← Economic Update with Richard D. Wolff
Economic Update with Richard D. Wolff
Economic Update: Capitalism's Problems Provoke Oppositions
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- [00:10]
A
Welcome, friends, to Economic Update, a weekly program devoted to the economic dimensions of our lives. Jobs, debts, incomes, our children, ours. I'm your host, Richard Wolff. I've been a professor of economics all my adult life, and I hope that has prepared me well to bring you these Economic updates. Today's program begins with a kind of shout out to the voters in the state of Missouri. They did something very important that changes the way the wind blows in this country. And that's why I'm bringing it to you. The gop, which controls the legislature there, passed a right to work law that outlaws mandatory fees. That's when union members no longer have a union. You don't have to be a member of the union, but if the union wins something for you, it has to give you all the benefits. And so unions develop the system where if you're not a member, you pay a fee to get kind of your share of the costs of the benefits that have to be given to you. And so the question was, would the citizens of Missouri support this right to work law, as it's called, basically freeing members of workplaces from having to pay for the benefits they still get? And the victory was 2 to 1. And here's who won. The unions won. The unions went to the people of Missouri and said, the right wing, the business community says if you get rid of unions, because that's what this is about, you'll have more jobs because companies will come in, you see, because unions will be gone and wages will go down and you'll have a job. And the union's answer roughly was, you need unions and you need them to be strong because otherwise your wages will go nowhere. It was a stark choice for the voters. You want jobs even if it means low wages, or do you want decent wages? 2 to 1, they went for the union position. They defeated the Republicans and the gop. Wow. You know what that means? It means that the voters are beginning to be angry at the betrayal. You know, before, they were angry at the Democrats who had promised to be the party of the working class but didn't really deliver, which is why many of them voted for Republicans and even for Mr. Trump. And what the vote in Missouri shows is that workers are beginning to become angry and bitter and feel betrayed by Mr. Trump and the Republicans, and they're going back the other way. This is a very important election, this little election in Missouri, and that's why it's important to talk about it. The next update has to do with this perennial crisis that is only getting worse. The crisis of Student debt, which is now totaling in this country over one and a half trillion dollars more than all credit card debt. I mean, it's extraordinary. But there's new research that comes from CNBC and from Market Watch and several other sources about the consequences of student debt. Listen to these studies and what they that the level of debt is causing young people who carry that debt, students to either postpone or forget about marriage, to either postpone or forget about having children, to either postpone or forget about buying a home. And you know something? All of those things have enormous social but also economic costs. In the United States, home foreclosures are now increasingly connected to student loans. They can't cover the young folks the cost of a house and the cost of their student loans, and so they are losing their homes. Here's what the economic conclusion. It's irrational. In our capitalist system, the losses that are being suffered as a consequence of, of student debt are greater than the profits earned by the colleges, which is why students have to borrow to go because it's so expensive. It would be more rational to lose the profit for the private corporations because that's less than the social costs of having student debt. You know, that reminds me of prisons. Turns out it costs more to put a human being in jail for a year than it would to give him or her a decent job paying 35 grand a year because it's more expensive to put them in a place from which they never recover and from which society does not recover either. The irrationalities of this system are mounting and they're all around us. And as these irrationalities mount, you're beginning to see behavior that is so starkly out of whack that I can talk about it and you can see where it goes. One, Mr. Trump has imposed sanctions on Iran. This is a bizarre story. In 2015, Iran signed an agreement with Russia, America, U.S. france, China, UK and Germany promising to dismantle its nuclear weapons capability in exchange for getting rid of the sanctions that were hurting the Iranian company country. Every one of the other countries that signedagain, Russia, France, China, uk, Germany has said that the Iranians are keeping their part of the bargain. Mr. Trump decided otherwise to flex his muscles. OK? He's pandering to his base. He's Mr. Tough Guy. We all know about that story. But then he took it a step further. He announced that the United States would punish any company in any one of those other countries that does business with Iran. Well, the leaders of that other country then have an interesting problem. Are you just going to knuckle under to Mr. Trump. Can you imagine the leader of France announcing to us in the United States that any company that deals with somebody France doesn't like will be punished? Excuse me, how do you work a world in which people behave like this? So the Europeans immediately said any company that is sanctioned by the United States better continue to do business with Iran because if they don't, we will sanction them. So the companies have to choose between violating their own country's rules or violating the United States rules. What an interesting moment for these corporations. And guess what? A number of them have