Dems' Self-promotion versus Hard Economic Realities - Economic Update with Richard D. Wolff

Economic Update with Richard D. Wolff

Episode: Dems’ Self-promotion versus Hard Economic Realities

Date: March 25, 2021
Guest: Bob Hennelly (award-winning journalist)

Episode Overview

In this episode, host Richard D. Wolff critically examines the gap between political self-promotion by Democrats and the harsh realities of the current U.S. economy, especially during the COVID-19 pandemic. The episode explores the struggles of workers in dying industries, international mishandling of the pandemic, misleading narratives about economic recovery, and Democratic failures to fight for significant changes like a higher minimum wage. In the second half, journalist Bob Hennelly joins to discuss the impact of recent legislation, persistent poverty, food insecurity, vaccine inequities, and the standing of the labor movement.

Key Discussion Points and Insights

The Coal Industry’s Slow Demise and Policy Failures

[00:15 - 04:40]

Wolff highlights the decline of the coal industry, attributing it to ecological concerns and higher costs relative to alternatives.
Main critique: The abandonment of coal workers and towns is not a natural tragedy, but a failure of capitalism to care for displaced people.
- “As the coal industry shrinks, the communities that depend on it...are left behind. It is no surprise that they fight back. ...We should help those people. They're our fellow citizens.” (Wolff, 01:25)
Wolff argues for a nationally funded, humane transition: maintaining laid-off workers’ incomes, retraining, and guaranteeing placement in new jobs.
He blames both media and politicians for ignoring these policy possibilities, contrasting them with empty promises from figures like Donald Trump.

Brazil’s COVID-19 Disaster: A Cautionary Tale

[04:41 - 08:00]

Brazil is suffering the world’s worst COVID-19 rates behind only the U.S., with government neglect worsening the crisis.
Wolff draws a parallel between Brazil’s Bolsonaro and Trump, highlighting their downplaying of the pandemic and failure to protect public health.
- “Mr. Bolsonaro ... advised the people of Brazil ... to 'stop whining about the disease.' What he meant, of course, was stop whining about my horrific mishandling of this disease. Like Trump.” (Wolff, 06:30)
Observes that the hardest-hit countries have “strongman” leaders who scapegoat minorities and mismanage public health.

The “Pent-Up Demand” Myth and Problems with Recovery

[08:01 - 13:50]

Wolff critiques claims of an impending economic “boom” from pent-up demand, comparing the current situation unfavorably with 1945.
- The end of WWII brought a surge after 16 years of deprivation, while COVID-19 has lasted just a year.
- Household debt is exponentially higher now, reducing disposable income.
- The U.S. faces global competition, especially from China, unlike post-war dominance.
- Extreme inequality concentrates wealth among the rich—who did not cut back consumption and thus won’t fuel a surge.
- “To call this [wealth tax] modest is one of the great understatements of human history.” (Wolff, 13:30)
Conclusion: There are no grounds for expecting a mid-century style economic boom.

Elizabeth Warren’s Wealth Tax Proposal

[13:51 - 15:30]

Wolff explains that Warren’s proposal exempts 99.9% of Americans and modestly taxes fortunes above $50 million.
The ultra-wealthy will still grow their assets faster than the tax rate, making opposition “just this side of disgusting.”
- “[The wealth tax] is even grosser than what we have, that those people shouldn't have decided they ought to pay their fair share.” (Wolff, 15:28)

Interview with Bob Hennelly

Democrats and the Minimum Wage Failure

[15:37 - 19:20]

The Senate dropped the $15 minimum wage from COVID relief under parliamentary pretext.
Hennelly: The ruling class engineered “cover” by using the parliamentarian’s nonbinding advisory.
- “What this consensus has done, this corporate consensus by people who are millionaires who raised billions to hold onto their office, is to keep capital formation safe. That's it.” (Hennelly, 18:22)
The exclusion of a wage hike preserves corporate profit at the expense of 20-30 million underpaid workers.
Democrats’ rhetoric on behalf of the working class has not translated into meaningful policy.

