← Economic Update with Richard D. Wolff
Loading summary
Transcript33 lines
- [00:54]
A
Gonna change one of these days. Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic aspects of our lives. Our jobs, our incomes, our debts, those of our children and those looming as we look down the road into our futures. I'm your host, Richard Wolff. I've been a professor of economics all my adult life, and I currently teach at the New School University and in New York City. We have many things on our agenda today, including an interview that I think you will find extraordinarily valuable and interesting. But I wanted to jump in with some of the events of the last week with which we always open our programs. One of you wrote to me recently and I found it really interesting saying that I talk a great deal about the inequality of wealth and income here in the United States and sometimes in Europe, but I don't talk about it elsewhere in the world. And I thought that was a good criticism. And I wanted to respond to it partly because I want the general point to be understood, that the way capitalism as a system evolves produces inequality everywhere. That's its long term tendency. That's why that book of a couple years ago by Thomas Piketty, the French economist, had such an impact around the world and was translated into so many languages, because it established the basic tendency of the system to produce inequality until there's a backlash from the population and then it gets reversed for a while until the drive, the tendency to inequality, is resumed. So my attention was caught this last week by a story from the Hindustan Times. In India, there was a scandal. And the scandal began with complaints by politicians that the government was using soldiers at the expense of the government to protect wealthy people and in particular to protect Nita Ambani, the socialite wife of India's richest man. Well, that was the clue. And I went and did some research. Her husband is Mukesh Ambani, an oil and gas magnate worth $21 billion. He has actually had a government security escort since 2013, when he was the subject of terrorist threats, somebody says. And he at least covers the costs of the government protecting him, but apparently not the protection of his wife, to whom 10 additional officers had been assigned. Delhi's Chief Minister, Arvind Kejriwal said in a public tweet, women raped daily in Delhi. No security for them, despite repeated requests. But Prime Minister Narendra Modi is providing security to his friends. Well, I did some more research, not so much about the scandal with the security. That's bad enough. But I wanted to understand what it meant that in a Country with literally hundreds of millions of some of the poorest people on our planet. There is a gentleman who has $21 billion. And I found out that Mr. Ambani is indeed quite wealthy and well known. He's an art collector, he's 52 years old. He serves on the boards of directors of companies. But what's really famous about them is that they live in a home in what used to be called Bombay, now called Mumbai. And the home is famous because it is 27 stories high. It contains a ballroom, a movie theater, six parking levels. If any of you listening or watching are interested, Vanity Fair magazine in June of 2012 did a very revealing photo essay on the Ambani home. $2 billion is the value assigned to it. And there are 600 servants who work in this 27 floor building. Wealth and poverty as extreme as it gets. And this time in India, where if anything, one has to wonder about the tolerability of it even more perhaps than in the West. I wanted also to be fair. You know how concerned I am with that. And having spoken about the Republican National Convention and some of the economic dimensions of it in Cleveland, I wanted to turn my attention to the recently concluded equivalent theater in Philadelphia, the Democratic National Convention. The point I want to drive home is the same as I did with the Republicans. Cleveland is one of the poorest, most destroyed cities in the United States and has been for decades. Philadelphia likewise. Let me give you some idea of the reality of Philadelphia, four blocks from the glitz and the glamour and the arena and the television and the well fed people having their debates. Poverty in Philadelphia, in the core part of the city, is listed by the U.S. census Department at 27%. More than 1 in 4 residents of that city lives below the poverty line. If you know what it means to live at the poverty line, you'll know that the word poverty is inadequate to convey the privation you suffer if you do that. Statisticians also in the United States have another category called deep poverty. It's defined very simply. That's if you live at a level less than 1/2 the poverty level. So you are in deep poverty. Philadelphia has the highest rate of deep poverty of any city in the United States. The Democrats chose to make a convention in the depth of poverty as the Republicans did, and neither of them felt it was necessary to say a word about it, to justify it, to explain it. In a recent book that I would like to mention because it gives you an idea of the extent of the poverty that was not discussed at either convention. The authors are Catherine Edin, E D I N and Luke Schaeffer. Katharine Edin is a professor at Johns Hopkins University in Baltimore and Luke Shaffer is a professor at the University of Michigan. They wrote a book last year, 2015, called $2 a Day Living on Almost Nothing in America. Nice title. Edin and Schaeffer published by Houghton Mifflin Harcourt in 2015. One of the interesting things they point out is that the number of children living in deep poverty, that is living in a household that earns less than half the poverty level in this country now numbers 3 million children in the United States. And that struck me because I'm an economist and I