identify the threats that we have it's crazy confrontation let it be an arms race based on often scary dramatic development the only way i'm going to resist i don't see how that strategy will be successful very critical of time time to sit down and tom. welcome to the alex out until friends call then but we discuss economic recovery from the pandemic i came to these professor david blanchflower of i think we got macaulay hampshire to discuss whether there are any signs of a biden made to come free and the united states by his hope is that the low end

folks will actually get out and spend and supporting the talk is that this mission will actually have the big stink that on child poverty of any measure since roosevelt since the new deal this is something focused on the low aims going to impact relatively poor people help states help schools focus on the real thing so i think it's quite interesting and didn't get a single vote but one republican in the senate. all of that and more to come but 1st to your tweets in nose and messages in the sponsor actually last week on trump and as a party over what we spoke to him as an anti trump republican and as martin bass pro trump republican phillips says trump and what he stands for is far from over the voices of people that believe in freedom will not be silenced and all system of lies will be torn down marcus says i think 4 years of biden could see him make

a comeback to be honest to cheney says definitely if the democrats don't start delivering on their promises and inform the senate so that things can actually get passed then another top style demagogue is going to talk with them in 202-220-2420 alan kennedy says i watched him the other night he didn't say one way or another if you'd run again but still peddling the line that the election was faked utter annoyance and i to the big empty during the last recession of over a decade ago and i professor david blanchflower was a lone voice on the bank of england monetary policy committee urging for more aggressive money to response to the global recession so what tools are in the policy both night to stimulate economic recovery from corporate over to alex i profess city of atlanta. professor david blanchflower welcome back to the alex salmond show it was great on top your arts or interesting days now looking

at the world the color me know sometimes you seem to have had a much sharper fall in than others have in china where the virus originated has already surpassed its previous peak output levels or other countries like the u.k. you know the last 10 percent last year are going to struggle to recover even into next year why the difference between various economies in terms of the impact of the covert recession. obviously some of it and a great deal of it has to do with lockdown it has to do with how the government responded so the response in the u.k. where you allow people to be furloughed which keeps the unemployment rate down alone discourages firms from producing so the workers of aig money output drop us so that that's part of it so it's about responses from government it's about the nature of the economy that people are in. and essentially whether people

could continue working under the situation where the virus is present and obviously there's i mean you're right to say that g.d.p. dropped a lot in the u.k. but actually look at unemployment look at unemployment in the united states unemployment in march was around 4 percent and in april it was 20 percent so we have so yeah some good indicators in terms of output but employment and on client has been particularly bad in the united states which in many ways explains the need for the buy in stimulus that i know we're going to get to talk about so let's talk about president biden as a man thing from the biden white house or a new economics is he the the roosevelt of the modern era. well i think i think to some extent yes and that is yes this is actually focused on the low end by this hope is that the low end folks will actually get out and spend and

supporting i think one thing i guess that i know you've been interested in the talk is that this man sheer will actually have the biggest impact on child poverty of any measure since roosevelt since the new deal so i think the answer is that people at the low end very this is very focused on people a lot and in some sense what's interesting is that the republicans voted against it but it's actually really popular amongst republicans who are going to benefit from it so we have a very interesting political thing where you vote against the interests of the people who vote for you so i think it's i mean it's the most popular measure we've seen in a very long time so the answer is this is something focused on the low ain't going to impact relatively poor people help states help schools focus on real things so i think it's quite interesting and didn't get a single books from a republican in the senate and the 10 to the financing of the biden

a company package as i suspect will they say well you know debt levels will just have to rise even further in order to make sure that we keep their color me moving and get people back into work. well i think the classic classic story in a sense that that i was writing about in 2009 and 10 skidelsky has written about which is that in a slant you book you don't worry about the debt you worry about activity and if we look back and look at look back under clinton under the great clinton boom deficits were being paid off the debt was being paid off and the reality is 2 things debt is really cheap right now well so the rate of return from borrowing essentially it's 0 is up and then the other thing in the debate in the u.k. spin about hat the central bank is by huge chunks huge chunks of these of the go in depth that's been issues the worry always is that if you do that if you print money

then that will generate inflation but if there's a huge deflationary shock of the kind that we are over that's what you want to do if deflation is what's coming in you put the inflationary shock in there to prevent us the going to deflation so the answer is it's precisely the right thing to do in the slump and under people arguing that are going to me 100 times on t.v. shows like yours inflation is coming and i always go well way you said it last time you said nice 38 times that i was on this program there isn't any inflation what we care about is employment unemployment and jobs and that's why you need the stimulus and that's why economists pretty much across the board think a similar should happen and this is not the time for reckless failed austerity which will put was applied in the in the in the depths of the recession in the u.k. generated the slowest recovery 300 years so i'm absolutely supportive of it and it

