← Economic Update with Richard D. Wolff
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Sam. Saint gonna change. Welcome, friends, to edition of Economic Update, weekly program devoted to the economic dimensions of our lives, our jobs, our incomes, our debts, those of our children and those looming down the road. I'm going to be talking about a number of topics today, but I wanted to remind you again of who I am, because apparently I don't do that often enough. My name is Richard Wolff. I'm a professor of economics. I've been doing that all my life. And I currently teach as a visiting professor at the New School here in New York City. And that's where the program originates. Although I am very proud to remind everyone that we are now broadcast Weekly, regularly on 71 stations across the United States. And we're growing, which is one of the best pieces of news I can offer. Okay, so let's jump right in. Most of the young people who graduate from colleges and universities, for that matter, most of the young people who go to colleges and universities, whether they graduate or not, go to public schools. The overwhelming majority, roughly three quarters of the graduates and the attendees at what we call higher education in the United States, which go to public schools, not private schools. It is a public function to train, to equip, to educate the brightest, the best that go to colleges and universities. Unfortunately, a sizable number of the brightest and the best can't afford it these days, can't take on the debts these days. And that's a whole other conversation. But I want to focus us on those who do go and on those who do graduate, whether they do so in a short amount of time or they have to go back to school and so on, because there are some numbers that ought to concern every citizen of the United States and indeed should have been, but wasn't a major issue of the presidential campaign in the year 2007 and 8, the academic year. That's the last year before the crisis of 2008. The collapse of global capitalism hit us all. In that year in the United States, the amount of money allocated for public higher education, universities, state universities, community colleges, state colleges, all of that was about $91 billion in 2015-16, the full year just ended. The total amount of money allocated by the United States to higher education to public higher education was $10 billion less. That is 81 billion instead of 91 billion. And that's with everything adjusted to take account of inflation. In other words, you had a major drop in the amount of money allocated to higher education. Public higher education. Well, let's see what happened over the same period of time. 27, 8 to 201516 to full time equivalent enrollment at public colleges and universities. It went up by just shy of 9%. Wow. Wow. The money allocated for higher education went down 11%. The number of people going to colleges and universities operated by state and sometimes local governments went up by 9%. The bottom line then is that state appropriation per student, the amount of money spent by public authorities per student over these years, roughly 10 year period shaped by the crisis of capitalism, dropped by 18%, folks. That's staggering. That's an amazing thing for one of the richest countries in the world to say that. They dropped by almost a fifth the amount of money spent per student to educate him and her to be as productive a citizen as possible. Why do I say this? Well, every economist I know, left winger, right winger, center, agrees with the following. The future of the United States economically in a world economy depends more on the quality and quantity of the young people getting higher education than perhaps on anything else. It certainly is a major determinant of our economic future. What kind of a country shoots itself in the foot by dropping the allocation of money to higher education? And not just dropping it a little, dropping it a whopping 18. That's actually over 18% in a short, basically eight, nine year period. Sure, we're in economic difficulty, but the economic difficulty we are in is absolutely no excuse for creating worse difficulties for us down the road. By the way, these statistics, if you'd like to pursue them, can be found on the website of the center for Budget and Policy Priorities. And their website is cbpp.com which is where those numbers were taken. An economic system that would cut back on the basis of its economic future is an economic system that is out of control, that is as badly mismanaged and disorganized as our current political races for president suggest we are when it comes to politics. Let me turn next to an obscure legal proceeding in the town of Princeton, New Jersey, and you'll see in a moment why it is enormously important and deserves a few minutes of our time this morning. Last week, last week there was supposed to have been a court case brought by some homeowners and residents in the relatively small town of Princeton, New Jersey, against the very, very wealthy Princeton University that is located in the same town. Princeton, just to give you an idea, has an endowment