← Economic Update with Richard D. Wolff
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Sam
Sam. Saint gonna change.
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Richard Wolff
Welcome, friends, Another edition of Economic Update, a weekly program devoted to the jobs, the incomes, the debts, all that part of our lives. I'm your host every week, Richard Wolff. I've been a professor of economics all my adult life and currently I teach as a visiting professor at the New School University in New York City. Here we are as 2015 comes to an end, and in this and the remaining programs this year, I am going to be trying to achieve a certain summarization of some of the major developments, economically speaking, across this year. But as usual, we're going to start with the hot items of this last week. Let me begin, however, by inviting those of you either living in the greater New York metropolitan area or or perhaps visiting the New York area during the holidays to come and join me at the Brooklyn Commons in Brooklyn, New York, 388 Atlantic Avenue, where I'll be giving a talk on capitalist decline and the way forward. It's 11 o' clock Saturday, December 19, for about an hour and a half at The Brooklyn Commons, 388 Atlantic Avenue. Everyone is welcome. I'll have some comments about our websites and other services we provide a little later in the program. Well, let me begin by the biggest item this last week, which was the decision of Janet Yellen, as the head of the Federal Reserve System in the United States, and her fellow board of Governors to raise interest rates here in the United States. And I want to mention a little bit about what that means and what the context for that is so that you can all think about it and draw your own conclusions. The Federal Reserve is the monetary authority of the United States. It's their job to manage the quantity of money in circulation, the level of interest rates you have to pay to borrow that money, and so on. They're the agency whose reputation got a little bit shaken, to be as polite as I know how, when they failed to see the enormous crash coming to the United States economy that hit in 2007 and 08. They didn't properly see it. They didn't properly prepare for it, and after it hit, they scrambled like crazy in order to produce a recovery which we are still waiting for. The we being the majority of the American people. It's been eight years or so since that crash hit, and the Federal Reserve has pumped a vast amount of money to keep the stock market in good shape and to boost the profits and viability of the banks. But they haven't helped the rest of us a great deal, to say the least. So with a reputation as poor as I've just summarized one could be allowed a certain skepticism as to whether it makes sense to raise interest rates. Now why, in fact, did they do that? Well, they're afraid, you see, because they pumped so much money, new created money into the economy over the last eight years to try to keep this economic disaster from being worse for most people than it already has been, that they got nervous about what might happen if all that money started at some point to be spent on goods and services, driving up the prices like crazy. To forestall that event, they've decided to raise interest rates. Now, the argument and defense they give is that, well, unemployment is down. Well, that's not quite honest, is it? Because we know, all economists know that the major reason unemployment has gone down is not that the unemployed found work, but much more because the unemployed dropped out of the labor force. They aren't looking anymore. And when unemployed people stop looking, they're no longer counted as unemployed. This is a fun game in numbers, but it doesn't change the reality that we're living in a depressed economy, which average Americans know only too well, since now they have to borrow not only for their home and not only for their car, and not only for everyday items paid for with a credit card, but even to get their kids a college education cost tens of thousands of loans. Well, with that background, let's return to what the Fed did. It raised interest rates. That makes it harder for average people to pay for all the debts they've run up, doesn't it? It means interest rates for credit cards will go up. It's the whole point of raising interest rates to make the cost of borrowing, whether it's for your college education, for your home, for your car, for, for your glass of water, more expensive. And if you're wondering whether in a time of economic difficulty, it's a good idea to solve economic problems by making the daily life of most people harder. You're asking the right question, and here would be a much better answer. Why don't we have what we did in the 1930s? Why don't we have a nice rollicking government jobs program, building up our dilapidated cities and infrastructure, taking care of the elderly in our society who are being thrown on the slag heap by what's going on, doing the daycare that our families need on a massive scale? We have lots of work to do, lots of people who would love a good job with decent income. There would be a difference you could make rather than raising the interest rates at this time. If you believe this is the right Solution. Please remember that the same Federal Reserve raising interest rates is the one that