Economic Update: False Econ Recovery, True Journalism

Summary

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Economic Update with Richard D. Wolff

Episode Title: False Econ Recovery, True Journalism
Date: May 16, 2016

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Overview

This episode of Economic Update explores the myths of economic recovery in the United States and the vital, often-overlooked role of true investigative journalism. Host Richard D. Wolff delves into recent news about economic policy, wealth inequality, public subsidies for private gain, deceptive corporate practices, and shifting burdens in the financial system, before turning to an in-depth interview with award-winning investigative journalist Bob Henley. Together, they reveal a stark disconnect between celebratory national economic narratives and the daily realities in most American communities.

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Key Discussion Points & Insights

1. Carried Interest: A Decades-Old Tax Loophole for the Rich

• Explanation of Carried Interest (01:15–08:00):
  • Carried interest is income earned by hedge fund and private equity managers, primarily for handling wealthy clients’ investments.
  • The standard compensation: “2 and 20”—2% of assets managed annually, plus 20% of any gains.
  • In 1993, a law allowed firms to pay regular income tax on the 2% fee but a much lower capital gains rate on the 20% performance fee, granting a massive tax break to the wealthiest.
  • “It is an outrage, and nothing other than being outraged is a way to deal with this problem.” — Richard D. Wolff (09:31)
• Continued Inaction:
  • Presidents and major politicians (Clinton, Trump, Sanders, Obama) have campaigned against it, but nothing changes.
  • Over 25 years, this loophole cost the US government around a trillion dollars—money that could have fulfilled other social needs.

2. The Myth of Government as a Burden & Real Subsidies for Business

• Stadium Case Study – Miami Marlins Park (10:29–19:12):
  • Public funds ($500 million in city bonds, $2.4 billion total with interest) built a privately profitable sports stadium.
  • Weighing public costs vs. private profits: “The subsidy was enormous, but the payoff was very poor... Forbes magazine referred to it as, quote, baseball’s most expensive stadium disaster.” — Wolff (15:47)
  • Real estate values benefited speculators, while taxpayers bore the risk and debt.
  • This pattern—private profit through public subsidy—is widespread across US industry, belying claims that government is merely a regulatory or taxing burden.

3. Corporate Patriotic Branding and the Budweiser “America” Rebrand

• Budweiser’s Rebranding to ‘America’ (19:28–22:14):
  • Originally American-owned Budweiser, now owned by Belgium's InBev, was temporarily renamed “America,” using patriotic symbols and language.
  • “You are to think of this beer as American, precisely because it isn’t.” — Wolff (21:59)
• Critique: Wolff lampoons this as cynical marketing, emblematic of corporate detachment from genuine national interests.

4. Financial Risks: Bail-ins & Negative Interest Rates

• Bail-in Mechanism Explained (22:30–26:53):
  • Unlike a bailout (government saves failing banks), a bail-in seizes depositors’ own funds to recapitalize a failed bank.
  • Legalized in the US (and internationally, as seen in Cyprus), many depositors remain unaware of the risk: “If you ever needed a sign of the power of banks in our culture, you have it in the phenomena of bail-ins.” — Wolff (25:56)
• Negative Interest Rates (26:54–28:45):
  • Negative rates mean depositors (even banks) pay for the privilege of keeping money on deposit, an extreme step indicating failed conventional stimulus measures.

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Featured Interview: Bob Henley on The Real State of Economic Recovery and Journalism

5. The False Narrative of Recovery

• Aggregate Numbers vs. Real Lives (31:26–33:30):
  • Media highlights national aggregates, but “nobody lives in the aggregate.” True economic health must be checked at the county and family level.
  • “Out of 3,069 counties, only 7%... have experienced a recovery.”—Bob Henley (33:16)
  • Other data: 30% of counties saw poverty increase from 2009–2014, only 4% saw poverty fall; the rest remained stagnant.

6. Why Elites Miss the Reality

• Disconnect Between Ruling Class and Public (34:42–38:11):
  • Media and political leadership have grown isolated, focusing on analytics and targeted selling rather than investigative reporting.
  • “There’s a death of civic space... You’re disconnected from the polity.” — Henley (36:13)
  • Historical parallels to the decline of previous empires, stemming from leadership blindness.

7. Hidden Economic Struggles: Asset-Limited, Income-Constrained 'ALICE' Households

• ALICE Explained (38:11–40:12):
  • Many families, not classified as “poor,” are nonetheless just two paychecks away from poverty.
  • In New Jersey: 37% face near-poverty; similar or higher numbers in California and Florida.

8. The Politics of Blame & Isolation

• Internalized Failure (40:12–41:17):
  • False personal blame, rather than systemic criticism, fosters political docility.
  • “You blame yourself rather than realizing it’s a system that isn’t working.”—Wolff (40:12)

9. The Degradation of Journalism

• Wages, Structure, and Punishment (41:17–44:54):
  • Investigative journalism is squeezed out by aggregation, poor pay, and the gigification of media.
  • “You don’t have the resources to go out and do reporting... So to some degree, the act of journalism itself becomes a political act, because you’re doing it because it’s what’s required, not what you’re compensated for.” — Henley (42:57)

10. New Jersey as a Microcosm: Persistent Crisis (45:28–49:35)

• Atlantic City & Mortgage Crisis:
  • High foreclosures, underwater mortgages (especially for Black homeowners), and banks’ continued predatory practices.
  • “The rape of the American household economy is continuing today.” — Henley (46:28)
  • Declining property values and shrinking tax base exacerbate fiscal crises for local governments.

