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Sam. Saint. Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives, our jobs, our incomes, our debts, those looming down the road, and they're scary these days and those facing our children, and they're scarier still. I'm your host, Richard Wolff. I've been a professor of economics all my adult life and I currently teach at the New School University in New York City. Before jumping into today's updates and then in the second half hour interview, a few short announcements. I want to remind everyone, because we're very proud here at Democracy at Work about this, that we are now a television program. That's right. This very program is a television program as well as a radio program. And you can see us Sunday evenings, 8 o' clock Eastern Time on Free Speech TV, carried by Dish Systems and so on across the United States. Again, 8 o' clock Eastern Time and the appropriate adjustments for Central, Mountain and Pacific times. I also want to remind everyone that the second Wednesday of every month, and that means in April, the 12th of April, at 7:30pm I give my monthly Economic update at the very famous historic Judson Memorial Church on Washington Square in New York City. Anyone who is listening or watching who may be in the New York area, visiting or resident is welcome to come. It's a chance for me to expand on the kinds of things we do on this program to meet you to answer questions. It's a real good opportunity to do all this live and that's something I look forward to. So once again, the next one will be Wednesday, April 12, 7:30, Judson Memorial Church on Washington Square. Finally, I will be in the Los Angeles area speaking on the Trump revolution, on where the economy is going, on the problems and the solutions. There will be two talksone on the 20th of May at the Emanuel Presbyterian Church in Los Angeles and the other on 21 April, the next day at Occidental College in Los Angeles. So once again, April 20 and 21, Emanuel Presbyterian Church and then Occidental College. For more information, go to democracyatwork and you will get the specifics. All right, let's jump into the economic updates. And the first one is the kind of update I like to do because it isn't me. I can quote somebody with impeccable credentials to tell us something about where the economy is going. And this time I'm going to quote John Gerspaks. I'll spell it for you. G E R S P A C H. He's the chief financial officer of Citibank one of the largest banks in the United States and indeed in the world. At a conference last month, he was asked about the decision by Citibank to dramatically cut its branches around the United States and indeed around the world by about 25% in the last few years, just closing them. And this is what he said. And it was reported in the financial times on April 3rd of this year. And I quote, reading from the Financial Times, Mr. Gerspeck explained that the US network of Citibank is now confined to six cities. New York, Chicago, Miami, Washington, D.C. los Angeles and San Francisco. And now listen to the quotation from Mr. Gersbach, because it says more about the American economy than an encyclopedia and it's much shorter. Here we go. Referring to those six cities where they've concentrated their networks, Mr. Gershbach says, quote, it's where the people with the money live and we feel pretty good about our ability then to generate good returns going forward. It's where the money is. If Those are the six cities where the money is, what is Mr. Gersbach telling us about the rest of the United States, where the vast majority of people are and how interesting they are to one of our biggest banks? I want to turn next to the elections in France that are coming up in a very short number of days, and I want to talk about them because they illuminate what's been going on in the United States, in the United Kingdom and elsewhere around the world. First, let me put the setting capitalism in France, as everywhere else over the last 30 to 40 years, has been leaving the country to move to lower wage parts of the world, imposing austerity cutbacks on public services, public jobs for the mass of people building up to the crash of 2008, from which we remain societies whose majority have not yet recovered, hardly at all. And so, of course, people are upset, getting desperate, becoming angry, becoming disillusioned with conventional politics. And so the British working class expressed their dismay over the way their capitalism has evolved by voting to leave the European Union. The surprise vote for Brexit. Yes, leaving the European Union doesn't solve their problems and indeed may make them worse. But this was a chance to vote against politics as usual, vote against the conventional leaders in Britain. And so the British masses did it. Likewise here in the United States. Conventional politics in the Republican Party had Jeb Bush and folks like that supposedly shoo ins to win until an upstart who expressed the anger and bitterness of masses of American working people, Donald Trump, basically pushed him out of the scene. And when the Democrats had a kind of upstart, new, different voice, Bernie Sanders, their leading candidate, Hillary Clinton pushed him out of the scene, not by winning so much as by shenanigans, but she did it, leaving the election to Trump the outrageous, the outsider, the nouveau against the same old, same old Mrs. Clinton. And we know the result. Working people changed. Either didn't vote at all, hurting Mrs. Clinton, or switched over to Mr. Trump, propelling him into victory. And now the French, basically, you know, the same story, but it's important that that be understood. Well, what's