pumped so much money into the economy they scared even themselves. And the one that didn't see the train wreck coming that we are still living with. Where is America at Christmas time 2015? Well, I looked for a story I could relate to you all that captured what I think is happening to America. And I found one. And I found it in New Haven, Connecticut, a city that I keep track of because I lived most of my adult life in New Haven, Connecticut. Well, on December 12th, last Saturday in New Haven, Connecticut, there was a march of hundreds of people marching from downtown New Haven, Connecticut to the Yale New Haven Hospital, the major medical institution for that area of southern Connecticut. Before their demonstration was over, 134 of the protesters had been arrested by the police in New Haven. Christmas time in America. What was the issue? The marchers were demanding jobs. Yale. New Haven Hospital, like Yale University together, is the largest employer in the southern Connecticut New Haven region. That's why they were the target. They are also enormously profitable institutions, especially the hospital, but also Yale University, and you all know why. Yale is one of the richest universities on this planet. It has served wealthy Americans and a few wealthy foreigners for a long time. It now controls and owns this huge hospital that serves the area, a hospital that is right at the center of the medical industrial complex that costs Americans more for medical care than any people in any other country pay as a percentage of annual income. So these poor people who have no jobs. Let me tell you a little bit about New Haven. The unemployment rate among African Americans is 17%. The unemployment rate among Latino Americans is 18%. Half of new Haven is African American or Latino American. So we're talking about a massive unemployment problem. And these folks went to the richest, biggest employer and implored them to hire more people. Yale brushed them off. Yale told them it was not about to do any of it, and it was doing more than it could be asked to do. Well, this is an interesting moment, isn't it? You have the richest entity in the New Haven area giving its finger to the mass of people suffering very bad unemployment, the rich getting richer, and the mass of people in trouble. So gross and unequal was it that we had an unusual step. The mayor of New Haven, Tony Harp, endorsed and supported the protesters. The governor of Connecticut, Daniel Malloy, likewise supported the unions and the working people who demanded jobs from Yale and Yale New Haven Hospital, so gross that even the politicians normally doing the bidding of the corporations that run the society, even they found this one more than they could stomach. Christmas time, 2015. My next short update requires me to thank the person who brought this to my attention. So thank you, Daniel Lowenthal, for making me aware of something he brought to my attention. A book by a man named Peter Drucker. For those of you that are not into management and business schools, you might not know the name Peter Drucker, but anyone who has studied management of a business knows Mr. Drucker's worth and his work. For example, the Wall Street Journal called Peter Drucker the dean of this country's business and management for philosophers. He is the most prolific writer to have published work in the Harvard Business Review, which is one of the most revered journals of business and management in the world. So what does Peter Drucker have to say that I want to bring to your attention? Well, it's a definition of what a business is and what it means to run something like a business. I'm going to quote it to you what he wrote. This is in 1954, the first edition of his book the Practice of Management. And this comes from page 37 and 38 on that book. For those of you who might want to pursue this, here's the Marketing is the distinguishing and the unique function of business. A business is set apart from all other human organizations by the fact that it markets a product or a service. And now here comes the part I want you to pay close attention. Neither the church, nor the army, nor a school, nor the government does that. Any organization that fulfills itself through marketing a product or a service is a business. Any organization in which marketing is either absent or incidental is not a business. And now comes the line that is most important. It should never be run as if it were one. That's right. The leading guru of management and business says that neither church, nor army, nor school, nor government should be run like a business. I want you to understand that because there are lots of arrogant, ignorant businessmen and women, some of whom are currently running for president, who keep telling us that it is the ultimate in wisdom of business, that everything else should be run like a business. Mr. Drucker, the leading specialist, says the it would be a terrible mistake, according to Peter Drucker, to run something that isn't a business in the manner of something that is a business. And you heard it here. Next item for Economic Update, a little bit about Christmas time in America and the gun business. I thought after some of you wrote to me that it would be important for me to say something about the gun business since it plays such a role in people's thinking these days and deserves