×

Trump presidency would be a ‘nightmare,’ says Joseph Stiglitz

Donald Trump would be a "nightmare" as U.S. president, making relations with other countries "extraordinarily difficult" and placing the U.S. economy in jeopardy, Joseph Stiglitz told CNBC, adding that the Republican candidate had "no deep understanding of economics other than knowing how to go bankrupt."

"We can only hope he won't bankrupt the country," Stiglitz, a Nobel-prizewinning economist, told CNBC.

Trump, a billionaire businessman, has filed for at least four bankruptcies, with NBC News putting the figure at six. He will contest Democrat candidate, Hillary Clinton, in the November U.S. presidential election.

Trump has previously said he would renegotiate the U.S. national debt as president, although he has since backtracked on this.

"That is… something that it is almost unimaginable that any leader would say … That is not the way capital markets will work," Stiglitz told CNBC.

He said a Trump presidency would pose serious problems for U.S. foreign relations, highlighting the Republican's promise to build a wall across the border with Mexico to keep illegal immigrants out.

"I think it will be extraordinarily difficult for our relations with other countries, for our economic relations with other countries, for our foreign policy relationships. You know, (talking about) building that wall between Mexico and the United States has built a wall between the United States and Latin America. It has done more damage already than one could imagine," Stiglitz told CNBC.


US presidential candidate Donald Trump (R) and Mexican President Enrique Pena Nieto prepare to deliver a joint press conference in Mexico City on August 31, 2016.
Yuri Cortz | AFP | Getty Images
US presidential candidate Donald Trump (R) and Mexican President Enrique Pena Nieto prepare to deliver a joint press conference in Mexico City on August 31, 2016.

Trump met with Mexican President Enrique Pena Nieto on Wednesday. In a subsequent speech in Mexico City, Trump reiterated his plan to build a wall on the border with Mexico, but said he and Nieto and not discussed who would pay for it.

In a later speech in Arizona on Wednesday, Trump announced that Mexico would "100 percent" pay for the wall, but "don't know it yet." President Nieto subsequently tweeted that he had made it clear to Trump that Mexico would not be paying for the wall's construction.

Stiglitz told CNBC that Trump appealed to voters who had not felt the benefit of U.S. economic growth over the last 25 years.

"Part of the support for Donald Trump comes because we have left large fractions of the population behind. In fact, if you look at the numbers, roughly the bottom 90 percent has had a stagnant income over the last quarter of a century and we have been trying to understand why that has been. And it's partly been because, I think, we have not paid attention to the issue," Stiglitz told CNBC.

Sticking to his sleep analogy, Stiglitz said he was "not having that many sleepless nights," because Trump was unlikely to win the presidency.

"Fortunately the probability of that nightmare coming through is small and I hope it is getting smaller by the day," Stiglitz told CNBC.

NBC News said on Tuesday that Clinton's lead over Trump had narrowed to six points from eight points in its weekly poll. Clinton now enjoys the support of 48 percent of voters, while Trump has 42 percent backing, according to NBC News.

Stiglitz is a professor at Columbia University and was previously adviser to former U.S. President Bill Clinton and chief economist at the World Bank.

Stiglitz also told CNBC that the European Commission's ruling that Apple should pay Ireland billion in back taxes was a "fair warning" to companies that were "dishonest" and tried to evade taxation.