The US unemployment rate fell to its lowest level in more than four years last month, but the addition of 162,000 new jobs to the world's biggest economy was lower than expected.
Harry Truman once demanded to be given one-handed economists because he became so frustrated with his advisers meeting every demand for answers with “on the one hand, on the other hand”.
Truman would have liked Joseph Stiglitz, the Nobel prize-winning economist who worked for a later Democratic president, Bill Clinton, and who does not mince words when talking about the current incumbent of the White House, Donald Trump.
Stiglitz, in London to publicise his new book, says that for the past six or seven years he has been growing increasingly disturbed by America’s growing inequality and the simmering anger it has caused.
“I began to say ‘if we didn’t fix this problem we are going to have a political problem’ and historically a Trump figure, a fascist kind of figure arises.”
Asked whether he really thinks Trump is a fascist, Stiglitz says: “I certainly think he has those tendencies. He is restrained by our institutions and every day those institutions work we feel relieved. We don’t know what the bounds are and we don’t know how far he would push those bounds.
“A couple of things are most disturbing – the attack on the press and the attack on the foundations of knowledge which goes beyond the press.
“We have never had a president who day after day lies and is unaffected by it. Normally everybody you deal with is tethered by a sense of responsibility and truth, but not him.
“I think the other thing you have seen with some of these fascist leaders is using ‘us versus them’ as a way of dividing society.” Stiglitz says Trump is using racism and misogyny to divide America. “To me it is deeply, deeply disturbing.”
Stiglitz had his differences with Clinton, for whom he worked as chairman of the council of economic advisers, and Barack Obama, criticising both for not doing enough to ensure that the fruits of growth were more evenly shared.
But he sees Trump as not just misguided but positively dangerous – a man who has difficulty telling the truth, whose word is not to be trusted and who might even respond to being thwarted in his plans by pushing the nuclear button.
He gives as an example the president’s determination to rip up the North American Free Trade Agreement (Nafta), which created a free trade zone between the US, Canada and Mexico a quarter of a century ago.
Trump thinks the agreement has been bad for America but is running into strong opposition from big business, which has outsourced production to exploit cheaper labour costs south of the Rio Grande.
“What I worry about is that when Trump is confronted with the reality that he can’t do on Nafta what he wants to do he will strike out like a little kid and do something dangerous - like putting his finger on a button he shouldn’t be putting his finger on.”
Would Trump really put his finger on the nuclear button because he was thwarted over Nafta? “We don’t know. There is a discussion in Congress to restrain his ability to put his finger on that button.”
Trump’s victory over Hillary Clinton in the 2016 presidential race has encouraged Stiglitz to update and expand his 2002 book, Globalisation and its Discontents. The original book, written in the wake of the violent protests on the streets of Seattle, Prague, Washington DC and Genoa, assumed that globalisation’s discontents were in poor countries. The new book charts how the unhappiness has spread from the developing to developed world and led to Trump, Brexit and growing support for extreme parties in continental Europe.
Stiglitz attributes Trump’s election to globalisation, rising inequality and the legacy of the 2008 financial crisis.
“This is a global phenomenon. Part of it is growing inequality and the way people have come to understand that inequality. They see the world doing better and they see that they are not getting better off. They don’t want to say it’s because of what I’ve done, it’s because of what’s happened to me. Something that Trump said captured what a lot of people think: the system is rigged.
“Part of this is a legitimate anger relating to the crisis of 2008 and how we handled it. We saved the banks, we saved the bankers and we saved the shareholders; we didn’t do much for homeowners and the workers who were losing their jobs.”
Stiglitz says he told Obama before he became president that the focus should be on helping ordinary Americans. “But the dominant influence were the bankers in Wall Street.”
The rules of the American economy were rewritten in the 1980s in ways that weakened labour and watered down anti-trust and other competition laws, Stiglitz says. He believes discontent would have surfaced even without the 2008 crisis. “But I think it worsened it, crystalised it.”
He added: “The crisis of 2008 made things much much worse. Millions of Americans lost their homes and the way things were managed was grossly unfair.”
The reason neither developed nor developing countries are happy with globalisation, Stiglitz says, is that trade agreements were written by and for corporations and against ordinary workers in both places.
Stiglitz was born in Gary, Indiana, in 1943. Then a booming steel town, Gary has become one of the places in the midwest that has come to symbolise America’s rust belt decay. Stiglitz says he understands the anger that turned Indiana into Trumpland because for the poorest Americans wages adjusted for inflation had not increased for six decades.
The US economy has been growing at a reasonable pace in the year since the presidential election, with unemployment falling, consumer confidence strong and the stock market rising. So does Stiglitz thinks Trump’s economic strategy will work?
“There is no way ... that it will raise living standards. The reality is that the standard of living will go down if he succeeds in doing any significant part of what he is proposing.
“He is proposing deglobalisation, breaking up the efficient supply chains that have been created and raising costs. If manufacturing jobs do come back to the US they will be done by robots in hi-tech parts of the country rather than the rust belt states.”
The updated Globalisation and its Discontents sketches out three possible ways forward: doubling down on the current model of globalisation, the new protectionism, or a fairer globalisation. More of the status quo is not politically feasible, he says, and wouldn’t work anyway, while Trump is the manifestation of the new protectionism. “It means going back into yourself, ignoring all the advantages of trade such as specialisation. It’s dishonest populism. We have to make globalisation work, stop more than 100% of the gains going to the people at the top.”
But is fairer globalisation any more politically feasible given the likely push back from the 1%. “There is going to be resistance. But we are democracies.
“I don’t think we can have democracies that work where most of the people are not benefiting economically, where most of the people are worried about their job security. Society can’t function without shared prosperity.”
Stiglitz says Bernie Sanders would have beaten Trump. “I see the election of 2016 as an election of protest. Bernie represented a return to the old values: a middle-class lifestyle, a home, a secure retirement, education for your children, healthcare. Jeremy Corbyn is saying the same thing in the UK.”
Instead America is led by a man Stiglitz says should not be in the White House. “He is not fit to be president. He does not have an understanding of the issues, the political process. He is used to making one-time deals. You can cheat your contractors when you buy a real estate property and fix it up. Reputation doesn’t matter. For the president of the United States reputation does matter. The reputation of the United States does matter. We are dealing with countries all over the world. They want to know if your word is good. Trump’s word is not good.”