that's a store of savings, a portfolio of shares of stocks and bonds, and so forth in the neighborhood of $22 billion. It is therefore one of the five richest universities here in the United States. And for all I know, perhaps in the whole world, it's very rich. What was this court case supposed to do? Here's the point. The local homeowners said, and by the way, many local small businesses agreed with them that there is something fundamentally unfair about a huge university, wildly wealthy, being able to carry on commercial profit making enterprises. But because it happens on the campus of the university, the they don't have to pay taxes. What that means is a source of revenue that's supposed to come to every community, both from the citizens who live there and the small businesses and medium sized businesses and big businesses that work there. One of those sources of revenue, which in Princeton would be enormous since the university dwarfs everything else, is cut off from local taxpayer use. It's not available to the local community because they're not allowed to tax. Let me give you examples. In the case that was brought here to trial, it turns out that the university partners with certain corporations when patents are developed for processes that were invented or discovered in the universities laboratories. Often universities partner with private enterprise to conduct research. And this is very attractive because it turns out that when the research results in something, you can copyright or patent or make private property one way or another and charge lots of money to other people to get the benefit from. Turns out if you're a university, you don't have to pay taxes the way you would if it was just done by some other private enterprise. Let me give you another example. I've been a professor at many universities when I was a graduate student and teaching, for example, at the end of my formal higher education training at Yale University, I was able to use my Yale University office, like many, many other professors to go around looking for profitable consulting gigs when I would do paid research or paid testimony. In other words, I was using my tax exempt university office located in a tax exempt university building located on tax exempt university land to make private profit. And by the way, the federal government requires me to pay income taxes on that money because it's a private enterprise that I'm engaged in. But Yale doesn't have to pay anything even though it's property is being used for a profit making enterprise. The university had a film series that competed with a local movie house. The university did all kinds of services out of its computer center which it charged money for, but it didn't have to pay taxes. You get the picture. Universities hide a great deal of money making activity, all kinds of it. They hide it from taxes, they evade taxes because they say it happens on the university's land. Well, let me remind you what the law says you get a tax exemption not because of where something happens. And you don't get a tax exemption because of the name of the institution. You're supposed to get a tax exemption if and only if your activity is a tax exempt activity like, like education, like charity, like religious services and so on. What Yale and Princeton are doing and all these schools do it is hiding, evading. They are trying to say that because it's a professor in a classroom, because it's a department at the university, or because it's the legal office of the university that has a patent, even though they are engaged in activity that makes money, not activity that educates anybody, not activity that's charitable or religious money making, profit earning activity, they can evade the taxes. Anybody else doing that has to pay by claiming they're a university. Well, the people of Princeton have had it. They went to court four days before it was to be heard in court, Princeton offered these people a settlement. 800 or so complainants were given $10 million basically to shut them up, to evade the risk that in a courtroom of local people this case would have been decided exactly the way it should be decided against the university. And that would put at risk the university from many other suits to deal with all the other tests, tax evasions that wealthy educational institutions practice as a matter of course. My guess is there were intense consultations among the lawyers for Yale and Harvard and Princeton and places like that around the country that made the decision. Don't risk it in court. It could cost us billions. Much better to spend a few $10 million shutting up the people who are complaining and at least thereby postponing the day of reckoning when finally tax evasion, which is something we'll be talking about repeatedly on this program, when tax evasion is made at least a little more difficult. Well, let's get at taxes in yet another way with yet another update. It was announced this last week by the Associated Press that the Oakland Raiders NFL football team is seriously considering moving from its namesake Oakland, California to Las Vegas. Why might they do