think in terms of numbers, 3 million is roughly 1% of the American population. And we've heard a lot about 1% ever since Occupy Wall Street. Now, that 1% is those at the top. But the 3 million children living in deep poverty, that's the other 1% at the other end of the spectrum. Wow. If the 1% at the top deserve our attention and our social criticism, then the least we could do is apply the same to that other 1%. At the other end of the spectrum. However, the Republicans and the Democrats each for their respective reasons and their electoral goals and objectives, chose not to and chose not to deal with it and to pretend that everything is really pretty good. For me, watching knowing how bad the economy is and the problems that it has, between the fantastic make believe of criticism from Trump and the equally fantastic make believe denial from the Clinton quarters, I really am left wondering what are the prospects for a society that needs to pretend either it doesn't have a problem or that it can solve the problem by slapping tariffs on goods from China, building walls in front of Mexico, and other fantastic imagina that are actually more distractions from our problems than serious engagement with them. The next item in our list of shorter updates that we do in the first half of the program has to do with three examples I thought would be interesting to you about unions, trade unions, labor unions behaving in ways that are a little different from what we've come to expect and perhaps give hope that the labor movement having now shrunken in the United States for 50 years without exception, such that today in the private sector, which is the major part of our economy, union membership is now below 7%. That is 93% of people working in the private sector are not members of and are not represented by a labor union. This in a private sector that once had 30% of its people represented by unions. So maybe the unions are Learning finally that they really do have to change their tactics if they're going to survive, let alone become important again in American history. So I wanted to mention three. One, in the United States, two abroad that I think are signs of a changing labor movement. First, the American Federation of Teachers gathered for its annual convention in Minneapolis. St. Paul did some interesting things. First, they marched on downtown and they marched against police brutality. There was the case of Philando Castile, who had been killed by police there. And it caused an enormous upsurge of feeling and conflict. And they wanted to go on record to say that they don't want anyone to be killed, but they are particularly concerned about police violence and in poor communities. And they went on to say, we want more investment in these communities. We can't teach young people if the homes in which they live, if the neighborhoods in which they live, if their whole life situation is an endless threat and danger and a situation of privation. To expect them to perform properly in school is absurd. And to present all these difficulties to the teacher is even more absurd since the teacher hasn't the resources nor the training to cope with a society that's broken down. It's very important that the teachers did that. They marched with others. Some of them were arrested. They were concerned to show that to be a teacher who cares about education brings you necessarily into becoming an advocate for social change when the society as it's constituted makes their job next to impossible. Bravo to teachers reaching out beyond themselves. And in this case, bravo to the American Federation of Teachers. The next example is Canada's postal workers. That's right, the Canadian Union of Postal Workers is fighting with the postal system in Canada. And the fight might interest you as well. It's the Internet, in a sense that's forcing this. More and more people are using email and other Internet communication mechanisms instead of the mail. This means that the mail services are finding less revenue coming in from the mail process and that puts them in some financial difficulty. Now they're responding like a corporation in Canada, much as the United States Postal Service often does as well. So they're laying off people, they're cutting back hours, they're thinking about not doing deliveries at certain times of the day or the week, etc. Etc. To hunker down and of course at the expense of people's jobs and postal workers incomes. And the postal workers union, instead of trying to beg that the cuts not be as bad as the Postal Service wants, kind of working a compromise which they will lose in the long run, have taken a different tack. And that's why I'm talking about it. They are proposing changes in the postal service that would allow their members not only to keep working at the same hours and the same income, but might also provide jobs for many more people. And they have come up with three suggestions, all of which are creative. Number one, well known, because that is done in the United States too. There ought to be in the United States, they argue, what already exists in many other countries. I'm familiar with it. For example, in France. In France, as in many other countries, the post office is also a bank. It's a place where you can have a savings account. It's a place where you can have a checking account. It's easy to get to because the post offices are all already there. There's no expensive profit to be made because it's the post office. It doesn't have to earn a profit, doesn't have to charge high prices for the services it provides because it simply has to recoup the cost of providing a service in the building and by means of the workers who already are there. All every day. Banks that would be. In fact, post offices would also provide a way for the government to compete with private sector banks, making sure that they behave