← Economic Update with Richard D. Wolff
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Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives. Jobs, incomes, debts, the interest rates we pay, those our children are facing, and those coming down the road in. In an economy that is changing and changing fast. I'm your host, Richard Wolff. I've been a professor of economics all my adult life. And that, I hope, has prepared me to offer you these interpretations and analyses of what's going on in the economy around us. My eyes were caught recently by an article in New York magazine that in turn was based on a research paper produced by the National Bureau of Economic Research. Both the National Bureau paper and the New York magazine article were published in January 2018. And they ask and they try to answer the following. Did the Democrats in the Democratic Party let unions die? I want to deal with the question in terms of focusing on one let. That implies that the Democratic Party was a passive kind of observer. Maybe it should have intervened, but in effect, it let something happen. The implication being it could have and it would have happened anyway, and they just let it happen. It might be comforting to people in the Democratic Party to look at the world that way and to read our history that way, but I think it's a mistake. I don't think the Democratic Party let the labor unions die. I think the Democratic Party was a major instrument for extinguishing that movement in the United States. And let me explain. All of this starts in the great crash of the 1930s. We had before that pretty much a Republican dominated economic and political system. Republican Party was in power when the Great depression hit in 1929, Herbert Hoover and all the rest. And out of the Great Depression came a complete realignment of politics in the United States. And at the very pinnacle of that realignment was the Democratic Party.
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Why?
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Because the Democratic Party, led at the time by Franklin Roosevelt, made a deal with the trade unions in order to deal with the Great Depression. Basically, the deal went like, we, the Democratic Party, will stand up and do things for working people. In exchange, we want you in the working classes of America to support the Democratic Party. And the deal worked. It worked very well. Let's go through it. The Democratic Party got the enthusiastic support of the overwhelming majority of working people. They voted Mr. Roosevelt into office for successive presidential terms. No person in American history had ever served four terms. No politician had ever been as popular as Franklin Roosevelt. The Democratic Party and Franklin Roosevelt rolled into office and stayed into office across the entire Great Depression and across the entire World War II that followed. And what did the working people get well, when you think about it quite a bit, they got the Social Security system for the first time in American history. When you reach age 65, your working life behind you, most of it, you could have a decent, comfortable retirement. The government made a commitment to make sure you got that as an honor to the work of your lifetime. We got unemployment insurance. If you lose your job through no fault of your own, the government will arrange to provide you with a check each week to see you through your hard times. A minimum wage was passed so that any working American would earn enough for a decent minimum standard of living. And finally, a public works program in which unemployed people, millions of them, got the jobs that would allow them to continue paying their mortgages, to keep their homes, to keep their dignity, their sense of self, and, and to be productive members of the community. The working people got a lot and the Democratic Party got a lot, and they ruled the roost. But of course, somebody had to pay for all of these things, and who was that? Corporations and the rich had to pay a big chunk of it. Roosevelt told them, you must pay because you're the only ones who have the money to do this. And, and the country won't hold together. It'll blow apart. It'll have a revolution. It will dissolve if we don't take care of the tens of millions suffering through the Great Depression asking only that they get a job. And enough of the corporations and the rich saw the wisdom of what Mr. Roosevelt did. So he got the taxes and he got the loans he needed to make that deal with, with the working people. But when the war was over, the corporations and the rich decided they had had enough of this arrangement. They didn't like it. They didn't want to keep being taxed and have their money withdrawn to help average people. And so they saw their vehicle as the Republican Party. But they also saw that in order to win, being Republicans wouldn't do it. They had to destroy the, the coalition that made the Democratic Party powerful. And what was that? It was the labor movement, together with the left wing of American politics, Socialists, communists, and all kinds of other ists that felt themselves part of that Democratic thing called the New Deal coalition. So the Republicans who didn't like it went to work to destroy that coalition. They started with the communists, whom they painted as the evil agents of a foreign power. When they were finished destroying them, they went after another part of the coalition, the socialists, and destroyed them. And when they were done, they went after the third biggest leg of the coalition, the labor movement, and demonized them, often using the same words and language that they had used against the communists and the