Economy to be reimagined and reconfigured in the way of a Global Pandemic that is shut down the daytoday operations of the economy. So that is a challenge that first order is to migrate my own job so the first person i thought of they happily complied dean baker senior economist for Economic Policy research the most recent book is called rigged and one of the reasons i admire as we go tonight as a fierce critic of the status quo and intellectual property. And its an ebook form also joining us is the staff writer kate i believe it is working on a book manuscript now and recently contributed the teacher is hours . So i want to thank you both for taking part in two dates discussion and the spirit of economic revival. If you are engaged of the topics of tonights discussion with the recent appearance on the podcast the politics of everything and reimagining the economy. Also to be a part of this discussion and its going live on facebook right now. And thats all i got. So to start with a very obvious question of the american stock market had a robust day today based on news of enhanced Quarterly Earnings projections certainly in my memory with that split screen effect with the dysfunction of the investment economy. And then we see that going off the cliff in tandem. So what explains the dramatic disparity in lockdown the real economy and what are those measures and incentives you recommended to being thes key indicators back into better alignment. So in principle the stock market that is supposed to represent the value of expected future profits of corporations so do the world is good or the economy is good . What will microsoft profits be . So thats the question that people need to ask if they will buy or sell stock. And then we had to go back and check the exact number so i know people are scared to death but then the announcements of the bailout plan its hard to explain because of course it was good but it was very business friendly so we tell boeing youre getting all this money from the government you pay your ceo 2 million per year instead of 20 million but we say no dividends for shareholders or buybacks. We did not do that. It was a very business friendly bailout so one of the things we see now that trump said dont want to extend Unemployment Insurance we want to force people to go back to work factories or and safe youll lose your benefits if you do. s everything we have seen coming from the republican side has been very business families im deciding if i want to put money into these corporations people were controlling the money to say yes we will ensure corporate profits. One of the things i found striking is to give a thumbnail account of the growth of the Financial Sector in relationship of how it has grown six full six hold over the last few decades and if you see that kind of growth that has been decoupled from actual Economic Activity and you gave the example of the Trucking Industry it will metastasize of all contributions to the economy you would recognize something is wrong intermediate goods we need the Financial Sector. We dont want to get rid of the trucking sector. But if we see that sector expand relative to the economy than what do we get for that . Do we see less waistband food so okay we have the data with stock and bond trading so say are we doing a better job . Are we allocating capital better somebody can argue that fine. But its pretty hard to tell that story particularly i cant blame the Financial Sector for the pandemic but certainly going back a decade i can blame the Financial Sector for the housing bubble and crash and certainly who played a really big role in that so tell me theyre doing a much better job for the economy its hard to say that. Yes. Someone came of political age in the wake of the meltdown to see this one dozen years later to feel not only those same structural decisions with the players making these calls and have done a lot for us to think of this moment with the oil industry as a time to pivot into something to envision a jobs economy that helps to rescue displaced workers and at the same time fight Climate Change and to address and equality. What about the reporting you have been doing . Its interesting because there is some serious thinking over the loss of the financial crisis and 2008 and they are asking the same basic questions how do you design a recovery that puts us on a more sustainable setting and thinking about how to scale up like clean energy. That is not the way the recovery was or for most of europe and then fastforward making it back into the headlines with aco sitting in Nancy Pelosis office and then that really starts the conversation what the response to the Climate Crisis should be and then have the conversation and the scale of the problems which i will not reiterate here but is massive and then the argument against that its a little hard to answer for a while is if you are talking about Something Like the new deal, that happened because there was an obvious crisis with people out of work, conservation problems are a whole range of things that was a crisis to a lot of people so much of america it is pressing for people around the world so were in a very different political environment. And since the Great Depression there is a real attempt to restart that conversation and then with the primaries and then to survive that conversation there is a real interest. And in this moment and where people are projecting agendas onto the candidate it is the unknown quantity touched on in this crisis. There is a lot of talk over the weekend how the brain trust is actively looking for the ambitious proposal on the scale of the new deal and i would like to claim that wisely they did frame that that was pragmatic agenda items that can be achieved under the prevailing climate that we have right now. But