Trump Presidency Would Be an Economic Nightmare, Says Prize-Winning Economist
Joseph Stiglitz, recipient of the Nobel Memorial Prize in Economic Sciences, did not mince words when discussing Donald Trump's potential impact on the U.S. economy. The acclaimed economist told CNBC he believed a Trump presidency would be an economic "nightmare," but has a slim probability of actually happening.
"I think it will be extraordinary difficult for our relations with other countries," said Stiglitz, who explained how Trump's centering his campaign around a foreign country funding American infrastructure was a precarious decision.
"[Proposing] building that wall between Mexico and the United States, has built a wall between the United States and Latin America because the wall has done more damage ... than one could ever imagine," Stiglitz said.
According to Stiglitz, Trump's career in business is also disconcerting.
"For our economy, I think the uncertainty of this political leader who clearly has no deep understanding of economics other than knowing how to go bankrupt [is a major problem]. And we can only hope that he won't bankrupt the country, but he has said things like 'let's renegotiate the national debt' ... that's something that's almost unimaginable that any leader would say," he said.
Stiglitz theorized on how Trump would do business in the White House based on the GOP nominee's statements: "You know you've lent us money that was just the initiation of a negotiation, we'll negotiate whether we'll pay you back."
"That's not the way capital markets work," he said, "So I guess I say it's a nightmare. Fortunately, the probability that nightmare coming true is small and hope it's getting smaller by the day."
Stiglitz empathized with the middle class and poor people in America, who feel squeezed in the current economy; particularly voters willing to take a chance on some of Trump's far-fetched ideas just because they want change.
"What we have to do is rewrite the rules of the market economy," Stiglitz insisted. "We have to, for instance, try to encourage firms to be more long-term, less excessive CEO pay, pay more attention to strengthening workers' bargaining rights ... I don't think it's rocket science, but we haven't paid any attention because we were blinded by the ideology of trickledown economics—that if the top did well everybody would do well, and that has been proven wrong."