socialists. What did the Democratic Party do confronted with this head on assault on the coalition that had brought them to power? The basic answer to that question, instead of confronting and stopping and reversing the assault, they joined it. First they joined to get rid of the communists, then they joined to get rid of the socialists. And in the end, they didn't have the strength to prevent the assault on the labor movement, which they kind of half endorsed anyway. So they weren't passive. They were part of the very reaction against the success of of the Democratic Party. They didn't let unions die. They destroyed the coalitions that had built the unions up. They destroyed the coalition that the unions, together with the left in American politics, had used to come to power. The Democrats were not passive, they were active. And that only makes the tragedy of their weakness today all the worse. The next update I want to deal with has to do. Well, it's hard to put it. The best way to say it is the irrelevance of the government. We live in a capitalist system in which we pay an enormous amount of attention to what the government does. But I'm afraid it's because we overestimate how important the government is. Let me try to explain very concretely. In 2016, the last year of the presidency of Barack Obama, how many jobs were created in the United States? 2.34 million. By the way, two plus million jobs were created. Mostly those jobs go to the new people entering the labor force. The population of the United States is growing. We have over 300 million people. So we add millions every year to the labor force. So when I say to you, we created As a society 2.34 million jobs, it means we barely kept up with the growth in population. What about the first year of Donald Trump's administration? How many jobs were created? 2.17. Okay, so 2.34 million jobs created the last year of Obama. 2.17 million jobs created. First year of Trump. Why is this interesting? First, Mr. Trump's boasts, as usual, turn out not to be accurate. He isn't the greatest job creating president in the history of the world. He couldn't even match Mr. Obama's in his last year. So so much for that. But that's not the really interesting thing. Notice how close they are. Under Obama, we created 170,000 more jobs. Not for those people, of course, very important. But out of two and a half, or almost two and a half million, it's kind of small potatoes. What's going on here is that what the president does doesn't matter. The number of jobs created in this country depends on the viability and functioning of the capitalist system as an economy. And the role of the government is not that important. We spend way too much time talking about what the government does or doesn't do and way too little talking about how this system works. Finally, if the number of jobs created under Obama and Trump are very close, yet we know that the unemployment rate dropped drastically across the year 2017, the first year of Trump, then we can kind of see that it had nothing to do with Mr. Trump. What it had to do with the reason unemployment went down was because large numbers of unemployed people left the labor force aren't looking for work anymore and so they're not counted as unemployed. The decline in the number of unemployed is more about discouraged workers who don't even look anymore than it is about job creation. Because as you can see, fewer jobs were created under Trump when the unemployment went down than under Obama when it didn't. Next item. Three international banks were fined early in February a total of $47 million for manipulating contracts for futures. That's a kind of security gamble in the stock market. I know this is old stories that banks are being fined is something I keep coming back to now for years in the United States. But I wanted to read to you and draw a lesson from this latest three big international banks together, $47 million. Well, I have to say again, $47 million for three huge international banks is as if I found you guilty of a major crime and insisted that the punishment was if you would give me 82 cents, you would reach into your pocket, throw the change at me and laugh. That's what ought to be done here. But in our mass media we don't do that. Listen to the statement of United States Department of Justice Assistant Attorney General Cronin in commenting on the misdeeds of these three banks that got this mild slap on the wrist. I'm quoting. Their behavior reflects a disturbing and reckless trend of individuals and companies seeking to put in illicit gains and profits above honest and law abiding conduct. Oh goodness, sounds like my teacher from civics class long ago. Honest and law abiding conduct, this fine. If that's the crime that they sought illicit gains and profits, the fine is an outrage. And it is simply the latest string in the illegal or unethical behavior of big banks. But what strikes me, as it always has, is we have yet another in the long string of criminal or unethical behavior that the leading officials in the government themselves call illicit gains and and profits and reckless and disturbing. But no one seems to imagine that. One response to private banks doing this is to substitute government banks, banks that are accountable to the people we electcountable even to us. No one seems to go that direction. Even though many banks in most other capitalist countries are public, it's not as though we've never seen it. It's not as though we don't know that in North Dakota we have a bank that's public, run by that state, that's been there for 100 years and has a clear track record of making fewer mistakes and paying better dividends to the people of North Dakota than these