Economic Update with Richard D. Wolff — "Economics of Trump"

Date: November 17, 2016
Host: Richard D. Wolff

Episode Overview

In this episode, Richard D. Wolff examines the economic policies and implications of Donald Trump’s election as U.S. president. Wolff begins with cultural reflections on systemic inequality—tying in Leonard Cohen's song "Everybody Knows"—then moves to recent economic news, including worker cooperatives and global industry deals to provide context on global capitalism. The second half deeply analyzes Trump’s key economic proposals (immigration, estate tax repeal, corporate tax cuts), and concludes by contrasting so-called “Trumponomics” with previous administrations, arguing that the major parties rarely challenge the fundamentals of American capitalism.

Key Discussion Points & Insights

1. Systemic Inequality — “Everybody Knows”

• Wolff opens with Leonard Cohen’s lyrics, highlighting pervasive rigging in economic and social life.
• Memorable quote:

  “Everybody knows the fight was fixed, the poor stay poor, the rich get rich, that’s how it goes, Everybody knows.” (01:28)

• Wolff reflects:

  “Kind of wonder that a song written in 1988 could speak so urgently and so beautifully at our situation today.” (03:18)

2. Worker Cooperatives as Alternatives (Austin, TX; ATX Co Op Taxi Company)

[04:15–08:30]

• In Austin, after Uber and Lyft left due to city-imposed background check regulations, taxi drivers formed a worker cooperative—ATX Co Op Taxi—with 360 members.
• Benefits include significantly lower fees for drivers and democratic control.
• Wolff frames worker co-ops as systemic alternatives to corporate capitalism.

  “They are much, much better off... now they’re working literally for themselves and it’s been very popular and very successful.” (07:15)

3. Capitalist Globalization Continues — The Audi/China Deal & Implications

[08:31–21:08]

• Audi partners with a major Chinese automaker (SAIC), expanding luxury production in China for Chinese customers.
• Key points:
  • Confirms that industrial capital continues to shift from developed economies to emerging markets, especially China.
  • VW/Audi’s expansion is a response to VW’s emission scandals—using China’s growing market as lifeline.
• Trump tariff threats:
  Wolff explains the (likely dangerous) effects of Trump’s proposal to impose a 45% tariff on Chinese goods:
  • Tariffs would provoke immediate Chinese retaliation—closing Chinese markets to U.S. businesses.
  • A trade war would imperil U.S. jobs tied to exports, and hurt major American corporations with operations in China.

  “To imagine... China... would allow the United States simply to knock [its export base] down, that’s not going to happen. And people who think it will are really living in a strange fantasy world.” (16:10)

  • U.S. corporations would oppose Trump, as many imports from China are products of American subsidiaries using cheap Chinese labor.

  “Let’s remember that half or more of the goods coming from China come from subsidiaries of American corporations located in China... [Tariffs] directly challeng[e] the profitability of major American corporations.” (20:49)

4. Pope Francis: Moral Indictment of Capitalism and Global Economic Policy

[21:09–26:15]

• Wolff quotes Pope Francis (from Telesur and La Repubblica) criticizing the use of billions to bail out banks while neglecting to help refugees and migrants.
• Notable quote (Pope Francis):

  “What’s wrong with the world today? When a bank files for bankruptcy, there’s an immediate outrageous sum of money. But when this bankruptcy occurs in humanity, there’s not even a 1/1000th portion to save these brothers who suffer so much.” (22:57)

  • On migration:

    “No one should be forced to flee his or her homeland, but the evil is doubled when... the migrant is thrown into the clutches of human traffickers... tripled if... one is despised, exploited, or even enslaved.” (25:10)

• Wolff underscores the Pope’s criticism as resonant regardless of listeners’ religious affiliations.

5. Trump’s Financial Advisory Team — Continuing Wall Street Ties

[26:15–29:05]

• Wolff points to a Wall Street Journal report indicating that Trump’s financial team is “stocked with Wall Streeters,” including former Goldman Sachs executive Steven Mnuchin.
• Quote:

  “Whatever Mr. Trump’s differences are... he’s relying on the same people [as previous presidents]... I wouldn’t expect major changes are too likely.” (28:34)

Second Half — Economics of Trump’s Policy Proposals

6. Deporting Undocumented Immigrants: Economic Realities

[30:06–36:50]

• Wolff analyzes the economic fallout of mass deportations:
  • Many undocumented workers fill low-wage, undesirable jobs (hospitals, construction, restaurants).
  • Deportations would force employers to hire U.S. citizens who demand higher pay, effectively increasing labor costs (akin to raising the minimum wage for those sectors).