properly, that they don't overcharge. Let me remind you, as I have documented on this program repeatedly, that every major activity of the major banks in the United States and I've enumerated them, bank of America, Wells Fargo, Citibank, all of them have been paying fines in the billions of dollars in recent years for money laundering, for overcharging during the mortgage crisis, for manipulating interest rates, the so called Libor scandal, for manipulating foreign exchange rates. Literally every area of banking, these large banks have been exposed as behaving either illegally or unethically, both. Why are we protecting them whether they're in Canada or here? By not having a competitor who might stop some of that behavior coming out of a post office. Not only that, in large parts of the United States, banking is not available. Banks don't get enough money out of having a branch in a small community. The post office is already there and has been would be an easy way to provide checking and savings accounts to millions of our citizens in Canada, in the United States. Good idea. Creative for a union to put it forward. But they're not done. They thought that the post offices could become all over Canada, a center for greening the country. A place where people would gather to develop projects to improve insulation of homes. In other words, it would be a center for a nationally funded program to improve the interaction between the Canadian people and their natural environment. What a creative idea for how to solve a problem. Not to be outdone, they also said that the postal office could be a place where you would be particularly structured to deal with elderly and ill people who are not able to get to the shrinking number of hospitals and clinics in the United States or Canada or, or many other countries. So that the post office could become a community center for a variety of valuable projects for local people. Not to do this in the name of the private profit of the banker or the private proper profit of the medical industrial complex would be to put profit ahead of people's needs. And that's a fundamental problem of capitalism now, the past and for as long as we allow it. Third example, this one is about the United Kingdom. In the United Kingdom, something interesting happened that I have been reporting on because it offers some arresting parallels to the whole phenomena of Bernie Sanders here in the United States. An elderly fellow rather like Bernie in England took steps from a point of view rather like Bernie's. His name is Jeremy Corbyn and I've been talking to you about him. The difference is where Bernie Sanders came in second. Rightly or wrongly, we probably will never know. Mr. Corbyn came in first. There was a race to become the head of the Labour Party in England and he won about a year ago and he became the head of the Labour Party. That would be the equivalent of becoming the head of the Democratic party in this country. It is the left of center, major other party in the United Kingdom after the Brexit vote, the vote where the British people voted to leave the European Union. The Conservative part of the Labour Party, who has been very angry that Mr. Corbyn and the mass of young people he brought into the party were able to win and become the leadership. The Conservatives, which include the majority of the members of Parliament from the Labour Party, saw their opportunity to, to counterattack and undo Mr. Corbyn and they called for him to step down. He had supported the side in that vote in England to stay in the European Union. He hadn't supported it with much enthusiasm, but he had. So he came out on the wrong end of that vote and that was the chance of the Conservatives. Why am I telling you this? Because Mr. Corbyn chose to fight back. He chose not to step down in the name of the unity of the Labour Party. No, no, no. He is standing to win the next election to see whether he can keep his job as the head of the Labour Party. Calling on all the hundreds of thousands of young people that joined the Labour Party in order to see it go in the direction that he represents, a direction very close to the perspectives of Bernie Sanders, by the way. And now the interesting thing, the labor unions of England, not all of them, but most of them, have come out foursquare in support of Mr. Corbyn and against the right wing of the Labour Party as represented by the majority of their members of Parliament. That is a split in the Labour Party that we should watch because it will give us a very strong clue as to whether the splits on that side of the political spectrum, both here and in places like England, where they're tending to take us. Because what is happening over there is not so different from what is happening here. It's not a coincidence that we have Bernie and they have Jeremy. It is something going on across the board. Quickly, in the time that remains, let me give you a couple more short items that I think are worth talking about. Starbucks got itself into some trouble this last week as large numbers of its employees took to the Twitter and other methods of social media communication to complain about cut hours for workers there to complain about jiggered schedules that didn't get presented, let's say, to the workers for them to have some say in, after all, what changes their lives. And Starbucks at first denied it, but then the flood of people saying that this had happened to them, people who worked for Starbucks, made it difficult. So here's how it was resolved. Did Starbucks step back from damaging its employees with changes in schedules and hours? No. But what it did do was to decide to drop its policy, which I didn't even know about. Maybe some of you did. It turns out if you worked for Starbucks until now, you could not dye your hair. You had to work in a particularly colored hair and particularly