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Sam. Saint Gonna change one of these days. Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives, our jobs, our incomes, our futures, our debts, those for our children and those for the friends and neighbors around us. I'm your host, Richard Wolff. I've been a professor of economics all my adult life, and currently I teach at the New School University in New York City. We have so many things to do in this hot July time of year that I want to waste very little time getting into it. But I do want to remember, since sometimes I let it slide, to ask all of you if you like the program you're about to hear. If you are a listener who has returned from listening to other of these programs, please make use of the websites that we maintain to give you much more of what it is we do in a condensed way on these programs. The first one is democracyatwork.info that's all one word, democracyatwork.info. and the other one is rdwolff, with two Fs. Either or both of those websites will provide you with a way to communicate to us your interests, your desires, what you like, what you don't like about the program. Each of them will allow you to follow us on Facebook and Twitter and Instagram, and in that way, partner with us and make available to your associations the kinds of material we present here. And finally, those websites have much material for you to use. YouTube videos of all kinds of our activities, audio files, written materials, it's all there, 24, seven, available to you, no charge whatsoever, as part of what we at Democracy at Work produce in the way of these programs. And I want to thank those of you that have, in fact, written to us. Many of you do, and we're very grateful, and we shape the program based on that. We also welcome any and all communications, any ways you can partner with us. We're always looking for more radio stations to carry this program. We're very proud that we are now on over 60 stations across the United States, but we are greedy and want to get on more of those stations. And likewise, I travel around the country giving talks. And if you're interested in any of these ways of partnering with us, use the websites, get in touch with us. We will follow up. I want to begin with something remarkable. Mr. Trump, as the candidate likely for the Republican Party, gets a lot of press around the world for the things he has said which make him look, say, an unusual candidate in the race, at least in some ways. But I believe our British Brothers and sisters have done us one step better. On 13 July, the new Prime Minister of Britain, Theresa May, who by the way needs some introduction, which I'll do in a moment, named the new Foreign Secretary. That's the equivalent of the Secretary of State in the United States. It's the person in charge of Britain's relationships with the rest of the world, the leading politician to shape British foreign policy. This is in a world of complex struggles, the kind of position you want to give to a sensitive, thoughtful, well versed, balanced kind of person. Theresa May, the new Prime Minister taken over from. What's his name? I've already forgotten him. Cameron. Cameron. David Cameron. Thank you for helping me. Theresa May was a banker before she became a Conservative politician. She's been a Conservative all her life, very proud of it. She is married to a banker. So we have now two bankers, Prime Minister and consort running the British economy. So not much change there from the sort of person that the Conservative Party has, has always put up. But she named as her new Foreign Secretary on 13 July the former mayor of London, Boris Johnson. I'm going to now read to you from a story carried on the day he was nominated July 13 by the Bloomberg News Service, a very conservative business oriented news service. So that's where the quotes are of Mr. Johnson in recent years that may remind you of an American politician. I'm not sure which one, but I'll leave that to you. Here now are the quotes. Number one, quote, I've slept with far fewer than 1,000 women, end quote. If that worries you. Wait a minute. In 2007, during the presidential campaign when Mrs. Hillary Clinton was running, Boris Johnson made the following statement and I She's got dyed blonde hair and pouty lips and a steely blue stare like a sadistic nurse in a mental hospital. And as I snap out of my trance, I slap my head, my forehead in astonishment, continuing the quotation, how can I possibly want Hillary? I mean she represents on the face of it, everything I came into politics to oppose. Not just in a general desire to raise taxes and nationalize things, but an all around purse lipped political correctness. I'm going to continue with quotations from Boris Johnson because it gets better or worse depending on your point of view. He criticized President Obama on his recent visit to the UK to support the Brexit, that is the vote to stay in the European Union. He attacked Obama by saying, why did he remove a bust of Winston Churchill from the Oval Office? He said, quote, some said it was a Symbol of the part Kenyan presidents and ancestral dislike of the British Empire of which Churchill had been such a fervent defender. Not only did the Mayor of London say this at the time of the visit of an American president, but the American President felt it necessary to respond and said as, as the first African American President, I thought it appropriate to put a bust of Martin Luther King in the Oval Office. And I moved Churchill's to the Treaty Room where I see it day we're not done. Johnson is famous for having explained and justified economic inequality in Britain because it was useful since it encouraged people to work harder. In other words, he resurrected what many of us thought was a very dead horse by saying that it's okay to make many people poor because they work harder. And like all people who have said that through history, they never quite got around to understanding that that meant the rich people, which they were, don't work hard because they don't need to. And that raises interesting questions, but they never thought it through that far. As Mayor of London who hosted the Olympics in 2012, he had this to say about the 2008 Olympics in Beijing. Virtually every single one of our international sports were invented or codified by the British. And I say this respectfully to our Chinese hosts who have excelled so magnificently at ping pong. Ping pong was invented on the dining tables of England in the 19th