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- [00:11]
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Welcome, friends, to another edition of Economic.
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Update, weekly program devoted to the economic.
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Dimensions of our lives. Jobs, debts, incomes, our own, our children's.
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What'S coming down the road, which is scary these days. I'm your host, Richard Wolff.
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I've been a professor of economics all my adult life.
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And I hope that that has well prepared me to offer you these economic updates for July 2018. Well, we begin with the Nissan Motor Corporation from Japan. The news broke on the morning of July 9th that Nissan also, like so many other nearly all the major auto companies, admitted to cheating on its pollution emissions controls. It made faulty tests of emissions and it made incorrect, faulty measurements of those tests. Well, we've seen it from vw. That's where the scandal broke originally. But American car companies, French car companies, and now the Japanese car companies, they all did it. Why am I telling you this? It's because the problem was never this or that country. Germany wasn't the problem and America wasn't the problem. And Japan isn't the problem. The problem is capitalism. That's why all the major auto companies have been caught doing what? Putting profits ahead of our health? Saying it's more important to make money and thereby to hustle a car that is dangerous than to protect the public from emphysema, lung cancer, and all the consequences of the pollution we live with these days. The problem is the capitalist system that puts priority on profits. That was always true. And it's important that now, with Nissan's admissions, to see that wherever capitalism runs the auto business, we have this kind of problem. I want to turn next to, in a sense, another problem of capitalism. A bit more subtle. My attention was caught by the Pew Charitable Trust, the Pew Research center, which is one of the premier polling institutions in the United States. And they recently did a poll asking Americans, particularly young people, what they think about the decline of labor unions over recent decades. Just to remind everyone, back in the 1950s, roughly 1/3 of American working people were either members of or represented by a labor union. Today, that Percentage is below 10%, a catastrophic decline, all almost in a straight line for more than half a century. And here's the interesting result that Americans gave to the Pew Research Center. They think it did more harm than good to the American society, which is.
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The question they were asked.
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Why do I bring this to your attention? Because we had a decline for over half a century of something that a clear majority of Americans think about was not a good thing. So it didn't happen, the decline of labor, because the American people didn't Want labor unions, as the right wing asserts. On the contrary, Americans wanted labor unions. Americans then and now believed they did more benefit to our society than harm, which is more than you can say from any other institutions. Unions were victims of a concerted effort by business and the government it controls to weaken working people's ability to get a decent job, to get a secure job. And let's not lose sight of one big fact. Where did the business community get the money to run these campaigns and to persuade and lobby the politicians? The working people produced the profits with their labor that were used by their employers to undercut those workers ability to get properly paid for what they did. There's more than a little irony in that reality. Another example of where people want one thing, but where the capitalist system gives them something else had to do with statistics out about what corporations did with that enormous tax cut they got last December. Well, it turns outand this is from NBC News, it turns out that the bulk of the money saved by the big companies who got a cut in their profits tax from 35% to 21%, that's a big cut. The bulk of that did not go to hire more workers and did not go to raise wages, neither of which have happened in proportion to the tax cut they got. Here's what they did do. They bought back shares of stock. That's right. A company can use the money it no longer gives Uncle Sam in taxes to go into the stock market and buy its own shares back from the private companies and the private individuals who own those shares. And you know what this does? It drives up the value of shares. And why would the executives of these companies do that? Because it turns out for many of them, their pay package depends on how well the shares do in the market. So they're taking the money they don't give to Uncle Sam, which therefore can't provide us with public services. And they're using that money to boost the values of the shares so they take home more money. You live in a system that makes that attractive and that makes it possible. And guess what? The result of businesses being able to use the tax savings to boost their share prices is to make the rich richer. And the rest of us, not so much. 1% of shareholders own 65 or more percent of all shares. So when