11. Broader Implications: Tax Policy, Pensions, and Systemic Erosion

• National Parallels (49:35–50:49):
  • US and territories like Puerto Rico show the risks of deliberate tax-base erosion and pension underfunding, while corporate loopholes like carried interest persist.

12. The Prison System: The New Exception to Slavery

• Historical Irony (53:03–54:36):
  • Discussion of the Thirteenth Amendment’s prison labor exception and Michelle Alexander’s analysis of systemic racial injustice; critique of political and media trivialization of mass incarceration’s impact.

13. Where Is This Headed? Grassroots and Social Movements (55:18–56:50)

• Emergent Solutions:
  • Local, grassroots efforts (like community-supported agriculture) provide hope and power through engagement and collective problem-solving.
  • “You cannot solve a social problem with an individual action. A social problem needs a social movement.” — Wolff (56:28)

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Memorable Quotes (with Timestamps)

• "It is an outrage, and nothing other than being outraged is a way to deal with this problem." — Wolff on carried interest (09:31)
• "The subsidy was enormous, but the payoff was very poor... Forbes magazine referred to it as, quote, baseball’s most expensive stadium disaster." — Wolff on Miami Marlins Park (15:47)
• "You are to think of this beer as American, precisely because it isn’t." — Wolff on Budweiser's “America” rebranding (21:59)
• "If you ever needed a sign of the power of banks in our culture, you have it in the phenomena of bail-ins." — Wolff (25:56)
• "Out of 3,069 counties, only 7%... have experienced a recovery." — Henley (33:16)
• "There's a death of civic space... You're disconnected from the polity." — Henley (36:13)
• "The rape of the American household economy is continuing today." — Henley, on the persistent mortgage crisis (46:28)
• "You cannot solve a social problem with an individual action. A social problem needs a social movement." — Wolff (56:28)
• "The act of journalism itself becomes a political act, because you're doing it because it's what's required, not what you're compensated for." — Henley (42:57)

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Notable Moments & Timestamps

• Carried Interest Loophole Explanation: 01:15–09:30
• Marlins Stadium—Public Subsidy, Private Profit Debunked: 10:29–19:12
• Budweiser ‘America’ Rebranding Satire: 19:28–22:14
• Bail-ins & Bank Power: 22:30–26:53
• Negative Interest Rates: 26:54–28:45
• Bob Henley Interview Begins: 30:02
• County-by-County Reality of Recovery: 32:00–34:42
• Civic Media's Collapse & Political Blindness: 34:42–38:11
• ALICE: Families on the Edge: 38:11–40:12
• New Jersey’s Crisis as National Microcosm: 45:28–49:35
• Closing: The Need for Social Movements: 55:18–56:50

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Tone and Language

Richard D. Wolff employs a direct, critical, and often satirical tone, aiming to empower listeners through clear explanations of complex economic topics. Bob Henley offers matter-of-fact, on-the-ground observations, blending personal anecdote with institutional critique, and sharing a sense of urgency about investigative journalism’s social responsibility.

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Summary Takeaway

This episode of Economic Update lays bare the vast gap between political/economic rhetoric and the reality experienced by most Americans. Economic "recovery" is a myth for the vast majority, perpetuated by policy, mass media, and corporate interests—while critical journalism that could expose these truths is itself under siege. The solution, both Wolff and Henley argue, can only come from renewed collective action and social movements grounded in authentic engagement and mutual aid.

Transcript

[A]