big banks do anywhere else in the world. And why does no one say, wait a minute, if these banks are always engaged in illicit activity, maybe what they need is some sunshine, some light to come in. Maybe they need the banks to be run as cooperatives so all the people in the bank know what's going on and all the people in the bank have power so that they can catch and identify and deal with criminal and or unethical behavior. Here would be some solutions that solve this problem. Instead, we give them small fines, we slap them on the risk, and then we act all, all shocked and surprised when one after another of these officials, year in and year out, is caught for every kind of crooked behavior that private enterprise has ever displayed anywhere. Before I go on, let me remind you we maintain two websites that are there for your use. Please make use of them. They allow you to communicate to us what you like and don't like. They allow you with a click of your mouse to follow us on Facebook, Twitter, Instagram. For those of you that are interested, there's more material that expands on what we do on these programs. The first website is democracyatwork. All one word, democracyatwork.info and the second website is rdwolf with two Fs.com partner with us. Make use of what's on those websites. They're available 24 7. No charge ever whatsoever. And finally, for those of you listening on the radio or podcast, if you would like to see this program as a television program, that option is available. Please go to patreon.com p a t r e o n patreon.com economicupdate and you can see this program as a television program. When Mr. Trump came to office the same month, November 2016, he immediately brought lobbyists who had been working for private enterprises into the government he got caught doing that which directly violated what he had promised in his campaign. So he announced a new rule making it illegal for five years. There was a ban on lobbyists. It was a big. See how strict I am. I'm not doing what I promised I wouldn't do. I'm really a hard nosed anti lobbyist guy. There was a provision in the little thing he did there that you could waive the requirement of no lobbyist in the previous years and no lobbyist after your government service. And of course the waiver has been used over and over again ever since. No draining of the swamp. If anything, an expansion of the swamp. But one of them caught my eye and I need to tell you, excuse me, about it. This has to do with Ms. Kaylee, and I hope I'm pronouncing her name correctly, Takaz. She has become an advisor to the Secretary of Agriculture with respect to now this is key dietary guidelines for Americans. In other words, she's now working in the government to provide guidelines for what we teach our children and ourselves is good for us to eat and drink and what is not okay. Guidelines are issued every five years. She's going to be working on that because she's an expert. Now let me tell you about where she comes from to give you an idea of what kind of expertise she will be contributing. Here we go. Kaylee Takaz was director of food policy for the Corn Refiners Association, a trade group for corn syrup manufacturers for two years before leaving for the Trump administration in July 2017. That's what she did. The Corn Refiners association makes corn syrup, which is a sweetener. It's a sweetener that has been shown to have all kinds of health effects that are not good and to be nutritionally dangerous, if not useless. Prior to that, she lobbied for the Snack Food association and the National Grocers Association. Prior to her lobbying days, she spent a year as a research analyst on tax policy and at the American Legislative Exchange Council. What is that? Alec? It's called a group of corporations and conservative lawmakers that work together to craft business friendly model legislation. She also spent the year before that at the Charles Koch Institution Institute, named after its billionaire founder and CEO, the and part owner of the global fossil fuels and materials conglomerate Cork Industries. The Corn Refiners association, where she worked just before going into the government, consists of the four biggest corn syrup producers in the United States. Archer Daniels Midland, Cargill, Ingredion and Tate and Lyle. She then lobbied the usda, the Department of Agriculture as well as the House, Senate, and Environmental Protection Agency trying to get dietary guidelines that were interesting to and supportive of her corporate clients. That's not keeping lobbyists at a distance. That's keeping lobbyists closer to you than your undershirt. Next item. Trump has been dialing back regulations across the board and particularly working to dilute Dodd Frank. Together with the Republican majorities in both the House and Senate. The Dodd Frank law was supposed to regulate banks. So it came as no surprise, with the reduction of these regulations to discover that banks are now lending loans deemed as risky as what they were just before 2 2008. It leads me as an economist to question, is it the situation that the bankers learned Nothing from the 2008 crash, and now that the regulations are being withdrawn by Trump, they can go and do it all again? Or are they, in fact, quite smart? They did learn something. What they learned is that even if they fail, they'll be bailed out at taxpayer expense. So then why not? I don't know how to answer that question. I leave it to you, because either way, the message, when you think about it, is pretty much the same. Finally, we live in a society of unprecedented inequality of income and wealth. You know, 35 years ago, the United States was one of the least unequal of the major capitalist countries. Today, we