already started cutting their ties with Iran because they are companies that do enough business in the United States that having the United States cut them off is more costly than having their own countries cut them off. But here's something you should be sure. Those are not happy campers. They are enraged, these corporate leaders. They're being squeezed and above all by Mr. Trump, who is making them enemies, both of him and of the United States. This is the bully in the neighborhood telling everybody that they have to shape up. The Europeans have declared again that in their view Iran has done what it was asked to do. They have no sanctions on Iran, they don't agree with the United States and they are very angry. And one of the things those companies are now doing is cutting back on trade and dealings with the United States cuz it's too risky. We don't know, they're saying, when the next president or the next economic problem for Mr. Trump will lead him to do what else. To us doing business with the United States is not safe, is not profitable. The long term effects of isolating the United States in this way or ought to make every American not caught up in phony patriotism think long and hard about where this country is going and what it means. Yet again, another story about how capitalism works in ways that are producing, as in the case of Mr. Trump and Iran, all kinds of consequences that are scary to contemplate. This time we're dealing again with the Monsanto Chemical Company. But now Monsanto is no longer an independent company because it was bought out by the German Bayer company. Some of you are aware of Bayer because of the aspirin that is associated with its name. Recently Bayer purchased for 62.5 billion the Monsanto Chemical Company. And one of the products of Monsanto that it's most famous for is the chemical sprayed on crops that's called Roundup. Very widely used. Well, Roundup has been accused by countless scientists across many countries of being a carcinogen causing cancer. And a few weeks ago in California, the trial brought by a cancer victim, Dwayne Johnson, was settled by a jury that awarded him, he's still alive, although terminally ill with cancer, $389 million because the jury was persuaded that Roundup, that the chemical produced by Monsanto basically caused his cancer. Now, I am not a scientist and I don't claim to know the truth or not truth of what is or isn't cancer causing. But I know Monsanto and Bayer who keep pushing this do it because it's profitable. And the people who are opposed do it because they fear our health is at stake. If I'm going to make a mistake, I'd rather err on the side of the health than to err on the side of making profit for one company at the cost of who knows how many people. So unless and until we can figure out a neutral, really scientific way of doing it, which I'm sure governments could do, I want to err on the side of preventing this. Capitalism works the other way. It puts the incentive and the profits in the hands of people like Monsanto who have been producing Roundup for years while people said it made for cancer. My last update for today that we'll have time from is one of those head shakers. It has to do with the state of Louisiana. Politicians in Louisiana a week or two ago made a interesting decision that they're terribly proud of. They decided to punish two banks, bank of America and Citibank. Why they're not going to do business of a certain sort with them. They're not going to let them be part of their pension investment process. And why they announced with great pride that these two banks had been cutting back on the loans they make to companies that produce assault rifles and other deadly weapons. It's part of the banks, accommodating to the upswing of opinion in America that there oughtn't to be the easy access to these kinds of weapons. So the legislature in Louisiana is punishing those banks. Now here's what I want all of us to think about. Those are the same banks that over the last several years have been found to be legally and ethically compromised. I'm being very polite here. They engaged in money laundering, in manipulating exchange rates of currencies, in manipulating the interest rates we all have to pay, in abusing the fees that banks can charge, and abusing the mortgage lending process that led to the crash of 2008. Through all the crimes they committed, through all the unethical acts they performed, the legislature of Louisiana had nothing to say or didn't punish them. That's not a problem. But when they wouldn't lend to assault rifle producers, well, then the legislature of Louisiana rose up. Yeah, it's unbelievable, isn't it? Well, when a system spins out of control, these are the kinds of stories that become the norm in the society. Well, we've come to the end of the first half of the show, but before we meet today's guest, I want to remind you to follow us on Facebook, Twitter and Instagram. Remember to subscribe to us on our YouTube channel and to visit our website, democracyatwork.info where you can see more of what we do and how you can participate in it as well. And if you listen to this show as a podcast, you can now download our new Economic Update app where you can find recent episodes and archived shows. Finally, thank you as always to our Patreon community, a very important support of everything we do and bring you these insights because we get that support. And to our Patreon community, thank you. Stay with us. We'll be right back. Welcome back, friends, to the second half of Economic Update. I am very pleased to bring to the audience and to all of you, Troy Walcott. He is a young man, as you can see in the moment, born and raised in Brooklyn, New York. He has worked for the Spectrum Cable Company for 20 years. And at the time of the strike, which we're going to be talking about, he served as a survey technician and he's also Local 3 shop steward for the company. Welcome to the program, Troy.