colored pants and shirt. And Starbucks clearly, although of course you wouldn't know unless you're privy to their internal documents. And I don't know, maybe WikiLeaks will give those to us soon too. But until they do, I can only guess that allowing people now to express themselves this was the language of Starbucks communique in any way they wish. By choosing their own hair color, you could give workers something that costs you nothing in order to be able to perhaps get away with fooling around with the hours, which is a matter of making more profit. We'll keep track of this and let you know. Last item for which we have time. Today, 2016 is the 100th anniversary of the federal estate tax in the United States. In 1916, for the first time, we passed a comprehensive federal estate tax. And let me make clear to everybody what that means. It means that when you die, you leave whatever wealth you've accumulated in your lifetime to whoever you want to pass it to, usually members of your family, your children and so on. That a tax is assessed. A portion of your estate, the value of the property you leave is taken by the government. And what's the rationale for that? Usually there have been several. One fairly obvious. The government needs money. The history of the estate tax is not coincidental. The reason it was passed in 1916 was we were fighting World War I, and it was turning out to be much more expensive than anyone had thought. And so the estate tax was one way to raise the revenue for fighting World War I. But that was not the only reason. There's an old idea behind the estate tax, and sometimes the idea gets expressed as follows. There ought to be a level playing field, the argument goes. Everybody who's born ought to have a roughly equal chance to develop their capabilities, to find out what their capabilities are, and to do as much with their capabilities as they can, and that they should be rewarded according to the merit they acquire, the skills they develop, the commitment they show, all of that. There shouldn't be an unequal playing field. That is, some people shouldn't start with way more help and resources and equipment and all the rest than others because of the notion that that would be intrinsically unfair. And that means some people can't leave to their children millions while other people are living in a slum, because that's not a level playing field for anything. That was the point earlier in discussing the logic of the AFT in Minneapolis doing what it was doing. So an estate tax is at least a step in the direction because it is almost always set up, graduated. So the richer you are, the bigger the bite out of the estate tax that the government will take. Now, lest anyone here get all excited about the estate tax, it never took very much from the American people. It never took very much from the wealthy. At its peak, it took. It accounted for, excuse me, 2% of the federal tax revenues in this country. So the 98% was taken from the income tax and all the other forms, but it was a significant amount. 2% of the United States government's take is a large sum of money. And so it was in force pretty strongly from its inception in 1916 until the end of World War II. End of World War II marks the end of most progressive taxation in the United States. We've been rolling it back ever since, both Republicans and Democrats. The Republicans with glee, the Democrats with hesitation. But they all do it, and they've all done it the same way. And so the estate tax has been cut back. So much so that I thought you might be interested in how. In fact, we are celebrating the hundredth anniversary. The state estate tax now allows you to pass more than your first $10 million worth of assets to somebody, and you pay no tax at all. In other words, the first 10 million are exempted for everybody. Well, guess what that means. It means that currently point 2% of people who die pay any federal estate tax at all. In other words, the vast majority of Americans have no federal estate tax, and it currently accounts for point six percent of federal tax revenue. We've gutted it. That's the simple story. We've gotten rid of it. It's a tax that targets those most able to pay the tax. It's a tax that. That takes relatively little from people who are still left after they pay it with enormous wealth. And it does a little bit to level the playing field. But even that little bit was too much for those at the top. So they got to work to pressure political leaders, Republican and Democratic alike, to do away with it. So in the 100th anniversary of the estate tax, it's barely visible anymore, which is a remarkable way of noting the hundredth anniversary. We've come to the end of the first half of our program. I want to thank you for being with me. I want to ask you, please to stay with me to remember the two websites that we make available to you 24. 7@no.rdwolf.com and Democracy at Work. All one word. Democracy at work. Stay with me. We'll be right back.
- [29:09]
B
Yeah.
- [29:12]
C
Without money, what would we do? We got a little idea. We see what's going on. They say the money is the root of all evil. But ain't nothing evil about money. Because we need that money to pay the bills, to pay the rent. How come? Banks folding, president scratching his head, the economy is down. Wall street about the loop amounting up and down. Gas prices up and down. Nobody knows what to do. You know what we need, though? Money, where have you gone to? Money, where have you gone to? I got to pay my bills, got to pay my rent. I'm hung around time, but my money don't spend money, where have you gone to? Where are you hiding? I said money, where are you hiding? I walk like a dog year after year like a dog When I need you, you always disappear why are you hiding money? Why won't you say a while I said money. Why won't you say why? You sing, we scrimp, we say.
