Nobel Prize-Winning Economist Joseph Stiglitz Slams Trump’s Myths About Tariffs, Affordability

This is Democracy Now!, Democracynow.org, the War and Peace Report. I’m Amy Goodman. During his State of the Union, President Trump repeatedly hailed his economic record over the past year. He also openly criticized the Supreme Court again for striking down his global tariffs in a decision that’s having major implications on the global economy. Less than half, four of the nine Supreme Court justices, attended the speech. This is part of what Trump said.

PRESIDENT DONALD TRUMP: Everything was working well. Countries that were ripping us off for decades are now paying us hundreds of billions of dollars. They were ripping us so badly, you all know that. Everybody knows it. Even the Democrats know it, they just don’t want to say it. And yet these countries are now happy and so are we. We made deals. The deals are all done and they’re happy. They’re not making money like they used to but we’re making a lot of money. There was no inflation, tremendous growth. And the big story was how Donald Trump called the economy correctly and 22 Nobel Prize winners in economics didn’t. They got it totally wrong. They got it really wrong. And then just four days ago, an unfortunate ruling from the United States Supreme Court, it just came down. It came down.

PEOPLE: [applause]

PRESIDENT DONALD TRUMP: Very unfortunate ruling.

PEOPLE: [cheers and applause]

PRESIDENT DONALD TRUMP: But the good news is that almost all countries and corporations want to keep the deal that they already made. Right, Scott? Knowing that the legal power that I as president have to make a new deal could be far worse for them. And therefore, they will continue to work along the same successful path that we had negotiated before the Supreme Court’s unfortunate involvement.

So despite the disappointing ruling, these powerful country-saving — it’s saving our country, the kind of money we’re taking in — peace-protecting — many of the wars I settled was because of the threat of tariffs, I wouldn’t have been able to settle them without — will remain in place under fully approved and tested alternative legal statutes, and they have been tested for a long time — they’re a little more complex but they’re actually probably better — leading to a solution that will be even stronger than before.

Congressional action will not be necessary. It’s already time-tested and approved. And as time goes by, I believe the tariffs, paid for by foreign countries, will like in the past substantially replace the modern-day system of income tax, taking a great financial burden off the people that I love.

PEOPLE: [applause]

AMY GOODMAN: We are joined now by Joseph Stiglitz, Nobel Prize-winning economist, Columbia University professor, former chair of the Council of Economic Advisers. Professor Stiglitz is also currently the chief economist of the Roosevelt Institute. His latest book just out in paperback this week, The Road to Freedom: Economics and the Good Society.

Professor Stiglitz, welcome back to Democracy Now! Your response? You were among the signatories, the economists who have signed a letter against the tariffs. Talk about the president’s State of the Union and his argument for tariffs and against the Supreme Court. Two of his own appointees ruled against him.

JOSEPH STIGLITZ: Well, the speech was characteristic of Trump — lies, misleading statements.
I was with a group of a large number of Nobel Prize winners who predicted that he would be bad for the economy and we were right. The tariffs are paid by Americans. They’re not paid for by the foreigners. He says they didn’t have any effect on inflation. We saw inflation was going down, and if we compare where inflation would have been with where we are today, it is estimated the average family is paying somewhere between $1,000 and $1,700 in extra money because of the tariffs.

The irony is he said it was going to bring back manufacturing jobs. Manufacturing jobs are down in the United States in 2025 when they were up under President Biden. He doesn’t talk about that. In fact, last year was one of the slowest growth in jobs ever in recent memory, about a quarter of what it was under President Biden. And interestingly, most or more than 100% of the jobs that were created were in the healthcare sector, nothing to do with his tariffs at all.

AMY GOODMAN: Trump said in the past, “We have the most people working in history.” What is the state of unemployment, of livable employment, the overall economy?

JOSEPH STIGLITZ: Well, when the economy — more people in the country? Yes, there are going to be more people working. That’s true. The fact is that labor force participation has not gone up. The unemployment rate has gone up a little bit, not a lot. But what is striking is how weak the job market is. As I said before, we have not created very many jobs, less than a quarter of what we had created under President Biden. And anybody with friends trying to get jobs knows what a difficult labor market today’s labor market is.

AMY GOODMAN: I want to go back to President Trump speaking last night.

PRESIDENT DONALD TRUMP: Now the same people in this chamber who voted for those disasters suddenly use the word “affordability,” a word — they just used it, somebody gave it to them — knowing full well that they caused and created the increased prices that all of our citizens had to endure. You caused that problem. You caused that problem.

AMY GOODMAN: “Affordability,” Professor Stiglitz. We are speaking to you here in New York. Of course the new mayor Zohran Mamdani sent the message to people all over the country, especially those who are considering elected office or to diehard politicians, senators, congressmembers, that affordability was the word, was the issue people are most concerned about. What about President Trump mocking it?

JOSEPH STIGLITZ: I think he is mocking the American people when he mocks the issue of affordability. The reason people worry about affordability is things are not affordable. And the other way of putting it is that their real incomes adjusted for inflation are down. Now, one of the striking things about what President Trump has done, he talked about this tax cut, the biggest tax cut in history. He was wrong about that. As a percentage of GDP, it doesn’t even rank near the top.

But where it does rank at the top is that it was the most regressive tax cut. That is to say the benefits went to the millionaires, the billionaires, the corporations, and those at the bottom paid the price. They paid the price with almost a $1 trillion cut in Medicaid. That was why the Democrats had insisted on the government shutdown. They said, “You can’t do that! That’s not right!” That you would be giving a tax cut for billionaires and asking the poorest Americans not to have adequate healthcare in a country where healthcare has been so bad, so bad that life expectancy even before the pandemic was on the down.

AMY GOODMAN: Your final comments, Professor Stiglitz, coming off of what’s considered one of the longest State of the Unions, an assessment of this country, in modern history?

JOSEPH STIGLITZ: Well, long speeches like that reminds me of Castro and other demagogues who just love — they get the platform and they just talk and talk and talk. But I think the striking thing is that in spite of the tariffs that were supposed to bring back manufacturing jobs, manufacturing jobs are actually down. And in spite of the tariffs that were supposed to eliminate the huge trade deficit in goods, the trade deficit in goods is actually up. So his policies have failed even in the areas where he — in the objectives that he set forth. So, yes, his speech was filled with misleading statements, with lies. We’ve come to expect that. But in the core aspect of his agenda, the numbers show that he has dramatically failed to do what he promised.

AMY GOODMAN: Joseph Stiglitz, Nobel Prize-winning economist, Columbia University professor, and former chair of the Council of Economic Advisers. Professor Stiglitz is also currently the chief economist of the Roosevelt Institute. His new book just out in paperback this week, The Road to Freedom: Economics and the Good Society.