The Illusion of Economic Recovery

[19:21 - 23:30]

Hennelly highlights systemic, pre-existing poverty and deprivation, especially in healthcare.
- “Even before the pandemic ... you had 250,000 people dying a year because of inadequate access to health care. ... Meanwhile, 750 are dying a day for lack of health care.” (Hennelly, 20:48)
COVID-19 intensified women’s economic setbacks, erasing years of workplace gains due to childcare and social infrastructure collapse.
Republican-led states are refusing to strengthen Medicaid or follow health mandates, echoing persistent regional inequalities dating back to the Confederacy.
The relief package mirrors the exclusions of past reforms (like FDR’s), which left out domestic and farm workers, disproportionately impacting women and people of color.

Food Insecurity—Pre-existing and Worsening

[23:31 - 25:50]

Hennelly discusses “ALICE”—Asset Limited, Income Constrained, Employed—Americans who struggle above the poverty line.
- “These are folks that aren't in the poverty level, but struggle week to week and have to give up something in rotation to get by.” (Hennelly, 24:29)
Food insecurity has reached shocking levels, e.g., in some New Jersey counties, 1 in 3 children lacks reliable access to meals.
Closure of schools removed a vital source of nutrition for millions of children.

Vaccines: Inequities and Policy Shortfalls

[25:51 - 27:33]

Vaccine distribution reflects pre-existing inequalities: “white rich people get access to the vaccine. Oh, it’s a shocker.” (Hennelly, 26:16)
Distribution varies wildly by state; there is no coherent national strategy.
Wolff and Hennelly both critique the federal government’s hesitance to impose mandates (e.g., requiring teachers’ vaccination for school reopening).

The Labor Movement's Current Standing

[27:34 - 28:29]

Unions, especially in the public sector, are faring better.
- “The unions continue to lead the way around the country for even a basic accountability...” (Hennelly, 28:09)
Example: Only postal unions and some Congress members are pressing the USPS to reveal pandemic death tolls among workers.

Notable Quotes & Memorable Moments

On coal communities:
- “We should help those people. … What's happening to their industry can and sooner or later will happen to whatever we are engaged in. And we would want to be helped just as they deserve to be helped.” (Wolff, 01:25)
On Brazil’s COVID crisis:
- “Mr. Bolsonaro ... advised the people of Brazil ... to 'stop whining about the disease.' What he meant, of course, was stop whining about my horrific mishandling of this disease. Like Trump.” (Wolff, 06:30)
On the failed minimum wage push:
- “What this consensus has done ... is to keep capital formation safe. That's it. ... they have forgotten [those who put them in power].” (Hennelly, 18:22)
On food insecurity:
- “There's an army of Alices. ... These are folks that aren't in the poverty level, but struggle week to week and have to give up something in rotation to get by.” (Hennelly, 24:29)
On vaccine inequity:
- “White rich people get access to the vaccine. Oh, it’s a shocker. I’m so shocked.” (Hennelly, 26:16)

Key Timestamps for Important Segments

Coal industry’s decline & policy failures: 00:15 – 04:40
Brazil’s COVID-19 crisis: 04:41 – 08:00
The “pent-up demand” myth: 08:01 – 13:50
Wealth tax analysis: 13:51 – 15:30
Democrats and the minimum wage: 15:37 – 19:20
Granular reality v. “recovery” claims: 19:21 – 23:30
Food insecurity before/after pandemic: 23:31 – 25:50
Vaccine rollout disparities: 25:51 – 27:33
Labor movement status: 27:34 – 28:29

Tone:
The episode is critical, direct, and unsparing, with both Wolff and Hennelly emphasizing the urgency and injustice of current economic policies. Language reflects empathy for struggling populations and sharp skepticism toward self-congratulatory political narratives.

Summary written for listeners who want to understand the substance and character of the episode without listening to the full broadcast.

