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Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives. Jobs, debts, incomes, all of it. I'm your host, Richard Wolff. I've been a professor of economics all my life and I bring these updates to you based on what I've learned. I want to dedicate today's program to a remarkable phenomena, particularly here in the United States, but around the world, of people rising up, fighting back against an economic system that has outlived its usefulness and is now begging literally for the change that many of us feel is long overdue. Let me start with the issue of immigration. It's much in the news these days when we have a, allow me, trumped up national emergency around the wall. And I want to talk about what the attack on immigrants and immigration by the Trump and Republican administrations, what it has produced and is producing in this country. I'll start with the story of North Carolina. The two most populous counties in North Carolina, Mecklenburg and Wake counties, have decided to refuse to participate and cooperate with ice, the immigration control authority in this country. And that has led to a back and forth dispute between the leaders of those two populous counties and ice. ICE has responded by raids in the streets of those counties. In short, the struggle against immigration is dividing the United States in bitter ways and those are going to have long lasting consequences. So I want to look at this a little bit more closely. The basic support for bringing large numbers of immigrants into the United States has always been the same. Employers are interested in cheaper workers, they always are. And immigrants work for less money than native workers. In most cases, undocumented immigrants are the best of all for employers because you can cheat them as employers regularly do, and they can't go to the police because they're undocumented. And so they become very vulnerable. So when that happens, when we have immigration and it lowers wages and displaces native workers, we then turn to the native born workers. They have long standing grievances against their employers. They're not paid well enough, they're not taken care of, they're not honored, they're not respected and they're bitter about it. And now they have the immigrants on top of the situation and enter then the right wing politician enter, then the racist enter, then the white supremacist. This is a made to order opportunity. What you do is you take the accumulated grievances of native born workers and you focus them not on what employers are doing to them, in this case by bringing in cheaper workers, but you focus on those cheaper workers, on the Refugees running from political military violence on the immigrants, running from poverty on the people coming to America for all the reasons that people always came to America. And you hope to make political hay by turning the native worker against the immigrant. But let me explain why this is a fool's errand. Employers have three basic ways to make more profits at the expense of their employees. One, move out of the United States to places where wages are much lower. American companies have been doing that big time for 40 years. Second, if you can't go there or you don't want to bring the lower wage workers here, that's immigration. And if neither of those are available, there's the really big one that's exciting. It's called automation. Get rid of the job altogether, replacing it with a machine. In the 70s, 80s and 90s it was computers. Then it morphed into robots. And the next big wave about to crash in American capitalism is artificial intelligence. Capitalists will do whichever one of those works for them. If you stop immigration, they'll move to going out of the country again. Or they'll focus on automation. That's the name of the game. The problem is not the immigrant. The problem is a system in which the profits of a few are enhanced by the taking it out on the mass of the working people. Don't be fooled. The immigrant is not the problem, never was. It's a system that has all these alternative ways to stick it to the mass of workers. Spending money on a wall which can't work anyway is a terribly silly, a kind of stupid mistake about understanding what the system is. It's either committed out of ignorance or it's committed by people who know exactly that the problem is the system and want everyone else not to go there because of where it leads in terms of anti systemic understanding and action. Which is precisely what I want to honor today. So let's turn to our next update which makes us job of honoring people who fight easier. As many of you know, because we've been talking about it for several months now, masses of people in France put on yellow vests and go into the streets, particularly on Saturdays, to show the government that they're angry about their taxes, about their pensions, about their wages. And they've been very successful. The government has tried everything under President Macron to stop it, to prevent it. Total failure of the government. In fact, they've had to give in to some of the demands. They got rid of a tax on fuel, they improved the pension situation and they raised the minimum wage. Amazing what they were able to achieve. But the government still wants to shut him down. And so a big