  “That’s the same thing economically as raising the minimum wage, because that’s what you’re going to have to do.” (33:19)

  • Consumer demand would shrink as millions of undocumented workers leave, hurting American businesses.
  • Deportees’ home countries (mainly Mexico and Central America) could be destabilized, with spillover effects for the U.S.

  “Do we wish to have an exploding, disintegrating Mexico on our border? ...Have we even thought about the consequences?” (35:14)

• Judgment: Heavy economic and social costs, likely to harm rather than help U.S. workers.

7. Eliminating the Estate Tax: Who Benefits?

[36:51–41:25]

• Wolff explains the estate tax—only wealth above ~$10 million per couple is currently taxed, affecting fewer than 5,000 Americans in 2015.
• Trump’s proposal to abolish it is a massive tax cut for “the super rich,” not for ordinary Americans.

  “It is a tax cut for the super rich. And all the PR about saving family farms... is exactly that: veneer cover fakery to try to get people to imagine that this is a service to average people.” (40:19)

8. Corporate Tax Cuts — From 35% to 15%?

[41:26–46:48]

• The current nominal corporate tax rate is 35%, but the effective rate is much lower (~22-23%) due to deductions, loopholes, and offshore accounting.
• Comparison to other countries is misleading—on an effective basis, U.S. rates are similar to Europe/Japan.

  “It’s a hustle. It’s an attempt to mislead the public into supporting something that’s good for the corporations. And that’s the end of the story.” (44:07)

• There’s no requirement that freed-up profits from tax cuts will be used for American jobs:

  “What they will do with the money... is anybody’s guess. They’re not required to use it to hire anyone... There’s nothing in economics that justifies such a claim [that it creates jobs].” (45:24)

  • Corporations may simply increase dividends, buy back shares, or invest abroad.

9. Clintonomics, Reaganomics, Trumponomics: Differences and Similarities

[46:50–53:55]

• Wolff responds to a listener question about whether “Trumponomics” fundamentally differs from previous presidential economic programs.
• His position:
  • Yes, there are small differences between Reagan, Clinton, Obama, Trump, but all avoid challenging fundamental capitalist structures.
  • Both parties ignore:
    • Soaring economic inequality (“we are becoming the most unequal country among the rich industrialized countries in the world” [50:04])
    • Instability and cycles of crisis in U.S. capitalism.
    • Alternative models (e.g., worker cooperatives) are left out of mainstream debate.

  “On ignoring it all, on being boosters for capitalism, the two parties never waver. And they are, in that basic way, the same.” (53:11)

Notable Quotes

• On trade wars:
  “Mr. Trump’s proposals to whack the rest of the world only work if they take it. If they don’t retaliate... he will make an enemy out of large American corporations.” (19:15)
• On estate tax:
  “Mr. Trump’s removal of the estate tax is an effort to give a tax break to the richest people in the world... It is a tax cut for the super rich.” (40:11)
• On labor and immigration:
  “It’s the same thing economically as raising the minimum wage, because that’s what you’re going to have to do.” (33:23)
• On policy differences:
  “Yeah, they had their differences. But on ignoring it all, on being boosters for capitalism, the two parties never waver. And they are, in that basic way, the same.” (53:11)

Timestamps for Key Segments

• Poetry & systemic inequality: 01:00–04:15
• Austin co-op taxis and cooperative economics: 04:15–08:30
• Audi/China deal and U.S.-China trade policy: 08:31–21:08
• Pope Francis on capitalism and migration: 21:09–26:15
• Trump’s Wall Street ties/Advisors: 26:15–29:05
• Economic analysis of Trump’s immigration plan: 30:06–36:50
• Estate tax elimination: 36:51–41:25
• Corporate tax cuts: 41:26–46:48
• Comparing economic policies across recent presidents: 46:50–53:55

Tone & Style

Richard D. Wolff delivers the episode in a clear, urgent, and critical tone. He avoids sensationalism, relying on explanations, statistics, and logic grounded in real-world economics. The language is accessible yet pointed, delivering both analytical rigor and moral critique. The use of cultural references and international quotes underscores the episode’s global and systemic perspective.

Summary

For listeners seeking to understand the probable trajectory and contradictions of Trump-era economics, this episode offers trenchant analysis rooted in historical context and systemic critique. Wolff systematically debunks many campaign promises, shows who stands to benefit, and reminds listeners that alternative economic structures—such as worker cooperatives—exist and warrant broader attention. The episode is critical of both political parties’ commitment to the existing capitalist system, arguing for deeper, structural economic change beyond the shallow battleground of contemporary policy debates.