are the most unequal. I don't blame Mr. Trump. This has all been happening for 30 or 40 years. But here we sit as one of the most unequal societies in the world, and we have tried as a nation over the years, a whole host of things to try to undo that inequality, to reverse it, to modify it. The war on poverty. I could go through the list of policies we've had. They haven't worked. Inequality is worse, not better. The efforts we made, the laws we changed, the tax situation, we changed, the special skills we taught, the special job opportunities we created. It didn't work. And I want to offer an explanation why and what to do about it. I think the efforts, well intentioned, as many of them, were undertaken by both Republicans, Democrats and others, didn't take account of the key issue, which is the system we live in. And by that I mean capitalism, because it has a name. And I want to be very clear about what I mean. In a capitalist system, enterprisesand most of them are corporations. As you know, or you should know, most of our economy is run by corporations. In a corporation, a handful of institutions and people own the bulk of the shares, and they use those shares that they own to elect one share, one vote. The board of directors of the company, the people who run the big corporations. General Motors, General Electric, General, everything else. And now comes something that should surprise no one. If a tiny group of people, major shareholders in most companies, 20, 30, 40, that's it. Board of directors in most companies, 12 to 20 individuals, that's it. They may have thousands of employees, tens of thousands of employees, but the number of people at the top is always the same. Very, very small minority of those engaged in any corporation, in every corporation. Here's the thing that should surprise no. If you allow a small number of people to be in that position of power, you cannot be surprised if they take the profits of that the enterprise earns, the corporation earns profits that all the workers there helped to produce. You cannot be surprised if they, at the top, who dispose of them all, give disproportionate amounts of them to themselves. Of course, they decide to distribute dividends to shareholders. They're the major shareholders. Of course, they decide to give huge salaries to the top managers who sit on the board of directors because those are the people they work with, those are the people themselves who make the decisions, and they enrich themselves. You can't really be surprised that for the mass of people that are not part of the running of the company, they don't get the big bucks. They never did. The way you overcome inequality, the way you make less inequality, is by changing this system. If the distribution of the profits everybody helped produce were distributed democratically by everybody, they would never give a handful of people the bulk of what they all helped to produce. They would distribute it, much less unequally. And let me say the same thing the other way. If you don't deal with that institutional arrangement, if you don't deal with that structure of the enterprise, all your efforts at an equalizing of our inequality will come to the sad end that we just saw. They won't work. It's a sobering lesson, but it tells you where the solution lies. We've come to the end of the first half of this program. I want to thank you for being with us. And I remind you, stay with us. I think you'll find the second half of today's program very interesting. Welcome back, friends, to the second half of today's edition of Economic Update. I'm very pleased today to address a topic with a guest, a topic that we have not devoted enough attention to, and it's broad, broadly defined as the relationship between law, the practice of law, the justice, criminal justice system on the one hand, and the economy on the other. If we're going to do economic updates. We have to also update the relationship between the law and the economy. And it's a very important one. My guest today is Leonard Goodman. He's a Chicago criminal defense lawyer with 25 years experience. He has done both high profile and indigent law. He's been a champion of defendants on both levels. He's also won cases at literally every level in both state and federal courts, including the United States Supreme Court. His current clients include the former governor of Illinois, Rod Blagojevich, I hope is the right pronunciation. His work on behalf of the wrongfully convicted has won awards, such as for an Afghani man held for 12 years at Guantanamo Bay without charges before his release in December 2014. Currently, Leonard Goodman is an adjunct professor at the DePaul University College of Law and a member of the advisory board of the center on Wrongful Convictions and at Northwestern University College of Law. He also founded the Leonard C. Goodman Institute for Investigative Reporting, which supports independent journalists doing investigative projects. He writes frequently for in these Times Magazine on law and politics. It is a pleasure to welcome Leonard Goodman to Economic Update. Thank you so much for joining us.
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Thank you for having me.
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Okay, let's jump right in. Given current headlines in the United States, would you say that politics, in some sense is part of the legal system, plays a key role in the legal system. And the reason I ask is that at least in high school and so forth, we were always told that the law stands somehow above the political fray as some neutral arbiter of our differences. And I wanted to get your reaction. As a practicing attorney, I would say.
