President Trump suspended his global tariffs for 90 days, except for China. But is this strategy enough to win the trade war and fix the economy? Glenn speaks with renowned economist Richard Werner, who makes the case that Trump’s next move should take place here at home. It’s not enough, he argues, to pressure the big banks. He must also cut the government red tape and help local banks flourish. Plus, Werner also argues that Trump is fighting a hidden enemy in Europe: the CIA.
Transcript
Below is a rush transcript that may contain errors
GLENN: Richard Werner. He is an economist. You can find him at ProfessorWerner.org.
ProfessorWerner.org. Richard Werner. Professor, how are you, sir?
RICHARD: Very well, thank you. Good to be on your program.
GLENN: Yeah. Good to have you on again. You are looking at the situation, and it is changing by the hour. What are you feeling, especially you're -- you're from Germany. Are you still in Germany today? Or are you here in the United States?
RICHARD: I'm actually in the US, in Florida as well.
GLENN: All right. What is happening in Germany and in Europe, and how is -- how this whole trade thing affecting everybody?
RICHARD: Well, it is affecting everyone.
Because actually, if you have the sort of lists of terrorists.
And where it was last week. Presently suspended.
If you look at the numbers. For some countries.
There were significant changes. And potentially, even now, that they're being suspended.
They're still in place with China. Very, very high numbers.
You mentioned, you know, in triple digit percentage. Tariff.
To China. And China retaliating. And as it's escalating. That's very dangerous.
Because China is part of the supply chains, across the globe. Even in other countries.
And, of course, the US.
Trump has a point. The US is the most attractive market. And exports being -- so it's true. That the US had some leverage there.
The question is, what do we want to achieve? And how do we go about it, in order to make sure we actually achieve it?
There is a risk, a situation which it will escalate, particularly if there's confrontation now.
Later coming from China, it's a bad guy. And, you know, it's -- it's in Asia. It's very important, not to lose faith.
And not to be publicly humiliated.
GLENN: Yes. Right.
RICHARD: And at the moment, you know, of course that's why they can easily give in. Want to shut the opportunity, the opening for compromise.
GLENN: So what would --
RICHARD: At the moment, the way it's done, it is very hard.
GLENN: President Trump said this yesterday. He said: Look, it's important in China, that they don't lose faith. That they're not humiliated. And he said, I feel like they're being humiliated right now.
So what should he be doing, while still staying tough?
What kind of opportunity, should be presented, to de-escalate this?
RICHARD: I think it's important to take it off the -- I mean, President Trump is very -- publicly. But maybe in this case, where we are at this point.
It's an important thing.
You know, the public focus.
And have some private conversations with China's leadership.
And maybe they even suggest a way in which they may be done. Essentially, someone needs to face a solution that makes both sides look good.
This can be done because the Chinese are as much interested in, you know -- as President Trump is, they are commoners, trading, sort of doing deals.
So it just has to be done, in such a way, that they're not forced into a corner.
And then they feel obliged to also, you know, stand up to all of these people. And to then -- they actually should be at this stage.
So I think it can be done.
I mean, I would be glad to help. You know.
Get me into the Trump team.
I had good relations. I was invited to be the professor of finance as well, the top university, Fudan in Shanghai met very senior people in China. And I've been in Japan for 12 years. And I know how to talk to Asia.
At the moment, it was perhaps -- yeah. This -- this lack of the right approach.
But it's about, as you mentioned, that President Trump is now acknowledging this.
And I think this -- this creates an opening.
And with the right advice. The other point I would like to make actually. Is that I think it is very smart of President Trump to raise fundamentally, you know, the tariff issue.
And how the US has not always been treated equally by other countries. Right?
When it comes to trade and tariffs. That is very valid.
And Paris in history, have been, well, actually mixed. They have been very successful and good for America and other countries. They use in combination with the right policies.
GLENN: Yes, uh-huh.
RICHARD: Domestic policies. That's where I think the Trump team needs some good advice. The Trump team knows the official mainstream neoclassical economics is not to be trusted.
And that's very true. But they're still acting with the right advice. I'm an expert of high brow economics, and I think the US can have 15 percent growth in 14 years like China had.
Which can be done. There is no real --
GLENN: What needs to happen? What needs to happen? What is he missing?
I think what is missing is the Congress doing their jobs. And putting other things in place. What are you saying, that is missing?
RICHARD: Yes. Well, a key thing is -- is to do with money.
And those who create money.
Now, the fed has created a lot of money.
Too much. And has caused inflation and everything.
But actually, normally central banks, only create 3 percent of the money.
97 percent of the money supply normally is created by the banks!
The banking system.
And the banks normally. And this is capitalism.
Where central planners are making decisions.
Private, commercially. Enterprises making decisions.
