Economic Update with Richard D. Wolff

Episode: "Another 'Gilded Age'"

Date: May 17, 2018
Host: Richard D. Wolff
Guest: Miguel Robles-Durán

Episode Overview

This episode explores growing economic inequality in the U.S., arguing that society is experiencing a "Second Gilded Age," marked by staggering disparities in wealth and power. In the first half, Professor Wolff discusses contemporary labor movements, the Theranos corporate fraud, the persistent gross inequality since the 2008 financial crisis, and recent policy actions by President Trump. In the second half, urbanist Miguel Robles-Durán joins to analyze the impact of neoliberal urban policy, gentrification, the housing crisis, and how city development patterns intertwine with economic and ecological crises.

Key Discussion Points & Insights

1. Labor Unrest and Shifting Power (05:53)

• Teacher Strikes:
  Wolff highlights a significant wave of teacher strikes across states like West Virginia, Kentucky, Oklahoma, Arizona, and Colorado. He emphasizes their "stunning success," noting that teachers organized across urban-rural divides and partisan lines to demand fair wages and adequate school funding.

  • Quote:

    "They have organized brilliantly. They have overcome divisions among the teachers, those in rural areas versus those in urban, those who are registered Democrats and those who are registered Republicans … to raise their wages … and get the schools the funding necessary to educate this generation of children." (08:14 – Wolff)

• Union Dynamics:
  While unions played a role, many strikes succeeded even without union infrastructure, reflecting a shift in labor organizing.

2. Corporate Scandal: Theranos & The True Cost of Failure (12:04)

• Theranos Collapse:
  Wolff dissects the rise and fall of Theranos, whose $9 billion valuation imploded after revelations of fraud. High-profile investors lost millions, but for them, Wolff notes, these losses are "tiny fractions" of their wealth.

  • Quote:

    "So much for the claim that these super rich people are super smart when it comes to investments. In this case, not so much." (14:50 – Wolff)

• Worker Risk vs. Investor Risk:
  Wolff questions why narratives of risk focus on investors rather than workers, who face life-altering consequences when a company collapses.

  • Quote:

    "The worker depends on his or her income from his or her work. And if the capitalist in question … is either crooked or incompetent, the ones who lose the most, who've taken the biggest risk are those workers." (17:19 – Wolff)

3. Are We in Another Gilded Age? (19:23)

• Historical Parallels:
  Wolff explains the term "Gilded Age," describing a period of unprecedented wealth and poverty in late 19th/early 20th-century America. He responds to a listener query by affirming that today’s inequality mirrors that era, calling for "another great novelist" to coin a new name for our times.
  • Quote:

    "We need another great novelist, another person like Mark Twain, to come up with the right phrase that captures the growing gap between the 1% and the rest of us." (21:18 – Wolff)

4. The Post-2008 Recovery: Whom Has it Served? (25:21)

• Unequal Lending:
  Wolff cites reports that banks are increasingly lending to the wealthy, demonstrating that the so-called recovery mainly enriched the rich, while middle- and working-class communities face discrimination from lenders.

  • Quote:

    "That's not a recovery folks, that's a deterioration of the situation of most Americans..." (26:40 – Wolff)

5. Drug Prices: Political Rhetoric vs. Reality (27:12)

• Trump's Proposals:
  Wolff critiques President Trump’s plan to address high drug prices, noting the plan omits two effective measures:

  1. Allowing Medicare/Medicaid to negotiate bulk prices.
  2. Permitting Americans to buy cheaper medicines from abroad.

  Instead, Trump blames foreign countries for low prices and proposes little tangible action—prompting pharmaceutical stocks to "zoom up" after the announcement.

  • Quote:

    "What Mr. Trump did was, was yell at countries … that their drug prices are too low, they should be higher." (29:13 – Wolff)

• Cycle of Inaction:
  Wolff tracks similar failed promises by Obama and the Clintons, blaming lobbying for lack of progress.

  • Quote:

    "Somehow our leading politicians run for office promising to do something about the bad drug prices. And then somewhere along the way, the lobbyists for those companies bring it all to nothing." (31:00 – Wolff)

6. Political and Economic Fallout from the Iran Deal Withdrawal (32:09)

• Global Consequences:
  Wolff condemns Trump's unilateral exit from the Iran nuclear treaty, warning it undermines America’s credibility for future deals, especially with North Korea.

  • Quote:

    "Breaking a treaty is a remarkable thing to do. Keep it in mind the next time you hear about other countries breaking treaties." (33:19 – Wolff)

• Business Impacts:
  The decision threatens billions in US and European business with Iran and could isolate the US further.

  • Quote:

    "This is an enormous political and economic disaster undertaken to boost the political fortunes of a minority president who's desperate to have more support." (36:05 – Wolff)

Second Half: The Urban Crisis — with Miguel Robles-Durán

7. Gentrification: Designed, Not Natural (29:41)

• Structural Intent:
  Robles-Durán argues gentrification is not an “unstoppable” natural force, but a deliberately designed outcome of urban policies—especially since the neoliberal shift under Margaret Thatcher and Ronald Reagan.

  • Quote:

    "Gentrification is something that is designed. It's not something that just magically happens." (30:36 – Robles-Durán)

• From Welfare State to Market-Driven Cities:
  Earlier city planning incorporated democratic input; post-1980s, profit-maximizing replaced community needs.

