Economic Update: A System Rigged Against US

Podcast: Economic Update with Richard D. Wolff
Host: Richard D. Wolff
Guest: Leonard Goodman (Chicago criminal defense lawyer)
Date: March 1, 2018

Brief Overview

In this episode, Richard D. Wolff critically examines how the US economic and political system is fundamentally structured to favor wealth, power, and corporate interests—highlighting both historical and contemporary mechanisms of inequality. The first half dissects the erosion of unions, the limited role of government in job creation, regulatory failures, and the chronic issue of economic inequality. The second half features an in-depth interview with criminal defense attorney Leonard Goodman, focusing on the interplay between law, politics, and economic power, and how the justice system perpetuates systemic inequities.

Key Discussion Points & Insights

1. The Demise of Unions and Political Power Shifts

• Wolff challenges the narrative that the Democratic Party merely "let unions die," arguing they were "a major instrument for extinguishing that movement in the United States" (01:18).
• Historical Context:
  • The New Deal coalition (1930s-1940s) solidified labor's role in Democratic politics, yielding Social Security, unemployment insurance, minimum wage, and public jobs.
  • After WWII, corporate and wealthy interests, through the Republican Party, worked to break this coalition by targeting Communists, then Socialists, then labor itself.
• Critical Analysis:
  • The Democratic Party "weren't passive...they were part of the very reaction against the success of the Democratic Party" (08:17).
  • The erosion of labor's power directly weakened working-class influence in US politics.

2. Government’s Actual Role in Job Creation

• Wolff exposes the "irrelevance of the government" when it comes to creating jobs, noting that job growth figures between Obama and Trump administrations were nearly identical (2.34 million under Obama in 2016, 2.17 million under Trump in 2017) (13:10).
• Insight:
  • "What the president does doesn't matter. The number of jobs created depends on the viability and functioning of the capitalist system as an economy" (15:05).
  • Unemployment fell mainly because "large numbers of unemployed people left the labor force," not because more jobs were created (16:40).

3. Soft Fines and Regulatory Capture in Banking

• Recurring criminal and unethical activity by large banks incurs only minor penalties—$47 million across three international banks—barely a deterrent (18:22).
• Memorable Quote:
  • "For three huge international banks...the punishment was as if you would give me 82 cents, you would reach into your pocket, throw the change at me and laugh" (19:20).
• Wolff’s Proposals:
  • Suggests government-run or cooperative banks as real solutions to recurring financial sector abuses.

4. Lobbyists, Revolving Doors, and Policy Corruption

• Case study of Kaylee Takaz, a lobbyist for the Corn Refiners Association, moving into a government role influencing dietary guidelines (22:00).
• Regulatory rollbacks (e.g., Dodd-Frank) under Trump enable banks to resume risky behaviors reminiscent of pre-2008 crash, with taxpayers ultimately bearing the risk.

5. Systemic Economic Inequality

• The US went from being among the world's most equal capitalist nations 35 years ago to one of the most unequal today (27:20).
• Core Structural Critique:
  • Capitalist enterprises are fundamentally undemocratic, allowing a tiny minority (major shareholders and boards) to control profit distribution.
  • "If you allow a small number of people to be in that position of power, you cannot be surprised if they take the profits...and give disproportionate amounts to themselves" (29:05).
  • Without democratizing enterprise structures, efforts to reduce inequality are doomed to fail.

Second Half: Interview with Leonard Goodman

Begins at [30:16]

The Political Economy of Law and Justice

1. Politics & the Legal System

• Goodman identifies three major ways politics corrupts justice:
  • Rare blatantly political prosecutions.
  • Government using law to protect corporations (e.g., targeting protesters, Aaron Swartz case).
  • Most commonly, "who doesn’t get prosecuted": elites and bankers avoid accountability, while low-level actors (often people of color) are aggressively prosecuted (31:00).

