit of impetus to the extremists. You know, it’s so ironic. He’s talking about Islamic extremists while he’s in Saudi Arabia, and here we have budget extremists back home, really extremist. And so, it is giving a license for that kind of extremism in thinking about the social fabric in our country. But they will go ahead on their own and try to structure. The House, led by Ryan, is going to come up with a more extreme budget than I think is going to be acceptable to the American people. Fortunately, the Senate will try to be—tame it in and bring it in. A good chance that they won’t be able to compromise. That is to say, they won’t be able to put together the numbers that work. And what happens then is, the government operates on a continuing resolution, where what you say is, "We haven’t figured out how to make a new budget. We’ll keep the old budget for another three months or six months, until we can reach an agreement."

AMY GOODMAN: Well, I want to thank you very much, Joseph Stiglitz, Nobel Prize-winning economist, Columbia University professor, chief economist for Roosevelt Institute, served as chair of the Council of Economic Advisers under President Bill Clinton, author of numerous books, most recently, The Euro: How a Common Currency Threatens the Future of Europe.