Yanis Varoufakis on Global Capitalism & How Trump’s Tax Plan is Class War Against the Poor

You heard in this introduction the tax plan that has been put forward. And you’re here in this country, and this is your specialty. You’re an economist. You taught at what? University of Texas, Austin?

That is right.

And you’re at University of Athens now in Greece. You’re the finance minister, former finance minister in the Syriza government. President Trump calls this a Christmas gift for the American people. What is your assessment of it? And then, fit it into the picture of global capitalism.

He has a very interesting definition of the American people. He considers the set of the American people to be exactly the same as the set of his friends.

Look, it’s déjà vu. We’ve seen it all before. It all began in the 1980s under Ronald Reagan, this mass redistribution of income from the have-nots to the haves. We saw it under George W. We’re seeing it again. But there is a difference now. The difference is that American capitalism has exhausted its capacity to reproduce itself through a process of tax cuts—the trickle-up effect of wealth rising from the bottom to the top 0.1 percent. In the 1980s, when Ronald Reagan first applied this kind of tax cut-based policy, the United States was still in control of what I call the recycling of global profits and surpluses. The United States economy was, if you want, the engine of growth internationally. The tax cuts in this country were fueling demand for the net exports of Japan, back then, Germany, Holland, later China. And this was keeping capitalism globally in that state of irrational exuberance, if you remember.

But then, after 2008, those pyramids collapsed. The American economy does not have that capacity anymore. The increase of the federal budget deficit, that supposedly the Republicans are all against—nevertheless, they are going to boost it magnificently now—are at the very same time, Amy, as they are antagonizing China, that owns a large chunk of American public debt, which now they’re going to keep increasing in order to line the pockets of their mates. You couldn’t design a more catastrophic economic policy than that—boosting the budget deficit by lining up the pockets of the rich, continuing to stagnate the incomes of the middle class and the working class, and antagonizing your main creditors. I rest my case.