Skip to main content

tv   HAR Dtalk  BBC News  April 7, 2021 4:30am-5:01am BST

4:30 am
american officials have described the start of talks in vienna, intended to revive the international deal on iran's nuclear programme, as a welcome step, and �*constructive�*. a state department spokesman said the discussions are expected to be difficult and an early breakthrough is not anticipated. brazil has registered more than 4,000 coronavirus deaths in 2a hours — a new record for the country. the public health system has been largely overwhelmed by the surge in cases. president bolsonaro has been widely blamed for the crisis. he has consistently played down the severity of the virus. the jury in the trial of derek chauvin — accused of murdering george floyd — has been told the neck restraint he used was against police policy and training. prosecutors say he made no attempt to calm mr floyd down before kneeling on his neck for more than nine minutes. now on bbc news, it's hardtalk.
4:31 am
welcome to hardtalk. i am stephen sackur, the covid pandemic looks like a watershed moment in global economics. big government is back as he felt engine of economic growth, the biden administration is boring trillions of dollars into an ambitious rescue and recovery plan, the europeans are doing their best to keep up. soaring debt, rising inflation, those fees seem to have been pushed aside. my guest is acclaimed us economist ken rogoff, once dubbed the godfather of austerity. is he a convert to bidenomics?
4:32 am
theme music. ken rogoff, in massachusetts, welcome to hardtalk.- ken rogoff, in massachusetts, welcome to hardtalk. thank you. at several points _ welcome to hardtalk. thank you. at several points over _ welcome to hardtalk. thank you. at several points over the - welcome to hardtalk. thank you. at several points over the last - at several points over the last year, you have described what has happened to the global economy as a result of the pandemic as an unfolding catastrophe. given what we see today, do you think you were a little bit too pessimistic? well, indeed, particularly the vaccines have been able to come out faster and have been more effective than all the public health experts were telling me, telling us. so, that has really been what is turned things around more than anything. no, i had not predicted it but it is not good enough, but better
4:33 am
what we hoped. the is not good enough, but better what we hoped.— is not good enough, but better what we hoped. the imf has 'ust issued its latest i what we hoped. the imf has 'ust issued its latest up i what we hoped. the imf has 'ust issued its latest up some i what we hoped. the imf has 'ust issued its latest up some ofh issued its latest up some of where the global economy is and they have upgraded their global growth forecast from i think around 5.5% to 6%, a pretty extraordinary figure and suggest there is a resilience in the global economy that perhaps we had not expected? yes and no. it depends on where you are _ yes and no. it depends on where you are in — yes and no. it depends on where you are in the world. the advanced _ you are in the world. the advanced economies, china, have done _ advanced economies, china, have done better but if you go to large — done better but if you go to large parts of the world we are seeing — large parts of the world we are seeing a — large parts of the world we are seeing a decade of poverty ending _ seeing a decade of poverty ending wiped out and most countries will not get back to where — countries will not get back to where they started until 2023, so it's— where they started until 2023, so it's pretty terrible, and is not — so it's pretty terrible, and is not even _ so it's pretty terrible, and is not even talking about within countries who have suffered the most it — countries who have suffered the most. it has been a disaster and — most. it has been a disaster and i— most. it has been a disaster and i would still put this as
4:34 am
the worst crisis in my lifetime, worse than the global financiai— lifetime, worse than the global financial crisis.— financial crisis. some economists _ financial crisis. some economists talk - financial crisis. some | economists talk about financial crisis. some - economists talk about the case shaped global economy as a result of the pandemic by which they mean the two levers of the letter k represent the growing divergences between the rich world and emerging economies. do you see that as one of the greatest and most damaging legacies of covid—i9? absolutely and a lot of the political conversations about what is happening within the wealthy countries, but is really nothing compared to what is going on in countries like brazil and india, and is going on in countries like braziland india, and we is going on in countries like brazil and india, and we have not even seen the financial fallout of these with emerging markets piling up debt that could run into trouble. this is a very painful period. the world is suffering incredibly. we are looking at the political ramifications within our own countries but around our world,
4:35 am
i think, this will reverberate for a decade. i i think, this will reverberate for a decade.— i think, this will reverberate for a decade. i want to come back to that _ for a decade. i want to come back to that but _ for a decade. i want to come back to that but i _ for a decade. i want to come back to that but i want - for a decade. i want to come back to that but i want to - for a decade. i want to come | back to that but i want to talk in detail about the united states. you said, only a few weeks ago, that you did not believe the us economy was going to get back to the per capita gdp place it had been in late 2019, possibly until next year all the year after next. again, this latest imf report suggests they believe the us will recover to that late 2019 point by the end of the year. so, without wishing to be rude, do you acknowledge you are wrong on that? i do you acknowledge you are wrong on that?— do you acknowledge you are wrong on that? i think everyone has ramped _ wrong on that? i think everyone has ramped up _ wrong on that? i think everyone has ramped up the _ wrong on that? i think everyone has ramped up the forecast, - wrong on that? i think everyone| has ramped up the forecast, the imf have been steadily doing it week after week. if you look at the big financial firms, week after week. if you look at the big financialfirms, the pace of vaccination, the opening up of the us economy and then certainly the very strong stimulus that biden has