- [30:50]
A
Welcome back, friends, to the second half of Economic Update. I want to remind you as well that we have those two websites that I tell you about each week that are ways for you to partner with us, ways for you to tell us what you like and don't like about the program, what you would like us to analyze, talk about, explore. We use them. We read every single communication you send to us. Both websites, whose names I'm going to give you, allow you to communicate by email to us. And we use that as a way to work with you and for you on this program. Both websites are also other ways of partnering. By clicking on the icon, you can follow us on Facebook, Twitter and Instagram. You can communicate to us if there's a radio station in your area which might carry our program. We will follow up if you let us know about that or any contact that you have there. And likewise, I travel across the United States. I'm always looking for places where I can meet all of you and others that are interested in what we do. If you're interested in working with us on that, let us know. And the bottom line, make use of this program. It's archived on the websites. You could get any program at any time that we've ever produced. Show it to friends, share it with friends. That's a way for us to partner. First, website rdwolff with two F's. Com. And the second, the more important one that we now maintain, democracy at work. All one word, democracyatwork.info info. Well, it is an enormous pleasure for me to introduce to you a person we're going to be talking with for the next 27 minutes. He and I met when we were in college and we have been friends ever since. His name is Adam Hochschild. He was a person active in the civil rights and anti war movements of the 1960s and 70s and then became a journalist and a historian who has written many, many books and articles. He co founded the journal Mother Jones that I think many of you know. And his latest book is what I want to talk with him about. It's called Spain in Our Hearts. This is what it looks like. And it's a discussion of Americans in the Spanish Civil War, 1936-1939. Adam, welcome.
- [33:21]
B
Good to be with you.
- [33:23]
A
All right, let's jump right into it. I would guess based on my experience as a college teacher, all My life that a good number of our listeners, maybe not as many as in an average American audience, but a good number of our listeners don't know what the Spanish Civil War was, don't know that Americans fought in it in a way they didn't in any other war. I believe in our history, any other foreign war. So could you begin by just giving us a capsule summary of what happened in the Spanish Civil War, which is obviously also a way of telling everybody why you wrote a book about it.
- [34:00]
B
Well, roll back the clock to the mid-1930s. It's a pretty grim time all over the world. Hitler came to power in Germany, 1933. Mussolini already in power in Italy. Semi fascist anti semitic regimes throughout Eastern Europe. One of the bright spots in Europe was Spain, which in 1931 became a democracy. Held national elections really for the first time, the king left the the country. And Spain was a country that faced enormous problems. Huge disparities of wealth. More than a quarter of the population was illiterate. But at last people felt something could be done about this. In early 1936, February 1936, Small D Democrats around the world felt a further surge of optimism when a coalition of left and liberal parties won the Spanish national elections that year. And it seemed then that things like land reform and further measures could go forward much faster. Then there was shock felt around the world when in July 1936, a large group of right wing army officers rose up against this democratically elected regime. They called themselves nationalists. They quickly came under the leadership of a tough talking young general named Francisco Franco. Within two weeks after this rebellion started, Hitler and Mussolini were sending large amounts of military aid. Aircraft pilots, tanks, tank drivers. Mussolini sent 80,000 ground troops as well to help these Spanish nationalists because the two fascist countries in Europe wanted an.
- [35:46]
A
Ally in Spain and this, the fascism, they wanted to overthrow the government that had been elected.
- [35:51]
B
Exactly. This was a military rebellion against a democratically elected government. Now you would think in a situation like that that other democracies would step in to help. But at that time there was a conservative government in power in England. There was a very unstable government in France that was afraid of a civil war there. Strong isolationist feeling in the United States States. None of the three major democracies wanted to step in in any way to get involved in this war which they thought could easily balloon into another world war in Europe. And they all said no. When the Spanish Republic, the elected government, wanted to buy arms. Ironically, the Spanish Republic had the money to buy those arms because Spain had happily remained neutral. During the First World War, when all the other major countries in Europe spent themselves deep into bankruptcy, but the U.S. britain, France, all closed their doors when.
- [36:51]
A
The Spanish Republic refused to sell them arms.
- [36:53]
B
Refused to sell them arms. Smaller countries followed their lead. And after three or four months, it turned out the only major country willing to sell them arms was Joseph Stalin's Soviet Union. Not a democracy by a long shot. And Stalin asked for a lot of things in return, namely high positions in the Spanish Republican army and security forces for Spanish and Soviet Communists. So some military help did start to flow from Russia, and that was enough to prevent General Franco and his troops from capturing Madrid in the fall of 1936. And then something else happened, which was that again, with Soviet encouragement, volunteers from all over the world came to fight for Republican Spain. Between 35 and 40,000 volunteers from more than 50 countries came to Spain to fight. And of those volunteers, 2,800 of them were Americans, by far the largest number of Americans that ever went off to fight in somebody else's civil war.
- [37:57]
A
And they were all volunteers. They were not like Mussolini, sending troops.
