Economic Update with Richard D. Wolff
Episode: Economics, Psychology and Trump
Date: April 6, 2017
Host: Richard D. Wolff
Guest: Dr. Harriet Fraad
Episode Overview
In this episode, Richard D. Wolff discusses the intertwining of economics and psychology, focusing on how systemic economic stresses and inequalities shape politics and personal wellbeing. The first half covers updates in global and American economics — bank branch closures, French elections, elite university admissions, climate and shipping, and the inequities within property taxes. In the second half, Dr. Harriet Fraad joins to analyze the psychological forces behind Donald Trump's election and what the current administration’s policies portend for the American working class, particularly in health, education, and economic security.
Key Discussion Points & Insights
1. Citibank’s Branch Closures & US Economic Concentration
[05:40 – 09:40]
- Wolff quotes Citibank CFO John Gerspach explaining the closure of 25% of their branches, concentrating operations in just six US cities: “It’s where the people with the money live and we feel pretty good about our ability then to generate good returns going forward.” ([07:00])
- Insight: This demonstrates the economic divide — major banks see most Americans as unprofitable, focusing only on the wealthiest urban centers.
Notable Quote:
"If those are the six cities where the money is, what is Mr. Gersbach telling us about the rest of the United States [...] how interesting they are to one of our biggest banks?" - Richard D. Wolff ([08:30])
2. The French Election and Global Political Anger
[09:41 – 19:10]
- Wolff compares the political climates in France, the UK (Brexit), and the US (Trump’s election) — emphasizing how economic decline breeds working-class anger and outsider candidates.
- Left vs Right: French far-left candidates (when combined) are as popular as the far-right, but the media only focuses on right-wing anger.
- Historical Parallels: Jean-Luc Mélenchon’s proposal for a 100% top income tax mirrors FDR’s 1944 proposal.
- All 11 French presidential candidates participated in TV debates; contrast with two-party exclusion in US politics.
Notable Quotes:
“The anger of the working class, here's the lesson, can go either way, just like in this country. It could go to Trump or it might have gone to Mr. Sanders.” - Richard D. Wolff ([15:00])
“It’s interesting that the most left wing character in French politics ... redefines, rediscovers and re-advocates a Rooseveltian idea.” - Richard D. Wolff ([18:30])
3. Elite University Admissions and Reproduction of Inequality
[19:11 – 24:00]
- Washington Post exposes how elite US universities admit based largely on wealth and potential donations, not merit, ensuring the perpetuation of elite status.
- The rich use money not just to get ahead but to ensure their children do, keeping out talented but less wealthy applicants.
Notable Quote:
“When a well-heeled family that made a contribution gets their child in, another child is kept out. And that’s not a child whose ability is less, whose creativity is less. No, it's a child who didn't get born into a family that has given or may give money to the school.” - Richard D. Wolff ([22:00])
4. Global Finance, Climate Change, and Capitalist Contradictions
[24:01 – 32:00]
- Legal and General Investment Management (LGIM), the UK’s largest asset manager, is shifting away from fossil-fuel investments, demanding companies adapt or face divestment.
- US deregulation under Trump may handicap American companies globally.
- Shipping Crisis: Shipping industry pollution collides with new global regulations, but companies can’t afford to comply due to post-2008 economic weakness. Profit motives drive environmental and health crises, with the public paying the real cost.
Notable Quotes:
“This is the spectacle of an economic system shooting itself in the foot. This is not smart.” - Richard D. Wolff ([28:30])
5. Property Taxes: Systemic (and Deliberate) Tax Inequity
[32:01 – 32:20]
- Local property tax only applies to tangible property (houses, cars), not intangible property (stocks, bonds).
- The richest Americans own most stocks/bonds and are exempt from local property taxes, increasing inequality.
Notable Quote:
“If you own a $100,000 house, you pay a property tax. If you sell that house and buy ... $100,000 in stocks and bonds, your property tax is zero.” - Richard D. Wolff ([31:30])
Main Interview: The Psychology of Trump’s Election
with Dr. Harriet Fraad
[32:24 – 57:33]
6. Why Did Trump Win? The Psychology of Disappointment and Desperation
[32:24 – 36:30]
- Blue-collar men and women turned to Trump after “neoliberal capitalists like Hillary Clinton and Obama promised prosperity and didn’t deliver.” ([32:40])
- Obama’s “hope and change” failed economically; people work harder but don’t get ahead. Frustration leads to radical action.
Notable Quotes:
“They decided ... we’ve got to go for somebody completely different out of the establishment. And they had two choices. One was Bernie Sanders ... the other was Donald Trump.” - Dr. Harriet Fraad ([33:14])
“Donald Trump did not mention specifically the bankers, but he said, ‘I will drain the swamp which is Wall Street.’” - Dr. Harriet Fraad ([34:28])
7. Scapegoating and the Sense of Displacement
[35:12 – 39:58]
- Many white working-class voters felt “excluded” as minorities, women, and LGBTQ people’s struggles seemed to dominate public attention, despite their own mounting hardship.