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B
Thank you for having me, Richard.
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A
Glad to. Let's start by telling our audience what Spectrum Cable is, what puts you on strike, what the issues are here that have brought this many people into this situation.
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B
Charter Spectrum is the cable company that provides service for a franchise area in New York City, well, throughout the state, but we're dealing with New York City. So prior to that, it was Time Warner Cable who controlled the same service for that area. Now, it came to a point when Time Warner Cable began to present itself for sale as opposed to, I believe, more serving the customer. We started to see changes in the company around that time. Things started to go away from customer service and a little bit more detriment to the technicians. And then it came to the point where Spectrum came in and it just turned to another level. So upon Spectrum coming in, we had like a senior staff, some of the older people that taught us how to work. They looked and removed them from their places and put them from foreman to a lower level and hired new people coming into the company and. And put them as supervisory roles over them, demoted them all. At the same time, they began to go away from the customer complaints and not really pay attention to what they were complaining about, but start to just go after what numbers they could fix to make the numbers look good. And none of us could understand why. And then it came to the point where we had to sit down to negotiate for a contract. We came to what we thought was terms for a contract, but it seems like Spectrum turned around and changed the terms as soon as we left the room. And then they then looked to, how would I say it? Do the same thing to the city. So the terms that they agreed with for the merger agreement that allowed them to come in New York City, they began to renege on those. So we started to see what the company was all about. And then it came to the point when we couldn't come to an agreement again. They looked to take away our benefits from us, our retirement benefits and our medical benefits, which is part of our main structure of our union, our benefit plan. Now, we spent 40 years sacrificing, instead of getting wages, sacrificing to that benefit plan. And they came and told us basically we couldn't have it anymore with no reason other than they don't want us to have that particular thing. Once they did that, they knew it was a direct attack on the union. And that's about the time we went on strike.
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A
How many people are involved in this strike?
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B
There are 1,800 of us.
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A
1,800 technicians, mostly like yourself?
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B
Correct.
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A
Okay, so let me be the economist for a minute. Nothing is more common than to have one big company buy out another big company and do it because they think they can get away with what the old company maybe couldn't or didn't. They're hotshots. They're going to come in there and do everything and make the profits go above. And they often go to banks to borrow money, promising that they'll be able to pay it back because they're going to squeeze more profits. And then you are the sacrificial lamb to make this all work out. So tell me a little bit about what it's like. How long have you been on strike?
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B
It's been 15 months now.
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A
15 months.
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B
15 months on strike.
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A
So everybody has to go find another job to survive any way they can.
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B
I'm picking up bits and pieces wherever I can to try to make sure I can get by. And a lot of people are doing the same thing, who have families and homes and American dreams that they were trying to have or achieve. And now they feel fear losing. So it's very hard on a lot of people and a lot of families.
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A
But in a way, they would have lost the American dream anyway because the company was taking away what they would have needed to get it. So they're trying to find it this way because the other one was closed.
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B
Bad catch 22. They're trying to take it away from you, so you have to lose it to fight to make sure you keep it. So either way, you're kind of stuck. But either stick to your principles to try to fight, make sure you can maintain it for the long term, or you just kind of give up now.
