Economic Update with Richard D. Wolff

Episode: Capitalism's Excuse: Blame Government
Date: February 15, 2018

Overview

In this episode, Richard D. Wolff explores the recurring pattern in capitalist economies of blaming government for systemic failures while relying on it to rescue the private sector during crises. Wolff provides a series of economic updates illuminating wealth disparities, the stratification of malls as a reflection of inequality, the consequences of tax cuts in states like Oklahoma, and the resurgence of nationalization debates in the UK. The second half of the episode features an interview with longtime labor movement activist Charles "Charlie" Fabian, who discusses the decline of unions in the US, challenges faced by workers, and sources of optimism for labor’s future.

Key Discussion Points & Insights

1. Capitalism's Blame Game with Government

[02:00–08:00]

• Capitalist leaders often rush to government for bailouts during crises (e.g., 1930s Great Depression & 2008 crash).
• Yet, these same leaders blame government for systemic economic problems to avoid scrutiny of the capitalist system itself.
  • Quote:
    “Isn’t it interesting that the very corporate leaders who turn to the government to save them when their system doesn’t work turn around and blame the government as if it were the source of all the problems rather than them?” — Richard D. Wolff [03:30]
• The tactic serves as a scapegoating mechanism, shielding capitalism from deeper critique.

2. Overfishing as a Cautionary Tale

[05:30–08:00]

• The collapse of the fishing industry shows the perils of unregulated profit-driven competition.
• Private enterprise's inability to self-regulate leads to resource exhaustion.
• Government’s failure to intervene allowed the “tragedy of the commons” to run its course.

3. Mall Stratification Mirrors Economic Inequality

[08:00–13:00]

• Most American malls are dying, with only luxury malls flourishing.
• Example: While Bal Harbour Mall (FL) expands, a nearby mall stands abandoned.
• The expansion of luxury malls even involves removing community institutions:
  • Quote:
    “There’s something even more poetic about the elimination of a church so that the wealthy can have yet more in the way of an expensive mall.” — Richard D. Wolff [12:40]
• Malls serve as a “poetic” mirror to economic inequality.

4. Young Families’ Alarming Wealth Deficit

[13:00–17:00]

• Analysis by Matt Bruenig (using 2016 Survey of Consumer Finances):
  • Median net worth for families under 35 (excluding vehicles): $1,250.
• Indicates lack of recovery since 2008 and a failure of the system to provide security for the next generation.
  • Quote:
    “Half the young families have $1,250 or less to cope with all of that. Nothing better gets across the lack of a recovery in the United States since 2008 or the failure of a capitalist economic system to provide for the young people that are going to be our future.” — Richard D. Wolff [16:30]

5. Austerity in Oklahoma: When Tax Cuts Starve Public Services

[17:00–25:00]

• Oklahoma slashed taxes (especially benefiting oil/gas companies) leading to a fiscal crisis.
• Schools shortened to 4-day weeks; teachers underpaid, many working second jobs (e.g., Walmart, restaurants).
• Teacher shortages forced districts to hire unqualified emergency replacements.
  • Quote:
    “To be responding to the current economic situation by savagely cutting the quality and the quantity of teaching we do to our young people is the equivalent in economics of shooting yourself in the foot.” — Richard D. Wolff [23:50]
• Reflects cyclical pattern: economic crisis ➔ turn to government ➔ ineffective aid/partisan obstruction ➔ scapegoating government ➔ repeat.

6. Nationalization Debate Returns in the UK

[25:30–29:00]

• UK Labour leader John McDonnell proposes renationalizing water, energy, rail.
• Argues this would cut costs for consumers by eliminating profit for private shareholders.
  • Quote:
    “The point is not whether you agree or disagree, the point is to understand this kind of thinking as a solution to the problems of the British economy is becoming mainstream again.” — Richard D. Wolff [28:30]
• Shift signals changing winds in economic and political thought.

7. US Federal Economic Policy: Tax Cuts and Rising Interest Rates

[29:15–31:00]

• Trump budget director Mulvaney openly admits:
  • Large tax cuts + increased spending require more government borrowing.
  • This will spike interest rates, making mortgages, auto loans, and credit more expensive.
  • Quote:
    “Turns out that cutting taxes for corporations and the rich and spending more on the Defense Department is going to whack you right in your pocketbook.” — Richard D. Wolff [30:50]

Interview: The Decline and Possible Renaissance of US Labor Unions

Featuring Charles "Charlie" Fabian

[31:00–54:30]

The Collapse of Labor Unions

• Union density in private sector now under 7% (down from about 33% mid-20th century).
• Workers face constant threats from employers to move jobs elsewhere (South, abroad), weakening bargaining power.
• Regional disparities: NY has 20% unionization, while much of the South is under 5%.
• Declining union power linked to overall economic insecurity for workers.