our attention. And I was conveniently assisted in this task by the Bloomberg News Service, which had a wonderful article on December 16th with the wonderful title Walmart, Guns and Santa, It's Christmas Time in America. Here's the things I learned from that article that I would like to share with you. From 1982, when these records start being kept, all the way up to around 2006 and 07, the sale of guns, long guns and handguns combined in America oscillated between half a million and a million and a half sold every year with the same kinds of statistics governing ammunition sold for those long rifles, long guns and, and handguns. But then things really took off after 2005, 2006, and I want to address with you what's going on in the last few years. Instead of sales per year between a half a million and a million and a half, we're talking about sales between 4 and 5 million guns a year. That's an enormous increase. What's that about? Well, if you want to get a quick answer coming from an economist, here's what it's about. In 2006 and 7, the American economy began to collapse and with it the middle class, which has been disappearing big time ever since. And with the anxiety level of Americans rising about their economic reality and even more about their economic future, sad to say, the gun producers saw an opportunity. They could approach the mass of Americans increasingly upset about their economic situation, tell them that their way of life was disappearing, which surely it is, and tell them that by buying a gun they could better protect themselves against the mystery, murky whatever it was that was taking away their standard of living. That last step, that buying a gun would change things, is and was absurd. But to a population frightened by what's happening, rarely given a straight story as to why it's going on, it proved not to be too difficult to get folks to buy guns. And who are the leading purveyors? Walmart. That's why Bloomberg titles its story Walmart the biggest seller of guns and an even bigger seller of ammunition in the American Economy. Indeed, the Walmart story in the Bloomberg News Service begins with a description of the reporter's visit to the Las Vegas, Nevada area, Walmart. I'm going to read from the story because I couldn't say this as well as as this creative reporter did, and I'm quoting. At the Las Vegas Walmart store, a middle aged woman talks with a cashier to clear her background check and to Purchase a child sized cricket 22 long rifle which comes in a black and Pink box for $114. On the box is emblazoned My First Rifle. And in her shopping cart is a blow up camouflage clad Santa Claus. It's Christmas time in America. Last quick update has to do with the oil business. The oil business is now a catastrophe. There is really no other word for it. We're down to around $40 a barrel. Not that long ago, a year or so, it was $100 a barrel. When you have a collapse in the price as severe as that, you know there's going to be suffering. The Canadian economy is suffering, producing big changes there because they bet so heavily as a country on the future of oil particularly and they never saw this coming. All those brilliant business leaders who invested in oil drilling, in oil rigs, in oil processing, all those brilliant bankers who lent billions for the oil business which was in their minds such a clear winner, they were all wrong. They all made drastic errors. So did the people in north and South Dakota, all through the mid part of the Americas, down to Louisiana and Texas, places where they borrowed too much on the assumption that they could bring up shale oil and all the other oil they can now dredge up out of the earth. And they assumed crazily that they would be able to sell that at 80, 90, $100 a barrel. What was the mistake they made? Their mistake was to imagine that if you add a new source of oil in, in massive quantities, which is exactly what the Canadians and the Americans planned on doing, that you would drive down the price of oil because the demand for it didn't go up like that. Suddenly the supply did. The first week of supply demand economics, you could learn what would happen then. So what did they think? They thought that the existing oil producers would, would all cut back. That's right. Saudi Arabia, Iran, Venezuela, Nigeria, the other oil producers would just cut off their own economic well being to convenience the Americans and the Canadians, well surprise surprise, they didn't do it. The Saudis, our great ally, has increased oil production. So has everybody else. At the November meeting, this last November of OPEC they decided to increase production. And at their December 4 meeting of OPEC they basically said anybody can produce any amount they want, knowing full well that what they were doing was keeping the supply of oil high so that what was produced in Canada and the United States, this new shale oil boom we were promised, would collapse the price of oil we which it did. That is driving fundamental economic trouble through millions of lives of Americans who've lost their jobs. There are more and more oil companies going out of business. No one yet knows how bad the impact will be on banks who are expected several of big ones to collapse because they can never get back the loans they made. Wow. Here is an interesting story, but because one of its