Sam. Sa. Welcome, friends, to another 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 that loom as we look down the road at the economic futures we face. I'm your host, Richard Wolff. I've been a professor of economics all my adult life and I currently teach at at the New School University in New York City. Well, we have so many items to jump into and we have a very exciting interview also coming. So let me get right to it, rather than making the announcements with which I sometimes start the program. Well, in the news again this last week was something about carried interest. If you noticed it in the newspaper, your eyes probably glazed over, as most people do. It sounds like some little detail of investment activity that doesn't concern people who don't have much to invest in the first place, but it actually does affect all of us. So I'm going to talk about it. What is it? Well, Carried interest is the name given to the income earned by hedge funds, private equity dealers, investment banks, and so on. These are a set of institutions who serve rich people. That's their main clientele. People who have millions or indeed billions and who are busy with their own lives and pay somebody else to manage their money. That's a polite way of saying to use their money to, to make still more money. Because in the way that a capitalist system works, the two ways you have basically of making money are by working for it or by owning property that can make money even though you don't have to work at all. And hedge funds and private equity folks, they're the ones who take money if you're lucky enough to have a lot of it, and they make it work for you, they make it make more money. Typically, here's how it works. You give a hedge fund a million dollars or a billion dollars or any amount that you have that you want them to manage for you. And that's what they do. They invest it, they lend it, they use it for all kinds of purposes in the stock market, outside the stock market. Their number one goal is to make money by using your money. And here's how it works. The hedge fund or the private equity fund, or the venture capitalist, whatever you want to call them, they charge you to do this, and they charge you on a system called 2 and 20. The 2 refers to the percentage of the money you give them that you have to pay them every year. So for example, if you give them a million dollars, you have to pay them 20,000 a year to manage your million dollars. So they get 2% of the money you give them, the money under management that they invest for you, but they also get 20% of any gain, whatever they make for you. 20% is their fee. So they get 2% of the amount you give them plus 20% of the increase they achieve by hopefully successfully investing your money. So I hope that's clear. If it isn't clear, don't feel bad. It just means you're not among the very rich people who has need for services like this. And I want to be the first to offer my condolences for that sad fact about you as it is also, of course, a sad fact about me. Anyway, why am I telling you this? Because in 1993, a wonderful law was was pushed through the Congress of the United States by these kinds of enterprises. And here's what the law the first 2% of the money that is given to a hedge fund, the people in the hedge fund have to pay the regular rate of income tax on that 2%. Just like you get paid your salary and pay income tax on it. And somebody who paints your garage and is paid by you has to pay income tax on it. So do the hedge funds have to pay income tax on. On the 2%? And here comes the fun part. They don't have to pay income tax on the 20% of the gain there. The law says they're allowed to pay the much lower capital gains rate of taxation. In other words, this is a bill that gives the richest people in the world and the folks they hire to manage their money a tax break. Oh, goodness. A tax break for the richest. And for the firms that cater to the richest, they get a tax break. It's worth, depending on who you listen to, between 20 and $200 billion a year that the federal government doesn't get from them. And I'm not even talking about what state governments could get. So we're talking about an enormous boondoggle given to the richest. But that's not why I'm bringing it up. I'm bringing it up for a different reason. Ever since this was pushed through the Congress, signed by the sitting President, critical people, and even not so critical people have said this is an outrage. That 20% that's not taxed, that's called carried interest. There's a historical reason why it's given that name. It really, it doesn't matter. But people have disgustingly dismissed this as an awful tax boondoggle. I'm just not talking about people like me Critical economists and so on. For example, every major candidate in the race for President Clinton, Trump, Sanders has come out against letting this outrage continue. But better than that, President Obama, when he was campaigning for president, said this was an abomination, it should be gotten rid of. Every budget prepared each year by President Obama over the last eight years has had in it a request that the Congress get rid of this law and make the hedge funds pay the regular rate of taxation all the rest of us have to pay, not just on the 2% fee, but on the 20% cut of the gains that they achieve for their billion and multimillionaire clients every year. Nothing has happened. The bill was passed in 1993. That means we've got 25 years now that we have had something which almost all serious observers believe is a gross boondoggle that has been given to the people in our society whose wealth means they need it least. And it has cost the government of the United states over those 25 years upwards of a trillion dollars by many estimates, of money not available for countless other social needs in order to make the richest amongst us richer. Still, it is an object lesson in who runs this government, how they make the government work, so that the next time you hear one of these folks tell you everything we did is legal, please remember they are the ones who write the laws which they then claim they are abiding by, hoping that we don't notice that they're the ones who not only got the law through the but who make sure that every candidate's commitment is never carried through, every promise doesn't get dealt with. It is an outrage, and nothing other than being outraged is a way to deal with this problem. Okay, let's turn to another issue that is very, very important. An argument is frequently made in the United States that the government is a burden on the business community, that government regulations are a wasteful, unnecessary intrusion on what a private capitalist market would deliver to the people if only the government got out of the way. This is part of a long strategy of the business community to demonize the government, to denounce the state, to portray the state as a burden so that everybody can get behind what the business community wants, which is lower taxes and less regulation. The trick has always been to convince a mass of people to support the attack on the government, to get what the business community wants, and to pretend it's what everybody else wants too, which is almost never the case. So I thought it would be good to give you an example of how the government has subsidized Business in a way that demands attention and that you're all, almost all of you listening or watching this program are involved with. Long ago, wealthy people discovered that you can get money out of the government to make the risks of things you do much lower and the rate of return, the profit you earn much higher. The trick is to find, let's put it politely, complicit politicians who will go along with you, and you make it worth their while and everything gets worked out. I'm going to give you an example. A few years ago, back in 2012, the Miami Marlins baseball team opened a new stadium. It was called Marlins park in Miami. Well, here's how it worked. The city of Miami borrowed money, issued bonds in roughly around $500 million in order to build this fancy modern stadium in a pretty dilapidated neighborhood of Miami. That meant right away a number of wonderful things. First, the cost of building this stadium was borne by the people of Miami because they would have to pay the taxes used by Miami to pay off the bond. Because they had borrowed the money from investors, that money had to be paid back with interest. In fact, the calculation for those of you that are interested is that since the bonds will last 40 years, the bonds that were used to raise the money to build the stadium, if you add up the interest cost over all those years to the cost of building it, the project as a whole will cost Miami to $2.4 billion. Wow. Wow. That's an incredible amount of money for a city, public money to support a privately owned, privately profitable baseball team. It was wonderful because real estate hustlers who knew this was happening could buy the property around the stadium, which went from a poor, dilapidated neighborhood, therefore cheap, to a very expensive place. And if you owned the property, you cashed in on this governmental activity. If you enjoy going to see the Marlins, you are benefiting from a government investment made at the government's expense. All kinds of people who sell hot dogs in there and flags and toys and all the things that go on in a. They all make more money because the building is subsidized by the people. Well, the subsidy was enormous, but the payoff was very poor. People didn't go to the Marlins park the way it was predicted. In fact, Forbes magazine describing this issue, referred to it as ready, quote, baseball's most expensive stadium disaster. The political fallout was amazing. The election that followed, there was a recall election that dumped the mayor of Miami and Dade county there. Because of the involvement of the mayor in pushing this boondoggle through, there's currently a securities and Exchange Commission investigating, investigating the financing, according to Katie Sorensen, a former Miami Dade county commissioner who voted against was a really bad deal. All the claims about the wonderful things it would do for the people of Miami were overblown and didn't amount to anything. But what I love most about this is the Asked to comment, one of the spokespeople, Claude Delorme, an executive vice president of the Marlins, said the In 15 or 20 years, then we'll be able to say whether this was a success or not. One year or two years or five is not a fair horizon to make that call. Now I'm an economist, so let me wear my economist hat and tell you what that just means. No one on earth knows what's going to happen over the next 15 or 20 years. They made claims about profitability that they want us now to believe can only be assessed in 15 or 20 years. Okay, here's what that means. You don't know when you make a commitment for $500 million, whether it will or will not pay off. The honest thing to do is to say that you won't know for 15 or 20 years. If the people pushing this project had told everybody we won't know whether this is a success or not for 15 or 20 years, they would have been laughed out of the room. No one is going to spend 500 to a billion dollars or in this case, $2.4 billion on something that is privately. Prof. Now, for these people pushing it, but for the rest of us, we won't know for 15 or 20 years. That's so grotesque it has to be faked. And that's what happens in all of these cases. The people who want it come in and tell you wonderful stories about the great thing it'll be, the financial success it'll be. It's never honest and it's never reliable. And the next time someone tells you that they have a sure thing, it's exactly like other people who tell you they have sure things that your mother reminded you. Don't listen to people like that. But finally, the other there are people benefitting, the very people who run corporations of all kinds, from real estate to building sports franchises to running sports teams to being the concession runners. They're all making money from this. All those ready private enterprises exist and are profitable because the government was hustled into subsidizing them. That is true for the larger part of all industry in the United States. And it gives the lie to all those stories about how the government is a big burden, what the business Community means it's a burden when they tax us and it's a burden when they regulate us. But for the rest of the time, what we want them to do is to subsidize us. And they work at least as hard at getting the subsidies as they ever do at anything else. I want to remind you because a number of you responded to this story when I first brought it to your attention. So I'm going to ask your indulgence because it is such a statement about the United States that I really can't, can't let it go. From May 23 through the election, that's November, you will no longer be able to drink Budweiser beer. I'm very sorry, but I have to make the announcement. In case you had not already heard. You will be able to buy the same drink and it will come in the same silvery can, but it won't say Budweiser. That's because Budweiser isn't Budweiser anymore. A few years ago, the Budweiser Corporation, born and raised in St. Louis, Missouri, and having become one of the major beers Americans drink, was sold by the Budweiser Company because it was profitable for them to do it. And they sold it to a Belgian company called InBev. So this very iconic American drink, the Budweiser beer, isn't American at all. It's Belgian. It's run by a Belgian corporation that makes all the decisions, how it's made, what's put into it, all the rest of it, because they own it. But apparently they're a little worried that Americans might figure this out since it is public knowledge, and that they might not want to drink the beer with quite the same interest if they knew it was Belgian. Therefore, from May 23 to the election, the InBev Corporation has decided, since they're in control now, no more Budweiser on the label. What's it going to be called instead? Okay folks, get ready cuz you can't make this stuff up. It's going to be called America. Yup, that's it. It's going to say across the can, America. But that's not the worst. Here we go. On the old Budweiser can, it also said king of beers. That was their slogan.