2. The “Too Big to Jail” Syndrome

• Despite systemic fraud by banks leading to the 2008 crisis, no top bankers faced jail; legal focus falls on low-level perpetrators (33:30).
• Notable Quote:
  • "So it's quite...Whereas the people at the top who designed this whole system and ran it, walk away, walk away" (34:48).

3. Historical Context & Growing Corporate Capture

• There’s nothing new about political meddling in justice (referencing MLK, COINTELPRO, and US Attorney firings), but:
  • "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" (36:10).
  • Past prosecutions (e.g., thousands of bankers went to prison in the S&L crisis under George H.W. Bush) contrast sharply with current impunity.

4. The Role of Big Money, Unions, and Campaign Finance

• Both major parties receive significant support from big donors, diminishing working-class influence due to weakened unions (38:03).
• Campaign contributions from the same corporate sources to both parties ensure "they'll both be beholden to major funders" (38:15).
• Goodman's Critique:
  • Political candidates who play the donor game move up; those who don't are targeted (48:43).

5. Corruption and Justice as Illusion

• Real political corruption is protected; prosecution focuses on minor figures, creating an illusion of justice (50:26).
  • "They're all very smart...so they have to have someone to prosecute. They can't prosecute the actual perpetrators...they go after street crime and low level people" (51:16).
  • Former FBI agent: government is "picking on cripples" (52:00).

6. Secrecy, Surveillance, and Democracy’s Limits

• Excessive secrecy (e.g., handling of Guantanamo detainees, classified hearings, retaliation against attorneys) undermines public scrutiny and democracy (44:00).
• "It's not a healthy democracy if you can't get a window into what your government is doing" (45:41).

Notable Quotes & Memorable Moments

• On Democratic Party and Unions
  • Wolff: "They didn't let unions die. They destroyed the coalitions that had built the unions up." (08:09)
• On Bank Fines
  • Wolff: "$47 million for three huge international banks is as if I found you guilty of a major crime and insisted the punishment was if you would give me 82 cents...and laugh." (19:20)
• On Corporate Control of Both Parties
  • Goodman: "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." (36:14)
• On Political Corruption Prosecution
  • Goodman: "The candidates that really play the game...are left alone...they move up the ladder." (49:07)
• On Hope and Reform
  • Goodman: "We have to figure out a way to get money out of politics...publicly funded elections, ethics laws—it's possible." (52:36)
• On Law and Inequality
  • Wolff: "If you allow a small number of people to be in that position of power, you cannot be surprised if they...give disproportionate amounts [of profit] to themselves." (29:05)
• On Public Responsibility
  • Goodman: "People should pay attention. People should serve on juries, serve on grand juries, ask questions, and don't always accept the government's word. They're not always telling you the truth." (55:01)

Timestamps for Important Segments

• [01:18] – Opening: Role of Democrats in union decline
• [02:52] – The New Deal coalition and labor’s historic gains
• [08:17] – Democratic Party’s active dismantling of the coalition
• [13:10] – Obama vs Trump on job creation: government’s irrelevance
• [18:22] – Bank fines and regulatory capture
• [19:20] – Wolff’s analogy: Soft fines, "82 cents"
• [22:00] – Lobbyists and government appointments
• [27:20] – Surge in economic inequality
• [29:05] – Undemocratic structure of corporations
• [30:16] – Interview: Leonard Goodman introduction
• [31:00] – Threefold political interference in the justice system
• [33:30] – "Too big to jail"—bankers vs low-level prosecutions
• [36:14] – Corporate capture of both parties
• [38:15] – Donor influence on both parties
• [44:00] – Secrecy, Guantanamo, suppression of information
• [48:43] – Campaign donations and corruption in justice
• [52:36] – Paths to reform and optimism
• [55:01] – Encouragement for citizen participation in legal system

Concluding Recommendations

• Wolff and Goodman both assert that reforming the system—whether via democratized workplaces, robust public banking, campaign finance reform, or transparency—is essential to reversing the runaway inequality and restoring real democracy.
• Goodman ends by urging greater public vigilance and skepticism toward official narratives, reinforcing the need for active, informed engagement with both politics and the legal system.