Loading summary
Transcript3 lines
- [00:00]
A
Sam. Saint gonna change. Welcome, friends to welcome to another edition of Economic Update, a 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 your host, Richard Wolff. I've been a professor of economics all my adult life, and currently I teach at the New School University in New York City. I wanted to begin today's program by reading you a little bit of poetry. I did that last week with Bob Dylan in honor of his getting the Nobel Prize, although I now understand he is busy and will not be going to Scandinavia to give the lecture, at least not at the originally scheduled time. And I wanted to read the poetry because it's also so much about economics, which is what we do here of a famous singer and songwriter who died very recently, Leonard Cohen. And one of his songs that has always spoken to me, I thought might be interesting to you. And listen for the economics that Leonard Cohen is singing about. The song in question is called Everybody Knows. Here we go. Everybody knows that the dice are loaded Everybody rolls with their fingers crossed Everybody knows that the war is over Everybody knows the good guys lost Everybody knows the fight was fixed the poor stay poor the rich get rich that's how it goes Everybody knows Everybody knows that the boat is leaking Everybody knows that the captain lied Everybody got this broken feel Feeling like their father or their dog just died Everybody knows the deal is rotten Old black Joe still pickin cotton for your ribbons and bows Everybody knows Everybody knows the scene is dead but there's gonna be a meter on your bed that will disclose what everybody knows and toward the end of the song, this stanza, Everybody knows it's coming apart Take one last look at this sacred heart before it blows and everybody knows Kind of wonder that a song written in 1988 could speak so urgently and so beautifully at our situation today. Well, I want to begin with the update about something happening worth our attention in Austin, Texas. Like most cities, Austin, Texas has taxicab companies. Like many cities, it has several of them. And like many cities, the taxis were threatened recently by the arrival of Uber and of Lyft, two of the major new ride companies that we have talked about. But what is interesting and new about Austin is something the city council there did and something that taxi drivers there did that I want to tell you about. First, the city council decided to require Uber Lyft drivers to get a background check to make sure that they were the kinds of people with the kinds of history that would be safe driving the folks of Austin, Texas around this is already normal, for example, in New York City. This is the kind of thing that Lyft and Uber and other such company drivers have to go through. Uber and Lyft in Texas were outraged and said they they wouldn't tolerate it. The city council went ahead and mandated it anyway and Uber and Lyft left town. They're not in Austin, Texas. At about the same time, another project came to head which had a real opening once Uber and Lyft were out of the picture. This was an effort by hundreds of cab drivers. Car drivers for taxi rides decided to form a worker co op and it now exists. It's called the ATX. Those letters, ATX Co Op Taxi Company. It's a worker co op. It currently has 360 members, so it makes it a large worker co op providing co op services as taxi drivers to the people of Austin. They are much, much better off, as they say, than if they worked for the existing taxi companies who charge a great deal for the daily use or rental of the taxi car and leaving very little for the drivers to take home. The worker co op lowers that drastically because now they're working literally for themselves and it's been very popular and very successful. So I wanted to let everybody know. Yet another worker co op in formation took the last two or three years to do it, but 360 drivers in the Austin, Texas area are very, very happy in a new and much better for them situation. By the way, for those of you that might be interested, the website that we maintain, democracyatwork.info has a section devoted to a partnership we maintain with existing worker co ops around the United States and even some abroad. If you are interested in learning about our worker co op partners, or indeed in becoming one, get in touch with us. Take a look at our website democracyatwork.info about. That's what you look democracyatwork.info about. And there you will find our co op partners and all the information you might be interested in about them. The next story, economic update I want to tell you about starts with a simple piece of information. A press release a few days ago between the Audi Corporation, Audi, the manufacturer, as I think many of you know, of the luxury German automobile Audi, signed an agreement with China's SAIC Motor Corporation, one of the major producers of automobiles in China, an agreement to work together. And the purpose of this is to increase the production of German luxury cars inside China for the Chinese market. Audi already had an agreement for producing cars with another Chinese company So this ramps up the capacity of Audi to become a major player in the Chinese auto market. Why is this significant? Well, number one, it's another piece of information for those who need it, that the relocation of capitalist industry out of the areas in which it grew up, Western Europe, North America and Japan, into the areas where wages are much cheaper and where the future of manufacturing is, is written for all to China, India, Brazil, places like that, that's still going on big time. The notion that