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A
Also, what kind of a human being. What are you looking at in the mirror in the morning? If you just roll over and play dead? I mean, then they get everything at your expense.
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B
That's the hard part that keeps a lot of us going because we can't sacrifice. You know, you have to go home and look at your kids. So you're going to do for your paycheck for your kids today, or you're trying to get your kids to school and college and make sure you provide for their future. So it's hard to look in the mirror and not think about that. Especially when one of the worst things I remember that grabbed me the most is we were sitting at the bargaining table. I think this was after about close to a year on strike. And we sat back down to try to come to terms. And the chief negotiator looks at me and tells me, I promise on my mother's grave, you'll never get back the retirement and medical plan for you and your family. So when it gets to that point, it's not about negotiating anymore.
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A
It's like war, right?
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B
Correct. Wow.
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So here's the question. What do you say to the audience of people across this country listening to you, watching you, their feelings about their own job situation, which is also in jeopardy for millions? They're looking. Either they've already had what you're having, or they got it coming in the future. In a way, they have a reason to support you. Because if not, if you win, it'll make it better for them, and if you lose, it'll make it worse for them.
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B
What I would tell them is don't accept it. What these corporations and companies seem to do is try to pick away from us piece by piece. They pit us against each other. So we think we're not the Same. We fight against each other while they keep taking away more and more and more from us. And then because they do it one by one, we don't stick together. But if we do this and back up, they're gonna put us at a low level and then they're just gonna find somebody else to come in and put that at a lower level than a low. You can't run from.
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It never stops.
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It's go to a different job. It's just going to start there. So if we can't collectively get together, what I would say to the people out there is you have to take a stance and know that it gets to a point where it has to be a living wage, where people working 40 hours a week should be able to get by and provide for their family and shouldn't have to work two or three hours giving away all the time of their life and not be able to support themselves when they just want to put in the honest day's work.
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A
All right, let me turn to a different issue, because when I first started paying attention to what you were doing, I got really excited by something you're doing that a lot of other people in your situation haven't done, or at least haven't done it yet. And that is to take it further, to say to themselves, it's one thing to fight for the benefit program and to hold on to our wages and so forth, but there's a kind of a wonderful further that you've taken it that I want people to know about. You've come up, your union, your group, with an idea of changing the whole way that cable is provided as a service to the city of New York and I think part of New Jersey also cover, which is to do it as a different kind of company, a company that's not run by a tiny group of executives working for the shareholders, whoever they are, but instead is a community, if you like, a democratically run community of the majority of people who work here who make it. Well, what lack of a better term, a workers co op. Tell us about what that's going. What's going on? What is in your mind? What are you proposing? What are you hoping to see?
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B
Well, we came up with a co op first.
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A
We.
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Because as we go through this fight, we're struggling trying to come up with anything we do to try to survive and get by. So the first idea we had is if this company is that bad, it might be the point where they're not looking to help this city or anybody else. They have to leave. Hopefully Another company will come in and buy it. And we've had name changes on the door before. We're still here. We're the workers.
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A
Well, you used to be called Time Warner Cable.
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B
Time Warner Cable. And before that, separate companies before Time Warner. So.
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A
So this is like musical chairs here.
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B
We always stay. The name on the door changes.
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A
Yeah.
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So I said, okay, let's get the next company in here. Maybe they'll do better. Better for the city. Once that didn't happen materialize, I started looking to it and I saw some cities like in Tennessee, Chattanooga, where the municipality took on the cable company. Now imagine all that money being an influx and providing money for the city to better itself. We presented that idea to a lot.
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A
Rather than to some corporation located far away.
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Correct?
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Correct.
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So we presented that idea to the city, but it gained no traction. No one seemed to take on, wanted to take on and bring in responsibility. So I started thinking to myself, I don't know if you ever watched the show Survivors Survivor and sometimes you look at it and you see there's a group of people and then there's one person controlling everybody. And for some reason they won't kick this one guy off. So I'm sitting there, I'm like, it's 1800 of us that have 40 years of experience. There's this five guys in the room that are controlling everything that doing bad. I was like, why do we need these five guys?