- They perceived being cast as “ignorant, bigoted rednecks” and felt shamed for their poverty, pushing them further toward a candidate who validated their anger and promised lost dignity.
Notable Quote:
“I will make you great again. I will make white men great again. And your kids will have brand name sneakers ... and that is a huge shame and fury ... that they’ve been bypassed.” - Dr. Harriet Fraad ([39:28])
8. The Reality vs. The Perception of Economic Decline
[39:58 – 41:03]
- Actual data shows minorities and women are still worse off, but the dominant narrative is about their advancement, fostering white working-class resentment.
Notable Quote:
“The truth of it is, since I’m an economist, that ... the loss ... in the average property owned by African Americans has been worse than [for] white people ... But the truth of it is lost.” - Richard D. Wolff ([40:10])
9. Trump’s Policies: Delivering the Opposite of Hope and Change
[41:45 – 53:17]
- Healthcare: Gutting the Affordable Care Act would have removed coverage from 21 million (many of whom voted for Trump), funneling that money into tax cuts for the rich and corporations.
- Nutrition Programs: Cutting WIC (Women and Infants nutrition), Planned Parenthood, and domestic violence prevention — all lifelines for struggling families.
- Education: Slashing funding for Head Start, pre-K, after-school programs, college grants, and support for students with disabilities.
- Impact: These cuts will worsen inequality, health, and educational outcomes — precisely for the demographic that supported Trump.
Notable Quotes:
“He’s taking the food from the mouths of babes and making life more difficult for just those people who supported Donald Trump because of their hope for change.” - Richard D. Wolff ([46:45])
“By taking away battered women’s shelters ... you’re condemning women to death, and you’re also condemning parents.” - Dr. Harriet Fraad ([48:08])
“Whatever it will, education will be cut at all levels … Parents are going to have to scramble. Already 85% of American children are in substandard daycare.” - Dr. Harriet Fraad ([50:04])
10. Political and Psychological Fallout: Where Is America Headed?
[53:17 – 57:21]
- Wolff contrasts Obama’s era (disappointing, but not worsening) with Trump’s: “Mr. Trump is making it much worse.”
- Fraad predicts psychological despair: increased depression, opioid addiction, and suicide, especially among working- and middle-class whites.
- But she also sees signs of hope in grassroots organizing, especially among women: "People are connecting, particularly women ... they’re organizing, protesting, marching, signing petitions as they haven’t for 50 years. And that will create the hope and the change." ([56:49])
Notable Quote:
“What happens to a dream deferred? ... Does it just sag like a heavy load, or does it explode? Those are the possibilities.” - Dr. Harriet Fraad, quoting Langston Hughes ([55:56])
Memorable Moments & Notable Quotes
- “It’s where the people with the money live and we feel pretty good about our ability then to generate good returns going forward.” — Gerspach, Citibank CFO ([07:00])
- “This anger of the working class looking for outsiders is at least as much a left wing anger looking for left wing solutions as it is a right wing anger.” — Richard D. Wolff ([14:20])
- “If you own a $100,000 house, you pay a property tax. If you sell that house and buy ... $100,000 in stocks and bonds, your property tax is zero.” — Richard D. Wolff ([31:30])
- “People are connecting, particularly women … they’re organizing ... as they haven’t for 50 years. And that will create the hope and the change.” — Dr. Harriet Fraad ([56:49])
- “What happens to a dream deferred? ... Does it sag ... or does it explode?” — Dr. Harriet Fraad quoting Langston Hughes ([55:56])
Timestamps for Important Segments
| Time | Segment/Topic | |-----------|-----------------------------------------------------| | 05:40 | Citibank closures and economic concentration | | 09:41 | French election, Brexit, US parallels | | 15:00 | Working-class anger: Left AND Right | | 19:11 | College admissions and inherited privilege | | 24:01 | Global finance, climate change & US disadvantage | | 32:01 | Property tax injustice | | 32:24 | Dr. Fraad: Psychology of Trump’s win | | 35:12 | Scapegoating and working class alienation | | 41:45 | Has Trump delivered for his base? | | 46:45 | Effects of health and nutrition cuts | | 50:00 | Cuts to education and family supports | | 53:17 | Outlook: From disappointment to despair or revolt? | | 56:49 | Organizing: Signs of hope and resilience |
Closing Thoughts
This episode reveals the deep interdependence of economics and psychology in understanding political outcomes. Wolff and Fraad argue that Trump's rise was driven not only by economic decline and inequality, but also by feelings of shame, exclusion, and resentment among the working class. The policies since, they contend, will only exacerbate this alienation—perhaps leading to renewed groundswell for progressive change as grassroots organizing intensifies in response.