somehow that's not happening anymore, or the even wilder notion that the reverse is happening, that manufacturing is leaving those parts of the world and moving back to where it once was, that's revealed to be the fantasy and imaginary of people who should and probably do know better. This is more evidence that the direction and the pace are what they have been for decades now. But that's not the only reason this deal between Audi and China is interesting. Audi is actually a subdivision of the VW Corporation, Volkswagen. And that raises another question. VW is in trouble. That's because of the scandals of it having inserted, knowingly, we now know, knowingly inserted devices into their diesel cars to fool the pollution control mechanisms established around the world to limit the amount of health damaging pollution Audi diesels and VW diesels pump into the air. They got caught and it is costing them billions in lost business, billions in punishing fines from Europe, from North America and so on. VW is in trouble and it can help itself get around that problem by expanding the Audi division, which isn't as badly implicated as the VW division of the company. And. And it can try to recoup by expanding in China what it is losing in the rest of the world, having been caught contributing to every conceivable disease that flows from air pollution. The third reason I'm bringing it to your attention is because it's a signal in its own way of what the Chinese will do if the new Trump administration here in the United States were to actually seriously proceed with the campaign rhetoric about slapping Chinese goods, that is goods coming into the United States from China with a 45% tariff. The point is to understand how the Chinese could, and with all likelihood would retaliate if Mr. Trump actually does such a thing. Let me explain. A tariff is a tax. It's just another name for a tax. But it's a particular tax because it only falls on the price of goods coming into the United States from abroad. If it was limited to China, and I'm going to set aside the question of whether that's even legal for the United States to do. But if it did that, either legally or getting around the law or changing the law, it would mean that a Chinese object, say a shirt that costs a dollar, because that's the money that the Chinese demand to ship it here. So the United States pays a dollar, it goes to China, and they send us the shirt. If we hit that with a tariff of 45%, the shirt would now cost in the United States not a dollar, as it did before, but $1.45. The $1 would still go to China. The other 45 would be a tax going to Uncle Sam in Washington. Why would we do that? Why would Mr. Trump advocate that? The answer is simple. Because the idea is Americans would not be willing to pay $1.45 for something they used to be able to get for a dollar. Instead, they would switch, this is the way the theory goes, to, to get their shirts, or whatever it is that comes from China, instead from an American producer producing here in the United States, who before couldn't compete with a $1 shirt. But if he could produce a shirt and sell it for, say, $1.35, that would still be more attractive to an American buyer than paying $1.45 for the shirt from China. And so the argument goes, by slapping this tariff, Americans will stop buying imported Chinese goods and turn instead to American goods. And that would generate jobs inside the United States making those American goods. And so Mr. Trump would be able to deliver jobs to the American people as he promised. So often. Here's the problem from China's response that would likely flow and that the news about Audi allows me to pinpoint for you. The Chinese would retaliate. Why? Because you are threatening them with such a tariff. The Chinese industrial miracle, the way in which that very poor country, the largest by population in the world, became an industrial superpower over the last generation, 25 years, was by producing for the rest of the world, producing for export. The Chinese people were simply too poor to be an adequate market to buy all that they wanted to be able to produce by building up their industries. So the Chinese leadership decided that they would become an engine of industrial production for export to be sent to Europe, North America and Japan, where the public exists, with enough income to pay for it. To hit them with a tariff is to hit them a body blow. It is an attack on their economic well being. It is an attack on their deeply committed strategy of export production. And to imagine, after 25 years of reorganizing their economy, becoming more industrial, less agricultural, more urban, less Rural in order to export, to allow the United States simply to knock it all down. That's not going to happen. And people who think it will are really living in a strange fantasy world. Need I remind you that China is a nuclear power? Need I remind you that it's now one of the richest countries in the world? I hope I don't need to. But in case you were wondering, over this last weekend the Chinese government released news reports published in their newspapers spelling out that they will retaliate. They will close China to American businesses if the United States closes America to to Chinese exports. Wow. What does that mean? Well, let's go back to the little story about Audi and the Chinese car producers. China is the largest market for automobiles in the world. If the United States hurts the Chinese government, the Chinese government with a tariff, the Chinese government will close the automobile market to the United States. It will give it instead to the eagerly competitive Volkswagen