Transcript

A (0:10)

Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives. Jobs, debts, incomes, our own and our children. I'm your host, Richard Wolf. I want to start today with the coal industry. It's a very sad story. It's an industry that's fading out for all kinds of reasons, above all ecology and cost. And it is giving way, as we know, to other forms, safer forms, cheaper forms of energy. The tragedy of the coal industry is really summarized in one capitalism. And what I mean by that is, is that as the coal industry shrinks, the communities that depend on it, the workers and their families that depend on it, are left behind. It is no surprise that they fight back. They don't want to give up their jobs, their incomes, their communities, the schools their children attend, the towns they live in, the people they know there ought to be, of course, and you all really know this, even though the media pretends not to have have this in mind, you know that what ought to be done is a national program. If we're going to phase out any industry, in this case coal, for good reasonsecological the health and safety of the American people and the fact that it's also cheaper to do something else. Those two together are powerful arguments. We should help those people. They're our, our fellow citizens. What's happening to their industry can and sooner or later will happen to whatever we are engaged in. And we would want to be helped just as they deserve to be helped. And what do I mean by helping? First of all, don't lose your income. If the industry is one that we are moving away from, maintain those people's income, those working families, families number two, have a program in place to help them train for, move to other jobs that should be guaranteed for them. A program to let them choose the kind of work, the kind of place they would most like to go to. Come on, we know how to do all of that. And if we did it, then the mass of the local people wouldn't fight to keep an industry going that is dangerous and unhealthy for others. They wouldn't become prey to hustling politicians who make up stories about how we shouldn't think it's dangerous when we know it is and we shouldn't think it's a good idea to get out of that industry, which we know it is. We are engaged in endless struggles. Look at how Trump pandered to the coal industry for votes and got them by promising to end the, the end of coal, which of course he didn't do, because his promise in that area was as empty as in most others. But we should be helping. That way. There wouldn't be an opposition because the mass of people would know that they're cared for, that they're helped, that their families will not be destroyed, that their income will not be destroyed. It's bad enough if they lose their community and have to change jobs. They. That's enough. The rest should be helped. My second update has to do with Brazil. Why Brazil? It is one of the worst locations of COVID 19 in the world. Now, a recent week was the worst week since this pandemic began in Brazil, where other countries are seeing a downturn in cases and deaths. Not in Brazil. This is a country of 212 million people. It's the biggest country by population in all of Latin America. It's got the second highest pandemic death rate after the United States. If you look at the situation in Brazil, there's a huge variation in what is done for people who come down with the disease. In many parts of the country, next to nothing is done for them. The availability of vaccines, very spotty, very uneven, very unfair. The hospitals are overflowing. And I'm using only the statistics that are coming from Brazil, from the officials in Brazil who have to admit it, their economic system is a basket case. There's no nice way to put it, and there's no end in sight, especially as the new variants of. Of COVID 19 show up and are resistant in one way or another to the little bit of procedure and vaccine that Brazil has. And then on top of it, and part of the reason why I chose to talk to you about it were the recent comments from Mr. Bolsonaro. For those of you who don't know him, think of Trump in a Latino version. Mr. Bolsonaro gave a speech, I kid you not, you couldn't make this up, in which he advised the people of Brazil who voted him into office to, I'm quoting now, stop whining about the disease. What he meant, of course, was stop whining about my horrific mishandling of this disease. Like Trump. He said in the beginning it was nothing like Trump. He said in the beginning it would pass quickly. Like Trump, he spent no time, no energy and no government capital trying to develop a comprehensive program. And now his people are sick and dying from his neglect. It is interesting that the three countries in the world suffering the worst scourge of this disease, the United States, Brazil and India, ranking 1, 2, 3 in horror, are all led by quote unquote strong men, Bolsonaro in Brazil, Trump in the United States and Modi in India. Right wingers, anti immigrant scapegoat specialists, failures to protect the public health of the people they claim to lead. My next update goes to the stock market euphoria in recent times in which people are saying something very strange and very, very wrong. We're going to have a boom, I'm told. I read it in the financial press, because there's pent up demand. You see, over the last year of the COVID pandemic and the economic crash, people have not had money and they haven't bought stuff and they haven't gone out of their homes and they've been scared and they've hunkered down and all the rest. And so the argument goes, as soon as we're out of this, which is going to happen any day now because of these wonderful vaccines, please know that I'm joking, bad joke. We're going to have a boom because everyone's going to go out there and shop till they drop. Here's why that's