century and it was called Wiff Waff and now the best one. In a 2002 column published in the Daily Telegraph, Johnson mocked then Prime Minister Tony Blair's globe trotting. In this case writing just before the Prime Minister's trip to the Congo. Get ready folks, here we go. Boris Johnson, the new Foreign Secretary of England, said the what a relief it must be for Blair to get out of England. It is said that the Queen has come to love the Commonwealth partly because it supplies her with regular cheering clouds of flag waving pickaninnies. They say he is shortly off to the Congo. No doubt the AK47s will fall silent and the pangas will stop their hacking of human flesh and the tribal warriors will all break out in watermelon smiles to see the big white chief touched down in his big white British taxpayer funded bird. I don't know what I can say. That man is now the Foreign Secretary of the United Kingdom. And folks, it tells you something about modern societies. I'm not going to spell it out, but it tells you something. If the best people they can find to run the United Kingdom are bankers who choose folks like Boris Johnson as the Best they can for their face to the rest of the world. Think about it, because it tells you much more about British society, just as the candidates we field in this country tell us a lot more about our society than they tell us about anything else. Well, what might lie behind all of this? I want to say something about that. And the way I'm going to do it is to present you with some economic information, which is what this program focuses on. The first comes from. Well, another Bloomberg piece of work. This is about what has happened to US manufacturing and the numbers are so stark that I thought I would just present them to you and then offer a short analysis. Since 1989, so that's not very long ago, maybe 25 years a generation, manufacturing output in the United states has surged 69%. That is over the last 20 odd years, we have produced a growing amount of manufactured goods and services. Well, not services goods. That's what manufacturing does. 69% over a generation. Employment in manufacturing over exactly the same period of time has fallen by 32%. 70% roughly. Increase in output, 30% drop in employment. That's called automation. That's called an economy in which machines have replaced people because we don't need as many people to produce a growing quantity of goods as we did before. In any rational society, this achievement of productivity improvement would have led to an improved situation for most people. For example, the work week in manufacturing could have been dramatically reduced because we don't need as many people as before, leading to giving to manufacturing workers the fruits of the improvement in technology in the form of leisure, in the form of a reduced work week would be no need to reduce their income because we're producing more than ever before. There's plenty to go around. We just don't need as much time. But we didn't do that. We also didn't take the increase in productivity and reduce maybe everybody's work week manufacturing by some, but everybody else, so that we all share in the benefit of becoming more productive. Since it has to do with the education we give one another in our schools. It has to do with the intensity with which we work. It has to do with the inventiveness of every everybody at a workplace who comes up with new and better ways of saving on labor. But we don't do that. Over the last generation, the workweek hasn't been reduced neither in manufacturing nor anywhere else. Not only that, the wealth, the increase in wealth has gone entirely the top 1 or 2% of our people. The benefit of this improvement in technology achieved by Everybody in the schoolrooms, in the workplaces of our country, the benefit of that increased productivity was taken by the few. And that's because profit and the maximization of profit is what governs what you do with improvements in technology. That's how capitalism works. It makes sure that profits are number one. Profits are the famous bottom line. Profits are the focus. So if you can become more productive, then you do it in order to enhance your profits and the income of people who live off profits. And we know who they are. They are the shareholders and the top executives of the corporations who gather the profits into their hands and keep them. Wow. If you put together the loss of jobs through automation documented in the numbers I just gave you, together with the loss of jobs as capitalists decided to move production out of the United States, where wages are high, to the rest of the world, particularly China, India, Brazil, or where wages are low, well, then you can see why profits have boomed. The people who run our society, the businesses, have gathered into their hands the benefits of the technology that we all help to produce and the benefit of being able to go to another country and get the work done at a fraction of the cost that you used to pay to an American worker. It has decimated American culture. It has destroyed places like Detroit that we're going to talk about more today, and Cleveland and Philadelphia and the countless other parts of this country that are in deep trouble. It explains why incomes haven't gone anywhere. In a way I'm going to tell you about in a moment, the decision of capitalists first to automate, but more importantly to take all the benefits of increasing productivity for themselves and to share none of it with the rest of us. That's why the workweek hasn't gotten shorter. That's why the average income of most Americans has gone absolutely nowhere. Nowhere. As I will document in a moment, we see an economic system that is now perverting the potential of human progress and subordinating it to the maximization of profits. That's why the capitalist system has run out of gas and is now encountering opposition of the sort it never felt before. Whether that's Mr. Sanders or a socialist running in the United States or Mr. Corbyn, a socialist leading the Labour Party in the very Britain that just made Boris Johnson its Foreign secretary. So I'm interested to give you another piece of information, this one from a British paper too. We're very British today. The Guardian. On 13 July, Larry Elliot wrote in the Guardian story, and I'm going to read you the headline. Of the story. Up to 70% of people in developed countries have seen incomes stagnate. Well, if I had a lot of time, I'd go through the statistics with you. But the story, if