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A
That's right.
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B
So I said, okay, you know what? Why don't the workers that have built this system and put it together combined with the customers who are pissed off at this company for coming in and telling them immediately that we're gonna raise your prices and we're gonna. The amount we raise the prices will make up for any customers we lose. Why don't we get together and get rid of this bad apple we don't like and work together? And now we can create a system where the cable company works for the customers, it works for the workers, and we can actually give back and not even help the city more. So once I came up with that idea, I started doing research, we got together with some of the people that were collectively had the same idea and started trying to work towards what we found. What I found out was worker cooperative and that's when that was born and we started working on it from there.
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A
It's exciting for me because worker co ops is something that I believe in. I think it's the wave of the future. I think what you're experiencing in your particular industry is Being felt with different details across the board, in factories, offices and school stores all across the country. And that very often it will be solved if and when the logical two groups have to get together. The customers who do rely on it and the workers who produce it. And that they're the ones who care about the quality of the work process and the output. And they don't have to have profits to be made. They have jobs to be protected, services to be provided to people. People. And we don't need the profit system, especially when it causes people to be treated the way you have by a tiny group of people trying to make more profit. I love the story. They're coming in and cutting your benefits while they jack up the prices. They're making the customer and the worker lose for them. Correct.
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B
I believe the CEO of the company came in, cut, looked to cut our benefits, but his pension plan was still intact, gave himself a raise from 16 to $100 million a year. And then the company, because of the tax cuts, what I think they brought in 9.3 billion extra dollars in profit. So they making money hand over fist. But then they could take away from the workers. And it's just not just us. I speak to everybody. Every company, they're losing their pensions, they're having to work more hours, taking more workload, and then what benefit is it to them besides more time out of their lives? And time is the only thing you really want to spend with your family. So now why do I have to put this middleman in there who's continually trying to take from me when I could just cut you out? And I'm the customer, I want to buy. We're the main source, the workers want to work and we can actually balance out and live a life where you could put in honest days work and come home and actually take your family on vacation once a year or just do the things that you're working for.
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A
You know, Let me ask you a question. I go around the country talking like this and people are nodding, but you're a person who's actually doing it. You're actually out there explaining. And I think at least I have the experience when I explain it. People have one of those aha moments, you know, going, oh yeah, are you having that too? Is this idea catching on?
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B
Absolutely.
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With your members and the people you talk to?
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B
Absolutely. And because I came to think of, I was like, I'm not a business person, I don't know economics. So it seemed very far fetched for me to even think of the this plan But I was like, if I can't do it, I can always find somebody who can help me do it and why not obtain it as damn as possible? And then once the idea get out there, I started seeing other things came in. I saw somebody put a post the other day about, this is a great idea. What if all the trade workers were to get together and form one big construction union where anytime work had to get bid on, we could underbid everybody we know to work better than anybody, we're safer than anybody. And then we would knock anybody else out of the way. I said, oh my goodness. Amazing. I'm thinking about same basic idea, same basic idea. I'm thinking about the farm workers who are struggling right now because they have to fight this trade war that they're fighting for us. Imagine if all the farm workers were to get together and form a cooperative. Who do you think is going to be able to go and farm the land better than them if they decided, you know what, we're cutting out the middleman? I mean, it's a great idea. And none of us, all of us are just workers. If we had a stable environment where we could work and make the income we make, we, we wouldn't be looking for this. But because they're cutting on us so badly, maybe it's time to come together and form a different option where we could set the standard for ourselves.
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A
Beautifully said. Look, I want to thank you very much for joining us. And I want to assure you that those of us that are professional economists, we want to work on this project. If you build it from the workers up, all the specialists you'll ever need to help you, we're just waiting. We much rather work for this than work for those big companies that are screwing not just you, but us too, when they get a chance. Thank you. Thank you very much, Troy. Thank you.
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B
I appreciate it.
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A
And thank you all for joining us. This discussion and conversation will be continued on patreon.com economicupdate. Join us there. And join us again next week for another version, another edition of Economic Update.