fundamental lessons is that leaving huge decisions about something as fundamental as the energy supply of a society, which oil is an important part of, is much too important, affects many, too many people to be left in the hands of private profit driven elites who make catastrophic failures, bad guesses, false investments that we all have to pay the price for, but we didn't have any say in making those decisions. There's an argument, if ever you needed one for transition, to democratically arrived at decisions whether to shale oil, raise that up from the ground with the fracking and all the damage to our ecology, whether to do that, whether to do that on the gamble that Saudi Arabia and other countries will simply lose out graciously to American millionaires becoming billionaires. These are crazy decisions would not have been made if the light of day, if rational debate, if a democratic collective decision making process were in order, rather than leaving oil in the hands of the oil men who have done a disastrous job. Okay, let me turn to responding to one of the questions many of you sent to me this last two weeks. Actually, you've been reading quite correctly and I commend you for your research. You've been reading and hearing stories that the Chinese economy is slowing and that as a result of the Chinese economy slowing, all kinds of countries producing the inputs to the Chinese economic growth story of the last 20 years, those countries, whether they sell copper to China or they provide rubber, or they provide all kinds of inputs to the Chinese industrial juggernaut. Now that China is slowing down, they're slowing down. And as they slow down in Asia, Africa, Latin America, well then the whole economy of the world is in trouble. And that will reach the United States sooner or later too. And so we are invited to blame the Chinese for slowing down. I find this somewhere between astonishing and silly and absurd. Let me tell you why. Let's first begin by talking about China and slow economic growth for the last 15 years. The United nations keeps a list of what economies in the world. Out of the 180 odd countries that the United nations reports on, which is virtually all of them, which country is growing the fastest? And over the last 15, 20 years, the country that appears number one on the list, the fastest growing country in the world is the People's Republic of China. Slow growth Not a Chinese problem. Number two. This year, 2015, the Chinese government announced a growth rate of 6.9%, which is indeed slower than it has been in the recent past. But let's compare it to economic growth in 2015 in the United States, which is in the neighborhood of 2%. That's right. The United States is growing slowly at 2%. China is growing more than three times faster. Not hear it about Chinese slowness as a problem in the world economy. But here's the most important part which I've left for last. If China is slowing down, and if that is making difficulties for other countries, and that those statements are indeed true, we should ask, of course, the question why? Why is China slowing down? And the answer is obvious and clear. China 20 years ago hitched its development to being an exporting country. That is, they decided to become a rich industrial country. They were a poor and agricultural country 25 years ago by producing exports for the rich parts of the world. North America, Western Europe and Japan, by and large. And they were successful in that. Why? Because the working classes in Western Europe, North America and Japan were the highest paid working classes in the world. Their wages had stopped rising 25 years ago, the way they had in the previous century. But that was still okay because they had substituted borrowing money for raising wages in those societies, allowing another 20 years of explosive growth. We all know that here in America, as we here in America, like our European and Japanese counterparts, began increasing our indebtednesses of various kinds. Credit cards, car loans, you name it. So the Chinese were having a great time building up their industries, producing exports to be sold to the evermore indebted with working classes of Western Europe, North America and also Japan. But then, in 2008, we know what happened. That system crashed. Working people could no longer borrow since their wages hadn't gone up since the 1970s. The game was over. The rich were becoming richer. More and more of the wealth of Western Europe, North America and Japan was being concentrated in fewer and fewer rich hands. The statistics there are something I report on all the time. And now what happened is the mass of people can't afford what they once did, they can't borrow, and their wages are going nowhere. So the Chinese are slowing down because the working classes in the advanced part of the world can't buy what they did. It's not China that's the problem. It's a capitalist system that works this way. China, China, like every other particular part, is caught up in that system. Blaming China is childish and ignorant. We've come to the end of the first half of this program, please make use of our websites rdwolf.com democracyatwork.info for all the various services, the connections to Facebook and Twitter, the newsletter that is free, and so on. And stay with us. We will be right back for the second half of Economic Update.