- [38:01]
B
Mussolini sent conscripts. These were volunteers. And of those 2,800Americans, more than 750 were killed, which was a higher death rate than the US Military suffered in either of the world wars. It's always been a piece of history that fascinated me, and I think initially it began to do so because I knew half a dozen of those volunteers. They were all people, all dead now, all men who were 30 or 40 years older than a couple of them were good friends of ours for many years. I used to hear their stories about fighting in Spain. So I've always felt drawn to that patch of history.
- [38:40]
A
Okay, let's ask some questions, some of which are shaped by the world we live in today, and one of which you mentioned. Donald Trump, rightly or wrongly, is now tarred with the label fascist by a growing number of people. Your book is about one of the icons of fascism, one of the emblems. If you think fascism, you basically think Hitler, you think Mussolini, and you think Franco. At least they're the three great examples in the last century. Given what you know about fascism, in particular Spanish fascism, what do you think about using that word to describe not so much Mr. Trump as an individual, but whatever it is he represents as a movement or a direction for the.
- [39:32]
B
Country, I certainly think you can describe his rhetoric as fascism, as fascist. I mean, for ideology. I don't think Donald Trump has an ideology other than himself. That's what he believes in. And that's the only thing he believes in and cares about. But when you look at the rhetoric, I mean, in the 1930s, there were really three things that made that were consistent for Franco, Hitler, Mussolini, and their small time imitators in Eastern Europe. The first is the strong man. You know, vote for me, I'm a strong guy. I will fix the problems. Don't worry about the details, just put them in my hands. That's the first thing.
- [40:13]
A
The second thing, so you see the parallel.
- [40:15]
B
Oh, yeah, yeah. The second thing is you make somebody else the villain. The fault. Everything that's wrong is the fault of. Most famously in the 1930s, the Jews. Today it's the Mexicans, the Muslims, or in Europe, where there are Trumpian people there, the Syrian immigrants or whatever. And the third thing is that you hark back to an imaginary glorious past. The wonderful Polish writer Richard Kapoczynski has a great phrase that he talks about in describing such people, about how the past they evoke is the great yesterday. And for Mussolini, it was the Roman Empire. For Franco in Spain, it was the glories of the old Spanish Empire. A little bit hard to figure out how he was going to get that back of Latin America. For Hitler, it was pre1914, Germany riding high, you know, before they lost the war. And so when Trump says make America great again, I hear the echo of that same kind of rhetoric. So I think he is appealing to some of the very same things that Hitler, Mussolini and Franco appealed to. And you could just hear it in a very creepy way in his acceptance speech at the convention. I mean, as I'm sure you've often said on this show, there is often not a lot of difference between the two parties in this country. Both of them usually stand for corporate and imperial business as usual. And I think that's still the case. But in this case, one of them also is embodying holy lot of fascist rhetoric. And I find that scary.
- [42:05]
A
All right, let me stay with it with you for a moment. You began your first answer to my question by pointing out that in Spain in the 1930s, as in the whole world, they were going through a great capitalist breakdown. The Great depression begins in 1929, gets worse and worse into the early 1930s, and then Hitler in Germany in 1933, and Franco literally two or three years later in Spain. It seems then that there is more than a little relationship between a breakdown of capitalism, on the one hand, massive unemployment, bankruptcy, poverty, shrinkage of the economy, and the emergence of fascism. And here we are in what everybody recognizes is the second worst breakdown of capitalism, the one since 2008. And we're beginning to see, do you see here, that we are in a parallel kind of evolution in which fascism is becoming again a way of at least large parts of our society coping with a breakdown of this system?
- [43:20]
B
I think there's some resemblances. I mean, in the 1930s, the breakdown was spectacular and spectacularly visible. You know, more than 30 million Americans had no cash income. There were these Hoovervilles of shantytown shacks, you know, in Central park, near Wall street, all over the place, millions of people living with them. Today, it's a kind of a slow motion, less visible breakdown. And you know the statistics better than I. But really for the bottom half of Americans, or maybe it's a little more than the bottom half. Real wages corrected for inflation, have been going steadily and slowly downward 40, 45 years now. Jobs are ever less secure. There's more and more chance that your job may get chopped into part time work or offshore to China. People feel much, much less stable. And I think that gives some of the same feeling that people had during the Depression. The world is changing all around me through forces I can't control, can't really understand. I need a strong figure who's going to tell me he's going to solve the problem to get me out of this. And I need some people to blame. And look, here are all these unwashed refugees trying to get in. You know, here are Mexicans coming across the border. That's what the problem is. I think this is something millions of people in this country feel. And Trump has brilliantly stoked those kinds of resentments, speaking to an economic anxiety that is very real and very justified.