[B]

That's gone.

[A]

InBev doesn't want that. Instead it's going to say e pluribus unum. I kid you not what the phrase that appears, one out of many appears on our currency will now appear on America Beer. And where the can in the old days with Budweiser had the recipe for the beer on the can that's gone too. InBev doesn't want that. And instead. Pay attention now, folks. Instead, America Beer on the can will have ready the words to the Star Spangled Banner on the can. So please be aware, American beer drinkers, you won't have Budweiser anymore, at least not until the election is over. You're going to have America Beer with the Star Spangled Banner printed on it and the currency printed on it, the phrase from the currency. And that's because you are to think of this beer as American, precisely because it isn't. All right, let me turn now to a question. In the time we have left for this first half an hour that you have sent me to respond, some of you have heard the phrase bail in, a bail in. And you've asked me what is it and is it important? And the answer is, I will explain what it is and I will explain why it's important. As you know, the phrase bail out, and there's a big hint. Bail out is a general term we use to describe when the the government comes in and saves a collapsed bank or a collapsed corporation because in its pursuit of profit, the way a capitalist enterprise is supposed to function, it has got itself into deep water and has collapsed as an enterprise. That's because the hunt for profit does this all the time to large corporations and sometimes in a big way. Last time, 2008, which most of you can well remember. And when that happens, these companies who don't like the government meddling in their affairs all do the same thing at the same time. They run to the government and beg it to save them. Having denounced it for 20 years, they then switch gears and demand it. And they get it because they have the money to buy the political system. Anyway, something we're going to be discussing in the second half of today's program with an expert on that subject. Anyway, when the government gives out tons and tons of public money, your money, my money, all of the money paid by taxpayers, when it gives it to companies that have failed in their project of making money and have instead gone bankrupt, like all the major banks did in 2008 and 2009, we call that a bailout. Public money used to save corporations that have misinvested, badly invested, made errors, been corrupt, whatever caused them to collapse. Well then, if that's a bailout, what's a bail in? Here we go, folks. A bail in is when a collapsed entity, for example, a bank has gotten kaput, has failed, has made loans to People who can't pay it back and is therefore desperate the way they all went in 2008 and nine, instead of going to the government for a bailout. Get ready folks, you'll go, if you're a banker, to your own depositors, people who've put their money in a checking account or people who put their money in a savings account and you take their money away from them, you make it your money, you take their money to recapitalize, we call it, to give the bank enough money so it can function because it's lost all of its own money. And we call it a bail in. Because what it is doing is saying if you're a depositor in a bank and that bank goes belly up, it can take some or all of your money that you deposited in there. And you say to me, what? What? Well, you didn't read the fine print, folks. Remember your grandma told you always read the fine print. The fine print ran to 12 pages and you threw that part of the paper away when you opened your account. I'm here to tell you in the United States, as in many other countries, bail ends have now been legalized and made part of many banks documents. And your money could be used in the event of bank failures in a way you never dreamed possible. And if you say to me, well, that's only on paper, it hasn't happened. I'm afraid it has. Some of you remember a year or two ago in Cyprus there was a collapse. And in the bank collapse in Cyprus, when the banks went belly up, up, they required bail ins by the depositors in those banks. People who had no involvement in, no knowledge of, and no responsibility for the misuse of their money by the bank, were required to lose money to the bank to make up to the bank for the failure of the bank. If you ever needed a sign of the power of banks in our culture, you have it in the phenomena of bail ins. Last item we have just a moment for, but it's enough. Some of you have also been reading about negative interest rates and you have asked me repeatedly now to explain them. Well, it's exactly what it says. You know what an interest rate is? If I borrow $100 from you at the end of a year, I give you back $100. That's the principal plus another say five bucks. That's the interest on that loan for that year. So the positive interest rate is 5%. It's positive because you, the lender get back more than you lent out. That's why you were willing to Lend it because you got the five bucks of interest. A negative interest rate works like this. I lend, you lend me a hundred dollars and at the end of the year, I give you back 98. End of story. In other words, you, the lender, have paid me to hold your money for a year, two bucks. So I only have to give you back 98, even though you gave me 100. That's a negative 2% interest rate. Why are we seeing negative rates? Very simple. We have pushed rates, as you all know, down to rock bottom. Interest rates in the United States are lower than they've ever been and it's been that way for years. The purpose of that was to push money into the economy. So we would kick start our economy. Everyone can borrow very cheaply and we would go out there and buy things and spend things and invest. It didn't happen. And now, even though the rates are very low, in order to push people to borrow more, we're saying the government is saying to the banks, you leave money with us, which banks do as a matter of course, we're going to give you back less than you leave with us. It's one more incentive for the banks to do anything other than hold on to money and leave it with the government. Get out there and get it to be lent. There's no sign it's going to work. It's only a sign that everything up until now hasn't worked, which most of us living in this economy already know. Indeed, our discussion today is going to be about the recovery and how real it is. We've come to the end of the first half of our program. Please stay with us. We will be back in a very short time with a very fascinating interview.

