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Sam. Saint. Welcome, friends, to another welcome to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives, our jobs, wages, salaries, incomes, debts, those of our children and those coming down the road to confront us in the future. I'm your host, Richard Wolff. I've been a professor of economics all my adult life and currently I teach at the New School University in New York City. Before jumping into today's updates and a very interesting interview, I wanted to mention that someone that you hear on this program from time to time, Dr. Harriet Fraad, talking with me about the psychological dimensions of what's going on in the economy and that many of you comment on in the emails that come to us afterwards. Dr. Frad and I will be speaking in the Bay Area of California in early October and I wanted to alert you all. We will both be speaking in Oakland, California during the day on Sunday, October 2nd, and we will be speaking in San Francisco at the Episcopal Church of St. John the Evangelist on the evening of Wednesday, October 5th. If you are interested in visiting with us in seeing these events, please check our website democracyatwork.info look under the events page there. You'll find it easily and it'll give you all the specifics about those appearances of Dr. Fraad and myself. October 2nd in Oakland and October 5th in San Francisco. Well, we have many things to talk about today, more than enough to fill the hour and indeed, as usual, not enough time. Most spectacular this week was a decision by Janet Yellen and the Federal Reserve not to raise interest rates. The simple and most important part of the explanation is the fact that they are afraid to do that because if you raise the interest rates, you make all kinds of borrowing that much more expensive. That will reduce the amount of borrowing businesses and individuals undertake. That in turn will reduce the spending they can afford to do and that will lessen the jobs and incomes of people. Since the so called economic recovery hasn't happened for the majority of people raising interest rates, whatever the logic is too dangerous and the Federal Reserve figured it out and that's why the rates weren't increased. We now wait until the November and December meetings, but it is a long shot whether interest will be raised. Interest rates will be raised even in December. Well, the theme for today might be, at least for the first half of the program, how and why large capitalist enterprises and the government are two sides of the same coin. I know there are many people who like to imagine to themselves that these two partners are really very distinct and different from one another, but it's been rarely less true than it is today. As if to drive the point home, let me tell you about former speaker of the United States House of Representatives John Boehner. He doesn't spell it that way, but he wants it pronounced that way because if you didn't, it would be embarrassing. Well, he's out of the House of Representatives, but this week he took a job with a law firm in Washington, D.C. named Squire Patton Boggs. It's a Washington based law firm long known for its lobbying. Well, turns out Mr. Boehner's not a lawyer, so they probably don't want him for that. And that leaves lobbying, pressing the government to do what he was pressed to do when he was the government. The musical chairs between government and big business keeps on spinning. In case you didn't know, two other leading congresspersons already are doing that for the law firm of Squire Patton Boggs. One of them is former Senator John Breaux and the other one is former Senator Trent Lott. So Mr. Boehner will be part of the elite corporate and government that tells us all what to do. Well, here's another example of musical chairs between top government and top corporate officials. It turns out this last week that almost Vice President Sarah Palin sold her mansion in Scottsdale, Arizona. She sold it and I want to stress this because it's a good lesson in how to make money being in politics. She sold her mansion in Scottsdale for 2.275 million. And I want to tell you about the house she sold. It has six bedrooms, it has six and a half bathrooms. It has a square footage, 7,971 square feet. Wow. It has fireplaces both inside and out, large kitchen, granite countertops, a walk in pantry, a home theater, a billiard room, a wine cellar, and not but two spacious master suites. Outside there's a 4.4 acre lot that has its own basketball and volleyball court, putting greens, bocce ball area and a pool with a spa. There's a six car garage with a. I'll stop here. I have no further comment on that. My next item is a response to a question. And the question was can I explain why the British people voted for Brexit that is to leave the European Union. And I've talked about this on the program before and I don't want to go over it again. But in response to one person's question, I did look up what had happened to real wages of working people, average real wages. And by that again, I mean how much you're paid adjusted for the prices you have to pay with the wages that you earn. This is called real average wages. And the time that we're measuring is the last quarter before the crisis hit. So it's the fourth quarter of 2007 all the way up to the last quarter of 2015. So basically what happened to wages in Europe across the period of the economic crash that happened in 2008 and that is especially in Europe, very much still with us. Well, the story is horrific if you didn't know it already. The average increase in real wages over the nearly 10 year period is in the neighborhood of 4 to 5% over a 10 year period. That's a very, very slow increase. And given the problems with how these numbers are accounted for and given the decline in government services over that time, you can see that the average has been very grim for the European working class. But two countries stand out because not only was it grim there, but they didn't have any wage increase. Well, it's even worse. They had a wage decrease over that period these last eight plus years. The two countries with the worst record, Greece, well that you know, from everything we've talked about on this program for years now. But the country you might not have known had as bad a history of real wages as Greece did was Great Britain. That's right. The real wages of the British working class on average dropped 10% over the last eight years. You wonder why the British working class was angry at