An Interview with Paul Craig Roberts

Talk to Sri Lanka Guardian Paul Craig Roberts

( March 24, 2016, Washington DC, Sri Lanka Guardian) Paul Craig Roberts, former US Assistant Secretary of the Treasury for Economic Policy, talks to the Sri Lanka Guardian about supply-side economics, US foreign policy, the Obama administration, the dangers of TPP, the Sri Lankan economy and the upcoming US election

Here are some excerpts of the interview:

Nilantha Ilangamuwa (NI): Dr. Roberts, Welcome to the Sri Lanka Guardian. You were United States Assistant Secretary of the Treasury for Economic Policy under President Reagan in the early 1980s. This was the time that neo-liberal economic policies began to dominate the world market. You yourself were awarded the US Treasury’s Meritorious Service Award for “outstanding contributions to the formulation of United States economic policy. But your recent analyses express strong opposition to these policies, in which you played a leading role in developing. May we have your take on this?

Paul Craig Roberts (PCR): The Reagan administration introduced supply-side economics as a new policy in order to cure stagflation, the simultaneous rise of inflation and unemployment. Supply-side economics is not neoliberal economics. Supply-side economics corrected one of the many mistakes made by neoliberal economics. As a high official in Reagan’s government, I was under constant attack by neoliberal economists who opposed Reagan’s economic policy. The supply-side policy that I introduced cured the stagflation, and the US economy resumed growing without having to pay for the growth in rising rates of inflation.

Today the successful supply-side policy has been abandoned.  Policymakers at the Federal Reserve (the central bank) and at the US Treasury have returned to the failed neoliberal policy. They say that they are trying to restart inflation in order to revive the economy.  In other words, policymakers have returned to the neoliberal view that economic growth requires the stimulus of inflation.

Reagan was determined to overcome stagflation in order to have the economic resources to threaten the Soviet Union with an arms race unless the Soviets agreed to end the Cold War.

Reagan believed, correctly, that the Soviet economy was in such bad shape that the Soviets could not afford a new arms race.  Reagan was opposed to what he called “those awful nuclear weapons.”  He wanted to remove them as a threat to life on earth.  The reason I received the Meritorious Service Award is because the economic policy that I introduced succeeded, and the economic success allowed Reagan to achieve with Gorbachev the end of the dangerous Cold War.

NI: Since the end of the Cold War much has changed in US foreign policy. Sri Lanka maintains a high degree of diplomatic relations with the United States of America, and the Obama administration is generally well-considered. What is your take on the Obama administration’s record after eight years?

PCR: You asked me to evaluate the Obama regime.  Obama was chosen to be president by the powerful private interest groups who rule the US, because he was a neophyte with little experience of Washington and, therefore, easy to control.  The less a president knows, the easier it is to control him.  Despite any good intentions Obama might have had, Obama knew very little and did not know enough independent thinkers to staff his administration. It was staffed for him by Wall Street and the neoconservatives, essentially warmongers who proclaim American hegemony over the world.

As Mike Lofgren, a member of the US Congress staff for 28 years writes in his recently published book, The Deep State, “Obama, like any president, is literally a captive of the people who brief him on secret intelligence.”

NI: It is often perceived that the Obama administration has attempted to wash away the US’ bad reputation acquired under previous governments.

PCR: Obama, whatever his intentions, was unable to hold the previous regime of George W. Bush and Dick Cheney accountable for the numerous felonies and war crimes that the Bush regime committed:  torture, war crimes, lies to the UN by Secretary of State Colin Powell, indefinite detention without due process of law, illegal spying without warrants, lying to Congress, lying to the American people.

Obama did nothing about his predecessor’s extraordinary violations of the US Constitution, such as submitting American citizens to indefinite detention without due process of law.  Indeed, Obama went even further than the criminal Bush regime dared to go. Obama announced the policy of executing American citizens without due process of law. These two extra-judicial practices are the hallmarks of tyranny.


NI: Instances such as revealing the torture report senate summary, calling for the closure of CIA black sites and Guantanamo Bay, criticism of loopholes in the Criminal Justice System, aren’t these good steps by the Obama Administration?

PCR: Obama has not stopped the government from mass spying on citizens without warrants. Although Obama seemed to want to stop torture and to close Guantanamo Prison, he was unable to do so. He was defeated by the Deep State or permanent government and by Congress which the Deep State controls. Guantanamo contains innocents sold to the US government as “terrorists” by Afghan warlords in response to the US government’s announcement of a bounty for terrorists. Torture is still permitted, because it has been redefined as a form of acceptable interrogation called “enhanced interrogation.”

Obama’s National Security Advisor, his UN Ambassador, his Assistant Secretary of State for Eurasian Affairs and a number of other high policy-making officials are neoconservatives. He has relied on Wall Street to staff the US Treasury.  Therefore, Obama finds himself still locked into combat in the Middle East and Africa and in very dangerous conflict with Russia and, increasingly, China, and Washington’s economic policy continues to favour Wall Street.