Corporation of Germany, or to other companies in Europe, Fiat, Renault, Peugeot, or to the Japanese, Toyota, Nissan and so on, and exclude the United States. That will be the end of the American automobile industry. It will be in deep trouble and it will mean the loss of all kinds of jobs we export. We Americans do over $100 billion of goods and services to the Chinese. If they retaliate, we won't be able to sell those goods there. Americans working here producing the goods we ship over there will then have no job anymore because hire them to produce what the Chinese will no longer buy from the United States. In other words, Mr. Trump's proposals to whack the rest of the world only work if they take it. If they don't retaliate, and to expect them not to is exceedingly strange. And if he tries it. Last point. He may be really shocked to discover that he will make an enemy out of large American corporations when he does it. Why? Because many of the largest American corporations over the last 25 years have spent ready trillions of dollars investing in corporate production around the world. They've been leaving the United States, as everyone watching or listening to this program knows. They've spent a fortune to produce over there, where they can pay much lower wages than in fact over here. But the whole idea, produce over there at low wages and then bring it back into the United States to sell it. They wouldn't have gone there if they couldn't sell it in the United States because there's nowhere else they can sell it. Wow. Let's remember that half or more of the goods coming from China come from subsidiaries of American Corporations located in China. Yes, it's Chinese workers, but it's American companies that employ them. You are directly challenging the profitability of major American corporations by slapping a tariff on goods coming from China. It won't be China that explains that to Mr. Trump. It'll be the American corporations explaining that to Mr. Trump and letting him know that if he proceeds, they will be his enemies. I'm not talking about the Chinese. I'm talking about the American corporations whose investments and whose future is so dependent on. On good relations with China. The next update. Well, I've been doing this increasingly, but I can't really stop myself. I'm going to quote to you from the latest statements about capitalism and about the capitalist world economy issued by Pope Francis. Wow. On the 5th of November, Pope Francis spoke at the closing ceremony of something called the Third World Meeting of Popular Movements. This was in Rome. Thousands of people had gathered from all over the world, people involved in popular movements for economic development and social justice. Here are some of the things Pope Francis said to that meeting as reported by the Latin American news service Telesur. I'm quoting now from the Pope. He criticized. Well, actually, I'm paraphrasing. First, he criticized countries who used billions to rescue banks during times of financial crisis but failed to invest. And now the Pope's words quote even 1000th thousandth of that money to help refugees and migrants fleeing their home countries who die in the Mediterranean Sea during the journey. Continuing, the Pope said, 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 1000th portion to save these brothers who suffer so much. A few days later, the Pope expanded on these thoughts in an interview that he did with the leading Italian newspaper, La Repubblica. Here's what he said about criticisms directed to him, that he was pushing for a more egalitarian society. The criticisms had said, is this a Marxist type of society that you are supporting? And the Pope answered Pope Francis his if anything, it is the communists who think like Christians. Christ spoke of a society. I'm quoting now. Christ spoke of a society where the poor, the weak and the marginalized have the right to decide. Not demagogues, not Barabbas, but the people, the poor. Whether they have faith in a transcendent God or not, it is they who must help to achieve equality and freedom. The Pope is an unmistakable critic, and he expanded on the question of migration, immigrants and how he as the leader of the Roman Catholic Church sees it. So I'll close with this quotation. Also part of his interview with the Italian newspaper last week, La Repubblica, quote Pope no one should be forced to flee his or her homeland, but the evil is doubled when facing terrible circumstances. The migrant is thrown into the clutches of human traffickers to cross the border. And it is tripled if arriving in the land where he or she hoped to find a better future, one is despised, exploited, or even enslaved. Pope Francis said Wow for Americans, much to think about whether you are Roman Catholic or not. The Wall Street Journal in the final update that I have time for today, the Wall Street Journal carried an article updated on November 10, 2016. And I'm going to read you the headline because it really says it all. But then I'll explain a bit. Here's the headline of that story published that day. Quote Donald Trump's financial advisory team stocked with Wall Streeters. Okay, what are they telling us? That Mr. Trump, rather like Mr. Obama, rather like Hillary Clinton, rather like most of the presidents of recent decades, is surrounded by, deeply involved with and reliant on the same small collection of Wall street financiers, one like the other. Whatever Mr. Trump's differences are, and he sure worked at underscoring his difference as his campaign theme, he's relying on the same people. And let's take a look at the three men who seem to be the major financial advisors. Number