4:36 am
been successful at getting through. so it looks like the us, miraculously, will be on pace to get back to where it started just two years after the start of the pandemic instead of what could have been longer. instead of what could have been loner. ~ g instead of what could have been loner. ~ } ., .., longer. why? how come it performs _ longer. why? how come it performs so _ longer. why? how come it performs so much - longer. why? how come it performs so much better l longer. why? how come it. performs so much better than you thought it would over the last year? oh, i mean, overwhelmingly - last year? oh, i mean,| overwhelmingly because last year? oh, i mean, - overwhelmingly because the vaccines have come and worked betier— vaccines have come and worked better and — vaccines have come and worked better and the public health problem looks like knock on wood — problem looks like knock on wood as _ problem looks like knock on wood as we say, is being gradually tamed. that is what is getting people back up and creating _ is getting people back up and creating optimism and certainly the support from the government has played a role in this. but if the — has played a role in this. but if the pandemic was not over, europe — if the pandemic was not over, europe lags horribly, continental europe particularly, we would be in a different— particularly, we would be in a different spot.— different spot. here you are, professor — different spot. here you are, professor ken _ different spot. here you are, professor ken rogoff, - different spot. here you are, | professor ken rogoff, former chief economist in the imf as i
4:37 am
said in the introduction, known in the press as the godfather of austerity. now looking at a biden administration pumping well, let's say, if they get their infrastructure spending plan through the congress, looking at injecting around 4 trillion us dollars into the economy over the next few years as a direct result of their rescue and recovery covid plan. godfather of austerity, do you approve? i godfather of austerity, do you a- rove? . approve? i have never written about austerity _ approve? i have never written about austerity in _ approve? i have never written about austerity in my - approve? i have never written about austerity in my work. i approve? i have never written i about austerity in my work. the word does not appear in my 500 page book, nor the concept, with my co—author but we do can set the high debt levels but you can raise taxes. i have not written anything about not taxing the rich i have written a lot about that, and biden proposes to do this. so there is this initial stuff he is doing, catastrophe relief but
4:38 am
he is proposing something stronger in the long run that will involve taxing corporations, taxing wealthy people, maybe taxing carbon, who knows? to pay for that and that was a direction i always supported. and i'm glad to see he is doing it. i’m supported. and i'm glad to see he is doing it.— he is doing it. i'm wondering if ou he is doing it. i'm wondering if you modified _ he is doing it. i'm wondering if you modified your - he is doing it. i'm wondering if you modified your views i he is doing it. i'm wondering | if you modified your views on anyway. you carefully said that you did write about geraghty, i take the point, but you wrote specifically about the damaging nature of high levels of national debt and the us federal debt projected over the next couple of years is going to far surpass the 90% level at which you postulated things become very difficult and damaging for the economy. indeed, i think the congressional budget office thinks the debt will grow to over 100%, thinks the debt will grow to over100%, maybe 107%, of gdp, so unless you resile from your earlier argument, you must
4:39 am
think this is dangerous? let me say what my early argument was, it wasn't that things suddenly change when your debt at very high. it is more like a cholesterol level, when it goes from 199 to 201, it doesn't mean you have a heart attack the next day, it means you're more mountable and the reason why you have more vulnerable when you have more debt is that because if you have more debt, you cannot react so aggressively but you have to try. we are in a wartime situation. and over the last 12 years since i wrote a paper on this with carmen reinhart, interest rates have collapsed, simply collapsed, so the government, at least in the united states, some advanced economies have, borrowing room that was not expected. that is the same reason stock markets are so crazy high. no—one expected interest rates to be so low. unfortunately, there are many countries in the world, most of the countries in the world, do not have this
4:40 am
luxury. they are paying much higher interest rates, and still borrowing as they should, in prices like this, but this situation is much more precarious. is situation is much more precarious. situation is much more recarious. , , , ., precarious. is interesting you use the word _ precarious. is interesting you use the word crazy _ precarious. is interesting you use the word crazy hi - precarious. is interesting you use the word crazy hi to - use the word crazy hi to describe stock market levels in the us and as you say, that is all about the consistently high interest rates you have seen, but is there not a danger of complacency in the stock market and amongst ordinary people who buy homes into other economic activity in the united states, an assumption that these interest rates will stay low and clearly, with the levels of government spending and the rising debt we are seeing, there is an inflation danger and with that danger comes the very real possibility of quite a quick rise in interest rates? the questions quite a quick, and people underestimate the interest rates will normalise with all without the high