that? Well, they might do it because Las Vegas and indeed the state of Nevada, together with the largest casino owner in Las Vegas, the famous Sheldon Adelson, a major contributor to Republican candidates for high office, including the presidency. The two of them have gotten together and offered to build them what would be the most expensive new football stadium in the United States. And what the state of Nevada has offered to do in a difficult vote at the level of the state legislature is to offerand get ready for this, folks, to raise taxes on room rentals in Las Vegas in order to contributehold onto your hats now, $750 million. $750 million to the building of this stadium. That's right. Mr. Sheldon Adelson will contribute hundreds of millions of dollars. He's a multi billionaire. The Oakland Raiders will have to contribute a little bit, but one of the biggest chunks will be the people of Nevada. That is in Nevada, where among other things, they've cut back money for the state university, cut back money for all kinds of basic social services, done a real number on not meeting the needs of their people. They're going to raise taxes on room rentals in order to build an even bigger stadium, 65,000 seats apparently, domed stadium and etc. Etc. Why am I talking about this? Well, it's not really, although I sure could to talk about what kind of priorities make a city and a state that cuts back on public services find it in its heart to raise taxes and build a stadium. Of course the defense of it is the usual. It will create jobs. It'll create jobs in the short run for the people who build the stadium, the construction workers, and it will create longer run jobs for people who do the cleaning of the stadium, the serving of the hot dogs at the stadium. People who as you well know, get wages that make them at or below the poverty level in our society. That's what Las Vegas gets for $750 million of taxpayer money. It is by the way also, and this is the more important lesson, it is yet another example, and there are tens of thousands of them, of the way in which capitalist enterprises, which is what the Oakland Raiders like every other team, that's what they money making operations that are invested in by wealthy people who own them and want to make money out of them. It's one of then the many, many examples of how the capitalist enterprise leans on, depends on and rips off the government taking huge amounts of the tax money paid by all of us in order to fatten their profits. They'll be smiling all the way to the bank, cashing in on the tickets they sell, on the television rights they sell, on the hot dogs they sell because the cost of it has been picked up by the state of Nevada to the tune of $750 million. The next time you hear some businessman, businesswoman, business, business leader tell you about how private enterprise is the backbone of the government, excuse me, of the economy and we need to get the government off our backs. The government isn't on the back of capitalist enterprise. The government has been shoring up funding, tax breaking, subsidizing capitalist interest from the beginning of capitalism. They don't want the government to help anybody else. They're very eager to have the government help help them. Just watch the owners of the Oakland Raiders and Mr. Sheldon Adelson, the owner of the biggest casinos in many parts of the world, working overtime to get state money to fund their private enterprises. Well, here's my next story that I want to talk to you about. And this becomes an increasing part of our programs. I'm proud to say that, and I'm happy to say it because I want you to enjoy as best you can the lifestyles of the rich and famous. To be a bit more honest with you, I want you to get to know them better and to see how they work. You know, I've said several times in recent weeks and months, I've told you about that report done by the British investigatory institution very famous around the world called Oxfam, O X F A M, which you can also find on the Internet if you're interested in their very, very good work. And I told you about a report, I believe, issued in February of this year that left us with the following statistic, that the 62 richest individuals in the world together own more wealth than the bottom half, the poorer half of the world's population, three and a half billion. I'm not going to tell you again the immorality, the ethical horror of what that means. I want to introduce you and talk to you briefly about the wonderful career of one of those 62 people. Okay? His name for everyone to know, and I want to be sure to pronounce it correctly, Al Walid bin Talal. He is a prince in the royal family that governs Saudi Arabia. And he is listed as, I believe I want to get his rank correctly here and not misstated that he is one of the 21st. I think 21st is the number of richest people in the world. In any case, he's one of them and he's doing real well. How did he get into the news this last week so that I could catch hold of him and tell you a story? Well, he bought a yacht. And the yacht he bought was originally built, by the way. It's a yacht that I'm going to