the leadership of their country. The big corporate leaders and government leaders who confidently predicted that the British people would vote to stay in the European Union because they were making money, excuse me, were supportive of that staying. The very fact that those leaders were for it was half the reason why the British working class needed to say something about the drop of 10% in real wages over an eight to nine year period. It's stunning. And the only thing more stunning than such a history is how few people talked about it. My next update, it's a small one, but it tells you a story. Goldman Sachs is a bank. You've all heard of it, it's been in the news and most of you probably believe it's a bank based and located in New York City, which is true, but less so than ever before. We looked into it and we discovered that the second largest office in the whole Western hemisphere for Goldman Sachs is in a place you might not have guessed, Salt Lake City, Utah. And Goldman announced that it expects to experience significant growth over the next few years. It's looking for people it can hire. It doesn't feel safe in New York City might be the reason, and thinks it's less likely to be problematically confronted if it moves to Salt Lake City, Utah. Something to think about when you wonder about where things are going and are trying to explain what's happening to the decision makers in our country. Well, going behind the news yet again, we are all confronted with extraordinary police actions against African American citizens. It doesn't seem to stop. We're confronted with the Black Lives Matter movement as one of the efforts to try to confront and deal with this situation. Is there some economics behind all this that might be interesting? Well, an answer is forthcoming in a September 20th study by the Economic Policy Institute in Washington, D.C. black white wage Gaps is what the article is about, written by Valerie Wilson and William Rogers III. Here's the basic takeaway from this as of 2015, relative to the average hourly wages of white men with the same education, same experience, same metropolitan location and the same area of residence, Black men make 22% less and Black women make 34.2% less than white people. And in order for you to understand how that might be bothering folks, that is a larger gap than those gaps were in 1979. So when people tell you, as they like to do, how much enormous progress has been made in the racial differences economically in the United States, at the very least you should raise your eyebrows. And if you want to know more about it, go to epi.org, read the report and try to connect in your minds, as I am doing in mine, the deterioration of African American jobs and wages relative to white people across the last 25 or 30 years. When we were told about progress and see whether it might have something to do with the issues that are in the news every day, it seems now. Next update, and we're cooking right along over the last 10 days. You might not have heard about it, but we are experiencing here in the United States the greatest strike of inmates of US Prisons in the history of the United States. It ought to be on the front page. And let me give credit where it's due. On the 14th of September, not very long ago, the Wall Street Journal actually gave a story to it. It told its readers, as well it should, that these protests were timed to happen in a number of prisons, particularly in the states of Alabama, Florida and Michigan, to coincide with the 45th anniversary of the uprising in the Attica prison in New York State. The prisoners know their history, and while they were objecting to many things as the reason for their strike, one was dominant that they get Treated like slaves, they are forced to work, and they are forced to work at pay levels that range from $0.74 per day to $3.34 per day, truly slave wages. And they're angry and upset about it. Well, I am, too. But my job is to give you some of the background and the analysis that goes with it. For those who do not know, the 13th amendment of the United States Constitution outlaws slavery. It's an amendment that came right out of the Civil War here in the United States. But that amendment, very court, very short, excuse me, very brief, has an exception. It outlaws slavery everywhere in the United States except as punishment for crimes in prisons. Here, let me do that again. We didn't abolish slavery in the United States because we specifically allowed it as a punishment for a crime. Think about that for a moment with me, won't you? A person commits a crime, a person is convicted. The person maybe didn't do the crime, we'll never know, but he or she is convicted and they go to prison. Now, we hope that in prison something will happen to that person so that they don't commit a crime when they come out. Treating them like slaves probably doesn't help a whole lot. It rarely did historically. And why would we do that now? And why would we be surprised if people who are told that liberty and freedom are the core values of a human life decide to strike, even in the terrible conditions of prison, against being treated like slaves, when indeed they are continuing? Here's one that takes the story of how the government and big business are two sides of the same coin another step further. Many of you have noticed because it's been in the news that the Mylan Pharmaceutical Company got itself into terrible trouble when it raised the price of its EpiPen, an anti allergy device, by a factor of five or more over a short period of time, making a fortune for the company and for its CEO, Heather Bresh. But over the last couple of weeks, as Ms. Bresh was forced to testify in front of the Congress, more people began looking into the story. And it gets, what shall I say, sleazier by the day. Turns out that Ms. Bresh, the CEO of Mylan, taking home a salary of 18 million bucks from this company that has jacked up the price of these anti allergy devices that are widely used in New York's. Excuse me, in American schools. Turns out she's the daughter of Joe Manchin. Who's that? He's the senator from West Virginia. Oh, goodness. The father's a senator. The daughter is the head of a big company doing things that are, at the very least, ethically challenged. But then it got better. Ms. Bresh's mother, the wife of Senator Manchin, is Gail Manchin, and she was president recently of the national association of State Boards of Education and apparently was in that position during the time, if the reports are to be