milestone was achieved on February 5 when the largest federation of labor unions in France, which had kept its distance from this mass uprising of the people, decided to call a general strike around many similar issues for working people and invited the yellow vests to join them, which they did. That's the death knell of Mr. Macron's government. May take a while, but he's done the merger of a mass popular movement with the largest labor union movement. And labor unions are strong in France, not like in the United States. That is a force that no president has been able to long resist. And Mr. Macron, who's less than most of the rest of them, will not either. And efforts to dissuade people from seeing the handwriting on the wall are not working in France. Massive action of people in the street has made all the difference there, too. My next update is a shout out, if you like. I want to honor a photographer by the name of Nan Goldin. Perhaps many of you know of her work. She has a group called Pain P A I N. It stands for Prescription Addiction Prevention Now. And they've been doing something remarkable. They've had lie ins, sit ins demonstrations at New York's Guggenheim Museum and the Museum of Modern Art at the Smithsonian Institute in Washington, D.C. and at Harvard's Art Museum in Cambridge, Massachusetts. And what is their issue? They are protesting the fact that in all those institutions they have honored the Sackler family. S A C K L E R. That's the family that owns and dominates Purdue Pharmaceuticals, the producer of OxyContin, one of the deadliest overdosed using drugs in this country that has killed many tens of thousands of Americans who over the years, OxyContin, Sackler, they've made a lot of money. And that's why they went into this business to make money. That's what happens when you allow your health system to be involved with profit, to capitalistically run your health system. You give an incentive to make money off of drugs that can be and are used for suicide, in effect, by tens of thousands of our fellow citizens. And Nan Goldin and the people of Pain don't want those folks honored who make money off of death. They don't want to see that. And they're protesting, as is their right and as is the service they're doing to all of us. But the message here is not to be particularly angry at this one example. There are unfortunately many, many other examples. The key thing to understand is that it's the profit that Drove that company to produce that good, to market it and spend a lot of money marketing it to physicians. It's profit that drove pharmacies around the country to honor the prescriptions for OxyContin, even though they knew perfectly well that there was a market in reselling them by the people to whom they wrote the prescriptions. A profit driven system to produce the drugs, to disseminate the drugs, to prescribe the drugs. That's what's the law that has to be changed to allow that profit making and health don't go well together and they never have. I want to conclude by talking about another stand up, step up, a fight back that deserves attention this time it's the New York City Council in New York City, it's currently considering a bill that would require employers in fast food restaurants. And in New York City alone, they have 60,000 employees. We're talking a lot of people here. The bill would require the employers to, to show cause before they can fire anyone. In other words, currently that employer can fire any worker at any time for any reason that they don't have to account to either the person they fire or anyone else for what they do. And this bill would say, you can't do that. If you can't show a reasonable basis for firing a person, you can't fire them. Why am I interested in this? Well, I want to shout out that people are fighting back, workers are fighting back, and they're getting people in office to work with them to put a bill like that forward and to struggle for it. But there's a deeper issue here. We really have two competing freedoms. Americans like a lot to talk about freedom. One is the freedom of the employer to, to fire at will. They want that freedom. On the other side is the freedom of the employee to know that if he or she is doing their job as that job was laid out to them when they were hired, they can't be fired by an employer who for whatever reason decides to do so. The freedom of having a secure job if you're performing. The freedom of your family to rely on the income, the freedom of your neighborhood to rely on your ability to sustain a neighborhood with the income from your job. Those freedoms are up against the freedom of the employer to fire you at will. So we have competing freedoms in capitalism in general. We know which freedom rules. That's why fast food employers can now fire at will. But the majority are employees, not employers. And it's not even close. The number of employers is very small, the number of employees large whose freedom should Rule is the problem and capitalism is the system that makes that problem acute. We've come to the end of the first half of Economic Update. I want to remind you please to subscribe to our YouTube channel. Please make use of our websites democracyatwork.info and rdwolff with 2f's.com. and of course, last but not at all least, I want to thank, as usual, our Patreon audience