one, Steven Feinberg, CEO of Cerebus Capital, an immense multi billion dollar corporation. Paul Atkins, the former securities and Exchange Commission leader, commissioner in Washington, a long political career running the sec, which is the major oversight on the stock market and the financial markets of this country. And finally, and probably most importantly, Steven Mnuchin, who was for 17 years a banker at Goldman Sachs, a company that Mr. Trump repeatedly criticized, but whose one of whose chief bankers is his major adviser. We'll see how Mr. Trump's economics plays out. But with a collection of advisors like that, I wouldn't expect major changes are too likely. But we shall see and certainly we will be commenting on it. Before we take our mid program break, let me invite you not only to stay with us because of the major discussions we're going to have in the second part of today's program, but also to remind you please to partner with us. And the way to do that is to make use of our websites, rdwolff, with two Fs com and democracy at work. That's all one word, democracyatwork.info. we organize those websites to be able to allow you to partner with us, to communicate to us. Both websites allow you to send us messages what you like and don't like about the program, what you would like to see changed, what you would like to see covered. Both of those websites allow you by a click to follow us on Facebook, Twitter and Instagram. They allow you to work out with us a trip to your area where I can come and meet you and make some presentations that I think will be of interest to folks in your area. It allows you to work with us to get this program on more than the 71 stations we are now regularly broadcast on across the United States. It allows you also, if you're interested, to sponsor some of the work we do. This program. The monthly talks I give at the Judson Memorial Church in New York City the second Wednesday of every month. All of these and other materials are available on the two websites to enable you to expand our reach to share what we do here with others that you know who might be interested. Please consider partnering with us in any or all of these democracyork.info sponsor will give you all the information you need about that democracyatwork.info about will give you a clear opening to existing worker co ops that we are partnered with already and that are described there and so on. These are rich, everyday updated websites. Share them with us. We will be right back. Stay tuned.
- [29:21]
B
Everybody knows that the days are loaded Everybody rolls with their fingers crossed Everybody knows the war is over Everybody knows the good guys lost Everybody knows the fight was fixed the poor stay poor, the rich, rich get rich that's how it goes Everybody knows Everybody knows that the boat is leaking Everybody knows the captain lad everybody.
- [30:07]
A
Welcome back friends, to the second half of economic update for this middle part of November 2016. While I can imagine that you are all thinking about and reacting to the election of Donald Trump to be the next president, and I'm sure you've been reading and hearing about all kinds of things. I do think a little more attention to the economic proposals that he is presumed to be bringing may be of interest and of use to you. So I want to spend a little time with you going over some of them. We don't have time to do them all. And I need to preface what I'm about to say by reminding everyone that the rhetoric of Mr. Trump on the campaign trail may or may not correspond with what he tries to do as president. And in turn, what he tries to do as president may or may not correspond with what the House of Representatives and the Senate are willing to support. So you have two big ifs. If he's going to push for what he said he believed in, and if he will be able to get that through the Congress, which will determine what he actually ends up doing or what his presidency represents. Keep all that in mind as we look at at least three of the major economic proposals Mr. Trump has offered. I want to begin with the suggestion that he is going to deport undocumented immigrants in the United States. At various points, he mentioned millions of them. The number I hear these 3 million, but we've heard larger numbers. And the numbers of undocumented immigrants in the country is much larger than that. So it is possible that maybe he actually means and will be able to deport undocumented immigrants. Immigrants. Let's take a look at the economics of that. Who are the immigrants? Well, if you're an undocumented immigrant in this country, the chances are that you are part of a family that depends for its livelihood on working at some of the lowest paid jobs in the United States. You are very likely to be working in a hospital as an orderly of the lowest level. You're likely to be working in a car wash, cleaning dishes in the back of a restaurant, doing construction jobs that are the lowest paid. If you actually yank these people out of all of these jobs, you are not only horrifically imposing misery on people who are already among the lowest paid, having the hardest lives of anybody. And I'm not going to ask how that squares with family values or Christian values or anything else. I'm putting that aside. This is a program about economics. I want to look then at what happens to the employers of these people, the hospitals, the fast food joints, the car washes, the construction contractors and so on. They're going to be without very cheap, hard working people, people whose situation, because they are undocumented immigrants, is very, very vulnerable. They have to show up on