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That politics does affect the criminal justice system probably in three ways. I mean, the one way that I think is in the news now is pure politically motivated investigations and prosecutions, which people are talking about because of the release of this memo, which does seem to show, you know, that highly politicized opposition research found its way into a criminal investigation of Trump and his associates during the election. I think that's the most rare, I think more common, you do see the federal government use its power to protect the interest of corporations. We see that with, I mean, you could look at what's going on in with the pipeline protesters and the federal government and the FBI getting involved in infiltrating some of those protest groups and aggressively prosecuting. There was a case a while back, some of your listeners may remember Aaron Swartz, who was really an activist for free Internet, and he downloaded some copyrighted materials not for personal profit, but to release them to the public. And he was aggressively prosecuted, threatened with decades in prison, and he took his own life. Tragically, there are those cases, I would actually say that you see the use of the federal government to aid corporate interest more starkly with the Department of Defense and what goes on with our military, where policies that just seem to not be serving the interests of the public, but do serve the interest of the weapons manufacturers, do serve the interests of oil and other mineral extraction industries throughout the Middle east and Africa. So I think probably the most common way that politics plays into the criminal justice system is in who doesn't get prosecuted. So, for example, we had a systematic fraud in the mortgage markets that caused countless people to lose their homes. People were swindled out of their homes. People, probably more of them, people of color, lost their homes and a majority of their wealth in this. And the federal government. If you look at, for example, press releases that come out of my neck of the woods in Chicago, they'll talk about how the Department of Justice is pursuing an aggressive, coordinated and proactive effort to bring to justice the perpetrators of mortgage fraud schemes. But as Eric Holder candidly admitted in 2013, they don't prosecute bankers. He basically said that these institutions have become too large, it's too difficult to prosecute them, whatever the excuse is too big to jail, they say. But who does go to jail? And it's generally the politically powerless. I've represented many, many people charged with mortgage fraud. All of them are very low level people. People that were encouraged by the banks and loan officers during the go go 2000s to take out these loans that everyone knew they couldn't pay back. And they were told, don't worry, you're going to be able to refinance and you could buy these properties and you could be Donald Trump and be in real estate. And a lot of these people went to real estate courses to learn how to do this. And they were encouraged to inflate their income. In fact, the bank set up these programs. They were nicknamed liar's loans. They were technically called stated income loans, where you say your income and we will not check. So that's what these people did. And they bought several properties and they thought, they fixed them up and they tried to be real estate. And the market crashed and now these people are going to prison. They're aggressively prosecuted by the Department of Justice. And when they get out of prison, the federal government comes after them to pay restitution to Wells Fargo bank or to bank of America or Citibank or whoever held the loan and lost money. So it's quite.
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Whereas the people at the top who designed this whole system and ran it, walk away, walk away. Is this different now? Would you say, you know, as a teacher in a law school, you're familiar with the history, in a way, of the legal system in the United States. Is it worse? Is it better? Is it the same? Is this the same old, same old? How can give us a sense of the politicization or the unfairness in a way of the justice system?
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Historically, somehow, what I would say is that we've seen this is not new. I mean, certainly we've seen throughout history. You remember how Martin Luther King was aggressively investigated, especially when he started becoming more of a threat to the corporate state and the war in Vietnam and.
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Income inequality, marching with those public works employees in Memphis and so forth.
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You remember the COINTEL program of the FBI where they went after people that were considered a threat, the Black Panthers, American Indian movements. So certainly we've seen this throughout history. I mean, even you'll remember Karl Rove was famous for advocating the firing of US Attorneys that did not help Republicans win election. That was a big scandal back then. But I would say the difference today is that the corporate state has really captured both of our two political parties in a way that I think we haven't seen in recent history. And because, you know, you can even go back to the late 80s under George H.W. bush. In the early 90s, he prosecuted, and that Department of Justice prosecuted thousands of bankers in the savings and loan scandal, which was really a much less egregious scandal than what we've seen today with the mortgage fraud zero today. And back then, thousands of bankers had actually went to prison, have felonies. So I think things are moving in a troubling direction, I would say.
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How would you describe it this direction? I mean, tell us what you think is unfolding here.
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You know, I'm not a political scientist, but you know, you can look back at the Clint, certainly one thing, you can look back at the Clinton years when basically a decision was made that the Democratic Party was going to grab the money from Wall street just like the Republicans grab the money from defense contractors in arms industry, health insurance companies. And you can also look at what's happened to the unions in this country and sort of the undermining of the unions. I mean, it used to be that working people had a real voice in our duopoly political system. And today I think it's less so. So I think that feeds the income inequality and the sort of, of slanting of the playing field in favor of the people who basically the big donors to our political leaders.
