← Economic Update with Richard D. Wolff
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- [00:10]
A
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.
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B
Thanks for having me, Rick.
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A
Okay, let's jump right in as we're recording this. It's a few days after the Democratically controlled Senate abandoned the $15 minimum wage mandate as part of President Biden's $1.9 trillion Covid relief package. This comes on the heels of reporting that the pandemic has called caused poverty to go up, food insecurity, that's the current euphemism for hunger to go up and to do so dramatically. What in your opinion could the Democratic Senate majority possibly say to justify such a retreat, such a collapse?
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B
Well, I would say that initially if it hadn't been for Senator Sanders forcing the question by having a vote, they were hoping that the Senate parliamentarians ruling the $171,000 a year Senate parliamentarians ruling prior to the vote basically had tried to give them some cover by saying they could not vote for the minimum wage hike from 725 last way raised in 2009 to 15 by 2025 because it didn't fit the criteria for the reconciliation bill. I'm sure people are aware that's this unique circumstance when you have the deadlocked where the vice president can break the tie. There's a certain room for the Senate on a simple majority vote to bring things up. And so they thought that they wouldn't have to have this moment of truth. What they are saying now, I'm sure if you look at the senators that are in there, you have the two senators from New Hampshire, a state that I understand does not have a minimum wage except for the federal minimum wage and you have a situation where they'll say that small business couldn't take that would be their defense. But the reality is what happened was we passed and we're on their way to passing certainly by the end of this week, a $1.9 trillion program that will be taxpayer funded that will require significant government borrowing. Meanwhile, what The Republicans, the 50 that voted with the the several Democrats who against the minimum wage, what they've done is kept the ability of major corporations to continue to amass huge profits of an unprecedented scale while not paying a living wage to the 20 to 30 million people that would have been directly affected by it. So 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. That's all they accomplished there by doing that. And so there are some important things in the program. Increased deductions for children, certain important aid to local county and tribal governments. Yes, that's in there. But in terms of the structural kind of change that they promised on the campaign trail, that's what they're not delivering on. And I had a conversation with Dr. Reverend Barber whose poor people campaign and Moral Monday was really the political grassroots architecture that the Georgia Democratic movement was built on. And in fact, an argument can be made that it was those poor, low wealth voters that turned out 6 million more than last time that put Biden and Harris in power. And yet it appears they have forgotten them. And as Dr. Barber says, it's time to hold those Democrats accountable, just like they held accountable Donald Trump for his abuse of authority.
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Yeah, I don't mind adding, as we said on this program, the excuse is so phony. If you want to help the millions who need a higher minimum wage and you don't want any small business to suffer, there are a dozen ways, and they're all familiar with them, to help small businesses that, that are confronted with a rising wage bill, that could easily be done. But to use the poverty of the worker and to beat them over the head by the difficulties of small business, as if you couldn't deal with both of those problems, it's revolting. It's as phony as a, pardon me, $4 bill. Okay. In the debate over Biden's Covid package, Republicans and centrist Democrats have argued that it's too big because the economy is already recovering. But you've done the kind of granular reporting at the local level. Do you find the economy recovering? Is that an argument not to help the mass of people, the one they're making?
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B
Well, I think this is important because it goes back to the original sin, if you will, of slavery, and that's that we have remained blind to this country, to the vast portions of our country where the economy's not working. This is a congenital problem. And so you have a situation where even before the pandemic, and this is something Dr. Barber brings out in the interview I had with him, you had 250,000 people dying a year because of inadequate access to health care. That's before the pandemic. And as he points out, you have seven vaping deaths. And we're convening a White House and congressional conference on it. Meanwhile, 750 are dying a day for lack of health care. That's before the pandemic. So this chronic underinvestment, three years of declining life expectancy now capped by something you can see from space in terms of the decline of life expectancy, is added onto this unraveling that's occurred of the social fabric on a scale that's hard to imagine, millions of women being pressured out of the workplace, giving back a generation of gains because we had no social safety net. So if someone is sick From COVID And let's keep in mind that we're talking about 30 million infections where we're at today. We know at least a third RIC will have, who survive, will have some chronic healthcare issue of varying severity. Who's going to be caring for those people? But primarily in our society, women. And add, the lack of dealing with education means that they're dealing with homeschooling. So all of that stuff that was built up, that infrastructure we had that was weak, depending on where you lived, has all but collapsed and there's been no uniform standing it up. And so as I speak to you now, we have states like Texas and Florida where the governors have decided to flout any basic public health requirements. And if you look at the several states that didn't want to invest in Medicaid when they had a chance, it's exactly like the Confederacy. So we keep seeing this same thing played over and over again. And this recovery act is just kind of like the same thing that happened with. I know this might be blasphemy, but fdr, we like fdr, but the reality is, faced with the political crisis of his time, he wanted to get the Wagner act through and the fair labor standards that set at minimum wage. And surprise, surprise, they cut out domestic workers and farm workers, leaving a huge chunk of the primarily female and people of color workforce. This has been ongoing.