time. They cannot risk losing this money. They can't complain if money is withheld, if money is paid too late, because they can't go to the police since they're undocumented immigrants. And that's even more dangerous than simply accepting whatever the employer dishes out to them. Wow. What's the employer going to do? Turn to Native American workers? They're not going to accept these conditions. They don't have to. They can go to the police if they're not paid what they're contractually agreed to pay. They can go to the unions easily and join up. They're not intimidated about their citizenship status because they're American citizens and therefore you're going to have to pay them more, aren't you, Mr. And Mrs. Employer, than you now get away with, with millions of undocumented immigrants. You know, the same people who were against raising the minimum wage in America seem to now be on the side of deporting immigrants. But I got news for you. That's the same thing economically as raising the minimum wage, because that's what you're going to have to do. You're going to have to pay more than whatever the real minimum was you used to get away with paying frightened, vulnerable undocumented immigrants. And I don't know whether American businesses, particularly the smaller ones, who rely for their profit on getting away with paying so little to the immigrants without documents, how they're going to feel about this, if you really begin to do it, how it's going to hurt their businesses, how it's going to therefore lead many of them to go out of business, perhaps, who knows? And cut back on other jobs, who knows? What an interesting situation. But it's worse than that. If you deport 3, 4, 5 million immigrants, those are people who used to buy food because you need to to survive and buy shelter, rent a place, buy clothing, maintain an automobile, they're not going to be able to do that anymore because they're going to be out of the country. All that business which all the stores of America relied on is going to be gone and. And it's not going to be replaced by anything that's a blow to an economy that's already in bad shape. Are we really interested in doing that? Is that really an important step to take now? I'm still not done. Let's suppose we deport millions. Given who those people likely are, the preponderance are Latin Americans, probably from Mexico and other parts of Central America, Mexico particularly, but other parts of Central America are themselves economies in deep trouble. What in the world are they going to do if millions of people are sent out of the United States, people with no wealth, with very little other than what they can carry, coming back to countries that don't have jobs for them, that probably don't have housing for them, where they will be poor people in a society that can't even sustain the poverty levels they already have? Do we wish to have an exploding, disintegrating Mexico on our border? Will those people then be forced into the drug trade because there's no other way to survive? Have we even thought about the consequences that will affect the United States if this is done economically. Wow. Wow. I could go on, but there's much to say about this crazy idea of exposing the least of our fellow American residents, the least of our brothers and sisters, the poorest among them, to the horror of a deportation experience to them, to their children, without even going there, the economics very, very questionable. Let me continue with another example. Mr. Trump has committed to getting rid of the estate tax. What does that mean? The federal government, for most of the history of the United States, has levied an estate tax, as indeed many countries do. The idea behind this is very simple. If you make money while you are alive, by dint of good luck, hard work, you name it, you are thought to be entitled in some sense to spend it, to use it, to somehow get the benefit of what your efforts and your good luck brought to you. But the idea is, you shouldn't. Most societies have said this, including our own. You shouldn't be able to pass it all on to your children because they didn't create the wealth. But even more than making it fair in that sense is the notion that we should, all of us, have a level playing field to try to make it in our own lives, that we shouldn't have inequality shaping who's successful and who isn't. The child born into a family of millionaires is not going to have the same opportunities that a child born into a poor family has. And to at least a little bit balance that, to make it such that your own efforts and your own skills and your own capabilities shape what happens to you in life, rather than simply being the lucky child of the rich. That's what's led people to have estate taxes. At least a portion of what you earned in your lifetime goes back into the community, rather than creating such grotesque inequality amongst newly born children as they enter the world and try to make their way. Well, rich people don't like that. They would rather leave their wealth to their own children. That's understandable. And it's been what society has basically allowed them to do in part, but not altogether by levying an estate tax. But the rich, as you know, or as I hope you know, have been in the driver's seat in this country, particularly in the last 30 to 40 years. And so they have whittled away the estate tax to the current situation. Mr. Trump now wants to finish that process by doing away with the estate tax altogether. So first, let me tell you where it is today, roughly. A married couple can today leave up to $10 million, roughly to their children or anybody else they wish to. And incur no federal estate tax. So for those of you that were worried about this, you can now breathe a sigh of relief because at least the first 10 million that you plan to leave to whoever it is you plan to leave it to when you die or will not have to pay a federal estate tax. Well, now that you know that, let me give you the hot. There are very few Americans who leave $10 million to their offspring or anybody else, because there's a terrible few Americans who have $10 million to leave to anybody. So gross is this situation that let me give you this stark fact. In the United States in the year 2015, the last full year we have, we had a population of roughly 320 million people. The total number of federal estate tax returns was 5,000. That's right. 