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Unknown
I see a mountain of my gates I see it more and more each.
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Sam
Day.
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Unknown
When what I get takes away Whether I go or where I stay.
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Sam
I see, I see it more and more each day I see a fire by the lake I'll drive my car without the brakes.
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Unknown
I see a mountain in my way it's looming larger by the day.
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Sam
I.
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Unknown
See a darkness in my face.
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Richard Wolff
I'll.
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Unknown
Drive my car without the brakes.
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Sam
Oh, give me some time show me a foot home from which I could pass yeah When I feel you show me a s For where I should go.
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Richard Wolff
Welcome back to the second half of economic update for this December day in 2015. In this second half, we are going to be doing what we usually do when we do not have a guest to interview, which is devote some extended, extended attention, excuse me, to some major topics in the economic realities of our lives that I think warrant some reflection. I'm going to begin today once again, as we did so often in the year 2015, such a transitional, such a historic year in the annals of Greek history, of European history, and indeed of world capitalism. But I'm going to take us back to Greece. And one of the reasons is this last week in Greece, something extraordinary happened which allows me to review the meaning of what's going on in that society. Here's what the Greek government decided to sell 14 airports in Greece. It includes the airport of the second largest city, Salonika, in the north of Greece. And it includes the airports on several of the world famous Greek islands, including Mykonos and Santorini, among others. Why is Greece selling its national treasures? The Greek islands are among the most beautiful things on this planet. Why are they selling the public airports? And the answer is that's the condition imposed on the Greek government by the Europeans and above all, by the strongest economy in Europe, the German government and its leader, Angela Merkel. In order to bail out Greece, they say they have to provide some money. But they're not going to do it unless the Greeks do what they are told. Let's review. Why does Greece need a bailout? Answer simple. Before 2008, the Greek government borrowed like many other governments. And when the capitalist economy collapsed in 2008, the Greek government discovered that it had enormous New expenses to help its people through a terribly difficult time. For example, Greece is a tourist attraction. When the economies of the rest of Europe and America tanked in 2008, you guessed it, the number of tourists and what they could spend collapsed. And so they didn't go to Greece in the numbers they once had, and they didn't spend in Greece what they used to. And the Greek government suffered likewise. The Greek government is a famous government, excuse me, the Greek economy in the world of shipping. But the shipping around the world collapsed when capitalism tanked. And so they couldn't make money in their shipping business, etc. Etc. Greece found itself the victim of a capitalism that made it impossible to repay their loans. So they asked the Europeans of whom they are a part, they're a member of the European Community, for help. They got a little, but those countries were having troubles too. And so those big countries, fearful of what they might have to do to to save themselves inside Germany, inside France, inside the Netherlands and so on, didn't want to help the relatively poor corner of Europe known as Greece. And so the Greeks discovered, with little help with an economic crisis that not only was terrible in its hitting their country in 2008, but was not going away, was lingering and lasting the way the crisis in Europe has done. The difficulties in Greece became more and more severe and the willingness of the Europeans to help less and less. In the end, the decision was made in the countries like Germany and France to bail out their own banks, to bail out their own big corporations, to take care of themselves. And if Greece couldn't make it through the crisis of capitalism, too bad for the Greeks. Well, the Greeks didn't want to go down that road. They weren't willing, the way working classes in other parts of Europe were, to absorb the cost of a dysfunctional capitalism whose governments were so controlled by big business that the only bailout help really went to the very banks and large corporations who are most responsible for bringing the crisis. The Greek people said, no, we don't want to pay the cost of a crisis we didn't cause and of a bailout we didn't get. Wow. First they voted in a left wing Syriza government to say we don't want austerity, we don't