And so the more diverse banking system.
Particularly, the more small local banks you have, the stronger the economy. The stronger job creation.
GLENN: Yes.
RICHARD: And that's where in the past, the US has been extremely strong. But in recent years, you know, the -- have really reduced the number of small local banks.
And it's collapsed in the number of community banks. And local banks. Almost across the United States.
And that's very bad for job creation, and then competitiveness. And China is the best case in point.
You know, they used to have this centralized Soviet-style system, you know, in only one bank.
And then when they deleted -- you know, in 1978. He felt -- let's forget about all this ideology, under Mao. Chairman Mao. Let's deliver -- let's deliver performance and growth.
And how do we do it? Well, let's learn from those who did it.
And it went to Japan and ask China, what's your secret of success?
And they told them. You need -- you need banks. How many banks do you have?
One bank. Are you serious? For 600 million people at the time. Something like that.
You need more banks than that, how about 5,000. And that's what he did.
He went back to China to create this 5,000 small banks, local banks, billionaire banks. Credit unions. Regional banks. Rural savings banks. Conventional banks.
GLENN: So what does Trump need to do to do that here? What does he need to do to create that here? What should he be encouraging?
RICHARD: Well, first of all, one needs to take the pressure off the small banks to merge. Because the Federal Reserve and the FDIC have been closing banks. That's why thousands of banks have disappeared in the US. Job. Job creation. Job creation. But who is the main employer? It is small firms.
They've been employed between 65 and 75 percent of total employment. And there's a special thing about small firms, and they can't get money from Capitol markets.
GLENN: Correct.
RICHARD: Wall Street is not open to them. The only external source of funding is banks. Local banks that -- big banks don't lend to small firms. It doesn't make sense. So who lends to small firms?
It's only small banks. That's why American policy is very strong. They were going a few decades back. More than 20,000 banks.
And they need these thousands and thousands of small local banks. Community banks.
But the regulators. And the centralization. Have led to mergers. And the number of banks have been going down rapidly.
For some reason, they think it's a good idea. Same in Europe. You know, the European Central Bank says, we have too many banks. We have to close the small local bank. Well, that's how you kill the middle class.
That's really what happens to the middle class. That the small firms are not supported anymore. There's new technology coming out. The small firms. They're not necessarily, the innovators.
But they're ones that have to quickly adapt, adopt a new technology, but for that, you need money!
If you have a small local bank that knows you, you will get your funding. You can upgrade. You can maintain the market share and stay competitive. And expand jobs, basically.
But in countries, where the banking system gets too concentrated.
The US now is at risk of becoming one of those countries.
Looking at the UK.
Five big banks. The small firm gets nothing from these big banks.
They have to do big business.
They lend to the hedge funds. In billions.
And that works for the big banks.
Is it really good that the US is headed that way? No. We have to change that. So we have to change policies, at the FDIC. They have to be bank friendly.
And therefore small firm friendly. And therefore employment friendly.
If we combine tariffs with the right monitoring and banking policy, the US can be hugely successful.
You know, Glenn, just help me to get to the Trump team.
GLENN: I'll put a word in for you. But I'm lucky to talk to the janitor.
So, Richard, let me -- let me go to Europe here for a second.
Because I think what Trump is trying to do, on many of his things is to break this elite, almost world economic forum grip on dismantling the West. He doesn't believe in the -- you know, slow decline of the West.
He is looking to change directions, 180 degrees.
And I think that's part of what these tariffs on Europe and everything else. Is to say, look, we're going in a different direction. We have to go in a different direction.
Who is with me?
Die read it that way, or not?
RICHARD: Well, I think that is a similarly -- is one possibility. And it would be -- you know, that would be a good goal. Because Europe is really still under the World Economic Forum and Deep State.
GLENN: Yeah.
RICHARD: And including the US Deep State. You know, there's variations in Europe where you get that. Sometimes when President Trump ends up arguing with European leaders, he's still arguing with his old enemy, which is the CIA.
They're in Europe. They have all their assets in place.
In the CIA app. You know, the CIA funded his program, which brought Klaus Schwab to the floor.
GLENN: Jeez.
RICHARD: So it's something to realize.
He's still planting the old enemy. He won domestically. But the old enemy is strong in Europe and other places still.
Where they've had to have a foothold to -- to the traditional military foreign basis, where the US army is, and so on.
To kind of -- and that's -- that explains a lot of his friction. So, yes. In many ways. It's good that Europe sees, okay. There will be a change in policy.
But they're just going to now run this bill under instruction, from their minders at the CIA.
Just really engaged the United States, against Trump.
They're talking about, well, we have to decouple. We can't trust America anymore at all.
GLENN: I know.
STEPHEN: And when the reality is, they're now just totally still following their minders. The Deep State minders.