8. Housing Crisis & Speculation (38:09)

• Runaway Prices:
  Deregulation and policies favoring investment over affordability have led to wild speculation, pricing out middle- and lower-income residents.

  • Quote:

    "If you begin to put … policies to favor those that want to invest and extract capital from real estate, what you will get is a market that is absolutely crazy to speculate … for the other members of the population, speculation is absolutely horrific." (38:24 – Robles-Durán)

• Mismatch Between Need and Supply:
  Most new construction targets luxury buyers or investors, with little interest in housing for ordinary people. Affordable housing demand vastly outstrips supply.

  • Quote:

    "Its interest is not people. Right? It's not society, it's not the well being of everyone. Its interest is just where … you can totally exchange it much easier among your luxury friends … But making housing that actually responds to the needs of people, where you treat it as a use value … for the speculators, it's … how fast can you flip it?" (41:15 – Robles-Durán)

9. Urban Inequity: Islands of Wealth Amid Decay (45:13)

• Urban "Islands":
  Wolff describes central city zones filled with luxury hotels and amenities for the wealthy and business travelers, surrounded by decayed or neglected neighborhoods, often hyped as “revitalization.”

  • Quote:

    "In the middle, typically in the downtown center … a burst of hotels, luxury condominiums, restaurants, a kind of a tiny core… But it's actually this tiny. Is that what you're talking about?" (45:24 – Wolff)

• Conspicuous Wealth Disparity:
  Robles-Durán agrees, noting the sheer presence of money ("never been more money in the world than there is now") and how city design hides deep inequalities from view.

10. American Cities Resembling Global South Inequalities (47:49)

• Joining the Global Pattern:
  The US is increasingly mirroring the extreme division common in “poorer” world cities: fortified wealthy enclaves amidst widespread urban poverty.

  • Quote:

    "Is the United States now basically joining that pattern, having given up on the vast middle class it once promised its people?" (48:46 – Wolff)
    "Definitely … And space also does or cities also do to us is that they mask very well all the inequalities..." (48:47 – Robles-Durán)

• Public Infrastructure Decline:
  Public services—subways, water, roads—are underfunded and decaying, because they are not profitable for private investors.

  • Quote:

    "The logic of governments is that, oh, we need to bring a manager so he can make it profitable. It is very difficult if there's no subsidy. And so all of these projects get abandoned." (50:49 – Robles-Durán)

11. Urban Ecology and Environmental Crisis (52:45)

• Extraction and Decline:
  Robles-Durán notes the ecological costs of urban development—e.g., water extraction for profit leaving communities parched, resource exploitation, and dubious “green” redevelopment that serves capital, not inhabitants.
  • Quote:

    "My interest in urban ecology … is as a way to understand every single aspect of the world. For me, an ecology is not the environment. So I always look at the way in which extraction of natural resources affect urbanization, affect cities..." (52:52 – Robles-Durán)

Memorable Quotes & Moments

• On Worker vs. Investor Risk
  Wolff:

  "The risk taken by a worker when he or she enrolls in a company is just as powerful as, if not more so in their lives as the risk of the entrepreneur and the risk of the investor..." (17:01)

• On the Modern "Gilded Age":
  Wolff:

  "Very good question. And my answer is yes, exactly. Just only this thought. We need another great novelist, another person like Mark Twain, to come up with the right phrase that captures the growing gap between the 1% and the rest of us." (21:18)

• On Gentrification:
  Robles-Durán:

  "Gentrification is something that is designed. It's not something that just magically happens. Right. And it's very difficult to communicate this…" (30:36)

• On Urban Inequality:
  Robles-Durán:

  "There's never been more money in the world than there is now … but the wealth disparities are so clear there. And one thing we have to understand… is that there's never been more money in the world than there is now." (46:12)

Timestamps for Important Segments

| Time | Segment | |-----------|---------------------------------------------------------------| | 00:10 | Opening & overview by Richard Wolff | | 05:53 | Analysis of the teacher strike wave in the U.S. | | 12:04 | Theranos collapse and discussion of risk | | 19:23 | Are we in a new Gilded Age? | | 25:21 | Lending inequalities post-2008 | | 27:12 | Trump's drug pricing announcement | | 32:09 | The U.S. withdrawal from the Iran deal | | 29:41 | (Second half) Interview with Miguel Robles-Durán begins | | 30:36 | Gentrification as a designed phenomenon | | 38:09 | The housing crisis and speculative real estate | | 45:13 | Urban "islands" of wealth amid poverty | | 47:49 | U.S. cities adopting Global South inequality patterns | | 52:45 | Urban ecology, environmental extraction, and resource crisis | | 54:56 | Closing remarks |

Tone and Language

Wolff’s tone is direct, critical, and explanatory, mixing economic analysis with plain language and vivid metaphor. Robles-Durán speaks as an academic and activist, offering detailed, global perspectives on urban crisis, and uses accessible analogies to explain the mechanics and impacts of gentrification and speculative urbanism. Both keep a consistently critical stance toward neoliberalism and policy choices that prioritize profit over public good.

Conclusion

The episode paints a compelling portrait of an economic and urban landscape where inequality is deepening and public goods are sacrificed for private profit, drawing clear links between historical patterns and present-day crises. It challenges listeners to question dominant narratives about risk, prosperity, city growth, and the role of government, urging critical engagement with both local and global trends shaping urban and economic futures.