the old part of France? Well, it's the inheritors of Sarkozy and, and all of that. And they're represented by a Mr. Fillon. His problem was he got caught. He and his wife using public money to give themselves no show jobs for themselves, their children and so on. And so he's in trouble. He can't get the kind of votes he used to. He's being pushed out sort of the way Trump pushed Bush out in this country. And then there's the kind of central member of the Socialist Party, a Socialist Party that's very much like the Democratic Party in the United States. A Hillary Clinton type person is running an independent campaign. His name is Macron. Well, you put together the Hillary Clinton type, Macron and the Jeb Bush type, Fillon, and they get about 42, 43% of the votes, according to the polls that have been done over the last few months. And then there's the real outsider on the right, Marine Le Pen, sort of the Trump of France. And then there's on the left, there's the sort of Bernie Sanders, but that's split into two parties. A left wing socialist, Hamon, and an even further left wing ex Communist, Jean Luc Melanchon. You put Hamon and Melanchon together, they're not, they're separate candidates. But if you put them together, they get as many votes as Le Pen does. Something, by the way, that the American media overlooks with a regularity that is stunning. But basically, you put the left half of French politics together, they get about 50%. You put the right half of the of French politics together to get about 43%. The lesson should be lost on no one. 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. The press tends to forget that it focuses much more on the right wing. Less Le Pen gets publicity in the west on a scale that completely dwarfs what is given to Hamond and Melangen, even though those two far left together have as many supporters in France as Le Pen does, that's the reality. So 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. Or it might have gone to Mr. Sanders. He is after all, getting the remarkable result in polls these days as being the most popular politician in the United States. Even Fox News has admitted that last thing about the remarkable French election whose results we'll know. The total number of people running for president in France right now is 11. The five that I've mentioned and then six others. The five are the major candidates, but there are six others. Some of them are fairly well known. Nathalie Artaud of the movement Lut Ouvriere Workers Struggle has been around a good while the others are a bit newer in most cases on television this last week, guess what? All 11 participated in a debate here in the United States. We of course exclude third, fourth and fifth party candidates in order to hammer at there's only really a two person race. The French don't do that so much. They actually give them all a chance to appear before the people and make their cases. You might be surprised to know that in polling after the debate this last week, the clear winner across the board, right wingers and left wingers said, was the most left wing candidate, Jean Luc Melanchon, who gave the best performance. And last point, Mr. Melanchon, Mr. Hamon, as the most left wing are interesting because what they remind an American most of is Franklin Delano Roosevelt. They're demanding not the end of capitalism, not an alternative system, not at all. They're demanding left wing progressive limits, constraints, controls on capitalism. For example, Mr. Melanchon has advocated a top income tax rate for the French people of 100%. That's right, a maximum income. Because if you earn more than that, you under Mr. Melanchon's proposal, 100% of that would be taxed by the French government. So you couldn't earn more than that. That's exactly what Franklin Delano Roosevelt proposed in his State of the Union message in 1944. So this is an old idea. It's an American idea, or at least it's as American as anybody else's. It's interesting that the most left wing character in French politics these days are one of the most redefines, rediscovers and re advocates a Rooseveltian idea. French politics will give us another sign of in which direction the anger of a mass of people Disgruntled dishappy, dissatisfied with capitalism, where that's going. The next item that caught my interest this last week was a story in the Washington Post. That newspaper did some digging and here's what they found. And this is a story on April 1, although it's not an April Fool's story, It's the real McCoy, not fake news. Here we go. It discovered in research into the University of Virginia. It basically discovered, and if you read the story, you'll see it, that admissions policies at elite universities are very careful to take into account when deciding who to admit, who to reject, who to put on a waiting list, the sort of in between. They take account of whether the candidate, the young person looking to get into the school, comes from a family that is rich or not, a family that has donated money to this university or not, and a family that might in the future, because it's well healed, be able to give money, especially if approached by the university in regard to the child of the family that the university accepted. In other words, if you've got the money, you get your kid into the good school. Is that the case? The Washington Post wondered. It did the research, it got the documents, and its answer is a resounding yes. Take a look at the story April 1st and you will see because it extends to many other schools beside the University of Virginia. And it's another reminder that the people at the top, the 1%, use their money, use the lure of their money to