believed, that schools around the country decided to make use of the EpiPen produced by Mylan Pharmaceuticals. Does this smell? Yeah. Doesn't it, though? Yet another story on the same theme of government and corporate going hand in hand. This one concerns a billionaire. Yes. Another one, this one by the name Joe Ricketts. He was the founder, is the founder of TD Ameritrade, and he owns the baseball team, the Chicago Cubs. Ricketts, along with his wife Marlene, were supporters of anybody but Mr. Trump. I believe they particularly supported a leading, brilliant leader here in the United States, Wisconsin Governor Scott Walker. They supported him. He flamed out kind of early. And I guess they've been wondering who to put their money to. Well, they may have supported someone against Trump at the beginning, but they've changed their mind as of last week. According to Business Insider reporter Jeremy Burke, Ricketts, along with his wife, is planning on spending $1 million in an effort to help Donald Trump win in November. The Wall Street Journal reported that and also reported that Sheldon Adelson, the billionaire casino magnate, is planning to spend $5 million to support Trump for president. Wow. This is sort of interesting. But here again, family, politics and business all combined. When I looked into Mr. Ricketts, the billionaire, I found out that his son Pete is the Republican governor of Nebraska who endorsed Trump back in May. Oh, goodness. Does this smell? Oh, I don't know. Maybe it's just coincidence that all these people in the government and all these people who are billionaires seem to overlap more and more as America goes along. My last update for today. Well, before I do that, let me drive home what the earlier updates talked about. Government, big business, billionaires, candidates, politicians, executives, millions of dollars made questionable use of public office. You get the picture. I stress that for a reason. There are efforts made to kind of pick apart this close partnership that governs the United States and has for a long time to pretend, in my view, that there really is a big difference between corporate leaders of big business on the one side and top politicians on the other. There are even people who want us to believe that the source of our problem isn't capitalism, big business and the power that big business has in a capitalist system. They want to believe that's not a problem. It's the government that's the problem. Libertarians of all stripes, anarchists of certain stripes, and people who simply need to have the government to blame because they either don't understand or are afraid to look at the business side of that coin. And likewise, there are others who want us to believe that big business is the problem. But the government is innocent, the government is good. And if we only get the government to do more things, liberally, things well, then we'll have a good society. And it's just important to get the government back in to playing a useful role. These two positions, apparently opposed, aren't in fact very opposed. They share an unwillingness to see the tight, coordinated, cooperative relationship between the top levels of capitalist business and the top levels of government. Does that mean nothing can ever happen to separate them? Of course not. There are moments in history when they have a clash, and those are important. But most of the time, and surely today, when the major candidates for president are a billionaire on one side and a multimillionaire on the other, we should stop with these fantasies that one side of this partnership is vanilla and the other side is bad. No matter which way you play that it makes the mistake of not seeing the solidarity, the shared interests and the coalition that they present to the rest of us. Last item for today. This one is in the nature of better news, at least for some of us who watch these things. Since last we talked, there's been an election in the city of Berlin in Germany, and what an election it was. The question will be who governs that city. It used to be that the Prime Minister, the Chancellor there, Angela Merkel, had a lot to say about that through her political party. And when she didn't have a lot to say on her own, she did it in coalition with a slightly to the left Social Democratic party, with which she has been making coalitions both at the national and regional levels. But in the election this last week, the people of Berlin strongly rejected both the Social Democratic Party, which did come in first still, but a much reduced vote. And they really gave a beating to Mrs. Merkel. They're not happy with her at all. So the two major parties suffered a stunning rejection by a whole new class of voters in the city of Berlin. Just as important was the name of the party that came in third, just a couple of percentage points less than Mrs. Merkel's party. That party is called the Die Linke Party. That's German for the left party. This is a party widely perceived in Germany to be anti capitalist. That is one of the defining slogans of the party. Runs like Germany can do better than capitalism. Oh, goodness. Third party in Berlin, couple of percentage points less than Merkel and gaining fast. Politics is shaking in a Europe beset by the crisis of 2008 from which it cannot escape. Nor is such an escape anywhere on its horizon. Capitalism is a system that thrives on people not understanding or paying attention to what's actually happening, which is one of the things this program tries very hard to overcome. We've come to the end of the first half of this program. Please stay with us across a very short break and come back and we are going to have a very important conversation about the state of higher education, the struggle between universities and the people who teach what folks go to universities to learn and what the class struggle in the university has to teach us about the United States and perhaps beyond that in this day and age. Stay with us. We'll be right back. About time. For anyone telling you after all your deeds no sound of roaring thunder stopped in Golder E. No time I get mine and make no excuses Waste of precious grit the sun shines on everyone. Everyone love yourself to death so you got to fire up. Welcome back, friends, to the second half of Economic Update. For this warm day in September, I want to begin by introducing a very good friend of mine for years that I'm happy to interview. His name is Professor Michael Peelias. So even before I describe who he is. Welcome, Michael.