describe to you in a few minutes, was originally built for another Saudi Arabian billionaire named Adnan Khashoggi. But it is now, as I say, it has been purchased by Al Waleed bin Talal. The yacht was built in 1980 by the yacht builder Benetti. It then cost in 1980, $100 million. That would be almost $300 million now. Its original interior, for those of you who care, was designed by Luigi Sturchio. Okay. It is 180 meters. No, excuse me, 85 meters long. @ that time it was the longest biggest yacht in the world. Bigger yachts have now been built and it is half a shame to tell us that it is now ranked below 60th largest yacht. If these kinds of distinctions don't mean much to you. They don't mean much to me either. But I thought somehow it might be interesting. This yacht has had a famous history. It appeared in the James Bond movie Never say Never Again where it featured as a mobile headquarters for some evil empire, etc. Etc. The original owner, Adnan Khashoggi, ran into financial difficulties, so in 1988 he sold it to the Sultan of Brunei, another billionaire in that top list. And he shortly thereafter sold it, and I thought this was cute, to a man named Donald Trump for $29 million. And after he reconditioned it and spent a lot of money on it, Trump renamed it from its original name, Nabila, for the daughter of Adnan Khashoggi. He renamed it Trump Princess. Okay. Then it turned out Donald Trump ran into financial difficulties and he sold it in 1991 to Prince Al Walid bin Talal for a mere $20 million. Wow. It has a new name. KK Excuse me. Yes. 5 KR. And it was explained in the press that the reason that yacht is now called 5Kr is because 5 is Alwaleed bin Talal's lucky number. And KR stands sort of for the Kingdom Holding Company, which is the way he holds his wealth. And the R stand has to do with one of his children. Wow. Let me tell you about this yacht. When it was delivered, it had five decks. It had a disco hall, a cinema with seats for 12 people and two double beds. I kid you not. Why the cinema has two double beds, I don't know. And my instinct tells me don't go there. It also has 11 opulent suites, a helipad on the top with funnels from the exhaust shaped outward so they don't interfere with the helipad. It has a pool with a water jet on top, a crew of 48, a top speed of 20 knots and a cruising speed of 17 knots. It is propelled forward by two 3,000 horsepower polar engines. I don't know what those details mean either, but you're talking about a billionaire. And that's what he spends his money on. If you're wondering where he gets it, by the way, he's listed as currently owning being the wealthy to the tune of $18 billion. But if you're interested in where he gets it, you might like to know that Al Waleed Bin Talal is the second largest shareholder after the Murdoch family in Fox News. I'm going to let that sink in. He also is the largest single shareholder of the Citibank of New York. He owns several private jets, including a Boeing 747, and he's rumored to be buying a new Airbus 380. The people who have lots of wealth spend it in these ways. Who cares that there's hunger in the country or in the world, that there's poverty, that there are diseases we know how to cure, that there are children needing an education that's not available. We are going to spend the wealth of the world. The amount of money gathered by Fox News and paid to its shareholders like him, the amount of money gathered by Citigroup out of every little checking account, out of every little credit card they issue and sent to the prince so he can spend it this way. This is the way capitalism works nowadays. We live in it. They benefit from is something to think about. We've come to the end of the first half of today's economic update. I want to thank you for being there with us and I would like to invite you to stay for more and I think even more interesting economic updates that we will be working through in the second half of the program. Stay with us. We will be right.
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Back. Hit the road Jack, don't you come back no more, no more, no more, no more. Hit the road Jack and don't you come back no more what you say? Hit the road Jack and don't you come back no more, no more, no more, no more. Hit the road Jack and don't you come back no more. Oh woman, oh woman, don't treat me so.
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Mean. You're the meanest old woman that I've ever seen. I guess if you say so I'll have to pack my things and.
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Go. That's right. Hit the road Jack and don't you come back no more, no more, no more, no more. Hit the road Jack and don't you come back no more what you say? Hit the road with Jack and don't you come back no more, no more, no more, no more. Hit the road Jack and don't you come back no.
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More. Now baby listen baby don't you treat me this way Girl, I'll be back on my feet.
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Someday. Don't care if you do. Call this understood. You ain't got no money, you just ain't no.