for the support. We will be right back. Welcome back, friends, to the second half of Economic Update. In this second half, I want to deal with two larger subjects, as we often do in the second half of Economic Update. The first one has to do with changes in our neighbor to the south, Mexico, and the second one has to do with the estate tax here in the United States and what is happening to it. And I want to draw some lessons about both of these issues. You know, Mexico has gotten a bad rap recently from our president and the people around him. Insults, attacks, demeaning of an entire society, accusations and and of course, the ultimate indignity of an immense wall, as if that was going to do something. In the process, Americans have been treated to a description and an approach to our neighbors to the south that is scandalous, unjust and ignorant. And I want to build on one part of that story. On the other side of the border, just on the other side of the border, Mexico has erected special industrial zones. They're called macchiadoro zones, and they're places where enterprises can set up under favorable conditions. And many of them produce for the US Market, which is just across the nearby border. And workers have come there from all over Mexico for the jobs that have been created. And the United States has benefited a great deal, but by having relatively low workers very close to the United States. So there aren't transportation costs may not have been very good for American workers whose jobs were moved across a border and given to people for much less. But that's how capitalism works, isn't it? In any case, what has happened recently is a testimony to the Mexican working class. A wave of strikes has swept across the maqueadoro industries, more successful and more powerful than any before and indeed having started or at least achieved a certain power in the famous city of Matamoros, they are now threatening these strike czar to move across Mexico. It comes as a time when a new, more progressive government under Obrador is interested in shaking up the cozy relationship between employers and a good number of the labor unions in Mexico, a system that produced low wages in that society and minimized the challenges to them. So the strikers, some of which working within and with their unions, some of them working over and against their union, their unions have been extraordinarily successful. In Matamoros, the strikers so far were able to get gains, in this case, $1,700 bonus, an enormous amount of money there, roughly a quarter of many workers incomes, annual incomes. They also were able to get an increase of about $2 a day in salary. And I say this in order to drive home that this is a big gain because average workers that were striking get about $12 per day as their wages in that part of Mexico. The movement is called the 2032 movement because it refers to the 20% pay increase the strikers are demanding and the 32,000 peso bonus they have demanded and already in many cases received. This is a profound successful labor movement in Mexico, one that Americans who need a profound, powerful, successful labor movement too, should envy, should admire and should recognize. So too is what's going on in Mexico more broadly. Another reason to dismiss the casual, almost racist denunciations coming down from Mr. Trump and those around him. Since taking office last December, Lopez Obrador has reached agreement to increase Mexico's minimum wage, raising it 16% nationwide and along the border in the Maquiodoro area, doubling it to $9 a day. This is after 30 years when wages did not keep up with prices. In effect, they fell. So there's much about our southern neighbor that Americans have to admire to respect. Conditions for workers to strike there are harder than in the United States, and, and yet they've done so. They've organized and they have prevailed. Well, what about the accusation that Mexico delivers drugs into the United States? Well, let's deal with that. Attacking Mexico for delivering drugs is a little bit like attacking the pharmacist for filling prescriptions. He's just a middleman. If you're really interested in doing something about the drug epidemic in this country, you'd need to deal with the conditions in the United States that lead people to need to do that. You'd also have to deal with the profit making incentive to producers of drugs in the United States and around the world who funnel them through Mexico, but who are responsible for producing them. The United States has been engaged in the drug war for 40 years. And like so many of the wars we've fought, the United States has lost. The drugs are available now as much as they ever were, maybe more so. And a wall is just the latest in the unsuccessful, inadequate failure to deal with the roots of the problem. Which are the profit driven production on one side and the broken lives, inadequate jobs and low income tax here in the United States that fosters and reinforces the market for drugs. When will people learn? And then there's the wall. And let me add to the wall the trial in New York City of El Chapo, a leading drug purveyor in Mexico. These are spectacles. The wall is a spectacle to try to get Mr. Trump re elected, to pander to his base, to give people the illusion, just like every other installment in the war on