want the mass of people to pay for a crisis they didn't cause and for bailouts they didn't get. And they elected Alex Tsipras for the government. Then they had a referendum in which a clear majority of the Greek people endorsed the refusal. The answer of the Europeans led by the Germans was blunt and crude. We will shut you down. We will make it impossible for you to function as an economy. There will be no money from the European Central bank to keep your monetary system afloat. They even created a system where Greek people couldn't get but €40,50 out of the bank per day, no matter what their condition, no matter what their needs, no matter what their personal emergencies. Nor were they told how long this would last. The Greek economy was brought to its knees, forcing their new government to go back on its promises to fight austerity, to accept that they had really only two either stay inside the European Community by knuckling under to all the demands for the little bit of help they're going to get being a poor country, getting poorer for we don't know how many years, or to take a very risky step, withdraw from the European Union, have even less in the way of help from the Europeans and God knows what kind of horrific enmity, risk the splitting of their own society into a civil war between those who are capitalists inside Greece and want to keep their profitable connections to Europe and the mass of people who don't. This was too dangerous. The existing government, right or wrong, is not my point here. The existing government knuckled under and that meant to get the little bit of help, the Europeans are willing to continue to dribble into Greece and dribble is the word. They have to come up with actions that the Europeans demand. They demand big unemployment. The unemployment rate in Greece is 25% or so what we had at the depths of the American depression. They demanded cutting the salaries of public and private employees that have been slashed drastically over the last three or four years in Greece. They are now considering cutting pensions of Greek workers. And this last week they took another step. They sold off the valuable property, in this case 14 airports. And you've got to love whom they sold the airports to a consortium of Greek and German capitalists. You heard me right. The Germans and the Greek capitalists are forcing the mass of people to knuckle under and in the process giving themselves valuable public property at fire sale prices. This is an economic system that delivers crisis to the masses, suffering to the masses, bailouts to the folks at the top, and sales of cheap public assets to boot. This is not a system that works for the majority of people. It's a system that services up the very bottom of the of what's possible in a society. This is not an acceptable economic system and the reality of that is staring us in the face. Later this week the people of Spain will go to the polls and they will have to decide what lessons they want to draw from what happened in Greece in 2015. Will they keep the old traditional parties in power, the ones that the Greek people threw out? Will they vote for the Spanish equivalent of Syriza in Greece, the Podemos party, or will they not? You know, the Spanish are not only following the Greeks, but in a sense, the Greeks also followed the Spanish. But to understand that, you need a quick reminder of history. Earlier in the 20th century, capitalism, as it spread across Germany, France, Central Europe, encountered a catastrophe even worse than the one in 2008. That capitalism exploded finally in what we call World War I, when the leading capitalist countries, Britain and Germany, went to war, drawing everybody else into their competitive driven war. That war was so horrible in the death it created across Europe, in the violence, in the destruction, it was assigned to many people that in order to avoid ever doing such damage to one another, Europeans had to ask the question, to what extent did the capitalist economic system contribute to this horror? And therefore to what extent do we need to consider either changing it or going beyond it to avoid another World War? Well, as a continent, they didn't go beyond it, and so they didn't avoid another World War no. 2 came along a few years later. But there were efforts of societies to go beyond capitalism in the hopes that it might save them from war. So a revolution against capitalism happened in Russia in 1917, toward the end of the devastating World War I there. But that wasn't the only effort, not by a long shot. In the 1930s in Spain, another government arose, calling itself a Popular Front government, a government composed of socialists, communists, liberals, who took over legally. They were elected in Spain to run the society, and they thought seriously about withdrawing from a capitalist world that was simply not serving most people. They thought of doing that, just like the Syriza leaders in Greece, at least for part of this year, thought about that too. But when they began to move in that direction, the capitalists forces inside Spain, the forces that didn't want to go beyond capitalism, the forces of old Spain, they got