4:41 am
spending, they are at record lows, these things don't tend to last forever. i don't think this time they will stay, i think they will rise. if they rise slowly, it will be painful and markets will go down, housing prices will soften or go down, but it won't necessarily be anything catastrophic. certainly, if some shock hit, which made interest rates go way up, which is not easy to say which it may be, but it has happen on occasion over the last couple of hundred years, that would be very problematic. yes, certainly, asset prices whether you are looking at bitcoin, gamestop, the stock market, housing prices are teasingly high and much higher than i think anyone would have projected a year ago, much less ten years ago —— at dizzy heights. ten years ago -- at dizzy heights-— ten years ago -- at dizzy heiahts. ., ., ., ,, heights. you have worked with senior administrations -
4:42 am
heights. you have worked with senior administrations and - heights. you have worked with | senior administrations and with the imf, how did you respond to another senior economist, and economic thinker in the united states, larry summers, saying this, that the more he looked atjoe biden's approach to pump priming the economy in this massive, almost unprecedented spending he has embarked upon, larry summers said he thought it was the least responsible fiscal policy he had seen in a0 years and warned the us is facing a pretty dramatic fiscal monetary collision. do you agree with that?— agree with that? this may surprise — agree with that? this may surprise you, _ agree with that? this may surprise you, but - agree with that? this may surprise you, but i - agree with that? this may surprise you, but i have . agree with that? this may i surprise you, but i have been disagreeing with it. first of all, it really depends on whether you think they will be doing this forever. we are in a catastrophe situation, wartime mode, and indeed, if that some progressive economists want, print money and spend money and not raise taxes to pay for it, you will have a problem. i sort
4:43 am
of see whatjoe biden is doing is tactically smart. he says he has very thin majority, he has a honeymoon. and he is taking what he can gap while he it. frankly, at least the first package to propose, well, i don't really know that people with $140,000 don't really know that people with $1a0,000 needed to get a check from the government, but it made it easy to get through. but the many other things on the package were good. in the second package, he's doing things that need to be done but then really trying to re—engineer the economy at the same time. i don't know if he expects to get it all through but it's a matter of tactics. larry would like to see more infrastructure spending, more real genuine productive spending. that is a free lunch, thatis spending. that is a free lunch, that is something with low interest rates, we should be doing whether it is broadband, improving distance education, building roads. this, we should
4:44 am
be doing, and it is cheap. i think he has overstated his case as he may be want to do, to try to push the administration that way. but when a government proposes a set of policies in this situation, i don't think they really expect everything to happen. really expect everything to ha en. ., really expect everything to ha en, ., , really expect everything to hauen. ., ,., happen. you say is almost incontrovertibly _ happen. you say is almost incontrovertibly true - happen. you say is almost incontrovertibly true that i happen. you say is almost i incontrovertibly true that this is what we should be doing in terms of massive infrastructure spending to kickstart economic growth, to rebuild america better, is it in so incontrovertibly true? i'm mindful of what ronald reagan said a0 years ago when he said the most dangerous sentence in the english language is that "i am from the government and i'm here to help!" his point is that the government is not the right all the best agency to be doing this stuff. is a right all the best agency to be doing this stuff.— doing this stuff. is a question of how to _ doing this stuff. is a question of how to pay _ doing this stuff. is a question of how to pay for _ doing this stuff. is a question of how to pay for the - of how to pay for the infrastructure, the governance of the infrastructure so many countries around the world have the private sector pay for part
4:45 am
of it and have fees later to pay back the private sector. there are different structures but do we need infrastructure? we absolutely do. there are certain basic things like decaying bridges and roads and then other things like broadband which we did not use to consider infrastructure but everyone does now. infrastructure spending and all the advanced economies have been on a straight line down for the last 50 years, really, and even though all economists, i wrote a piece in 2008 in the financial times arguing for more infrastructure spending, even though all economists have agreed on this, curiously, it is difficult to do politically. itjust is difficult to do politically. it just does is difficult to do politically. itjust does not happen and does not happen quick enough and i commend joe biden for putting up front and centre. donald trump talked about it but never did anything. getting back to the _ but never did anything. getting back to the point _ but never did anything. getting back to the point you _ but never did anything. getting back to the point you made - back to the point you made earlier in the conversation about the danger of growing