looks like it's going to be popular and boost the economy so let me take you back and decayed when you where you're sitting on the monetary policy committee of the bank of england the voter after voter you know a lot of voice say the whole s. . additive belt painting is not the way forward let's get a company underway if and firstly it had been as lore then as they are now do you think you would have had any supporters as a realisation that that wasn't the way ahead looking back it's pretty hard to understand why people didn't see it and what i mean it was blindingly obvious so i guess you'd have to ask them i mean people said to me oh it wouldn't made any difference absolutely would have made a difference if we do understood that you know better banks we're going to fail in this recession you should not allow the lamest a fairly sure done things to prevent northern rock and roll roll back of scotland the law and so i think the answer was if you got a retaliation in the hearse it life would have been much better and so it in for

people to argue if we receive it when they made any difference that it was down its focus he was persuasive enough were all rather ridiculous arguments and essentially that's where we are remember alex that this that the 2 things as well the scale of this shock today and the speed at which it happened was even greater than any of them in 2000 took about going to be a year or so to really get down and into recession call call them call them up this time so that was unprecedented but remember now hell we have the experience of missing it in 2008 so at least you can say you know if you listen you should realize the year ahead of time that this was going on and you should realise that your spirity that you implement it was a disaster don't do it this time it just won't go that one last thing i remember rachel lomax was a great member of the committee said to me that one of the one thing perhaps the biggest mistake the m.p.c. made was not listening to me about what happened in america so what happened in

america spread around the world so maybe in a sense this huge stimulus maybe that will have a positive effect on everybody else it's america's booming as it has repercussions elsewhere but americans for him call. now obviously you keeper a good what. the chancellor has budget for over the last week and there seems to be a curious mix of a fairly heavy continued stimulus with the threat of a substantial increase in their the tax ratio in times to come it's almost there as there is not so much jam today of a standard to tomorrow as trying to disguise the jam today it seems a very unusual approach to economics to try and under play your step millar's below the consequences to be in the in the few years time of what you think is up to the chance of the exchequer. i think he looks absolutely clueless i mean i think i mean

the answer is that if you prefer you prepare for the worst and hope for the best it doesn't seem to have actually understood well what recovery is going to look like the right things we do not know what will or long one changes in behavior and we do not know after the these schemes are taken away what proportion of firms are going to survive if it works on furlough you bring them back from furlough does the focus of our so the answer is that you certainly shoot default on the side of to exude much and if inflation rises we know what to do about it so it's really really you sort of continue this stuff and you say here we go get back to austerity we've got hurt the poor we've got a lorry it's really just that in 2010 it really was the core the disabled single mothers. and our old people's homes and libraries because of the great recession so i think the answer is that you know basically if you have somebody who doesn't really seem to understand that the way out of

a recession is to do more and you rather weird combination of yellow do further lowering that we go lower rate corporation weird combination of things if it felt like but even so to get back to do was stare at it so we can do all that stuff again and reduce the role of the state i thought it was a very strange budget that will have to be reversed all the others a pretty quickly. well i mean a chance 1st defense and why should i have a wonderful is the fencing it doesn't seem to be going don't their traditional line of slashing capital expenditure on the does or a good deal of encouragement in his budget for company capital spending. at an aspect there who are where you can detect a less and perhaps has been aware that this is rather a good time for many many reasons to be encouraging and of course committing capital expenditure as a government with the one thing that we didn't really hear much about which is

about well let's try and get capital projects moving quickly i mean are you so going to build a rail it will that takes 20 years to get to be completed and you and i remember in the in the in this start at just after the great recession we talked about shovel ready projects and i thought you did really very well you got out really quickly and he said let's go fight this project that have already been given the public approval they've got through the planning process and they're waiting to get funded and i remember you said our web site a lot if you set a website you set up a 1000000000 quid is what the stuff fundamental started where did i hear that i heard that the sooner you know and i remember we actually i remember actually people asked david cameron to sign you know a list of projects that are ready to go yes that was null and that was it 10 years ago and soon after us in the city it to me why don't you just find if there's if there's a hospital that's approved or a round about iraq bypass or something why don't you just do that shuttle red means

you have to have your brain where you have to decide that this is an important thing to do infrastructure just takes a really long time and it's a sensible thing to do because it gets the economy how big. join us out of the big rallies continues his discussion with professor david blanchflower economic recovery from the pandemic with either. banks geysers financial survival they say money the balance. plus it easy this is a central plank support diet coming to the club in my notes a stop to. some control for a middle class. most of our very hard working people who want to get ahead that

have either have some some health issues or have some other strick about luck a full time job one told me his pay for a place to live and missing just a month's rent can get you a victim to gunpoint if anything bad happens to any thing that just throws your budget off slightly. better catch up real quick or you're going to have a judgment of possession against you and get addicted anyone that's homeless is treated like garbage people look at you like a monster or someone bad or you chose to be there most of the time it's not the case see how it used to be in the world's richest country. welcome back to the issue alex is in discussion with professor david blanchflower of ivy league dartmouth call this new hampshire u.s.c.