together and they said, we will not permit you to do what you were elected to do. Democracy was not in their way of thinking anything they were bound by. And they got help from others in Europe who were likewise uninterested in democracy. Hitler in Germany, Mussolini in Italy helped the general who made a civil war inside Spain, Generalissimo Franco, and he subjected the Spanish people to a devastating civil war in the middle of the 1930s, a war designed to destroy the effort of Spain then to go beyond capitalism. Franco was successful, the loyalist government, as it was called, was defeated, and Spain descended into a fascist dictatorship that lasted four decades and has a lot to do with the relative backwardness of Spain among the larger countries of Europe to this day. But I don't doubt that in the back of the minds of quite a few Greeks in and out of the Syriza party was a knowledge of what happened in Spain and a fear that pulling out of the European Union in the face of the demands for the crushing of the Greek economy, might subject them too, to foreign interference, even from the same places, supporting their own oppositions, their own Greek capitalists, in a civil strife that would plunge Greece down a path that it was too frightening for them to pursue. That this story I'm telling you wasn't, the way this was presented in the American media is par for the course. When are the true dimensions of these conflicts presented? Honestly, we are given by our media stories that are fanciful, designed to pander to the worst caricatures of what's going on. The Spanish people reacting to the Greek people who were reacting to the earlier Spanish people, they all have one thing in common, people coming up against the devastating negative dimensions of what capitalism has represented. Has capitalism raised the standard of living of people in the last several hundred years? Yes, it has. Does it deserve some credit for that? Yes, it does. Did it also create unspeakable inequality in the Western world? You bet it has. Did it also contribute to the worst world wars this planet ever saw? Uh huh. A rational discussion of capitalism would weigh its costs and its benefits, just like a rational conversation of what is going on in Greece would have to raise the costs and benefits of staying in an unequal capitalist Europe versus the real risks of breaking out. Is it possible to break out in one country without help from others? Might that help be coming? What is the possibility of collaboration between Syriza in Greece, Podemos in Spain, and the similar forces that are gathering strength everywhere else? Those are the real questions that will shape the future of capitalism and the future of the world we live in. And one point of this program is to put these realities on the table so that the pretend universe that our mass media keep us in begins to crack and the real debates and conversations can finally begin. One way to also deal with this coming to the end of 2015 is to ask a question about corporate behavior. Earlier in this program, I actually talked about that when I pointed out, in terms of one big industry, the oil Industry, the catastrophic mistakes of investment, mistakes of banking were made that are now producing a collapse of the oil price, throwing whole governments into disarray. Huge parts of the United States are becoming wastelands of abandoned oil rigs, of broken banks that can never get back the money they lent for oil that cannot be sold at a profitable price in the world market, etc. We leave the decisions that affect our lives this way, that affect something as basic as the oil that heats our homes, moves our cars and powers our businesses in the hands of tiny groups of people driven not by what's good for our economy, our homes, our cars, but what's good for their bottom line. And they make disastrous decisions. It's bad enough to allow them to have that power when the decisions they make work, but when they make disastrous decisions, then we really are finally brought up against the fundamental. Is this a way to allow decisions about something as important as energy and oil to be made when it works so badly? Well, I want to develop that and I want to look at two other industries, much in the news in 2015 that teach us the same lesson. The first is the banking industry. My goodness. 2015 saw major banks, American and other around the world caught in the law, caught with unethical behavior, caught ripping off their clients. Spectacular. They were caught laundering money, knowingly handling illegal criminal funds to help the criminals. They were caught, fined and are paying for manipulating interest rates, the so called Libor scandal. They were caught and are paying fines for manipulating foreign exchange rates, as they were earlier caught for having misbehaved in 10 different ways during the mortgage crisis that blew up in 2008, and for overcharging us for everything from an overdue check and an overdrawn account. I mean, there's literally nothing these banks haven't done that hasn't been partly illegal, partly unethical. Why do we leave something as important as the financial well being of our economy, the money