4:46 am
disparities in the world economy, growing inequalities, both between rich and poor countries and also internally within countries growing inequality. do you see that the policymakers in the rich world care enough about the dangers of growing global inequality? they clearly don't. we have seen some small steps but many of these inequality in rich countries ignores everyone else, for example anti— globalisation, a french economist wrote that globalisation, capitalism had failed and it produced an inequality, not if you are a farmer in india or china, the billions of people lifted out of poverty, and between the pandemic, this reversal of globalisation, the need for decarbonisation, the need for
4:47 am
vaccines, we are seeing things going in sharp reversal and there is barely a whisper about it in the debate in washington. they are handing out trillions of dollars when $100 billion spent on for example helping india phase out its coal plants or $25 billion on helping poorer countries get vaccines would bring massive global benefits. i am very concerned that this narrow focus on me, ask, has really not sustainable any more then inequality in rich countries and this will come back and bite us if we ignore the rest of the world the way we seem to be doing. yes, it is a me—first—ism, which some might pin the blame for on donald trump, but it goes far beyond donald trump, doesn't it? i mean, yes, his slogan was america first,
4:48 am
but actually, in some ways, joe biden isn't really moving very far away from the concept of america first, and one could say the same about european nation states as well. there is a concern to look after their own people and a sense that protectionism is still alive and kicking as a sort of economic formula for the future. no, absolutely. the vaccines have sort of brought out the worst in all of this, and, you know, you are seeing some funding going out into the rest of the world, but it's very minimal. the trade wars, everything, so they are absolutely — donald trump captured this. but, frankly, bernie sanders, the democratic progressive candidate, still presidential candidate, still very influential, him and donald trump were not very far apart on these globalisation issues. i think donald trump tapped into the democratic base when he was campaigning against this, and normally the president
4:49 am
is someone who says, �*0k, we need to be responsible, we need to look at the whole world.�* joe biden, i think, at his heart, understands these issues as responding to the political moment. i'm optimistic that we will see better, over time. but near—term, absolutely, it's been america first, still. but aren't there are two different forces, trends, here are that are working together? one is the fallout from the pandemic, where governments around the world look at their supply chains, they look at the uncertainties and vulnerabilities that come with that form of globalisation, and they begin to think, �*you know what? maybe we should back off from that and, and do more at home?�* and then there is the whole question
4:50 am
of the china relationship. us—china relationships, a feeling that the rich world has become too dependent on chinese products, chinese economy, and a wish to back away from that. those two trends are seeing governments in the rich world talk more and more about changing their economic model, it certainly takes them very far away from globalisation? no, that's absolutely right and i don't have easy answers to that because the us—china tension, the us—china—europe relationship is the most profound thing over the next a0 years. we're looking at a situation with this pandemic which may have come out china, has probably advanced china's economic progress relative to the rest of the world by an extra few years. and many other parts of the world look to china and feel like it works, and the advanced economy system has not worked as well for them. so we're in a very troubling moment, and yes, i think the us needs to look very hard at how to deal with china. so... and it may involve a retreat from globalisation. yeah. so, when biden talks about china and says,
4:51 am
you know, �*i'm not going to let china eat our lunch', and implication of that clearly is the us is going to disengage economically china and indeed compete very aggressively against china in different parts of the world economy, do you think he may be making a mistake? a self—harming mistake? well, the problem is china is also making our lunch. laughter. they make a lot of what we consume. well, that's my point. yeah. and the intermediate products. well, i mean, we are where we are. and it's not an easy situation to get out of. ithink, obviously, it would be desirable to find a more co—operative equilibrium, but this, i don't know what you want to call the brewing between the us and china, could breed problems. and, you know, you do what you have to do. i hope that they find a way
4:52 am
forward out of this, i really don't have anything more than bland hope, in that to match. i think they are very tough questions. and frankly, as awful a person as donald trump was, deeply flawed, we could go on and on, he probably did move the conversation in a direction that it needed to go. there are people who tell me that hillary clinton was planning to do this on day one, anyway — i don't know. but it's a change in tone that probably needed to be explored, and we're doing it. and on that same thought, this isn't even just a debate in america, i'm very mindful of the french, too, talking about the long—term impacts of changing the relationship with china, and also, learning from what the covid pandemic has told us about the vulnerabilities in the world economy.