5,000 people had to file a federal estate tax tax return because those 5,000 out of 320 million actually left more than $10 million to somebody and therefore had to pay the tax on what part? The 10 million? No, that goes free and clear. No tax from the federal government. The federal tax only applies to whatever you leave in excess of 10 million to anybody. Okay? Mr. Trump's proposal to get rid of the estate tax is therefore an immense favor done to those 5,000 people. They will, if he gets his way, not have to pay estate tax on the above 10 million that they may leave to anyone. That in the years ahead. Let's be really. Mr. Trump's removal of the estate tax is an effort to give a tax break to the richest people in the world, or at least the richest people in the United States, the very, very richest, those with more than $10 million to leave to their children or anyone else. It is a tax cut for the super rich. And all the PR about saving family farms so they can be left to the children is exactly that. Veneer cover fakery to try to get people to imagine that this is a service to. To average people who want to leave what they created in their lifetime to their children. If you have a sense of equal opportunity, of having the same chance to grow and prosper in your life, you will support an estate tax. If you think that wealthy people have gotten enough tax breaks over the last 30 to 40 years that they don't need another one, then you will oppose the elimination of the estate tax. It is something to think about as we see whether Mr. Trump pursues it, whether the Republicans who control the Congress support it, and whether the Democratic Party opposes it, and whether the American people will tolerate it. The third of the many economic proposals Mr. Trump has talked about also demands some attention. He proposes to cut the corporate tax rate from its current 35% level down to, at least the last time I saw it, 15%. That's a major cut, more than cutting it in half. So let's take a look at that. 35% is the legal rate that a company has to pay a corporation on its profits. It's not 35% of the revenue they get from selling whatever good or service they produce. No, no, no. It's just 35% of the profit of the difference between the revenues they earned and the expenses they incurred to produce the goods that got them. The revenue, 35%. But here's the reality in economics. For decades, every economics course that has ever discussed corporate profits, and many courses do, has taught its students to distinguish between the legal or nominal rate of taxation, 35% and what we call in economics, the effective rate of taxation, namely, what the corporations actually pay as a percentage of their profits. Do they pay the 35% to the federal government or do they pay less? Is the effective rate less than that? We're assuming that no corporation pays more than it is legally required. Well, the answer to this is obvious. For those of you who have ever studied it, the effective rate is much, much lower. Why? Because corporations have all kinds of deductions they can take, all kinds of exemptions they can take. One of the biggest ones is leaving your money in a foreign bank account. If you've made the money by selling goods over there. And when you leave it in the foreign banking account, you don't require to pay taxes to Uncle Sam as long as you leave it there. Okay? And we'll come back to that in future broadcasts because it's an interesting topic. But for the moment, let me tell you that the following is the statistic. The average effective rate is probably in the low 20%. Let's say 22, maybe 23. There's different ways of calculating that, and they disagree, but it's way lower than the 35. So when you hear, as you will for sure, as Mr. Trump's effort to do this works its way through the media and through the Congress, that 35% is more than corporations pay in other countries. That's true. 35% is higher than the nominal rate in other countries. But when you compare the effective rate, what corporations actually pay in the United States with what they actually pay in Europe or Japan and so forth, it turns out that we are very similar to them. In other words, it's a hustle it's an attempt to mislead the public into supporting the something that's good for the corporations. And that's the end of the story. And let me drive it home in yet another way. Let's suppose it goes through. Let's suppose the corporations pull off this little hustle and get themselves a 15% nominal rate. Then they can use exemptions or deductions, or maybe they can't, but. But they won't even care so much because getting it down to 15% is more attractive than even having 35% and using the deductions. Let's suppose they get it. We are told to believe that corporations whose taxes are cut will therefore do all kinds of useful things, hire lots of us, get jobs going again, boost business. There's absolutely