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I noticed recently I had some occasion to do some research on the statistics of who big donors give money to. And while there are some that are clearly in the Democratic camp and some that are in Republican, the majority of those that I saw give to both. It's really like they're covering their bets. They're making sure that it really doesn't matter which of the two get in because they'll both be beholden to major funders. And they've understood that. And it's smart to do that. And you can see that if you think of working people as having a voice through their unions and through a political party that responds to them, if they're less able to get the Democratic Party to respond to them and their unions are weaker, they've lost position on both areas where they might have had and in the past did have some sway. Let me ask pointedly, do you think the Trump administration is doing more than has been done? Is this part of a long, slow trend, or is there something dramatically happening under Trump that makes you even more worried than you might have been before?
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You know, I think it's too early to tell. Certainly he's appointing a lot of judges, but, you know, the Democrats have not, you know, basically anyone. First of all, if you look at who is on the Judiciary committees and look at who they're getting their money from, both sides of the aisle are getting money from big business Wall Street. So any candidate for a federal judge that's going to get through that vetting process is going to be somebody that is acceptable to the corporate state. So, yeah, he is appointing some very right wing federalist judges, which are very troubling. I think it's too early to tell exactly what is going to be the effect of the Trump administration in terms of Department of Justice and whether they're going to be used more politically than in the past. So it's hard to say. I mean, I think the one good thing about today is that people that Trump is maybe because he's such a buffoon, that people are actually paying attention to what he's doing. And I think that's a good thing. I feel like a lot of people sort of went to sleep during the Obama years and he was expanding the war on terror all through Africa and.
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The drone war and expulsion of immigrants.
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So I think it's good that people are paying attention now. I mean, even this Nunez memo that came out, I mean, at least it's a Little sunshine into the process. Because, you know, you listen to, for example, people like Adam Schiff, who was the intelligence, the ranking member of the Democratic Intelligence Committee, saying, this is, you know, we cannot release this memo. It's going to, you know, causes huge national security concerns and sources and methods and all this stuff. And then people look in and they're like, really? This is going to, you know, so I think the more sunshine we can get, you know, Leonard Cohen has a famous line, there's a crack in everything. That's how the light gets in. So, you know, maybe this is a crack, maybe the Trump administration is a crack that people are going to start paying attention to what their federal government is up to. You know, and I, you know, you look at people, I think people are a lot more knowledgeable about what goes on in the state House and their local governments, which is appropriate, you know, because. And have very little scrutiny of the federal government. I mean, most of our Federal representatives are 1,000 miles away in Washington, D.C. at least from us in Chicago. And they rarely come home except to find there's very little contact with them. We don't really know what they're doing. You know, at least with the state governments, they have some constraints because they have budgetary constraints. The states have. The state and local governments have to balance their budgets, right?
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They can't just borrow.
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And the federal government just writes checks that we all have to. Are obligated to pay someday in the future. And, you know, also the state and local government actually have to pay, provide services. They provide. You know, they are still schools, public schools, and there's police force and garbage pickup. So, you know, I feel like people ought to pay more attention to what goes on in Washington, D.C. let me.
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Ask you a question that I know is as old as Methuselah in the history of the labor movement. It has always been understood that the government, unless you are very lucky and in an exceptional circumstance, finances, is going to be doing what big business and what the power and what the wealth wants it to do. So that when you confront, for example, an employer in a negotiation over a strike or a contract, you're always thinking that behind that employer or if the employer needs it, there's the government and the judicial apparatus. Is it fair, from your experience, Ana, is it fair to think of the judicial apparatus as reinforcing this particular economic system, the distribution of wealth and income in our society or capitalism, in short, that we have a legal system that deserves the adjective capitalist as opposed to some other adjective? Or isn't the neutral thing that I remember being taught in high school, it was somehow a of bunch of this.