- [44:57]
A
I just wonder, as I listen to you, whether there will be people who understand that a system that now twice in the last 75 years has not only broken down, but given support to the rise of a fascistic response, is perhaps a system. One ought to be debating the desirability of whether this isn't, rather than each time dealing with the crisis it falls and takes us into to deal with the system itself that is prone to doing this sort of thing. Anyway, let me go back, let me ask you some questions because again, I think they may shed light on our situation. Why do you think the liberal governments of that time, the democratically elected governments, French, British, American, and with particular emphasis on Roosevelt, who one normally places on the left hand of the spectrum, why were they unwilling to help them? Why were they unwilling even just to sell I mean, let me remind everyone, the United States is the biggest seller of arms in the world today and has been for decades. So we don't have an aversion as a country to selling arms. Why not to them?
- [46:15]
B
Well, I think Roosevelt, you know, in many ways, he was the best American president in the 20th century, but he was not good on this issue. He was certainly a man who hated fascism and increasingly had an understanding of what it was, but he was a very shrewd politician. He knew there was no constituency in this country for getting drawn into a war in Spain in any way. It's also widely believed, although no one can prove it, because for obvious reasons, it was a promise that was never written down. It's widely believed that. That before running for reelection in 1936, he promised the hierarchy of the American Catholic Church that he would not in any way get involved in the Spanish Civil War. The church was terribly wrought up against the Spanish Republic because the Catholic Church in Spain had been extremely powerful, extremely reactionary under the previous regime. When Spain became a republic with a democratically elected government, they took education out of the hands of the church. And then when the war broke out in 1936, there was a lot of bottled up rage in the Spanish Republic against the church for being allied with the landowners and with the fascists. And thousands of clergy were murdered by angry mobs. So the Catholic Church here was very much pro Franco, pro nationalist. Roosevelt was worried about the Catholic vote and is believed to have promised the hierarchy that he wouldn't intervene. He was also trying to read the mood of the American people. And he was a very careful reader of opinion polls, which were a new thing then. And he knew that the Gallup Poll showed that the vast majority of the people in the United States had no opinion whatever about the war in Spain. In contrast, for example, to certain other pressing questions of the day, such as whether King Edward VIII of England should resign his throne to marry the woman he loved. The great majority of the American people knew that what he should do there, which is that he should do it. So Roosevelt was being very cautious, and it's a great tragedy. To his credit, he later realized that he was wrong. And in early 1939, when it was too late and when the Spanish Republic was really in the last stages of losing the war, he told a cabinet meeting, we made a grave mistake by not selling them arms. We made a grave mistake.
- [48:48]
A
Your book points out that one American corporation was very helpful to the other side, to Mr. Franco, to General Franco, and to the right Wing in overthrowing the democratically elected. Could you tell us what that corporation was, how they helped and why that wasn't the problem and the government didn't prevent that from happening.
- [49:10]
B
Well, this is a very, very little known story of the war that was also pretty little known at the time. We think of Franco's allies, major allies, as being in Berlin and Rome, which they were. But he also had an ally here in New York City, high in the Chrysler Building, which was the headquarters of Texaco, a major American oil company whose CEO at the time, a Norwegian immigrant named Thorkild Rieber, naturalized American citizen, was a man who loved dictators, he loved Mussolini, he loved Hitler, did business with both of them. And the moment, the span. And actually I should back up and say Texaco had, the year before the war began, 1935, signed a contract with the elected Spanish government agreeing to become their major oil supplier. Because the United States, especially the state of Texas, was the major oil supplier in the world at that point. And the moment the war began, Reber, who was in Europe, decided to switch sides, canceled his, his company's contract with the Spanish Republic. When a Spanish Republican tanker showed up to take on oil at the Texaco pipeline terminal in Texas, its captain was astonished to be told, we're no longer selling you oil. And he made a deal with Franco. And he was such an enthusiast for Franco and the Spanish nationalists that he went to nationalist Spain twice during the war. The second time he got a VIP tour by airplane of the front. There are photographs of him flying around visiting the front line. But his enthusiasm was so great that he sold Franco. Not only did he sell Franco the majority of his oil during the war, and of course a modern army runs on oil. Aircraft fuel tanks, diesel fuel for trucks transporting soldiers. You know, 60% of the oil going to Spain was going to fight the war. Not only did Reber in Texaco sell Franco all this oil, but he did it at a huge discount, which he never told Texaco shareholders about. It's not mentioned in the company's annual reports. And as far as we can tell from the minutes of their meetings, he never even told his own board of directors about this. Sold it at a huge distance, sold it to them on credit, which was a violation of US law which says you can't sell even non military goods to a country at war on credit. So don't worry about payments, you know, you can settle up after the war is over. And he did something else which has only come to light in recent years. It was discovered by A Spanish scholar, Guillerm Martinez, who very generously shared his documents with me. It turned out that as the war was going on, an oil company, like other companies, tends to know what its competitors are doing. And especially in the oil business, it's pretty hard to disguise a tanker taking on cargo somewhere. Reber sent out orders to Texaco installations, agents, tank farms, office in ports all over the world, saying, send us by telegram immediately any information you pick up about oil tankers heading for the Spanish Republic and name how many tons of oil the ships carrying, date it's departing, what port it's heading to, and so on. This was all immediately forwarded to the Nationalist high command, where, of course, it was just the kind of thing that bomber pilots and submarine captains looking for targets would find useful. 29 oil tankers carrying oil to the Spanish Republic over the course of the war were sunk, damaged or captured. And in one or two cases, we can tie that directly to information supplied by Texaco. You know, got the actual telegrams and letters. So the United States was supposedly neutral in this war, but Texaco had joined one side of it.