[C]

Something good, oh, something good oh, something good oh, something good tonight make me.

[B]

Forget about you for now.

[C]

To get hot get the floor before.

[A]

You go not.

[C]

Let'S go your mind let's go but something go oh, something goes oh, something good oh, something good tonight make me forget about you.

[A]

Welcome back to the second half of Economic Update. I'm very pleased to welcome again he's been on the program before, a friend, a journalist, Bob Henley. Thank you for joining me, Bob.

[B]

Thanks for having me.

[A]

Let me introduce him properly to all of you. Bob Henley is an award winning print and broadcast investigative journalist. Let me interject here. There are very few of these investigative journalists left because most of the print media and a good bit of the rest of it don't think it's profitable to have people do investigations. And so here's another example of how the profit motive ends up with results that are less than desirable. In any case, Bob Henley writes weekly for Salon and City and State. His work has appeared in the New York Times, the Christian Science Monitor, the British paper, the Guardian, and in dozens of other publications, both in the United States and abroad. His broadcast credits, he's also a fellow radio person includes the PBS NewsHour, NPR, the BBC, as well as CBS's 60 Minutes. He is currently the political analyst for WBGO, the Newark, New Jersey based NPR affiliate. Okay, Bob, you clearly got lots of credentials.

[B]

Thanks so much for having me. Always enjoyed.

[A]

Good, Bob. All right. You're an investigative reporter, and one of the things I know from having read a good many of your pieces is that you have been developing a theme which I also try to argue that the so called recovery. I make quotation marks in the air. The so called recovery either isn't there or if it is there, is there for a very small slice of our population and has bypassed everybody else. Is that a consistent message you're getting from your work? Tell us about that question.

[B]

Sure. One of the things is that we in the commercial media are focused on aggregate numbers, which are generated by the Federal Reserve and the Department of Labor and the Bureau of Labor Statistics. Nobody lives in the aggregate. And so what you need to do is actually go to where people live. People live in counties and people operate economically in families. And so I got in touch with a Marxist organization known as a National association of Counties. There is such a thing. And they're number crunchers. And there are 3,069 counties and they have kept track of what's happening and they have a criteria for recovery. And it's very common sense. Four basic indicators, jobs generated, unemployment rate, median home price, and incredibly, the gross domestic product of the county. It's possible today with computers to be able to get a sense on a.

[A]

Granular level of the total output of goods and services in that county.

[B]

And so what they tell me is that out of the 3,069 counties, only 7%, 214 counties have experienced a recovery. Now, if you look to counties that.

[A]

Have what percent again?

[B]

7. That would be between 6 and 8, 7%.

[A]

So the other 93% are in some.

[B]

Phase of being stuck or actually declining.

[A]

Wow.

[B]

So if you take look at counties that have a half million or more, only 14, sorry, 126 of those counties with over half a million people, that's what's in the country. Only 17% of the larger counties have experienced this recovery. Now, if you Go over to another reliable database, which is the American Community Survey, which is generated by the Department of Census. What you'll find is that from 2009 to 2014, compared to the prior four years, 30% of America's counties saw poverty go up. Only 4% saw poverty decline. The rest were just stuck. Hence my Twitter handle, Stuck Nation. And so what's happening is there is an unraveling that is continuing and is not documented. And this is why the Beltway media was so surprised by Bernie Sanders and Donald Trump. They are blind to the economic and social conditions in their own country, and they do not report on this continuing dislocation. And there's many other examples that we can go into.