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Yeah, I mean, I think that's an interesting example with labor because the system does work, the collective bargaining system does work when you have somewhat equal power on both sides. But if all the power is on one side, it's hard to negotiate. So when you had strong unions, they could go in and negotiate. We got weekends and we got 40 hour weeks in child labor laws and things. But I think things have shifted in such a way and it's almost like a runaway train where the more inequality we have, the more our federal government is funded. It's basically a federal government that represents the interests of capital and not people. You can call it a democracy, but it's a very troubling time. And I think part of the problem also is secrecy because we have, basically what the federal government does is they have the ability to control what information gets out. Guantanamo, my representation of Guantanamo is a great example because basically they rounded these people up, sent them to Guantanamo Bay and then made speeches that these are the worst of the worst, these are dangerous terrorists. And people have no way of judging that because all of the information about their territory cases was classified. So in order to represent someone, I had to get a security clearance, I had to fly to a secure facility and look at the evidence. And no reporter could ever. All my hearings in the case were closed so no press could write about my client. One time I wrote an article about my client, I had my security clearance taken away from me and I had to fight to get it back. So, you know, I think that secrecy is something that people need to pay attention to because it's basically, we can have a drone strike where missile is fired at a wedding party, women and children are killed and we have no way of judging this. We have no information. The government locks down the information. The families of the victims can't go into court and demand because they just say national security secrecy. So it's very, you know, you can't, it's not a healthy democracy if you can't get a window into what your government is doing, you know.
- [45:53]
A
Leonard Cohen cracks Lead in the Light Leonard Cohen has a song, my favorite song, whose title is Everybody Knows. And you put those two together and it's just what you say. Everybody knows that we're not allowed to know and there sits the danger of society spinning out of control. I also love your image of that train because for me as an economist, what I see is an ever smaller part of the population Accumulating an ever larger amount of money in a society that is at least nominally democratic, where everybody has the vote. And these wealthy people, a tiny group, are very clear and they're right, that's dangerous for them that sooner or later the mass of people are going to use what they have, the vote to undo the inequality of the economy. So they have to control the politics, otherwise they're not secure. So they buy the political system to prevent it from doing what it was there to do. But then you have, the end result is a society that's on a runaway train of self accumulation. The, you know, I was asked very recently on a television program to comment on that tax cut was the same thing for me, the one in December, because here you are, the rich are already richer than ever. They have become more rich relative to Everybody else for 30 years. And you pass a tax cut that gives all the benefits to those who need it least. There's something wrong in that picture. And I have this sense that in the law you're telling us something very parallel is underway. Is that a fair sense of what.
- [47:40]
B
You know, find or disagree?
- [47:43]
A
You know.
- [47:43]
B
No, I do agree because I think when you're talking about an imbalanced society, you need law enforcement and people basically need law enforcement to keep order. Because like what you're describing as a society where you have the 90% have really no representation because the only candidates we get to vote for are corporate approved candidates for either party. For either party. And so what is, you know, so you're going to see unrest and you're going to need the federal criminal justice system to really protect the interests of that 1%. And it is a scary situation.
- [48:21]
A
You told me some examples you gave me when we were preparing for this and I wanted to draw you out a little bit bit about them. Tell me what you think is going on in the law around campaign donations, which is a topic of enormous interest to our audience because it gets right at this. What's that about? What upsets you? If I can say it that way.
- [48:43]
B
In that area, what we see, and in full disclosure, I represent Rod Blagojevich, who is in prison for political corruption. They say, but if you look at the system, the candidates that really play the game, right, that is, they get their funding from Wall street, from the defense industries, they do their bidding. Those people are left alone.
- [49:08]
A
Generally, they kind of move up the ladder.
- [49:10]
B
The political ladder, yeah, it's certainly a corrupt arrangement. I mean, if you're sitting on the banking committee over seeing banks and you're taking, you know, you're being funded by Wells Fargo and Citibank. You know how that's, it's insane really. I mean, or if you're sitting on the defense appropriation committee and you're taking money from Raytheon and General Dynamics and Northrop Grumman, you know, and then you are voting, you know, using your power to make sure that we're sending weapons all over the world and giving these.
- [49:44]
A
Companies huge contracts and all that.
- [49:47]
B
So yeah, it is an out of balance system. I'm sorry, I lost track of your question.
- [49:58]
A
No, it's a very good phrase because it's very nice and polite. The real question is political corruption. Yes. And the campaign don't. This money changing hands. Like you, I feel as though 30 years from now people will look or 50 years from now look back at this and find it incredible that we could allow this almost to the level of pretending it isn't happening when it is as stark as your example just gave.