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Good. Well, I guess if you say so then. Welcome back, friends, to the second half of Economic Update. Here we are in October 2016, and the updates keep coming to me, often from many of you, and I wanted to take a moment to thank you again for sending us interesting materials, interesting articles. They're very valuable. It's a wonderful way for you to partner with us and for us to to benefit very much from the partnership. And again, the way to do it very simply go to our websites, rdwolff with two Fs.com and democracyatwork.info both of those websites enable you to contact us, to email us, to send us anything you like to tell us what you like and don't like about the program. Make it better. Make it better for you by letting us know what you want and what you would like to see more of, less of, etc. By the way, those websites are also where we upload material literally every day, where you can follow us on Facebook, Twitter, Instagram, just by the click of a mouse. It's very easy. It allows us to provide you with all kinds of information, all kinds of audio and video and written materials. We do that to serve you and to build the audience and the awareness to that this program is committed to partner with us, make use of that material, share what we're doing here with people you know might be interested. All of that's possible. I want to thank the very warm reception I got earlier this week when I visited Florida. I spoke in Sarasota and St. Petersburg and in Tampa. The audiences were wonderful. The questions couldn't have been more interesting, both for me and I hope, for the audiences that were there. This is a wonderful opportunity for me to get around in the country to meet people, to have the kind of extended interaction that our program simply doesn't make possible. If you are interested in having me come to that part of the country that you are active in or where you live, just use those websites that I'll give you again in a moment as a way to begin the conversation. We have people who will work all that out with you, just as we have people who will help get this program on even more stations than the 71 that carry us now. So as I say, rdwolf with two Fs.com and democracy at work. That's all one word, democracyatwork.info that's the way to partner with and to extend thereby the influence and reach of what we do each week on this program. Let me get right back to the economic updates. I was struck this week to be particular on October 19, 2016, by an article carried in Bloomberg News. Bloomberg News is, if not the most important financial and economic news service in the world, certainly one of the handful that reaches the most people in the business world or people interested in the business world. I follow it all the time because it's a way for me to gather materials, among other things, for this program. So my attention was caught when I read the following headline, October 19 the author Joseph Cioli C I O L L I Joe Cioli here's the multinationals set to win the Election and then this short article lays it out better than I could. He basically said, well, let me read you the first sentence. You'll get the flavor. Regardless of which candidate wins the US Presidential election, domestic companies that stash the most profits overseas will be the victors, according to Goldman Sachs Group Incorporated. The rest of the article summarizes the lesson of a recent Goldman Sachs report and it basically says how happy the biggest corporations, those that are multinational because they're active around the world. How happy they are because they're going to win no matter whether Trump or Clinton emerges victorious on Election Day. Since the media have excluded the other two candidates, I don't mention them. But it is a bit of a shame on a country that calls itself democracy to pretend that two of the four candidates who jump through every hoop to become a candidate are somehow not worthy of inclusion on debates, et cetera, et cetera. But that's not my topic. My topic is why is it that multinationals are going to win in either case? Because both major candidates have committed to trying to bring home the trillions. We're talking 2 to 3 trillion dollars in wealth accumulated by multinational corporations that they keep abroad. Because as long as they keep it abroad, guess what? They're not taxed here at home. If they came home, they would have to pay taxes on the profits they earn, because that's the law. But they got a provision of the law in years ago that says you don't have to pay if you keep it in a bank account or do something with it abroad and never bring it back home. Or at least so long as you don't bring it back home. So now we use the excuse, and that's what it is. Wouldn't it be nice to bring the money back home? As an argument now accepted by both Major party candidates that if elected, they will reduce the tax to induce them to come home. Home. How nice. Instead of slapping them with the tax they should have paid all along, we are going to induce them by giving them, you guessed it, yet another tax break for corporate profits. And that's why multinationals are going to win no matter who wins the election. And I didn't say it. Bloomberg News said it. By the way, it's called Bloomberg