. professor david blanchflower with a look back to the 1930 s. and politics f.d.r. a marriage with the practical application of a new economics and john wayne of keane's put forward the general theory and put forward a new a new philosophy of economics a new body of thought do you see the same thing a melting no or a new body of thought which is addressing current circumstances and the government crisis. so what's happened today well what we've seen in the last decade is basically no inflation no wage growth of stairs he failed the fit of the idea that inflation was really the ogre that we needed to care about and really has really gotten so there is an apple or a mark in the heart if you like within economics for the hearts and minds not least because basically it going on ics miss the great recession the models didn't have

the financial sector in them the assumption was that markets would perfectly priced things so the answer is you his that obviously given that fate economics kicking and screaming is going to have to do something but the other in a sense the big deal relates it to biden today and several of the republican chairman of the economic council of advisors to the president come around to the view that that debt matters less than we thought that debt to g.d.p. ratios really only of the the argument was shown to be false that debt to g.d.p. above 90 percent well or out that that was crass nonsense so that whole realization that you know the altar can still be applied kicking and screaming is changing so the answer is that it's going to transform economics it's slowly it is and particularly about the labor market governments are really got the labor market

wrong in the fifty's it and i argued with them endlessly mimic at raising rates because the economy was a long one and that it wasn't and now they recognize that that's the case so the answer is that kicking and screaming but slowly we are moving there and this stimulus by and by was broadly supported by congress which certainly was not the case in 2000. but of course any of recession has disproportionate affects and they vary from country to country you made the point that you could have a shot in the clay and still be protecting the workforce what we see in there as we americans from this the session the be a premium on a protecting the people increasing sustaining productive potential or well the the balance he economics prevail once again and people be left on the scrapheap quasi i guess that's that's the worry but i am encouraged by the fact that this measure by

the i mean is designed to get me really is the signed earth to help people who make under $70000.00 a year that's not in true before that the previous one was a tax cuts of billionaires this is a tax cut for ordinary people so i think the answer is that distribution of matter is hurting people have been hurting a lot and governments at their peril i think are going to be essential going to be ignored are and in a way the other thing is that people's longmont be a bit is going to change they're going to probably save more they're going to worry about you know what happens to granny are you going to put them in and old people all of that stuff so it's hard to believe that we're going to just go back to where we were in 2020 or in 2000 so i think the new world order is coming and hopeless their science of economics match up to the experience of the people who've been you've been the pioneer of what about economics the to take into account the

common sense of the of the public when applying your economic ideas how do you do that in the middle of a lot though and professor blandford isn't it quite difficult to go walking a boat and finding that common sense. well obviously none of us have done much walking the bell for a really long time so i have to call it now the walking about the internet because you know the legs of not as active as they used a walkabout and by the lot more to. the the reason why i walk about economics is really important if you look back to 2008 and you looked at what people say did you look to what firms said you looked about people said and you looked at it let's say late in 2007 it was blindingly obvious that a recession was coming so what about economics is about this into what people talk to people this isn't and firms this is the what they say and take it seriously so we're in a new world and the interesting question will be given people have taken this huge

shock what will they do what effects will that arrives and to argue is members of the m.p.c. have done that we can just try to get back to normal makes no sense firms firms are not just going to get back to all because they don't know people going to us are going to stop them using are they going to carry on buying things on amazon are you going to not go to restaurants are you going to not to meet any what are they going to stick in their country all that stuff but the economics of walking a balance is actually the only way you're really going to find this out think think about what we do in forecasting out your in this business what we do is we look back in history real events that have occurred like this may say ok extrapolative or bad we think this you have no data point we have no data points anywhere in the world of this kind where happiness is collapsed so we better go and ask people what they're going to do and that turns out to be anomalous state talk to firms think about what they're going to do to well their plans and take seriously what they

said and it turns out that's a better way of understanding the economy than silly theory that that i used to listen to and in meetings at the m.p.c. which sounded to me that theology rather than what how the world actually works so this is a. trying to understand how the world works by immersing yourself in meat and the 1st minute of basle you used to do rightly with immerse yourself in trying to work out what's going on and i think that's a role that economists can now play and that's ok stick he looked around understood what was going on and came up with the model which told us our to how to do better so i think that the benefit is going to walk about and it turns out it's taken off behavioral economics is huge do you feel. and would their device of the one percent pay off or to the nurses in the united kingdom be an example of that. probably sounds good in the treasury to talk about public sector pay the state but to

