https://vimeo.com/438722890

The massive finance firm Blackrock says there will be "de-globalization" and intensifying rivalry between the U.S. and China no matter who wins the November elections. Heiner Flassbeck says Europe cannot agree to take sides, on theAnalysis.news podcast with Paul Jay.

Transcript

Paul JayI'm Paul Jay and welcome to theAnalysis.news podcast.With millions still unemployed in the United States and COVID cases spiking across the country, it's going to take some time before the economy returns to whatever normal is going to look like. The American government's extension of unemployment payments ends at the end of July, and the Republicans are complaining that workers would rather sit at home with their government checks than try to go to work. In other words, risk their lives to get the economy going - while the investor class with the Fed support cashes in no matter what. Europe and Germany have been praised for finally coming around to the need for government stimulus during a recession. The German investor class has made austerity practically a religion; but is its current stimulus actually such a big break with the past? How long will this revolution in policy, as the massive finance company BlackRock calls it, last? Talking about stimulus funds, the pandemic is far from over, yet there is already talk of inflation down the line and eventually the need for austerity. Now joining us is Heiner Flassbeck. He became the state secretary, vice-minister of the federal German Ministry of Finance from 1998 to 1999, where he was responsible for international affairs, the EEU and relations with the IMF. Flassbeck worked for the United Nations agency UNCTAD in Geneva from 2000 on and from 2003 to 2012 he was the director of the Division on Globalization and Development Strategies. Since January 2013, Heiner has been director of Flassbeck Economics, a consultancy for global macroeconomic questions. Thanks so much for joining us, Heiner.

Heiner Flassbeck Thanks for inviting me.

Paul Jay: So what city are you in? Where are you today?Heiner Flassbeck: I’m in Geneva, and France soon.

Paul JayLet's start with Europe and then we'll move to the United States. Germany and most of the other European countries that have the capacity to do so have put, what we read about in the newspapers at the very least, significant amounts of stimulus money directly into the economy. We're told Germany has done something significant. How do you rate how the governments' central banks of Europe, particularly Germany, are dealing with the crisis?

Heiner FlassbeckWell, first round the institutions, the government, the central bank, and the European central bank, seem to have understood how dangerous this crisis is so they reacted immediately. They reacted with huge sums of money that they put on the table. But the very open question is now, how deep is the crisis? And more critical than that, how quickly would Europe and Germany get out of this crisis? And there is a lot of uncertainty around this. We have seen the biggest shock ever in economic history since the wars at least, and that was clearly a government-made shock. So it was an intentional shock, it was not coming from the economy, it came from the government. And the first idea was that the government would, so to say, create a scenario of a long vacation. We all will have two months of vacation, more or less, and then we go back to work on the first of September every year.But this has not played out because the unemployment check was too big and the compensation that the government gave all of Europe, including Germany, was too little and too small. So that even in Germany, we have something like nine million people who are directly affected by the economic fallout of th...