News because it's owned, majority owned, by Michael Bloomberg, another one of the billionaires in the 62 richest people on this planet. I don't think I need to say much more. Well, Goldman Sachs shows up again in this last week. Being the world's biggest and most powerful investment bank, I guess entitles you to lots of press. This time the press had to do with activities in a courtroom in London, England. There the two sides squared off. On the one side, Goldman Sachs, international investment banker. On the other side, the sovereign wealth fund of Libya, the country in North Africa. First, let me explain what a sovereign wealth fund is. Countries, and these are mostly countries that have some rare natural resource, gas, oil. But not only there are other kinds of countries. If they can accumulate a great deal of money, these countries, because of the prices they charge for whatever it is they have or do, they can put that money aside, and many do, into what's called a special fund and use that money to invest in stocks and bonds around the world in order to make it grow and to have it. Perhaps you can think of it this way as a reserve fund. One of the most famous in the world is the sovereign wealth fund of Norway. Norway knows very, very wisely that the oil and gas found there is a limited resource. They can sell it for a great deal of money, but as they sell it, they run out of it. There's only so much beneath the land and water of Norway. And so they decided not to lose out on all the benefits when the oil and gas run out, that they'll take a good part of the revenue they get from selling oil and gas now put it into a fund, invest it wisely around the world and therefore get a benefit for many more Norwegians from for a much longer period of time. That's what a sovereign wealth fund is. And Libya, which has oil and gas as well, did that. Well, the problem was the Libyans wanted to get wealthy quickly and they turned to the Goldman Sachs Corporation as many sovereign wealth funds have to help them. Don't you know of some good investments that will get us more return than simply buying Stocks and bonds, which we know how to do. Oh, yes, said Goldman Sachs. We have these complicated derivative instruments. The very language is daunting. And you get the kind of picture. Goldman Sachs is pitching these clever deals to the sovereign wealth fund, whose desire to grow quickly and become even richer is salivating at the prospect of. Of making a killing. Well, but they might not be salivating enough. What the courtroom showed in London was the. The Libyan sovereign wealth fund claims they were systematically misled by Goldman Sachs, that they lost as a consequence of risky deals that Goldman Sachs entered into with their money, having told them a story about how the risk wasn't very great. Now the Libyans claim it turns out the risk was great. The reason they know that is they lost $1.2 billion. At least that's the claim. Goldman Sachs invested it and that money was lost. Those investments turned bad. Goldman Sachs says that's the way the market works. They didn't mislead anybody. They told them what the risks were. The Libyans say, no, you didn't. What got a little bit dicey was the revelation in the courtroom that Goldman Sachs had, I'll be careful with my words now, provided trips, rewards, gifts, including perhaps prostitutes to the various personages, internships to their relatives. All kinds of things were alleged and claimed, denied and denounced. But you get a glimpse from that trial into the seedy world by which bankers suck the money into their own hands. That was supposed to help countries around the world have a less short time of benefiting from their natural resources. For those of you interested, the court in London found in favor of Goldman Sachs and against Libya, which is now considering, of course, appealing this judgment. All right, yet again, another story that might have gone by your attention and that's part of what economic Update as a program is committed to making sure that the stories that never see the light of day or that are buried in some obscure corner that most of you have not the time or the attention to look into because these documents don't flow across your desk the way they do mine. My job is to find them, to analyze them, to present them so that you do understand the economic system you live in and understand it for being the flawed, declining, troubled and out of control economic system that it is. That's, of course, a decision you will have to make as to whether you agree. My job is to present the evidence and let you at least know what's going on. So I turned recently with great interest to a story that appeared in one of the most conservative business publications in the world. It's a British magazine called the Economist. I presume many of you have seen it. It's very widely distributed around the world. And in the issue of The Economist, dated October 15th of this year, there was an article and I'm going to read you the title of the article and then analyze quickly with you what it says. Here's the article that is the form of a why did the Obama administration change its mind on the American Airlines US Airways merger? Okay, let's review quickly what happened. Three years ago, American Airlines and US Air decided