[A]

Why? Tell me, how did an elite, a ruling class, whatever you want to call them, the Beltway, I mean, the big corporations, I mean, it's in their interest on some level to know what the hell is actually going on. How do you help me understand? Help the audience understand?

[B]

Well, I think that part of it. What is this part of it is that what's happened is. And I started reporting when I was 17, so I'm 60, so I started writing for the Ramsey Marr reporter, getting paid 10 cents an inch and $5 if I took a photo. So I've seen the progression of this. And what's happened is that instead of news judgment, we had something called analytics. And we have a. You have basically the news media, the commercial news media is making decisions on how to sell things to people, not inform people. And at the same time, we've had this atomization of the marketplace. So when I was coming up, my parents, liberal to progressive, would say, Mr. Murrow's on tonight, Bob, we're going to watch Harvest of Shame and we're going to learn about what's happening with migrant farmers. And tens of millions of Americans got that education that came out of that kind of documentary. Now we have so fractured the media landscape, and it's. Now there's no civic space in terms of. Unless you really work to try to find it. So if you want to be involved with hockey 24 7, you want to be involved with Martha Stewart 24 7, through the media, you can. And until something actually blows up in your immediate environment, you're disconnected from the polity. And so this death of the civic space has been facilitated by a commercial media that wants people to spend money and borrow money and buys into a mythopoetic generated out of Washington that there's been a recovery. I mean, President Obama has presided over the largest Decline in African American household wealth in the history of the Republic. No one has asked him about that because if they asked them about it, to my knowledge, they wouldn't be invited back. And so you have this kind of situation where access is what's driving this. And also there's no granular reporting being done at the county level. And this is a big breakdown for what's happening. We don't have the situational awareness that we need to make public policy decisions.

[A]

Well, you know, it's hard for me as a historian. It's partly what I've taught all my life, not to see in what you're saying, a very scary prospect. When you look back at the collapse of empires, Roman Empire, Greek Empire, British Empire, what you come up with is that particularly in the last decades of these empires, a level of isolation and blindness that makes you beat yourself in the head. How could the leaders, the czar, the emperor, how could they not see what now looking back, is so wildly obvious? Were they so out of touch? And the answer you come to is, yeah, they were now talking only to people who were cheerleaders for whatever it is they stood for. And they never saw coming the revolution that that was obvious to anyone who literally didn't have their hands in front of their eyes.

[B]

Well, one of the things that's happened too is that there is such a deterioration of the economic circumstance for the average American. And it's something that cropped up in a very interesting way in my native New Jersey. You've probably heard of this thing called alice, which is asset limited, income constrained employee. This is a matrix that's used by the United Way, which is a charitable organization which tries to help families in need when they're in crisis. How this came to their attention was. And this goes to the disconnect between how we hear about our perceptions about the economy itself and what we're really experiencing. In Morris county, where I live, they were getting all these calls for people who were in need, who actually needed food and energy assistance.

[A]

The United Way.

[B]

The United Way. And it was like, this doesn't calculate. Looking at the poverty numbers. Where is this coming from? And they got in contact with some economists at Rutgers, and they realized that the poverty data, the number that's used, is irrelevant to the social circumstance today. It doesn't include things like childcare, transportation, housing. We know housing is such a big part of the cost. And so once they developed this metrics, they found out that there was something like 837,000 families in New Jersey that were not poor, but we're a couple of paychecks away from being poor. If you add in the 300,000 families that are indeed below the poverty line, you have 35, 37% of the state of New Jersey that is two paychecks away from oblivion. In California, it's like 45%. In Florida, it's like over, like 43%. So this deterioration has happened in a way that undermines everything that they've been telling us about what's going on. And what it does also is, is it's a political control tool. Because if you believe that there is a recovery and you, however, are just a loser, everyone else is doing fine. You, however, don't measure up, then you're isolated and you're not in power and.

[A]

You blame yourself rather than realizing it's a system that isn't working.

[B]

Exactly. So what we see in the form of both Trump and Sanders is the opportunity to collectively be in a large room. And of course, Trump is very problematic in so much of what he's saying. But in terms of the anger that's being reflected, this is where the anger is coming from. America has been lied to about the social condition, economic condition, and it's been misruled for now. Coming up, I think the post World War II environment, look at what we've done in terms of our spending, in terms of how we've directed all this money overseas to destabilize so much of the world. There's a consequence for that, there's a cost for that. And so you also see at the same time a deterioration of America's infrastructure. And at the same time there's, I think there needs to be a look at the opioid addiction that's going on, the heroin that is blowing through this addiction issue through the 20 somethings. And you have a media that doesn't examine connections, it compartmentalizes things. Because to make connections at this point is incendiary.

[A]

All right, let's turn to that. The making of connections. You're a reporter, you've been a reporter in one way or another for quite a big part of your life. Tell us, where is that at? What is happening? I mean, we made some comments at the beginning of our interview. What is happening to reporting as a field in a country going through the kinds of crisis as, and trauma that we are as a nation? What's happened to the journalism?