wrong. The parallel is drawn with 1945 when finally the end of World War II, when people had hunkered down and pent up demand, they, they exploded with buying things in the late 40s and 50s and 60s and that was a period of economic growth. There was something to that in 1945. So I'm going to concentrate here by explaining why the situation we're in now is not like 1945 and therefore there's no reason to expect, let alone to bank on some boom happening now. So let's begin, number one. In 1945, Americans had not bought things, had pent up demand, not for one year as we've had now with COVID but for 15 or 16. Because it was 1929 that the crash, the Great Depression happened. That lasted from 1929 to 1941. And then we had immediately World War II from 1941 to 1945. You put it all together. It's 16 years of not painting the house, not repairing the car, not buying your kid a bicycle. None of the things that people might have some pent up demand for for 16 years. Nothing like that's true now. We've had pent up demand for a year. That's an important difference. Number two, in 1945, the level of debt of the average American family was a small fraction of what it is today. People are now having to spend a significant portion of their incomes servicing the debt, paying the interest and the principal of a Debt that's accumulated. Mortgage debt, car payment debt, credit card debt, student loan debt. You put all those together, they're in the many, many trillions of dollars. And people are having to shovel income over to take care of the debt before they have anything to spend at the Mall. Number three. The United States came out of World War II in 1945. King of the hill. Every other capitalist, competitive country, Britain, France, Germany, Japan, Russia, any other one that you might mention had been destroyed in World War II. The United States had suffered no war on its territory other than the opening salvo at Pearl Harbor. Other than that war was fought in France, in England, in Germany, in Russia, in China, and so on. So we were alone. We had no competitors. We produced. The rest of the world bought. There was no option. That's not our situation now. The United States has a very powerful competitor. If there were to be a boom in spending, a huge amount of it will go to that competitor. It's called the People's Republic of China. And they produce the clothing and the appliances and now the automobiles that Americans will buy if they buy anything. And that will produce income and jobs over there, not here. We did not have that situation in 1945. Finally, 1945 was a much less unequal America than the one we have now. Much of the income this country now earns is concentrated in people who are so rich that they haven't cut back their consumption. They're not going to explode because they never had to cut back. You're confusing your situation and mine with theirs. Big mistake. You put all that together. No boom. My final update is about Elizabeth Warren's wealth tax proposal. It deserves a commentary. Her idea is no tax for 99.9% of the American people. So let's begin. Her proposal exempts from taxation 99.9% of people. So unless I miss my guess, nobody I'm talking to now is in the line to pay this tax. It is on 1/10 of 1% people who have assets over wealth over $50 million. Because the first 50 million of everybody's isn't going to be taxed. You can all relax now, okay? How is it going to be taxed afterward? 2% on what you have above 50 million will be taxed each year. If you have more than a billion. 3%. To call this modest is one of the great understatements of human history. Let me give you an idea of what that means. If you're a person who has $50 million or more, then you are aware. Let me help you. If you don't know about this, that you don't take care of that money because you don't know how to do that real well. You give that to something called the hedge fund or a capital manager or all kinds of terms of specialized people. They take a fat fee, but they invest your money and they will tell you, as they will today or tomorrow, that they can do at least 5 to 10%. Okay? So if you have more than 50 million, you're going to make 5 to 10% a year. It's going to grow. 2% of that 5 to 10 is what you'd have to give the government, which means even after the tax, your wealth will grow. And yet the people who have to pay that are screaming bloody murder. It is even grosser than what we have, that those people shouldn't have decided they ought to pay their fair share. It's just this side of disgusting. And maybe not even this side. We've come to the end of the first part of today's show. Before we go to the second half, I want to remind you about our new book, the Sickness Is the System When Capitalism Fails to Save Us From Pandemics or Itself. It's available at democracyatwork.info books. I want to thank our Patreon community for their ongoing and invaluable support. If you haven't already, Please go to patreon.com economicupdate to learn more about how you can get involved. Please stay with us. We'll be right back with our great guest, Bob Hennele. Welcome back, friends, to the second half of today's EGG Economic update. I am very happy to bring back to our cameras and our microphones a friend, Bob Henley. Bob is an award winning print and broadcast journalist. He is a staff reporter for the Chief Leader, a New York City based newspaper that has been covering Labor Unions since 1897. Bob is also a regular contributor to Salon magazine, which is where he writes about economics and politics. Over the years he has done reporting for quite a list of outlets and here they CBS's 60 Minutes, the new York Times, the Village Voice, the Christian Science Monitor, cbs, Money Watch, National Public Radio, WNYC, and the Pacifica Network. So Bob, welcome again and I'm very happy to be able to pick your brain for all of us.