one of the centerpieces of the article is that you point out to the extent of which the intellectual property has grievously distorted especially in the pharmaceutical industry which is obviously a key player in confronting the coalbed crisis. And we are seeing i dont want to say its an exciting moment but in a very dramatic way to put forward many years now to get a life or death test and the rates to develop a vaccine with covid so can you explain to the viewers the Critical Role intellectual property has played one of the things that strike me is recognition with the rights of the economy both in terms of how large they are and affecting the distribution of income. So the conventional view is because of technology and the point i was making it isnt technology that made bill gates the richest person but we have copyright so anybody that makes thats they are arrested without permission thats technology. It serves a purpose no doubt it gives him incentive to develop the software. But we could do that differently. We dont need that copyright it could be shorter or weaker it is our choice. And prescription drugs. Obviously it is crucial to our health but it is an incredible amount of money so to spend 500 billion on prescription drugs this year that is two. 5 percent of gdp an enormous amount of money i use the food stamp budget. People get excited all my money goes to food stamps. That 70 billion now seven times the food stamp budget and the gop part so get rid of all the patents and sell it to the free market then its 100 billion. Drugs are cheap. Is a that to an audience and its cheap to manufacture and distribute. We have to and the monopoly. So i argue looking at alternative mechanisms so its not like we have to dig something up National Institutes of health to finance Biomedical Research and everyone agrees most of that is more basic research those are developed with more basic research and with that research with the Testing Process and then we would be sold as generics. That would be cheaper then to take away the incentive with the safety and effectiveness of their goods. But the story is the other Drug Companies were telling doctors this is a new generation of opioids they are not addictive. They knew they were but they said otherwise to get a lot of money. So with the pandemic it comes up front and center but we would like to see is fully open research. We need to develop a vaccine. Most people agree. Science advances most quickly when that is open whether here or germany or china they find they have a great breakthrough. Why not share that . Alternatively maybe something fails. If they could find out if the researchers determined it will go nowhere so we like to see open research to get a vaccine just as quickly as possible it is cheap to distribute that would be cheap and then to create a huge problem for ourselves and then scratching our heads and then we wouldnt have this problem. One of the reasons i reached out to you is this among other things takes a renewed look at the political decisions that have gone into the creation with both the financial is asian of the economy and the enclosure of the pharmaceutical industry and intellectual property how do you write the rules in advance . Who benefits from a certain set of protocols and rules . So part of the split screen effect and the way at the most extreme to envision that tradeoff to open the economy and have that, these are questions that are obviously more than nearly policy driven and wonky matters as we have come to understand it. So for both of you, how do we go about the 19th century model of the economy . Which has always been the case but at some point along the line and then to interact badly with one another. Thats a really good question. And its starting to break down it was treated as a machine and then to move in the right direction. And then the Monetary Policy. And that has been clear and then to pay close attention to talk about political economy properly so the quote unquote economy as part of politics. That only those that can understand and interpret . And that is a contest and we have seen in the last year and with those last two climate strikers in europe to write something that hasnt been included and may be that is optimistic to be a part of the story so that will not be a driving force behind the Trump Administration but we are seeing in some places like south korea and the new deal with the recovery measure and this is very complicated and controversial in some way the what has been neglected for so long and is the basis and people are raising that point and with that object of which we are already starting to see with iphones across the world and the hurricanes are coming up is felt to understand that political economy that is a part of nature thinking seriously that recoveries tend to do and for gdp about what direction that takes. A couple of points so what i consider an enormous victory the Federal Reserve board has hugely change the way he thinks and talks about the economy i dont want to single them out that exclusively they have said Monetary Policy is the Income Distribution that if you let the Unemployment Rate get down to three. 