Worker Resistance & Legislative Results

• Responses:
  • Push for "runaway shop legislation" (WARN Act) requiring advance notice of plant closures.
  • Not a true solution: only softens the blow rather than preventing job loss.
  • Quote:
    “What the workers fought for was an improvement. At least you got 60 days notice.… It made the problem less awful, but it didn’t solve the problem.” — Richard D. Wolff [38:30]
• Violent repression of labor organizing is a historical reality, but companies often simply relocate to escape worker power.
  • Quote:
    “Capitalists have a great way..., you push it, but it bulges somewhere else.… They like to go somewhere else because pushing back and fighting back... Flood’s a costly thing.” — Charlie Fabian [39:10]

Public Sector Example: Political Strategies

• In New Haven, unions tried arbitration and political campaigns after massive layoffs, resulting in the election of many labor-backed candidates to the Board of Alders, even against party establishment.
• Demonstrates that labor’s political engagement can shift local power dynamics, although it doesn’t always fix the underlying economic issues.

Fears for Union Extinction & Possibilities for Renewal

• Union membership keeps declining; ideologies under attack.
• Quote:
  “If [the labor movement] doesn’t change its tactics drastically, then it will disappear. But that doesn’t mean workers won’t adopt new tactics and strategies. And if you’re not going to change, get out of the way, because we’re coming.” — Charlie Fabian [49:09]
• Historical cycles: periods of decline followed by innovation, split from orthodoxy, and resurgence (e.g., sit-down strikes in 1930s).

Seeds of Hope: Broader Social Movements

• Labour needs to build coalitions—organizing not just workers but whole communities.
• Grassroots coalition-building (e.g., environmental activism, women’s movements) gives Fabian hope for future worker power.
  • Quote:
    “What makes me optimistic is the fact that even after the election of one of the worst people ever...it was within months that...the New York City march in February of 17 [the Women’s March]...gave me hope.” — Charlie Fabian [52:50]
• Unions should devote more resources to collective action beyond the workplace.

Memorable Quotes

• “It is important to have a scapegoat… and the government has been the scapegoat of choice for right wingers and for people who love capitalism and cannot get their heads around the idea that it’s a system with a lot of problems.” — Richard D. Wolff [04:10]
• “As long as you didn't organize the South and the other areas, you were stuck. And even if you had, then they would have gone out of the country. We know they would have because that's what they've been doing.” — Richard D. Wolff [36:30]
• “Flood’s a costly thing.” — Charlie Fabian [39:10]
• “If you’re not going to change, get out of the way, because we’re coming.” — Charlie Fabian [49:09]
• “This economic system puts the mass of workers in loggerhead relationship with the employers, so that in event the system itself regenerates the logic in the minds of the workers—if we get together, if we stand together, we can have a better deal here than what we’re offered by this system. It’s an embedded radicalism.” — Richard D. Wolff [53:51]

Useful Timestamps

• [02:00] — Capitalists turning to government in crisis, then blaming it
• [05:30] — Overfishing and the failure of market regulation
• [08:00] — Malls as economic mirrors to inequality
• [13:00] — Young families' net worth shocker
• [17:00] — Oklahoma’s school crisis due to tax-slashing
• [25:30] — Nationalization proposals in the UK
• [29:15] — Federal tax cuts, spending, and rising interest rates
• [31:00] — Interview with Charlie Fabian begins
• [32:30] — Collapse of union density and its effects
• [37:05] — Worker pushback and legislative efforts
• [41:20] — Public sector labor strategies and political campaigns
• [45:25] — Fears for union disappearance and the case for optimism
• [49:09] — Urgency for unions to change or be replaced
• [52:32] — Hope from women’s march and coalition activism

Tone & Language

Wolff’s tone is incisive yet accessible, blending clarity with pointed criticism of capitalist structures. Fabian brings a grounded, pragmatic perspective, balancing “scary” realities with optimism borne of history and communal activism.

This episode provides not only a trenchant critique of contemporary capitalism's deflection of blame, but also a rich, first-hand look at labor’s decline and potential renewal—both a mirror and a call to action for listeners.