The success that the Reagan administration had in ending the Cold War has been overturned by the neoconservatives. As the result of the neoconservative control of US foreign policy during the Clinton, George W. Bush and Obama regimes, the trust that Reagan and Gorbachev had established between the major nuclear powers has been destroyed. Thanks to the neoconservatives control of the US government, the world again faces the possibility of nuclear armageddon.

It would be uncharitable to blame the resurrection of the possibility of nuclear armageddon on Obama. The US president is not the powerful, all-knowing person that the world thinks. Essentially, he is a captive of the private interest groups whose money put him in office and once in office, he is a captive of the Deep State.

NI:  Internationally, it is perceived that many people have benefited from “Obamacare”?

PCR: Obama partisans look for a success in domestic policy. They seize on “Obamacare.”  Obamacare was written by private insurance companies to serve their interests, not the health of the American people.  What the private insurance companies did with Obamacare is to divert public monies away from health care into their profits.  For most people who need health insurance coverage, they cannot afford Obamacare. The premiums are too high, and even if a person has a subsidised policy, the deductibles and co-pays are so high that most people cannot afford to use the policies.

The very poor Americans, a number that is rapidly growing, who cannot afford any premium are bundled off into Medicaid, that is, onto state budgets.  The states impose a condition. Any poor person who receives medical care under Medicaid is subject to any assets the poor person may have, such as a home, being confiscated by the state in order to cover the cost of the person’s medical care.

In other words, Obamacare dispossesses a poor person of everything he or she has in exchange for medical care.

In American politics, anytime a president says that something has to be done about this or that, what is done is determined by private interests in order to serve their interests, not the interests of those in whose name the programme originates.

NI: The Sri Lankan Foreign Minister expressed his government’s desire to be a part of the Trans Pacific Partnership known as TPP recently in Washington DC. What are the risks and advantages of the TPP?

PCR: The Trans-Pacific Partnership (TPP) is not a partnership and has nothing whatsoever to do with free trade. TPP was invented by transnational corporations in order to make themselves immune from the laws of the countries in which they do business. The agreement gives the corporations the authority to sue any government on whose territory the corporation does business for any policy, regulation or law that impinges on the profits of the corporation.

For example, if a country has a law against GMOs (genetically modified organisms) the US corporation Monsanto can sue the country for “restraint of trade” in a tribunal that consists solely of corporations.  The country’s own courts are bypassed.  In short, the TPP permits corporations to negate any law in the countries that sign the “partnership” that does not serve the interest of the corporation.

Governments agree to these “partnerships” for one reason only.  They are paid enormous sums of money by the corporations to sell out the people they rule and to become accomplishes of the corporations who intend to use TPP to establish themselves above the laws of the countries in which they do business.

The United States government is a hegemonic power.  Every agreement the US government makes is designed to increase Washington’s financial hegemony over the rest of the world. Any government that signs on to the Trans-Pacific Partnership or the Trans-Atlantic Partnership is either extremely naive or is a corrupt government that has been bought by the US corporations.

NI:  What strategies should a country follow to develop a cordial relationship with the USA?

PCR: Any country concerned with its own sovereignty and welfare has one important rule to follow: Stay as far away as possible from Washington. Once a country is in Washington’s grip, the country is plundered and left in ruins.  Look at Ukraine today.

NI: Can you give any suggestions as to how a country with debt interest higher than annual income can navigate the economic crisis?

PCR: The purpose of Western loans to other countries is to indebt the countries beyond their ability to repay. When it becomes impossible for the countries to service the debt, the IMF offers to rescue the country with a loan to pay off the existing loans. The IMF is then repaid by forcing the country to sell public assets, to grant mineral rights to foreign corporations, to accept US military bases, and to curtail state pensions, employment and social spending.  The domestic population is forced by the IMF into penury while the creditors exploit and plunder the country and its peoples. Currently this is happening to Greece and Portugal. The process by which Western bank loans followed by an IMF “structural adjustment program” loots countries was throughly described by John Perkins in his book, Confessions Of An Economic Hit Man.


One of the main ways that the West controls foreign governments is to get them indebted. The West then “helps” the indebted countries manage their debt problem by forcing governments to open the country to foreign exploitation.  The plunder of Latin American countries by US banks and the IMF is a well-known fact. It has happened again and again. The countries either never seem to learn or the governments are paid bribes to accept loans which are then used to control the country.

NI: The Minister of Finance and Governor of the Central Bank of Sri Lanka have said that they will soon introduce new laws to allow foreign capital to enter to enter the micro-finance sector, “laws are being formulated to cover foreign financing to enter micro-lending”. What are the risks and opportunities associated with micro-lending and what measures would you suggest for a country to follow in order to strengthen the local currency?

PCR: If countries wish to remain sovereign, they should stay out of debt to foreigners and finance their own needs with money creation by their central banks. If Sri Lanka allows foreign banks to enter its micro-finance sector, the foreign banks will achieve control over the life of Sri Lankans and most probably control over the Sri Lankan economy and ultimately the government itself.