give their children all kinds of advantages of other people don't have, which gives those children a leg up to become themselves part of the 1%. And to reproduce is a sign of a capitalism getting old and a capitalism keeping the same people in the same position no matter what. And it's therefore a capitalism that cannot tap the energies, the enthusiasms, the creativity, the intelligence of all kinds of people. Because you know, 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. Keep in mind, we don't do education like that everywhere, do we? Primary schools, secondary schools, everybody gets into the school. It's your right, it's your obligation as a parent to give your child the right to an education. High schools do not, in general, at least not the public ones, have the ability to exclude people who don't have enough money. The private high schools well, that's another matter. And when you talk to the schools, they explain to you we have to do that. We're competing with all the other schools. If we don't admit the kinds of people who are likely to give us money, we'll fall behind. And what are those schools then saying? They're part of a system. They're saying don't single them out. They're saying don't punish us because we have to behave this way if, even if we don't like it, because the system works in such a way that we will be self destructive if we don't do something which even we know, as the Washington Post story tells, is undemocratic and unjust and in the long run bad for our society and even its economic system. The next story has to do with an obscure company in Great Britain, but here's why it's important. The company is called Legal and General Investment Management. Sounds boring. Well, it's the largest asset manager in England, that is, it manages other people's money, rich people's money who give this corporation known as LGIM the letters of the words I just gave you. And they have $1 trillion under management. That's the amount of money that's been given to them by individuals, by companies to manage. So they have an enormous impact, not just in Great Britain, but in the world if you dispose of a trillion dollars worth of investment. And here's what they've been doing, and it's something for Americans particularly to think about. They have decided that the successful businesses of the future will be the ones who adapt to the changing reality of global warming and climate. They want companies to not be reliant on fossil fuels, to not be part of what pollutes the air, the water, the oceans. They think the companies that adapt best to and soonest to a new world that does not allow these sorts of things as they are being outlawed across the world except in the United States. They believe the future lies with those companies. And they're letting companies know they will vote against the managements, they will divest, that is, they will not invest in companies that do not adjust to a green system of organizing capitalism. And you know what that means. It means they're going to favor those kinds of companies here in the United States where the Trump administration is deregulating and dismissing and denying all of this stuff. Companies are not going to be in the forefront of making adjustments because they don't have to. The law isn't pushing them, the government isn't pushing them, etcetera and so they will be disfavored by lgim. They will be companies that have a harder time selling their stocks and that will filter down to a harder time succeeding competitively. In other words, the next time you hear some gleeful tweet of President Trump about getting rid of climate regulations, this is the spectacle of an economic system shooting itself in the foot. This is not smart. The rest of the world is a bigger economic unit than the United States is, by a lot, and it is going in a different direction. We ought to be worried, very worried. Here's another example, in a way, of the same thing. The shipping fleets of the world, the big ships, the freighters that carry things, have been in terrible shape since the collapse of 2008. They haven't recovered at all because global foreign trade hasn't. We don't have the money to buy the quantity of stuff from China we once did, etc. Etc. So shipping companies have been in dire trouble. Meanwhile, the climate issue has caught up with the shipping industry. They pour all kinds of pollutants into the oceans of the world and into the air. Why? Because companies, to make more profit, American companies, European companies, Japanese companies, have been moving to Latin America, Africa, Asia to produce where wages are low, many times thousands and thousands of miles from where the market is. So, for example, an American company that serves an American market moves production to China. It now has a new problem. It's making a lot of money because it pays Chinese workers much less than American. But it has to bring that stuff 10,000 miles back to the United States to sell it. So it has to use shipping. And the ships dump their refuse, their spent fuel into the ocean and into the air. It's a big contributor to acid rain. The sulfur that comes from these ships becomes particles that are known to be causes of asthma, bronchitis and a whole host of other diseases. That's why the United States, excuse me, the United nations in October of last year reached an agreement that shipping companies have to stop doing this pollution that they're causing. They're going to have to change to more expensive fuel or they're going to have to install scrubbers, they're called, to be less of the pollutants. Well, they can't afford it because the economic crisis of capitalism has hurt them. It's a wonderful