Transcript
A (0:10)
Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives. Jobs, incomes, debts, those now, those in the future, and those besetting our children and as they face the future, too. I'm your host, Richard Wolff. I've been a professor of economics all my adult life, and my hope is that it has prepared me to offer these economic updates about what's happening around us. I want to begin today with a small European country's sudden transformation. The country is Armenia, a place of 3 million people that was, until relatively recently a Soviet republic, is now an independent country. And it has suffered, after leaving the declining Soviet Union, from corruption, from a deepening sense of inequality that was real. And finally, by that marker of inequality, when young people in large numbers leave a country because they can't see a future for themselves and so emigrate something afflicting Greece, something afflicting many of the problematized countries, particularly in the south of Europe. So it was with great hope that the Armenian people and those of us who watch noticed that there were spring demonstrations across the spring of this year that were finally bitter enough and large enough to force out of power the old Republican party and particularly its president, Sarg Syan. I hope I pronounced that correctly. And into office came the opposition party led by Nicol Pashinian. The reason I bring this up is not only to celebrate a progressive change of government, particularly one brought out by mass action of people, which is the most democratic way it's ever done. But I want to raise a fundamental question, not just for Armenia, but for all the other countries that have had, or may soon have springs like this of their own, like the Tunisian Spring and the Arab Spring and so on. They make political changes, they throw out the old scoundrels, and they bring in new people devoted to fighting corruption, to ending the inequality, to making it no longer a problem for young people to build the future at home. But the truth of it is, unless you are willing to change the basic economic system, you cannot achieve those ends. A political revolution without the economic transformation needed to go along with it will not succeed. That, in effect, was the lesson of the decline of the Soviet Union. The end of it was political changes were made, no doubt long overdue. But the economic changes that had to go with it were not of the sort or the depth needed to support societies that are not driven towards inequality, corruption, and so on. You have to face the reality that these kinds of transformation offer an opportunity not just for political but for economic transformation. And the real question is Will these new progressive forces that come into power after springs like this understand the need and have the political determination to change their economic systems? My next economic update has to do with banks here in the United States. They've been in recent weeks reporting record profits. Banking is doing really well and I want to tell us all to be thoughtful about that in the following. The same banks that are rolling in the profits have been complaining bitterly over the last year or two about the Dodd Frank bill. That bill passed in the wake of the crash of 2008 that actually put some limits on what banks could do in the hope of forestalling yet crisis. The bank said it would hurt them, harm them, cripple them. Oh, the language. You should have listened to it, as I unfortunately had to do. And yet here it comes. The Dodd Frank bill has nothing to do with bank profitability. They've been more profitable with it than they had been before without it. Sure enough, the tax cut last December is helping bank profits too. That's right. The tax cut and the Dodd Frank bill are signs that the banking industry is able to get the political support it wants. Cut taxes and no real reform either. Why? Because the people who live off profit run this society now and they want to run it to make more of those profits. That's what they do. They complain about anything and everything that stands in their way even as they make more money. It's kind of a politics of pay to play. And the banks have a lot of money to use and they're playing the government every which way they can. And it's working out really well for them. Third update for today. Early on, Mr. Trump boasted about what he had done for the Harley Davidson Company, the big motorcycle producer. He was saving jobs. He was making America great again by keeping jobs here. Then came the tax cut at the end of last year, providing a big boost in the profits for, you guessed it, Harley Davidson. And what did Harley Davidson decide to do after all that political theater about saving jobs? They decided that with the extra money they had by not having to pay taxes, they could close their famous plant in Kansas City. 800 workers would lose their jobs. And that's exactly what's happening. And the company is moving to York, Pennsylvania where wages are significantly lower than they were in Kansas City. Not only that, with new machines there'll be a net loss of about 350 jobs. No warning was given to the workers in Kansas city, despite the 22 year partnership. That's the word they used between the company and the two unionssteel Workers and machinists that represent the workers. What did Harley Davidson say? I'm going to read it to you because I want you to listen to what they said after you know the reality of what they did. This is a decision we did not take lightly. The Kansas City plant has been assembling Harley Davidson motorcycles since 1997. And our employees will leave a great legacy of quality price and manufacturing leadership. We are grateful to them and the Kansas City community for their many years of support and their service to our dealers and our riders. Wow. Thank you. We're dumping you. Have a nice day. With no warning, no preparation and no funds to help any of the 800 families left jobless by their profit driven decision. Oh, and by the way, did they say anything about the theater they had undertaken with Mr. Trump to help him politically? Not a word. Meanwhile, Harley Davidson also announced it's opening a plant in Thailand and it already has two. One in India and one in Brazil. Making America great again, not its highest priority. It also took its extra tax savings and