5 percent as they did to their great credit before the pandemic but disproportionately the Unemployment Rate gets low those are the most disadvantaged in the labor market africanamericans and hispanics and those of criminal records were getting jobs with pay increases. We see things going the right direction and the conventional wisdom and this is about liberals also that okay the economy is bigger and smaller bed doesnt have that direct effect of Income Distribution and that is huge and that was a big change thinking about Monetary Policy that was a huge change. One of the things we have to contend with will be a huge deficit in 2020 and 2021. We will say because we have these big deficits we would really love to do something on Climate Change and the reality is completely the opposite and the logic is if we have largescale unemployment, i cannot tell a story not even the rest of this year but that is the context to say lets have a really Ambitious Program to install solar panels make our buildings more efficient and subsidize mass transit that they all require a lot of work. For those resources that are employed then and fortunately there has been movement. The deficit will be there. But we made enormous headway to change that debate. So what you just mentioned what are the three main policy priorities to use this moment and that they have to be the employer of last resort . We talked about basic Green New Deal type of measures what are the rest of the things to be front and center . And by this i mean buses i love the metro but those take time when you get more we need more buses on the road tomorrow ideally clean buses are electric buses we can do that pretty quickly. That is something we should have been the amount of money to pay their 52. 1 of the things people get on the bus and then they are fumbling with their wallets why do we need this and then to devote those resources and to do something we wanted to do anyhow. So the whole idea to make people pay we dont want to ration take the but says much as you want that would be great that something that would be very important. And in the uk and in london and they pay money to drive into the city at the end of the day that is a strange heritage. And milton friedman. This was with leftwing labor party mayor. So there are some other things like that that has to be front and center it really has to be front and center its a very big chunk of the economy and this is creating jobs yes we have to do something that i dont want to make fun of it but that was the economy. It has been a running jump on a running joke that infrastructure never happened we had two dams first in michigan displacing tens of thousands of people. Apart from creating a new greener infrastructure and existing infrastructure and for people employed a lot of the people from the new deal will not be around. And to put on your own campaign advisors. Giving continued loss of jobs in the call sector with the swing states with a creative opportunity staring you in the face. So really to be on the decline for a long time because Energy Demand is really low. And those that pay close attention so that starting to creep back up and then treating that negative which is historically unheardof. And people being optimistic that takes place for the oil industry to bn. And then to have a moral obligation that we will talk about in a second but also a huge opportunity and people are working much more. And with the services company. Through the end of this year. And then on the tax basis which is hugely dependent on the high incomes or parts of appalachia which is a huge chunk of the income. And the tax revenue is related in some way and those places in general. So there is a huge overlap between places and Something Like a depression. And it is such a clear opportunity in virginia and North Carolina so when the Trump Administration is so clearly one oil company that applied for a 97 milliondollar tax break and those that funnel the amount of that executive. There are number of things for democrats to do and then very easy thing for state and local people who are adjacent to those sectors with 3 million abandoned wells in the country and that demands of an organization and then to be demanded that federal Government Department of energy that this is crazy aspirational stuff to talk about the federal job guarantee into future work but a lot of the stuff is out there. And i could go on but there are other policies democrats would advocate. And this is a good time for the proposals. And with that crisis of mass unemployment and Banking System ground to a halt. Also one of the things in your piece that stood out for me like reform intellectual property that you are looking in the pretax economy with a political debate around the economy in america is about tax cuts and as we say tonight that were air relevant topic at this moment but those proposals that were aspirational and realistic nicely weighted sidestepped the issue that has dominated politics all of my political life basically. Yes. It is easy in the sense so one of the points we make that increasing inequality this isnt original im not opposed to the higher tax rates on rich people but the reality is its not as much as they claim it was 90 percent and now its 37 percent so now you have three. 5 percent medicare tax with california being the highest. Which people are being hit but the point is if you are a rich person you are paying a marginal tax rate of over 50 percent. Its lower than it was but not quite as much as is portrayed. Thats on the before tax side so trying to change those rules of copyrights with the Financial Sector are not contributing to a productive economy. With these and other innovations you cannot show that half the time its insidertrading but to make that great contribution to the economy but again to tell the story im not even talking about society as a whole not the vast majority of ceos from the standpoint of the shareholders the ceo at wells fargo he walked away with over 100 million did he a great job for the shareholders . Maybe if he didnt get caught that he did. So i just mentioned those extreme cases but go back to the sixties and seventies 20 or 30 times the pay of ordinary workers. Now they get 250 or 300 times of 20 million per year. That is Corporate Governance structure which is very difficult for shareholders to rein in the ceos this isnt as secret. With the idea im a shareholder i dont l