story about how the capitalist system breaks down. Can't solve the problem of its instability, can't solve the problem of. Of its pollution. And now the two are feeding on each other. It's a crisis no one knows what's going to happen. The shipping companies cannot afford to do what they have to do. Once again, we're seeing that the whole notion of profit is put our health in jeopardy. It's the part of capitalism we don't pay attention to. When profit does something that fouls the ocean, damages our health, and the companies that made the profit put it in the bank. And the rest of us deal with the costs that they as companies don't have to bear. Now the shipping companies are caught in that dilemma in the short time that we have left during this first half. Let me make a comment about the season. It's the tax season. April always is a tax season. And so I like, and I will do this in the next couple of weeks as well, to say a few things about our tax system because it's on our minds since we have to pay them today in the time that I have, I want to say something about property taxes. Here in the United States, as you know, we have three levels of federal, state and local. Federal government mostly relies on income tax. State governments rely on sales and other kinds of taxes. The local government tends to rely on property taxes. That's how most cities and towns survive. They tax the land, the homes, the automobiles, the business part of town. They all have to pay a tax that's a percentage of the value of the property. So if you're a property owner, you pay a tax. If you are a homeowner and you rent it out, you charge your tenants a rent, part of which you use to pay the tax on it. So renters pay. They just do it indirectly. Okay, here comes the punchline. If we really had a property tax, we would tax all property, both the kind that I just mentioned, which by the way is called tangible property, land, buildings, automobiles and so on. But we would also tax intangible property. And that's simply stocks, bonds, things like that. But we don't in the United States, we only tax tangible property in our thousands and thousands of cities and towns. We tax your home, we tax your car, we don't tax the value of your stocks and bonds. This is an enormous tax injustice. It exempts from taxation stocks and bonds, they don't. They are property, but they don't have to pay a tax. Let me show you how gross this is. If you own a hundred thousand dollar house, you pay a property tax. If you sell that house and buy with $100,000 that amount of stocks and bonds, your property tax is zero. You don't pay any. Now let me remind you, it's the richest people in America who own the bulk of stocks and bonds. 1% of shareholders own about two thirds of all the shares. So this is a property tax system that hits the middle and lower classes, the homeowners, the small business owners, the, the renters, directly or indirectly, and it exempts the folks at the top. If you feel taxes are unjust, you're right. But the solution isn't to make them higher or lower. The solution is to tax those who have escaped taxation for so long. We've come to the end of the first half of Economic Update. For today. We're going to have a very, very important and interesting conversation. And in the second half, please stay with us. I will introduce my guest, who is the same guest on the first show of each month, as some of you know, and we will have that conversation in a very short time. Please stay with us. We will be right back. Sam. Welcome back, friends, to the second half of Economic Update. I'm very happy to announce again, for those of you who may not have known, that the first program each month is devoted to an interview that I have with Dr. Harriet Fraad. She is a mental health counselor and a hypnotherapist. She has a private practice in New York City and has had it for many, many years. She writes in a variety of journals. And I'm happy to also say that you can now access her writings at two places. One is her own website, Harriet Fraad, spelled f r aad. That's all one word, harrietfraud.com but you can also go to the website that we maintain on this program, democracyatwork.info and you will find there her work as well, covering the topics we'll be discussing today, but a whole host of other things as well. Before I jump into the interview for today, let me first welcome you, Dr. Farad, to be with us and also remind you that we maintain two websites that you can go to, democracyatwork.info and rdwolf.com that are kinds of supplements to this program. They carry a great deal more information of the sort that we normally cover here. They allow you to comment on the program, to ask questions, to tell us what you like and don't like. They allow you with the click of your mouse to follow us on Facebook, Twitter and Instagram. In other words, there are ways for you to partner with us, to see a way that you can make use of what we do here by sharing it with people you think might be interested, making use of it in your own life that's why we maintain these websites. They are available 247 at no charge whatsoever. Democracyatwork, all one word. Democracyatwork.info and rdwolf with two Fs dot com. Okay, Dr. Fraad, let's begin with a question that may be the most popular question we're getting these days in this program. So let's begin with a first question that is perhaps the most frequently received question that we get in this program these last few months. Now, how do you account as a psychological specialist, a professional, how do you account knowing all you do for the election of Donald Trump? What happened in this society to produce that outcome? How do you think about it?