increased the dividend to its shareholders. And it bought back 15 million of its shares in the market at a cost of $700 million. Put into the hands of shareholders who sold their shares back. And about all this, Mr. Trump has so far nothing to say. The theater is over. The photos were taken. Who cares what the reality is? Well, you can be sure Kansas City is learning that it better care. Next. My attention was caught, as I'm sure many of yours was, also by the news from Vancouver, Washington and Oregon. A young boy, 15 years old in Vancouver, Washington, tossed a firecracker into a forest. And the end result was a forest fire that burned 48,000 acres. Terrible thing, no question about it. Thoughtless, careless, A terrible mistake by a 15 year old boy. The Oregon judge presiding over his trial sentenced him. And remember, he was 15 when he did this. To five years probation, 1400 hours of community service. And get this, a $36 million fine. And said something like punishment befits the consequences of the boy's action. All I can ask you to do is to remember that Jamie Dimon, the head of Morgan Stanley, and Lloyd Blankfein, the head of Goldman Sachs, did things in their capacity that harmed way more people and way more of this country than anything the 15 year old boy could be accused of doing. And they got no probation, no hours of community service and no fine whatsoever. Crime befitting what? Punishment befitting what crimes? Justice in the United States, if you want to call it that, at this point in the program I would like to particularly thank our Patreon community. That's what we call the folks who in the past may have been listeners but wanted to see this program as the television program it all also is. And anyone can do that. And we encourage you to do that by going to Patreon P A T R e o n patreon.com economicupdate we really appreciate your doing that and the support that that shows us you feel for what we are doing. I want to also ask you to subscribe to our YouTube channel. It is an important step in building our reputation, in building our reach as a program delivering special kinds of news and analysis to our supporters. If you Watch us on YouTube, please remember to subscribe. I'm very proud also to tell you that on our website democracyatwork.info we now have a store with all kinds of interesting mugs and shirts and other things. I want to stress to you that they are made by union co ops. We take seriously our commitment to support workers who have built a co op and who are part of unions that protect and defend the interests of working people. Take a look democracyatwork.infostore just go to our website, look for store and you can see what there is from this bevy of union co op products. And finally at our website you'll also be able to follow Puerto Rico Forward, a special blog that we produce, also available on Apple Podcasts and Google Play. Returning to our updates, the next one has to do with the Federal Reserve in the United States, our central bank. They do a special kind of research that we find very valuable called the Survey of Household Economics and Decision Making and they recently released this survey for the year 2017 and they list there some information very valuable for economists, but two particular items I want to bring to your attention because they are wonderful snapshots into the reality of the American economy right now. Here's the first one. An emergency expense of $400 would cause what kind of problems for American families? A medical emergency? Something breaks in the house, whatever $400 cost. 40% of Americans cannot cover an emergency $400 expense without either borrowing from others or selling possessions. In other words, 40%, just under half of American families do not have $400 in money readily available in the event of an emergency costing $400. That, friends, is an inadequate economic situation. You should not be in that situation forced either to borrow from other people or sell your possessions to handle a $400 emergency. If, as the Federal Reserve smartly decided, if we raise it to $1,000. An emergency that costs 1,000 and believe me, be easier to make a list of emergencies that cost 1000 than to make a list of emergencies that cost 400. Well then it would easily be over half the American people cannot meet an emergency demand for $1,000 without either selling possessions or borrowing from other people. The majority of Americans are in tough economic shape. That's the truth. The other statistic that just jumped out at me from the Federal reserve was that 20% of Americans knew some other person who was addicted either to opioids or other painkillers. One in five Americans knew somebody. Think about it. Next, let's go to Hamburg, Germany. Something interesting happened there that's also worth your time. My attention. In Hamburg, Germany, the decision was made by the local authorities to close several major highways to older diesel cars and trucks. Number of cars and trucks involved, over 200,000 were basically told you can't use these highways anymore. That's the equivalent of being told something that you have spent a lot of money on is effectively unusable on major arteries in and around the city where you live and or work. This was done after the European Commission declared that Germany, among other countries were was violating the pollution limits, pollution emission from vehicle limits that were harming the health of the people, which is the job of the European Commission to protect the health. It turns out that Hamburg is one of 80 cities where nitrogen dioxide levels exceed European safety threshold levels. Now, why the old diesel cars and why is pollution too high? The answer has a lot to do with what used to be called the VW scandal, but is now a scandal involving virtually all automobile makers. They faked emissions tests, or rather to be more accurate, they installed devices into their diesel vehicles that allowed them to report lower pollution emissions during the testing than they actually emitted on the road, thereby exceeding the safety limits. Now that's a nice way to put it. Let me put it more bluntly. They damage the health of their own people in huge numbers so badly that the European Commission has to come down on them and forbid them to let these cars run on the roads. This is a direct result of the scandal and the horror that the Europeans understandably