[B]

Well, what's happened is it's something that's turned into a. You have more and more content that's being aggregated so When I first started and I was working at the Village Voice, I was getting a dollar word in the 1980s. So an investigative piece about the US arming Iraq. Well, there's a good topic, you know, Rumsfeld shaking hands with Tana Hussein, the oldies but goodies. You'd get $1,000 for 1,000 words. Today that story's worth between 200 to $300. So that's a deflation that's happening. Some of my clients are up to $500 a post. But what that does do is it forces you to. The entire undertaking is one where you don't have the resources to go out and do reporting. And so. So you have a lot of analysis that's going on. You don't have the kind of shoe leather reporting, which is, so what are the economic conditions at the county level? You have people opining about it, but no real information being generated. You have the similar situation with what's happening geopolitically. We hear reports about China's economic circumstance totally devoid of the ecological crisis that's driving so much of its economic problems right now. So there's a disconnect. And it has to do with the fact that organizations, media organizations, do not want to spend the money on employing anyone, because we know the one imperative in America is not to give anyone a job. So there's all these contract relationships that you have. Freelancers, interns, 1099 provisional employees, consultants, everything that they can do to make sure that they're not in. So what's happened is there's been a degrading of journalism. So to some degree, the act of journalism itself becomes a political act, because you're doing it because it's what's required, not what you're compensated for.

[A]

Right. Is there an active punishing of reporters that try to make those connections? In other words, when you have a reporter who tries to see a little bit deeper into a problem and sees that it has certain systemic roots, is that kind of reporter punished or in trouble or what are the pressures against him?

[B]

Well, I think the pressures are that you just have to constantly reinvent yourself. Because as much as there are pressures economically, there are new opportunities all the time. And so now you have to think strategically. If you're going to do a story, you have to think like, well, I'm going to be doing it for this website. I'm going to take the audio from it and do it for a radio station and then continue to find ways to repurpose it. And you also sometimes listen, I've had to work overnight in a grocery store to support the political act of being a reporter. I mean, because there comes a point in time where you have to look at this is what's required for the common good. I mean, it's great to make a living. I make most of my living from being a journalist. But the reality is that sometimes what you're writing is so important, no one is going to pay you to say it.

[A]

What a comment on a society. What a statement about where you're headed. Tell us a little bit about. I mean, we're a national radio program. We're all over. But like you say, sometimes it's important to go below the aggregate. Tell us about New Jersey. You study New Jersey, you write about New Jersey. You really are one of the best known journalists with a history of folk. Tell us about New Jersey as an important part of the United States that can give us some insight about the economic conditions of the country as a whole by focusing in that.

[B]

Right. It is. One of the things to keep in mind is that New Jersey is still very much reeling from the Great Recession. And there's no better exhibit than Atlantic City, where you have one of the highest foreclosure rates in the nation. In the city of Newark, you have a situation where at least 50% of all the mortgages, primarily African American households, are underwater in terms of the fact.

[A]

That they owe more money than the.

[B]

House is worth and the banks have not been held to account. So again, give you some numbers. It's always good to have specific numbers. The banks are insisting in some cases that homes worth $150,000 are worth $300,000. And even though the banks got bailed out, they're refusing to come in good faith and write down the principle. And that's the thing to understand is that the rape of the American household economy is continuing today. That's the other thing to understand that narrative, that it's over looking in the rearview mirror. We solved it. It's all done. It is still going on today. When I took a look at this inspector general's report that kept an eye on all these programs, you hear them all the time on TV and on radio. We're going to help you reset your mortgage. This is the collateral damage. We're going to have you sign up for a new mortgage. Hamp, harp, they have a whole sea of acronyms. When you drill down, what you find out is that more often than not, these result in people going back into foreclosure. And here's the kicker. The very Same banks that brought the Crisis on got $1.8 billion in fees for putting people through this mill that ends up in foreclosure and destitution anyway.

[A]

Right. How isn't going. Let me put it differently. You have a person, a governor. I mean, on paper, he's still a governor. He seems to be busy running anywhere.

[B]

Else but New Jersey. Yes.

[A]

What's the politics of an economic condition in a state the way you've just described it? How do you square that it's a Republican, that it's a Republican who's busy everywhere else, that it's a Republican who is at least widely suspected of major shenanigans, even in a society that doesn't expect much from politicians. What's the disconnect again here between the leader and the reality?

[B]

Well, there's a kind of feudalism in the fact that the public is so disengaged from their politics, with the exception of to this national contest, that he can be out of state. To the point. It's interesting. I think there was some civil servants made the point that he wouldn't. If he was like a regular state employee, he wouldn't meet the residential criteria because he was out of the state so much. I think what's happened is that it's a very cynical situation. You use your position and then you build it, and so then you don't look back at the state. The state itself is still in this major disrepair. We have foreclosures as a major issue. We haven't gotten back the jobs we lost. And the other thing that's happening is you have, particularly for young people, this reality that the kids that graduated in 2015 are making $10,000 less on average than the kids that graduated 10 years before that. So we've kind of blown up the conveyor belt of the American dream. You have kids moving back in with their parents. You have a situation where deferring getting married, deferring household formation. And so this unraveling is continuing. And it's particularly difficult in New Jersey because so much of the wealth of New Jersey was built up in the value of homes, and we haven't seen that come back. So you have a situation where municipalities are dealing with people as they rightly should, appealing their property taxes, their levies, saying, listen, my home isn't worth a million anymore. It's worth 650,000. And that still is playing out. So you see an erosion of the ratable base, the actual tax base. In the case of Atlantic City, it's become a Swirling situation where they're on the verge of bankruptcy because their response to a decline in property values was to raise taxes, which even caused an acceleration of the economic demise of the city itself.

[A]

So on top of the economic crisis not being alleviated, you now have a fiscal crisis in the sense that the revenue base of the community means that at a time when the people of New Jersey need help from the government more, the resources the government has are diminishing.