and circulation of money, the lending of money that we all depend on. Why do we leave that in the hands of a tiny group of private enterprises whose main focus is making profit for themselves, which they tell us and who have shown us this year that every conceivable, misbehavior, illegal, unethical, fraudulent that is imaginable, has been in fact committed by them? Isn't this time to question capitalism as a way of organizing business? Isn't this a time when the suggestion made by some of us, a growing number, that we could get a better economic system if we democratize the enterprise, if we Say that the enterprises have to be run partly by the workers, democratically, all of them who make them happen, and partly by their clients and customers who depend on them. That if we made decisions by the workers who make it and by the clients who consume it, these services and goods would be handled better. And even if mistakes are made, they're mistakes we all made. So we can all say, okay, we have to live with a mistake we all made. We now live with the mistakes they make. The 1% make them, the 99%, whether they be Greek or Spanish or Americans, are the ones who are asked to clean up the mess. Well, that's the oil business and the banking business. Are there other examples? You bet. Limits of time prevent me. But I got one more I have to talk about because it was so much in the news in 2015. That is the automobile business. Let's review. Three biggest oil companies in the world, or at least among the four or five biggest. General Motors, Toyota and Volkswagen. Vw. I'll pick those. Not that there aren't other examples. There are plenty of them, but these are the giants. So let me talk about them. I'm just reminding you because, you know, General Motors was caught this year. Doing what? Killing people. By not dealing with faulty ignitions. Faulty ignitions that they knew about, but somehow didn't report, didn't fix, didn't admit until this year. People died. Lots of people. People were injured. What's going on here? A tiny group of people driven to make profits for shareholders found it convenient to install faulty ignitions, then found it convenient not to tell anybody when the reports came in as long as they could, making huge profits and now paying off a small amount of money to fix what they did. Isn't that a sign that we can do better than this in something as important as the automobile? Well, I'm just beginning. Toyota got caught having used for years dangerous, faulty airbags that were not only not saving people from injury, they were causing injury. Wow. Same story. VW did one better. Not only did it intentionally insert devices into its cars that cheated on emissions controls, gave a faulty reading when governments checked as to how much pollution they were dumping into the air. The VW cars. But they knew it and they did it. And they thereby escaped pollution control, dumping huge amounts of pollution into the air that caused people to have asthma and lung cancer and to live less healthy lives. And why did they do that? To make more money. Government inspectors didn't catch it year after year. How interesting. They didn't catch the ignition problems. They didn't catch the airbag problems they didn't catch. Wow. What are we talking about? Big business Capturing governments to make sure they can do what the profit motive drives them to do. How many more lessons do the American people, the German people, the Japanese people, all people need to learn before they realize that leaving production in the hands of profit driven private capitalist enterprises is too dangerous, too risky for us to tolerate much more. How much greater does the inequality that these industries mammoth profits fund? How much longer will we tolerate that to be in danger of the product we're buying that makes the profit that makes a tiny group of people rich? Economic Policy Institute in Washington and other researchers announced over the last two weeks, as I talked about in my program last week, that the richest 20 people in the United States now have a combined wealth equal to the total wealth of the lower half of the American population. That's right. 20 people have more wealth than 160 million Americans. That's what this capitalist system does while it destroys the oil energy that we depend on, abuses the financial system we depend on and makes the cars we cannot live without dangerous and unsafe. I don't want to dwell, I really don't, especially not at Christmas time, on negatives. But when a system presents so many so often and so awful, it becomes dishonest not to face them and not to talk about them. Thank you very much for your attention. Let me ask you again to thank with metruthout.org that remarkable independent source of news and analysis every day. And let me invite you, as always, to make use of our websites, rdwolf.com, democracyatwork.info to sign up for our free newsletter, to follow us on Facebook and Twitter, and to keep communicating with us through those websites so that you can partner with us in making these programs worthwhile. I look forward to talking with you again.
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Sam
Sam.