drugs, that this one will somehow be successful when all the others weren't. And the trial of El Chapo, you're going to imprison a leader. There are 10,000 more waiting right behind him. You haven't dealt with the cause of the problem. You haven't dealt with the production of, of the drugs. You haven't dealt with the demand for the drugs. This is a pathetic failure designed to distract people from the reality, which is a system that by profit fosters the production of these kinds of items. And by failure to give people decent jobs, decent lives, adequate incomes, creates the demand for the drugs. And if you have a system that creates the supply on one side and the demand on the other, walls are not going to solve the problem of bringing the supply to where the demand that yields the profits is waiting. You can twist and turn, you can have one distraction, one spectacular item after another. Mr. Trump's wall is the latest in. In a hopeless line of failures to deal with a serious problem that has hurt so many Americans for so many years that it is yet again another politician's little political football tells us more than about that sad politician. It tells us about a system that not only doesn't work, but keeps distracting us from, from that fact. Then there's the inheritance tax. I want to talk to you about that and I want to do that in an important way. The whole idea of a tax on estates or inheritance, and those words are synonymous here. The whole idea was the notion which some people used to think was American in some particular way. The notion of equal opportunity. That somehow each fresh, new innocent baby born into this world would have an equal opportunity to develop his or her skills, attitudes, capabilities, you name it, to do the best they could in their life. And that it isn't fair that one baby starts with a silver spoon in its mouth and the other one with. With nothing to eat, with or without a spoon. And that therefore we say to people, if you do well in life and you accumulate some wealth, good for you. But most of it is going to be taxed so that your children have an equal opportunity with the children of folks who have nothing to leave to their kids because of the salaries they didn't get, the wages they didn't earn and the capital gains they never saw. That's the idea. And for a long time in the United States we at least gave lip service. That is, we had an estate tax. We said beyond an amount and it wasn't very large. Sizable, but not crazy. We would tax estates. Now it's true we didn't a tax tax them as energetically as we might have, but we did. Let me remind you that for much of the post war period after World War II, estate taxes in this country were between 60 and 80%. So we took a big amount, we let the first few hundred thousand go and after that we taxed it. But all of that changed recently and nowhere more excitedly the than under Mr. Trump and the Republicans when they got elected. Here was the exemption, the first five and a half million dollars that was already achieved by Republicans and Democrats before Mr. Trump. They raised the exemption all the way up to the first five and a half million you could leave to anyone you wanted to. And there was no estate tax. But in the tax reform of December 2017, that Mr. Mnuchin, the Secretary of the treasury and Mr. Trump said would not be good for rich people, but only good for the middle class. A straight out lie. There really is no other word to use. One of the things that tax reform did was raise the exemption from 5.5 million to 11.18 million per person so that a couple in the United States, a wealthy couplesay, Mr. And Mrs. Gates or Mr. And Mrs. Bezos or any of them could leave you ready $22.36 million to their descendants and pay not a nickel of estate tax. And how much on the amount above that since they're billionaires? 40%, not 60 to 80. 40%. Wow. That's a gift to the richest people in this country. An immense gift. We worth millions or even billions in the case of the richest of all. It was a gift to the richest. Those who need it least got the biggest gain out of that tax reform. Mnuchin and Trump said the opposite. But the truth is what I just told you. So we don't have it. Estate tax that really bites. And we have an exemption that means the child of wealthy people can walk away with that many with $22 billion free and clear. You know what this does? It cements into our culture the gap between rich and poor. It makes it inheritable. We are doing to the richest of America what monarchies used to do for the king who left it all to his son, the prince who left it all to his son, the prince forever. We're making it impossible because the wealth is handled in these wealthy families who keep it through the generations. Which means the rest of you and me don't get it. There is no equal opportunity. Less than there was in the past and it wasn't great in the past either. This is a country which is more and more falling into warring minorities with the wealth and power and the rest of us sitting there waiting for what? For something like the yellow vests in France to emerge and say we've had enough. We've come to the end of economic update for today. I want to thank you for joining us. I want to ask you to partner with us, spread the word. And I look forward to speaking with you again next week.