NI: On a final note, the forthcoming US elections are currently gripping the world. Business tycoon Mr. Donald Trump has upset the Republican Party ticket while Hillary Clinton and Bernie Sanders are battling for the Democratic nomination. What do you think will happen?

PCR: Everyone wanted Obama to succeed.  But he could not, because the President is no match for the powerful private interest groups that control the US government. Obama’s failure has helped many Americans to understand that the two political parties, Republican and Democratic, represent the One Percent, not the 99 percent.  Consequently, in the current primary elections in which the two candidates for president are being decided, voters have turned away from the establishment candidates to outsiders.  Donald Trump is not a member of the Republican Washington establishment, and Bernie Sanders is not a member of the Democratic Washington establishment. Consequently, these two candidates are receiving much support from voters despite the constant media attacks on Trump and Sanders.  Indeed, Trump seems to have defeated all of the Republican candidates, and Sanders is showing a strong challenge to Hillary Clinton.

Bill and Hillary Clinton are known to represent the Wall Street banks and the military/security complex.  As has been widely reported, the Clintons have been paid $150 million in speaking fees by the Wall Street banks and other powerful private interests. CNN reports a documented amount of $153,000,000.

If Donald Trump wins, and is permitted to receive, the Republican presidential nomination, the establishments of both parties will work to elect Hillary if she is the Democratic nominee.  If the contest is between Trump and Sanders, it will indicate that the establishments of both political parties lost control despite help from the media.  Whichever person wins the presidency, he will have a difficult time, because the Washington establishment will work overtime to control his government.

The United States is not a democracy.  It is an oligarchy ruled by powerful private interests.

Bill Clinton was in office for eight years as a Democrat. George W. Bush was in office eight years as a Republican. Obama is in his eighth year in office as a Democrat, and the policies of the government have never changed. The same wars, the same violations of the US Constitution and international law, the same favouritism of the One Percent. In 24 years nothing has changed, except the plight of the American people who have grown poorer, more indebted and less independent.

Author: Sri Lanka Guardian

Sri Lanka Guardian has been providing breaking news & views for the progressive community since 2007. We are independent and non-profit.


” . The supply-side policy that I introduced cured the stagflation, and the US economy resumed growing without having to pay for the growth in rising rates of inflation.”

PCR always ignores the obvious, that anyone can throw a good party on the credit card. Reagan increased the debt more than any other President: he tripled it. Since 1989, the rich have tripled their incomes and wealth, while the median wage has fallen 40% as a result of Reaganomics.

PCR takes credit or creating economic growth while hiding the fact that it was stimulated by tripling government spending, for which the working class has been paying since. He claims to be an enemy of neo-liberal policy but in fact his “cure” for the economy was the beginning of an economic program which has enriched the rich at the expense of the working class.

He gets very upset when people point this out, and that is why, he almost never allows commentary on his articles. I welcome this rare opportunity to remind people of how Reagan brought about economic growth and what the results have been ever since.

Interesting what you say about the Regan period. Regan was controlled by the big US financial groups. I always remember Regan being told to hurry up and finish his speech by Don Regan former Merill Lynch CEO.

Although PC Roberts analysis of the condition of American now may be correct and the neo cons have got control, things were not wonderful during the Regan period and the nuclear Armageddon almost happened. How about his ‘Star Wars’ and calling the Soviets the ‘evil empire’.

The video referred in this comment may not be available in every country – Edits

Thanks for a different point of view . Since retiring, my partner and I have been digging for the truth with regard to the “History of the USA” and for good sources for the study of economics. These two categories were and continue to be missing from American “education.” this ignorance has led the American 99% to submit to the enslavement into which we are sliding.
What would you suggest as a basic starting point for studying and understanding economics. Some of our go to books have been: WEB OF DEBT by Ellen Brown and THE CREATURE FROM JEKYLL ISLAND, by G. Edward Griffin. What eye openers to the criminals and their shills who have run this country for a very long time. But these expose mainly the financial system. The insider terminology, eg. “supply-side”, the similar obfuscations by Bernanke and Yellen make the subject of economics beyond the understanding of the average (undereducated) American. Congress members really only understand the checks they receive for playing along.

There are many books written that expose the many lies and deceits that serve as cover for all kinds of evil, both in the past as well as now and will continue into the future. One book I highly recommend is Gerard Menuhin’s “Tell the Truth and Shame the Devil” – chuck full of exceedingly revealing quotes from very prominent people you will probably recognize.

Also recommend Richard Grove’s “Tragedy and Hope” website, chock full of excellent resources.

Dr. Roberts is an incredibly gifted economist who serves for the welfare of Americans and the world. I am so impressed that you interviewed him, and hope you do so on a regular basic to get truth about economics and geopolitics which is absent from main stream media.

You have spoken the truth PCR: “The United States is not a democracy. It is an oligarchy ruled by powerful private interest.” One can modify saying it is an Oligarchy manipulating the democracy to its advantage.

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