[B]

And also that's a system that isn't working well. And also, if you look at what's happening, there was a good piece in the Times that looked at the fact that Puerto Rico is the canary in the coal mine. The reality is that we, because of the fact we let the tax base of the nation be so deeply eroded between things that, that have been going on in Delaware where people, corporations are able to hide their fortunes there and be able to move their profit centers offshore for the purpose of taxation, that we've so eroded the fundamental economics of the country that we're not going to be able to make the pension payments that are required. So New Jersey has this huge overhang when it comes to public pensions because the state has not been current on its payment. And it's not alone. There's a number of states, municipalities too. So this inability to come to terms with these challenges while you continue to do the kind of thing you're talking about with carried interest, this is why.

[A]

We are where we are.

[B]

I mean, the next person becomes president is going to have a real mess.

[A]

Yeah. A number of European commentators looking at the American election make a joke. It circulates all over Europe, which is looking at the economic crisis here and the building political crisis. You know, the joke is, why is everybody trying to become president? This is a disaster that you're going to be stepping into the control of something that is spinning out of control. It's a strange.

[B]

And we didn't even see it coming because the corporate media has not been able to own what is really going on, the facts on the ground, and have been busy building up this idea of this legacy that somehow we saved ourself. That, you know, this has been a great turnaround. Well, everyone knows that that hasn't happened.

[A]

Tell me a little bit about how the journalism developments that you've described, how have they affected you as a human being, as a citizen of the United States?

[B]

Well, I think that one of the things I've come to understand is that this is a situation where particularly right now in this period of crisis that like I say you have to be willing to do things on spec, write things that need to be written, investigate things that need investigating, whether or not you're going to be paid. And what you try to do is there's times where I will do a story that I know is a profile or something that doesn't have great political import to subsidize an investigation. That's going to take time. I mean, I have been working on. It's very important to get down to Atlantic City because what's happening, happening there is that city is coming apart. It is going to be the new Flint. I mean, this is something that we're seeing increasingly where African American cities are losing self determination after the dominant white power structure drives the public finance into the ground. Then the coup de grace is, well, you folks can't run this place. We're going to take away democracy locally. And so that's something where you have to put money out of your pocket to be able to get down there to see what's going to witness what's going on. Because unfortunately we see a media that is not willing to invest in this kind of investigative reporting.

[A]

Yeah, these are ironies that are beginning to mount. You think about the constitutional amendment in the United States that outlaws slavery. If you ever go back to read it, it's amazing because it says slavery is outlawed except in prisons. It's in the amendment. It's as if a commitment to be against slavery wasn't enough. It is outlawed except in the prison. And then we read through the work of Michelle Alexander and people like that that over the last 50 years we have crammed our prisons full of the very people whose ancestors were slaves because it's the place where you can continue to be a slave. There's something so, so poetically ironic. It kind of, it takes your breath away.

[B]

Well, I'm glad you mentioned this because one of the things is the trivialization of this and the way that the news reports these things. So now we have a situation where there's some senators who want to reconsider the fact that we have criminalized an entire age cohort and, you know, created a situation where there's some real social impact here. A missing generation. When you do the beat reporting, you'll find out that hundreds of thousands of grandparents have had to step up and raise their grandchildren because of a missing generation. And this is kind of like we give cover to politicians. Like, well, you know, we got it wrong a little bit. We're going to fix it. Like this is something that historians are going to be very harsh in judging us.

[A]

Yes, absolutely.

[B]

Because it has been, like you say, a continuation in the through line, through what happened in the Civil War.

[A]

It's an amazing inability of a system to come to terms. Let me, in a little bit of time that we have left. I want to go back to this to get a speculation. I mean, you study these things, where is this going to go? This disconnect and the recovery story is a wonderful case study. The leadership to protect itself, to isolate itself, to cheerlead for itself, to keep the public believing that they ought to be reelected, can't recognize the reality. So the gap between the reality and the self delusion of the leadership, where is this going? Where do you see this leading a country like ours?

[B]

Well, I think what's happening is that you're seeing grassroots movements that are kind of stepping in to fill the void and the disconnect and a desire to have a kind of real engagement. I mean, a lot of my time is spent helping my daughter with her CSA. She has an organic collective, Organic Farm. She has 50 families that subscribe that support her efforts and they get the share. Right, right. And so what's fascinating to watch this business over the last three years really grow from 10 to 50 families is that when. And she has her annual potluck dinner. I look around and it's a group of people that are Republican, anarchists, libertarians, and have nothing in common politically but a connection to the place and community where we live. And I think that that is happening. I think that that is a situation where people are feeling like we've tried it the other way. We want something authentic and connected that we have power over. That can both heal the environment and move us forward collectively. I think those are. That's where it's going.

[A]

All right. It couldn't be a nicer way to end it. I would say the same thing. In a simple formula. You cannot solve a social problem with an individual action. A social problem needs a social movement. And you're describing what might be emerging, what we hope will be emerging. Because the alternative, alternative is a scary dead end.

[B]

And we have to make that alternative. It's up to us.

[A]

Thank you very much.

[B]

I'm at Stuck Nation. By the way. That's a Twitter handle. All right, thank you.

[A]

Bob Henley, reporter, investigative reporter, specialist on New Jersey, but on many things about America as well. We've come to the end of our program. I want to remind you, please, to make use of our two websites, rdwolf.com and democracyatwork.in fox. Use them to communicate with us. Use them to use this program, which is archived at those websites. And you can listen to it at your pleasure or send it to somebody else. Let us work with you. Get in touch with us. And I look forward to speaking with you again next week. Gonna be my time. My time, baby. Change. Thing going to change. Yes, it is, Sam.