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It makes you really stop and recognize the cost to this society of the political establishment that keeps finding itself a way to stay in power. I want to ask you about something you and I have discussed. Tell the audience what your research has found about this quote, unquote, food insecurity issue here in the United States both before and as a result of the pandemic.
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B
It has been largely invisible for a long time. One of the things is that the United Way is a national charity. And it's the kind of place that if your life's coming along, going well, and you lose your job, you got to feed your kids, you can call. And they pride themselves on providing that kind of spot relief. Funny thing happened in 2008. They're getting closer. Morris County, New Jersey. Wealthy place. If you look at it, 10,000ft and look at the analytics and the data because of federal poverty number, it doesn't even show up. There's not even a blip of poverty. Really. What they were finding was that New Jersey, because of its high rent in utilities and childcare costs, had created this whole missing cohort of a population. And they realized they were employed but had a low income so they came up with this phrase, Alice asset limited, income constrained but employed. And Rick, there's an army of Alices. People know Alices. You may be an Alice, and 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. These are the people the Federal Reserve told us before the pandemic couldn't come together with $400 without borrowing it. There were an army of those people before. Now it's off the charts. So in places like New Jersey, you have some counties where maybe one in nine kids were having trouble knowing where their next meal was coming from. Now it's one in three in certain counties. And it's also aggravated by the fact that in this country for a long time now, and teachers know this and people that are child centered, many children got one, if not two meals from their school. So when you get rid of in person instruction, you've collapsed that critical piece of the safety net.
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A
In other words, the diet of the kids is negatively affected as well by the school problem.
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B
Yes.
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Okay. I'm worried about the time limit and the amount of material we can get in quickly. What's your sense of what's going on with vaccines? Are the vaccines some magic bullet that's getting us out of the woods here or what?
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B
Well, first of all, despite all of the protestations by the power structure that they're so aware of, the vast inequities revealed in terms of racial and economic inequalities by how this Covid has played out. Well, the vaccine in terms of access, what we're seeing is white rich people get access to the vaccine. Oh, it's a shocker. I'm so shocked. But the reality is that depending on where you live, like my experience of it was a totally professional, organized situation in other states. It's random. It's kind of like it's like gambling in terms of online gambling. And so this is an example of where while it seems that there's more of it around, you have a situation where we don't have a coherent strategy. Even now, for instance, where the CDC and Biden administration wants in person instruction to start again, the president signaled that he wants teachers to be vaccinated. But here's an idea. How about, say if you get any federal aid, you can't open in person instruction until your teachers are vaccinated, assuming they want to be vaccinated. See, we're not acting according to the scale of the problem. That's why we're still reacting to the problem. Just like we're not geared up for the massive challenge to healthcare that's from the long term consequences of COVID Yeah.
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It'S amazing, this sudden hesitance to do the mandates. It's amazing. Especially after that reporting of the Florida governor somehow making the vaccines available in. In elegant, upscale gated communities. We have almost no time left. Very quickly, you cover labor. How would you assess the labor movement? How is it now? How has it been affected by the pandemic? And we really only have 20 seconds.
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B
Okay. What's happened is if you're in a union that's activated and it's a public union, you're probably faring better. And the unions continue to lead the way around the country for even a basic accountability. The US Postal Service, for instance, will not disclose how many people died who worked for the post office. And the only people pressing for that answer are some members of Congress and the postal unions.
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A
Okay. I sure hope you're right. We certainly need help and the labor movement could provide it. Bob Henley, as always, you're not only a good reporter, but you're a good communicator of what you've learned to report. Thank you very much for being with us. And to all of my audience, thank you very much for being part of this. And I hope Bob's reporting is as helpful to you as it has always been to me. I look forward to speaking with you all again next week.