they wanted to merge into one airline. The Obama administration filed a lawsuit against that merger, alleging that it would raise prices and fees, cut service and be bad for the American people. Three months later, the Obama administration reversed its position, settled with the airlines, allowed the merger to go forward, and it is now part of the scene. The Economist asked itself, why the reversal, why this peculiar situation? But it asked the question because it has other questions. And I want to make sure you know what they are. The United states now does 80% of its flights with four airlines. That is much less competition than exists among, say, European airlines. And it turns out that European airlines have much lower profit margins than American Airlines. Gee, how surprising. Very little competition. Prices are higher, profits are greater. More competition, just like the textbooks tell us, should be. More competition, meaning lower prices, lower margins. And that's how it works. The Economist enjoys telling us that in recent times, the price of fuel, as we all know, has dropped by 50 to 70%, but the fares have only dropped by 8.6% in the United States, even though they've fallen more than Europe. Hmm. How interesting. Well, then why did it happen? If already the airlines are more profitable than their European counterparts, if they're already only 4 doing the bulk of the business, why would you allow this to happen? And why would you reverse yourself? And now the Economist gives us some answers. First, immediately after the Justice Department announced its opposition to this merger, the mayor of Chicago, Rahm Emanuel, sent a letter to the agency urging them to change their position. Turns out that he had plans for the Chicago o' Hare Airport and, and he wanted that airline to be part of and to support those plans, which it eventually did. Wow. Maybe he had an interest a few months after the exchange between Emmanuel pushing Mayor Emanuel pushing for this merger to happen against the Obama administration, where he was once the chief of staff of President Obama and a close advisor of his. Just a few months later, and I'm now going to read to you from the Economist magazine, several American Airlines executives, including the chief Executive donated to Rahm Emanuel's re election campaign. Folks, if I had a moment more time, I'd stop here and play the national anthem. There's something painfully American about all of this. Well, we're not done. It turns out that lobbying on behalf of the airline merger were a number of people. The two airlines spent, according to the economist, $13 million on lobbyists. Among the lobbyists was Tony Podesta, who turns out to be the brother of John Podesta, who at that time was an advisor to President Obama and is today, if I'm not mistaken, the campaign manager for Hillary Clinton. If bells don't go off for you now, I don't know what it will take. But we're not done. The justice department assigned the 30 lawyers, says the Economist magazine, to handle the case against the merger of American Airlines and US Airways. The airlines mobilized four times that number of lawyers, including many who had previously worked in the Obama administration at very high levels. Needless to say, this barrage of effort worked. The government that saw the merger as a bad thing for America changed its mind. And I'm sure none of those things that the Economist magazine discovered and that I just reported to you had anything to do with the change of heart. Wow. Wow. Well, I want to conclude today by telling you about an event that I'm sure most of you probably missed, but yet it tells us an encyclopedia's worth of what is happening in the world economy and what it means. I'm talking about a strike that has been going on for a week or so at the Jim Beam whiskey producer in Kentucky. That's right, in Kentucky and particularly in two towns, Claremont and Boston. In Kentucky, 200 unionized workers who work in the Jim Beam distilleries have gone on strike. They are very upset that they are working very, very long hours without time to see their families. They're actually not complaining all that much about the wages of the full time workers. They are much more upset about two other things. That new workers are being hired at much less than what the traditional workers and many have worked there 20, 30 years are getting. And they're even more upset that temporary workers are becoming a larger and larger part of the workforce. And whereas those who have been at work for a long time are earning $23 an hour, the new employees are earning only $17 an hour, and the temps are being paid $11 an hour. You don't need an advanced degree in economics to understand what's going on here. Wow. So let's talk a little bit about this strike and what it teaches us. Many of you probably believe that Jim Beam whiskey, whether you happen to drink it or not, and it's one of the major producers of bourbon whiskey in the world, as is Kentucky as a state, you might be surprised to learn that Jim Beam, this American icon of bourbon whiskey and bourbon is an American invention, is an American product, isn't owned by Americans. Jim Beam is a subsidiary of the Japanese multinational corporation known as Suntory. What does that tell us? It tells us that a local company