nothing in economics that justifies such a claim. A corporation that has lower taxes to pay is now going to sit on the money that it used to pay in taxes. And then the corporate board of directors, typically 15 to 20 people, under the pressure of major shareholders, another dozen folks, they will sit around and decide what. What to do with the money they no longer have to pay in taxes to Uncle Sam, thanks to Mr. Trump, if he gets his way. What they will do with the money they no longer spend on taxes is anybody's guess. They're not required to use it to hire anyone. And even if they did decide to hire anyone, you know who they'd hire? Chinese workers who are much cheaper than American workers, or Mexican workers, or workers in Bangladesh or Brazil or India or God knows where. There's no requirement that they employ Americans. They can decide to lend the money to a foreign government. They can decide to lend it to Uncle Sam. They can do whatever they want. That's why they like this. They have less taxes to pay. They have more money in their pocket. Why, they could even use it to pay themselves higher executive salaries, to pay out larger dividends to their shareholders, to use the money to acquire one another in mergers. In short, there are many, many things they may do, many of which will not generate any jobs at all. It's the same mistake as imagining that the other things corporations want us to do will make them all, quote, unquote, job creators. Nothing of the sort is true. A tax cut gives the beneficiary more money in his or her pocket in the corporate bank account. What they do with it is an entirely different matter. Let me turn to another topic. One of you sent me a question and you said you've been reading recently about Clintonomics and you recall some years ago, hearing often the phrase Reaganomics. Are these really fundamentally different economic policies? Are these really different ways of understanding and operating in the economy? And I want to respond to that because we're probably going to get, if we don't already have it, Trumponomics. We did have Obama nomics. So I assume we keep getting this. Let me begin by the obvious. Are there differences between Clinton and Reagan? Of course. Are there differences between Obama and Trump? Of course. Are there differences in their economic policies? Yes, there are some. But here's what I want to drive home as the more important the differences between them in economic terms are small. Mrs. Clinton, for example, said she would increase taxes on the very wealthy. Mr. Trump, not so much. Mr. Trump said he would cut the corporate tax rate that we just discussed down to 15%. Mrs. Clinton said 20%. Or in other words, not so much. Mrs. Clinton said she wouldn't slap a tariff on Chinese goods. Mr. Trump said he would, and so on. There were some differences, but they were small. And what do I mean by small? Neither of them dealt with the big economic issues. Last week I spoke about that, so I won't repeat myself, other than to say that the really big issues that confront this economy are inequality, which we are becoming the most unequal country among the rich industrialized countries in the world. We're already there, but it's getting worse. That's a real big issue. And we are unstable. We are now going through the second major crash of capitalism in 75 years. The other one, the 1930s, and between the end of the crash of the 1930s, roughly dated 1941, and the beginning of this one, roughly dated 2008. The National Bureau of Economic Research counts 11 downturns every four to seven years. This economy turns down. That's called instability, and that's an enormous burden on this country. Real economic policy would deal with inequality in a substantial way, not by an adjustment of the tax at the top or an earned income tax credit for the poor. These are small things. These are band aids. When the problem is a cancer. We have to have massive programs to deal with the massive redistribution of wealth from the middle and the bottom to the top over the last 30 years. And neither candidate even admitted it, let alone dealt with it. But here's something more. Capitalism as a system is in question. It is being criticized and challenged all over the world. A new economic system is becoming more and more interesting to more and more people. Worker co ops, a way of organizing enterprises in which people democratically decide one person, one vote. What happens in the enterprise. Not a tiny group of board of directors and major shareholders, but all the people whose livelihoods depend on it, all the people who make the profits. They should have democratic power. If we want to have a society that changes and works better, we need policies and we need candidates who, who talk about what should be done to develop a worker co op sector in our economy much bigger than it is, so we can all see it and we can all imagine working in it and learn what it's like to work in a democratic enterprise, use our purchasing power to support an enterprise. We believe in capitalist or worker co op. That should be a debate. The issue was ignored by Mrs. Clinton. It was ignored by Mr. Trump. Clintonomics and Reaganomics ignored all of that. 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. We've come to the end of our program. I Want to thank truthout.org that remarkable partner of ours. Now, for years we work together with them. They send out this program. We are grateful. I want to thank all of you that pay attention, that visit our website and that look for ways to partner with us. It is a pleasure producing this program and I look forward to doing it again next week. Sam.