- [53:21]
A
In other words, a billionaire corporation. You don't have to go to our own time to see how they shape the political life. You go back almost 100 years now, and it's the same story.
- [53:35]
B
Oil companies had their own foreign policy then, and they have their own foreign policy today.
- [53:41]
A
Why do you think almost 3,000Americans made that decision? Given everything you've told us? They were aware of all of this. They were aware of the imbalance in how the United States responded. They may have known. Well, I guess they didn't know about the Texaco part of it, but they made a personal decision, took an enormous chance. How do you account for that? What does that tell us about American people responding to something like this?
- [54:12]
B
Well, I think it does tell us something good. You know, these were people who came from all walks of life. Many of them were labor union members, workers. A lot of them were longshoremen and clothing workers, in particular, because there were strikes in those industries here in the east coast at that time, people were out of work, but there were many college students. There were more than 5, 50 alumni, students, faculty or staff from the City College of New York. The first American to get wounded in combat in the battle for Madrid was a senior from Swarthmore College who ran away without telling his parents to fight in Spain. They came from all walks of life.
- [54:53]
A
And you mentioned in the book that a significant portion, given America at that time, of African Americans were involved there.
- [55:01]
B
Were about 85, 90 African Americans. And I think they had an additional reason for being concerned, which was that the previous year, 1935, Mussolini had begun his conquest of Ethiopia, one of the last parts of Africa that hadn't been colonized. Black Americans were deeply upset about that. A number of them tried to volunteer for a force to go and defend Ethiopia, but the logistics in the US Government put obstacles in the way, and they never got there. And there was a saying among African Americans in Spain, this ain't Ethiopia, but it'll do. And I think all of these folks felt, and correctly so, that a rapidly expanding fascism was the major danger that the world faced at that point, because, you know, there were other tyrannical regimes in the world, like Stalin's Russia and so on. But fascism was on the move. Hitler was making noises about taking over Eastern Europe, which he then did. Which he then did. So here was a place where a democratically elected government had been threatened by a military uprising backed by these fascist regimes. And people felt, this is where the front lines are, and if we don't stop them here, we're going to have to stop them somewhere else. One American volunteer, Maury Kolau from New York, said after the war, said, for us, it was never Franco, it was always Hitler. And this was the only place, Spain, where could push back, where you could push back. And it was the only place where Americans in uniform were being bombed by Nazi pilots four years before World War, before we entered World War II.
- [56:49]
A
Adam, thank you very much. It's a pleasure to hear about this. It's also a moment for me to talk about something that's always been important in my life. History is, in the end, the biggest and best teacher. We have to make sense of what's happening now and what's happening in the future. To try to understand the past with the information that's available to make that effort is so important. And I think for Americans trying to figure out what to do in the chaos of a broken capitalism today, seeing what a generation before us did through your book is an enormous contribution. So on behalf of all your readers, of whom I'm one, thank you very much.
- [57:28]
B
Well, thank you.
- [57:29]
A
All right, folks, we've come to the end of our program. I want to thank truthout.org, that remarkable independent source of news and analysis, and urge you, as I always do, to check out their website, truthout.org for that kind of analysis, available 247 at no charge. Please stay with us into the future. I look forward to talking with you again next week.
- [58:07]
C
Sam.