found profit in selling out to a huge multinational. And not that I'm in favor of small scale capitalist enterprise as somehow better or different in basic structure from a large one, but it is the case that a company born and raised in the Kentucky neighborhoods where it exists may have a different attitude towards its workers, towards its community, towards its obligations. And as a citizen, you know, of its local area than a multinational corporation with operations around the world, headquarters 10,000 miles away, etc. Etc. More and more of the American economy is in the hands of multinationals. And by the way, it isn't that much better to be in the hands of an American multinational than it is of a Japanese or a European. They are more like one another than they are different. And they have global operations that make them function. And the care and attention and loyalty they have to any one small part of it is minuscule. And that would be the case if it were an American multinational every bit as much as it is with the Japanese. Well, what's going on here that has broader lessons for us? Well, I think it's this. If you allow a private company, as Jim Beam once was, an independent private company, to function in an area, then you're saying, okay, it'll make some jobs, it'll produce some product, it has some organic relationship to the environment in which it functions. But if you allow a private company, when and if it feels like it, to sell itself to another company, that may be very good for the executives who will get a bonus, who will get a new job, who will get a higher corporate salary. And it may be very good for the shareholders who get a nice boost in the value of their shares when the big company buys them out as owners of the shares of the little company. So it's good for the executives and it's good for the shareholders, but it is not good for the workers there. How do we know that that's why they're on strike? Because they are getting shafted here? The decision made by a small number of people, the board of directors of Jim Beam that made that decision was 15 to 20 people. The number of folks on strike, 200. That's 10 times what we're talking about. A decision was made by 1/10 of a community, the people who work in and around Jim Beam, and it affected 100% of the community. That's not democracy. Since everybody was affected by what was done selling the company, everybody should have had some say in the matter. Everybody should have had some democratic participation. The majority have been hurt, and not just the majority on strike, but the majority of people in the community affected by this. It's a wonderful example of what it means to allow small numbers of people to have the kind of power that the corporate capitalist structure conveys on them. But that's not all. Permit me to make an observation, a kind of hypothetical. Imagine with me, imagine if the Jim Beam Corporation hadn't been a top down, undemocratic capitalist enterprise. Major shareholders, a few board of directors elected by them, 15 to 20 people. That tiny group of people making a decision that impacts Kentucky, that impacts Claremont and Boston in Kentucky, that impacts immediately the 200 families of those who are striking and indeed the other workers who aren't striking because they're not part of the union, et cetera. Imagine an alternative. Imagine a gym Beam in which the workers, 2, 3, 400, however many there are, managers included, were a democratic cooperative. Imagine that. Maybe if everybody had to decide what to do with the company, they might not have decided to sell it to a global multinational. I don't know. But it's worth a shot. And imagine if companies in general were democratically run. I don't think, and let me push this to get you to see the point. I don't think a strike would ever happen, because a strike makes no sense. When workers strike, they hurt themselves. They have no income and they hurt the company, which has no profits because it has no product. This is a situation where both sides lose. And it's because they're always set against each other. The capitalists trying to get more, the workers trying to hold on. If workers were the owners and operators, they'd be on both sides of that conflict. What they lost as a worker, they'd gain as an employer. What they lost as an employer, they'd gain as a worker. There'd be no point in having issues resolved by a strike. We would have an economy that runs very differently. Think about it, friends. It is an enormous lesson from a little corner strike in Kentucky at Jim Beam. We've come to the end of our time for today. Thank you so much for being part of this program. Let me remind you, please, that we have already a partner called Truthout.org, a remarkable independent source of news and analysis, and that we're looking for more partners, yourself included. Go to our website, particularly democracyatwork.info check out sponsor for a way for you to help this program, but check out the entire website for the many ways you can partner with us. We want you to. We invite you to. And I look forward to speaking with you again next week. Your time now, baby but after a while Gonna be my time My time, babe Thing gonna change Change, change, change, change, change, change Thing gonna change yes, it is, Sam.