Working families are suffering, is the Biden plan big enough? Why doesn't Wall St. fear inflation or a drop in the US dollar? Bob Pollin on theAnalysis.news with Paul Jay.

Transcript edited for clarity

Paul Jay

Hi, I'm Paul Jay. Welcome to theAnalysis.news podcast, and please don't forget there's a donate button at the top of the webpage.

Over the years, Republican cries about the evils of big deficits have been more rhetorical than real. That is, as long as the deficit came as a result of tax cuts and not social programs that benefited working people. Biden takes the reins of the federal government at a time when most of Wall Street has embraced the need for more stimulus and shows little to no concern about the size of the deficit. So why is Wall Street so on board with more stimulus and given the change of mood of the financial sector and the historically low inflation rates, is the plan announced by Biden going far enough?

And once the economy is recovering, will Biden succumb to pressure from austerity hawks and move towards a more balanced budget? And how will Biden achieve his goal of making the U.S. power grid carbon neutral by 2035? Is he planning to phase out fossil fuel or is he depending on carbon capture, which is still unproven technology? We're going to talk about all of this with our guest who's now joining us, Bob Pollin. He's the co-founder of PERI the Political Economy Research Institute in Amherst, Massachusetts, and co-author of a book with Noam Chomsky titled Climate Crisis and the Global Green New Deal: the Political Economy of Saving the Planet. Thanks for joining us, Bob.

Bob Pollin

Thanks very much for having me, Paul.

Paul Jay

So let's start with this change of mood. You know, it wasn't that long ago when the predominant majority voices on Wall Street, certainly expressed through the leadership of the Republican Party and many of the Democrats, was all about austerity. And even at times, if they accepted a certain amount of stimulus when there was a recession, but it didn't take long before the austerity hawks were back yelling again. But there seems to be a real change of mind about this on Wall Street. What is that about?

Bob Pollin

I would say in the first instance, the people on Wall Street recognize the magnitude of the crisis. Which is historic and they don't want to go down. Now, what's happened over the last nine months since the covid pandemic started? The US economy has experienced this massive recession. If you look at over the last nine months, 45 percent of the workforce, 78 million people have filed for unemployment insurance.

If you look at basic indicators, which I was just looking at, almost 20 percent of households with children in the last week have faced food insecurity, don't have enough to eat. Another 20 percent say they can't afford their rent. That's from the real side of the economy. Now, on the financial side of the economy, the Dow Jones Industrial Average from March until today is up almost 70 percent. This is again, this is truly unprecedented that the real economy is experiencing severe suffering, but Wall Street is doing great.

And why is Wall Street doing great? Well, because in March, we passed the initial stimulus program, the Cares Act, which was about 10 percent of GDP deficit expansion. On top of that, the Federal Reserve began buying up bonds from Wall Street to keep them afloat, to get money in their pockets. To date, they've bought up about three trillion in bonds. So that's 14 percent of GDP pumped into Wall Street directly.