a population who've just been put the lives in the hands of the the national health service and salting the nurses seems like a very bad idea in your guts you know it's not so perhaps of the chance for them but more walking about did come to terms with that reality alex i mean though there was i understand there was a little bit of economics of walking about to be done apparently the french were in the same position right the french they relied on the nurses on and the similar public approval for them they are out there this week crowd they offered a 10 percent pay raise i mean it just it just seems meanspirited i mean it makes little sense right these people put their lives in a position many i'm subminimum lost their life people got sick the public the public surely bally's this bread citizen ended up meaning a lot of people left low get foreigners who worked in the u.k. actually left so in many senses a shortage and when there's a shortage of people and the demands of them as recent simple economics shifts

should suggest that you raise the price i mean lot but what's the talk since then the talk is that people will leave the profession people will move to other countries and the quality of the service will decline further and you're less ready for the next shot becomes a lot. not really very not really very hard and the amount of money alex i mean i suppose us 10 percent rather than what the amount of money is actually pretty trivial when i remember i remember once gordon brown said to me down i remember the one percent of g.d.p. is a really big number in a way with rewarding the nurse making the population healthier and he's right if you can it if you can impact one percent of g.d.p. that's an awful lot of money in people's pockets so i think that's the answer it just looks it just looks it's beyond meanspirited just looks dark. and finally. let's talk about the big question the aftermath of the the great recession of

2910 was a prolonged period of stare that in many countries which resulted in lost lives what's going to be the impact of this big covert recession isn't going to be a sharp recovery or this is going to be a stellar to again with last hope for a generation to come. well the worry i guess is that is that it's the scale of the shock let's put it in reality the scale and the speed of the shock was much greater than we've seen basically ever before. and the likelihood is that people's behavior will change firms will be wary about investment investing and perhaps further we very wary because of a possibility of another and it coming in the future so the answer is i think this is likely because of this serious game of the thing and it's not just the british throne it's

a global problem the global economy as has been france and germany and so on that they've been hit so it's not just is there a change in long island behavior in the u.k. it's well what about the united states what about in france and germany and japan and italy and saw garbage global changes in things and the answer in big column is it takes a long time for economists to it just so my suspicion will be the that it's going to be worsened by potential errors once again on the part of fiscal therapies and the reason that it's so i'm paul is i mean i remember people say to me dad the year from 2002020 with the years of the central banker and i mean all the central bank transfer rates below 0 so the responsibility falls on the british chancellor i have great confidence in a way in the us but my friend janet yellen is sitting there in the treasuries as a labor economist fantastic record of our academic record she gets it i mean i've

talked to a lot of the times she gets exactly what you and i have talked about she thought about jobs and the need the stimulus and the need to get focused on this stuff so i feel like the benefit for the for the world is that you have janet yellen sitting in the u.s. treasury i couldn't have picked a better person unclear to me that anybody about caliber is a vice in the british government i think is really in court. first there are understand this new world order people in place understand it not go back to people who basically failed in the past and are going to try and use those things we need new creative thinking focused on particularly people at the low end especially the people at the low end who are being impacted the most are the pandemic so i think that and i think but in political terms we're probably going to see that to be really important so slow recovery the question is are politicians going to be on the right side of the wrong side professor david blanchflower with the economic

wisdom game from walking about on the internet thank you once again for joining me on the alex salmon show excellent always good to talk to us just a word decade ago professor danny blanch for provided me with invaluable advice as far as the scotland and how to use fiscal stimulus food shovel ready projects and to tackle recession now in country after country the emphasis has moved to monetary policy with countries taking advantage of a start a clue little interest rates in order to issue more debt to fight recession and that's populations across the planet a man's blinking into the poor slot bone sunlight then tension will turn to the bread and butter issues and in tough economic times people are supposed to question what is to be done those politicians were finance and will prosper those who haven't will sink. so for those freedom myself and all of the should. stay

safe we'll see again next week. ironic that all the people that are in the big point bubble talk about the other bubbles that the fed is inflated without recognizing that they're in a bubble themselves i mean it's like a bubble is generally in the eye of the beholder nobody can tell their own bubble and so you've got all these people who are involved in the crypto bob or they can see it.

in the shouting for covert emergency hospitals bill for half a 1000000000 pounds out to practically no patients at the same time. just a one percent pay rise for those frontline health workers. and in many. more. to. russia builds on its existing 3 vaccines now by developing a drug that stops the disease spreading in those already suffering from corona virus coming up we told developers about how those trolls are getting on.