you're interested, easy to find the guardians available for free on the Internet. July 18th. Larry Elliot, the author, you will there see that there has been a stagnation of of incomes for the majority of people in most of the developed world, including the United States and the United Kingdom. People are very upset, people are very angry. People are looking for ways to get out of this declining situation that capitalism as a system has put them into. And the media, unfortunately, are busy coming up with everything else to focus people's attention on. Do we stay in the European Union or not? It's not the issue, friends. It's not the problem, friends. Should we have more or less immigration? Not the issue, friends. Not the problem, friends. Should we be more or less angry at this or that political movement? That's not our problem. Our problem is in a dysfunctional economic system whose priorities have been to go somewhere else and to replace people with machines and to keep all the benefits for a tiny part of the population. Half of the industries in the world now suffer from what is called excess capacity. They have the capacity to produce more goods than they can profitably sell. And you know why? Because there are too many people have dropped out of the labor market, too many people are unemployed, and too many of the people who have a job have it at those low wages that the capitalists went to take advantage of. You put all that together and you don't have the people that to sell stuff to, which is why you don't invest and which is why we have such a long, slow, quote, recovery from the crash of 2008, which never seems to end. Karl Marx, in one of his better insights, pointed out that capitalism is a bizarre system. Every capitalist is constantly looking for ways to cut his or her labor costs. Substitute machines for people, find cheaper workers for the ones you have now. Save money, save money, don't pay the workers. And that's how they make money and make profits. And that's what they're all driven to do by competition. Not understanding. And Marx here has a wonderful ironic sense of humor, not understanding that the very success of capitalists in reducing their labor costs deprives the market of the money it needs to be able to buy what those capitalists are producing. In other words, capitalism is an internally contradictory system that stumbles and bumbles over itself. That would be bad enough, but the stumbling and bumbling tends to be passed down the ladder so that the people who are at the poorest have to take the biggest hit. Everybody kicks down and sucks up in a capitalist system because that's how it works. And that produces bitterness, resentment, tension, and a whole lot of other problems that blow up, to everyone's surprise, who's not paying attention to the economic realities. Surprise when the British people vote to get out of the European Union. Surprise when police behave in the United States in a way for which there is no justification. Surprise when people begin to push back against the police, etc. Where's the surprise? Where's it coming from? Surprised at what? You stagnate people for an entire generation. No increase. You hammer at human beings with an endless barrage of advertising telling them that a successful person has had one who lives in this neighborhood, who wears these kinds of clothes, who eats these meals, who goes to these restaurants, etc. You tell everybody, buy, buy. It's a symbol. It's a sign of your success. And then at the same time, you don't give them the wages with which to do that. That is cruel. That is a kind of torture of a population. The metaphor I like that someone once gave me is that's like the kind of cruel owner of a pet dog or puppy who has the puppy jump up in the air in order to get a piece of food. But as the puppy jumps, they keep raising the food so the puppy never gets it. The puppy will eventually go mad from this. And what do you think happens to human beings if they're constantly told this? You must give your child a college education. On what? On what? Later in this program, I'm going to tell you about some of the statistics of what particularly African American people in the United States earn. They are being treated like that proverbial puppy being asked to live a certain style, give a certain something as a parent to your children, to your husband, to your wife, and not being given the wherewithal to do it. That is a torture of human beings. And it has all the effects that torture always has. Well, I don't want to leave you with just that news. And I don't want to appear to be overly critical of our British brothers and sisters. So let me comment on their equivalent here in the United States. In the New York Times of July 12, one of the leading bankers in the United States, perhaps the leading banker in the United States, Mr. Jamie Dimon, he is the president of the JP Morgan Chase Bank. He wrote a column. I don't know whether he chose the title or whether the New York Times did, but whichever one it is, I want to read it to you. The title of his story, his op ed that he wrote carrying his name, Higher Wage Wisdom. So we are now going to get. I'm going to help you relate to the wisdom of one of the leading bankers in the world, Jamie dimon. The first four paragraphs of this story are remarkable. Mr. Dimon has discovered that. Hold your breath now. Wages in America are too low. This has been debated by half the country for 30 years. Mr. Dimon just got it and he's really exercised about it. He says, opening the fourth paragraph of his speech, a pay increase is the right thing to do. I'm not going to discuss how it came to be the right thing to do now in 2016. But it wasn't the right thing to do for Mr. Dimon and his bank last year or the year before or five years ago or 10 years ago. Now it's the right thing to do. Oh, this is exciting. Further on in the story, Mr. Dimon gives us a very interesting piece of information. The JP Morgan Chase bank itself employs ready 18,000 people at a minimum wage of roughly $10.15 hour. Whoa. If you earn that an hour and if you work 40 hours a week and if you work 52 weeks of the year, you qualify in the United States as a poor person, you are below the poverty line. 18,000 people in Mr. Diamonds bank are paid poverty wages. That's the truth. It's been the truth for many, many years. But Mr. Dimon is now going to do something about it. He's very excited. He is raising the wages of these 18,000 people up to $12 and in some cases as high as $16 an hour.