- [50:26]
B
So you know, what I would say though is that generally what happens, it's similar to the Morgens fraud cases is that because they don't go after the people that are actually in the pockets of the, you know, the accepted donors of both parties. They go after because they have to make. The federal government has to at least create the illusion that they are interested in political corruption. So in Chicago, generally they go after aldermen, mostly people of color who, you know, stings are set up so that they'll take $1,000 or $2,000 an envelope and you know, approve some bill and those people go to prison and are aggressively prosecuted. So, so it's really, you know, the problem is when the game is rigged and the people at the top are untouchable, somebody has to get prosecuted. We have this huge apparatus, Department of Justice, I mean, just in Chicago, I think there are 70 full time federal prosecutors. They're all very smart. They went to Harvard and Stanford and Yale and they're excellent prosecutors. And so they have to have someone to prosecute. They can't prosecute the actual perpetrators of mortgage fraud. You know, they go after street crime and low level people.
- [51:35]
A
It's really, I mean we used to call those fall guys, people who have to take the fall so that the illusion, since we all know it's corrupt, we need the kind of the closure that somebody is paying for it. Even if it's the person who in that guarantees you that when he or she goes to jail, nothing in the basic corruption has been stopped or changed.
- [52:00]
B
A former FBI Agent that I know calls it picking on cripples. He says that's basically what the federal government does. Most people that are prosecuted in the federal system can't afford a lawyer. So if you can imagine that, I mean the resources, unlimited resources that the federal government are being used to go after, after people who are too poor to hire their own lawyer.
- [52:23]
A
Is there something. I know this is a difficult question. If you could do anything, what would you do? Or are we so far down the road you define how to control train that we can't?
- [52:36]
B
I'm glad you asked it because as we were talking earlier, some of your guests are so optimistic and I hate to come out and be gloomy bit, but I mean, we have to figure out a way to get money out of politics. I mean, there's ways that first of all, you can have publicly funded elections, you can pass ethics laws. It is possible to say that if you are personally benefiting from policies of the government, you can't contribute, you can't support this politician. I mean, it makes sense. States do it. So the federal government could do it as well. European systems, they have their problems, but you know, they have a real social, robust social safety net where there's actually some sort of feeling that, you know, we take care of each other. And you know, I think you can look at the policies that come out of European and they're less reliant on the federal criminal justice system to police. So you have much saner policies on the war on drugs and you know, treat people that are addicts as, as people with medical conditions that need help rather than need to be incarcerated. So I think there are models out there and there is hope.
- [53:46]
A
I think it's also, there's a kind of a hope in the very danger, but the danger has to be spoken. If you run your judicial system as lopsidedly favoring the power and the wealth, you are breeding in the mass of the people. An understandable disrespect and distrust of that judicial system. And my guess is that comes back to haunt societies. I think history is full of these examples where dictatorial, unfair, unjust governments have found themselves eventually brushed aside by a population that no longer believes a word these people say, for all the reasons you've in a sense outlined. So I mean, in a way, if they didn't trust the government, there's hope that they will then find a better way, as people in the past have. But meanwhile we sit in a society strikes me that suffers the stories you say. So I understand that you admire the optimists who have been on the program, but it's important to balance it with some level headed sense of where it is. Anything you would say in closing, since we're running out of time, about our legal system, since you're so deeply ingrained in it?
- [55:02]
B
No, I just, you know, I think people should pay attention. People should serve on juries, serve on grand juries, ask questions, you know, and people come in. Don't always accept the government's word. They're not always telling you the truth. I think people, and you know, if I'm picking a jury, obviously I like people from more urban settings that have different experiences with the police than maybe you or I have had. And so I think we need to be skeptical and don't always accept things at face value that are told to you by the government.
- [55:33]
A
Very good. Thank you very much. Leonard Goodman.
- [55:36]
B
Thank you, Rick. Professor, it was a pleasure.
- [55:40]
A
Thank you all for paying attention as well. I think there's much to chew on and learn. I want to thank you for partnering with us by watching and talking and listening. And I want to thank truthout.org that extraordinary independent source of news and analysis that's been our partner for a long time. Thanks again. And I look forward to speaking with you again next week.