4:53 am
bruno le maire, finance minister, he said, there will definitely be a before and an after coronavirus in terms of global economics and economic thinking. is it that big a deal? it's very hard to say what's going to be on the other end of this. i think it's going to change the way we work. it's going to change relationships in the global economy, it's very hard to know where that is going. a lot of people say, when i express the view that we are going to see some fall in globalisation, they say no, it's never going to happen. i'm not so sure. i mean, again, i don't know what to say about where we are going. if we did break off from china, it would lead to a sharp fall in the standard of living. 0n the other hand, if you are playing the long game, you're trying to look a0 years ahead, and you haven't figured
4:54 am
out a way to coexist with them economically, then something has to be done. i think it the end of the day china's part of the world, if we don't solve their pollution problems, if we don't, you know, deal with them in a way that's mutually satisfactory, geopolitics, it's not going to work. so, we have to work with china, we don't want to have the kind of relationship with china we have with russia, china is a much more formidable foe. the new notion that government is good, rather than bad, in terms of being the key driver of the economy, is that now where america is? well, we're in a catastrophe, like a war, and so you don't really think of the private sector as dealing with it. let's not forget that these vaccines, which have gotten us out of the pandemic, that they weren't even big pharma, they were small, entrepreneurial firms that had these ideas. we'd be waiting years longer if we didn't have them. so it's not — the central government contributed that in terms of research. but we are at the end
4:55 am
of the pandemic, i think if we keep attending the government can do everything, we will be in trouble. but again, if we need to combat inequality, we need to raise taxes, we need to spread the wealth around in a way that globalisation has fallen short. ken rogoff, we have to end there. i thank you very much forjoining me on hardtalk. thank you. well, it's certainly been cold in the last couple of days. we've snow, particularly across northern parts of the uk. but here's the good news if you don't like the cold. it is going to feel a lot better on wednesday. we won't have that cold northerly wind. we won't have that windchill, which we've been experiencing for a couple of days now. but the arctic air has spread right across the continent into northern parts of the mediterranean as well, so it's quite a widespread
4:56 am
outbreak of cold arctic air. now, through the early hours you can see clear skies across much of the country. still a few wintry showers there across parts of scotland. but lighter winds, clear skies, a frost as well. temperatures in some cities down to around —2 or —3 celsius early on wednesday morning. so wednesday's looking something like this, lots of bright, sparkling sunshine first thing in the morning. but the clouds will build through the morning and into the afternoon. so actually the second half of the day is looking a little overcast for some of us. and in the north—west of the country, later on in the afternoon, and towards the evening, the clouds will thicken further and we are expecting some outbreaks of rain in places like belfast, glasgow, much of the western isles. and that's because a weather front is approaching, the winds turning direction, actually milder air is reaching us. and by very early on thursday morning you can see that generally across the country it is frost free — almost. now, that change is brought by area of low pressure which will be tracking into the north of the uk. you can see that slightly milder air brought in by these south—westerly winds. so i think on thursday
4:57 am
temperatures, at least for a while, will recover to double figures, onlyjust. perhaps 11 or 12 across parts of england and wales. but with that also comes a weather front and outbreaks of rain parts of the north—west of the uk. i think the best of the weather will be further south and also south—east. now, as we head into thursday night and friday, that weather front will move across, in fact, it's a cold front and behind it we once again open up the gates to a cold air stream from the arctic, which could bring wintry showers to northern areas of the uk. so, yes, temporarily it is going to turn just a little bit milder through thursday, friday, maybe saturday, but the second half of the weekend it is turning colder again.
4:58 am
4:59 am
5:00 am
this is bbc news with the latest headlines for viewers in the uk and around the world. i'm ben boulos. a trial of the astrazeneca vaccine on children is paused in the uk while the country's regulator investigates possible links to rare blood clots in adults. brazil's daily covid deaths top a,000 for the first time — a new, unwanted record, for the country. ndirect talks between washington and tehran are taking place in vienna as both side try to salvage the iran nuclear deal. a self—imposed one child policy — the chinese parents limiting themselves to a single infant. translation: for me, it's i already hard to raise this one. it feels better to put all your energy into one child.
5:01 am
greenland goes to the polls, with the country divided over a mining project that would make them a major,

19 Views

info Stream Only

Uploaded by TV Archive on