feel at the betrayal that they were subjected to by the profit driven decisions of car companies to make more money, no matter what it did to the air and the health of the people of Europe. It's a stunning. Maybe a little too late, maybe a little too little, but it's something and it's an admission that's worthy of some attention. My next update has to do with a poll. A poll of 250 emergency physicians that were surveyed and asked if they had experienced a shortage or absence of critical medicine in their emergency departments in hospitals and clinics in the past month. Here's what drew my attention. More than one third of the physicians polled said patient outcomes had been negatively affected as a result of these shortages. Nearly 90% said they had to take time away from patients to deal with these shortages. And 97% said they had to substitute other medications from those they would have preferred for their patients. I want to remind everyone listening and watching, Americans pay more for their health care than any other people on this planet. We have the most expensive hospitals, doctors, insurance policies, drugs, medical equipment in the world. But the quality of the care we get, as shown in the fact that our longevity is mediocre, our need to go to the hospital is not at all at the bottom as it should be. We pay more. And now it turns out we can't even get reliable supplies of the drugs we need. Drugs are produced as a private capitalist commodity in this society. They're produced and marketed to make money for the companies that do it. That's the primary thing. And so if they need to create shortages, maybe to make you use this medicine rather than that one, because maybe this one is more profitable than that one. Well, that's what we allow private companies to do. So I have to report to you serious medical shortages while we pay the highest prices in the world for this sort of of medical care. I want to close out the first half of our program today by what might be called good news. Although it depends a little on your perspective, I admit. The fifth edition of a remarkable book. It's called the Wealth Ex Billionaire Census. That's right. It's a annual report that takes a look at all the billionaires and how they're doing. This is not very difficult to do. There aren't very many of them, a couple of thousand, more or less. So I want to tell you how they did in the last full year, 2017, because I'm sure you'll be happy for them. Here we go. The wealth of the billionaires on this planet rose during 2017 by 24%. Let me do that again, and let me be stark with you for a moment. I want you to ask, how did the wealth grow that you have that the people you know have, that the people you know about have? Did it do that well, last year, did your wealth grow by 24%? See, if you're a billionaire, you don't need it to grow like that. If you're not, you do. But in capitalism, it works the other way. The ones who need it don't get it, and the ones who don't need it do. And if you allow that system to continue, you will allow it to produce these kinds of results, which people like me will have the bad taste to report to you. The billionaire population also rebounded in 2017, up by 15%. Here we go. 2,754 individuals. That's right. 2,754 individuals, the largest number on record, are now billionaires. Wow. Any other interesting results? Yeah, couple. First, it used to be that most billionaires were located geographically in North America. But with 2017, that changed. Where are most billionaires now located? Asia. I'm an American. I was brought up to think that this was the land of wealth and power and dominance and you name it, all the superlatives wrapped into one. How undignified that in the era, the first full year of Donald Trump's presidency, he's presiding over a shift of the locus of billionaires from a declining part of the world economy to the rising sun of another part, billionaires. Of course, it's a dubious distinction if you think about it, because billionaires in Asia are even further from the economic conditions of the mass of their people than billionaires elsewhere in the world. So it's clear that inside of Asia, like inside of Europe, like inside of the United States, the inequality keeps growing out of control. For me to say to you that the billionaires of the world saw their wealth go up by 24% when no one else did means that the inequality, the distance between the rich and the rest of us keeps getting worse and worse. This is a capitalist system, like a train running down the track, seeing the stone wall, but apparently powerless to stop what's coming. I want to thank you for your attention. We've come to the end of the first half of Economic Update. Please stay with us after a short break. We will be right back. Welcome back, friends, to the second half of Economic Update. It is with real pleasure and satisfaction that I present to you in this second half a discussion with two people who have done something extraordinary and courageous and important for the history of the United States. One is a worker and the other one is a student. And not the least of what they've achieved is a unity, a working together, an honest, collaborative coalition, because they shared some common concerns and commitments and proved themselves able to work together despite all the factors that prevent that from happening so often in the United States. My first guest is Roderick Prude. He's a food service worker who has over 15 years of experience and currently works as he has for a while at the cafeteria owned and operated by the New School University in New York City. He's worked there since 2014. My second guest is Dylan Nam. He's a student at the New School University. He studies sociology and politics and he was part of the group of students who in support of those workers at the cafeteria, such as Roderick Prude, occupied that cafeteria and together they were able to achieve a victory that I want you to know about and that we are here today to discuss. So please join me in welcoming Roderick and Dylan to Economic Update. So first let me thank both of you for joining me today and being willing to come and talk about your situation. So let me start by asking one of you to give me or to give our listeners and our viewers a brief summary of what happened. Why did this occupation take place, what led to it and where does it stand now?