the price of shares goes up, it's really good news for the 1%, not for the rest of us. Inequality gets worse. And why am I telling you this? Because poll after poll, not just by the Pew folks, but by everybody, Gallup and everybody Else says Americans would prefer less inequality than what we have now. The tax cut, which was sold to the American people or something we all want, produced the very greater inequality that every poll shows Americans don't want. We didn't want labor unions to disappear, and we didn't want inequality to grow worse. And we have a government and a business community that gave us both of those things we don't want. And now let's talk about a really big event that we also don't want. A trade war. We're already in one. It kind of started on the 6th of July when the Trump tariffs went into effect against China. We already had some increase in tariffs before that, and the Chinese immediately retaliated, which the Europeans are doing, the Canadians are doing, the. The Mexicans are doing, and so on. Let me talk to you about what a trade war is so we all understand what is being done to us First. Every country, for as long as we have historical records, manipulates its foreign trade. It tries to get advantages for its own people at the expense of other companies, other individuals in other countries. The United States has not been greater or lesser in doing this than anybody else. I'm going to just give you a few examples. Are we a country that allows others to send their stuff over here without putting a tax, which we call a tariff, on them? The answer is no. We have been doing that all along. The entire history of the United States is the up and down of these tariffs. Do we have them today? You bet. I've given you some examples in the past. I'm going to give you one right now just to give you an idea. Light trucks, a kind of vehicle that Americans really want to have in the countryside, on the farm, but also in the suburbs and indeed everywhere. Light trucks carry a 25% tariff applied by the United States government, ready for the last 50 years. That's why light trucks are made here, because foreigners can't bring them in here. We don't let them, since we slap them with a tax that raises their price, which is why they are produced here. Is the United States the only one who does this? Of course not. Europeans do it and the Japanese do it, and you name it, they do it. Likewise, we put quotas. In the 1970s, we told the Japanese automobile companies, you can't bring more than a certain number of cars here, no matter what the price is. That was something we did. Countries do that. Typically in the history of capitalism, there are periods when they bring down the tariffs because they think free trade, opening trade is profitable. The more Profitable way to go. Those usually are interspersed with periods when they go the other way. That's called protectionism rises. Then they put high tariffs. These things come and go. When you've exhausted the money making possibilities of a period of free trade, you shift to protection and vice versa. All that Mr. Trump is doing is reacting to what? To a period of relative free trade, from roughly the 1970s to roughly four or five years ago. It was a period when tariffs came down and taxes came down because American corporations wanted the whole world as their oyster, to sell wherever they could, to buy wherever they could, so we would get cheap clothing from abroad and fuel that we needed and so on. In the course of that free trade, as we all know, companies made a fortune. We've had the biggest rise in the stock market in American history. Profits were made, which is why that was done. But in the course of that process, some companies lost out and large numbers of American working people lost their jobs as companies moved abroad. And so guess what? What happened is what has always happened, the victims of free trade began to be bitter and angry and to look for a change. To what? To what capitalism always changes to. When the upset around one phase leads you to shift to the other one. And Mr. Trump is now trying to build his political career on being the champion of a shift to protection. Will the companies that invested in free trade let him? That's what the next few months and years will show us. Will it go back to protection? Maybe. But here's something that's so important for everyone to understand. This is a fight between one set of companies that sees more profit in a free trade arrangement versus another set of companies that sees more profit in a protectionist arrangement. They're fighting it out. Each side hopes that the government will go their way. The protection type companies want higher tariffs like the steel and all aluminum companies got. The companies that don't want that, like the car companies that just built enormous plants in China and India, which they want to sell those cars back here in the United States. They don't want it. They're fighting. Each side will come to the mass of the American people and say, you should support us because it's in your interest. This has been going on back and forth for centuries. It's time we stop being fooled. This has nothing to do with working people. Working people are going to be badly affected by the automation that happens, whichever way it goes, by the profit growing strategies, whichever way they go. Believe me, if we don't have cheap workers abroad that American companies can hire or low paid workers, bringing them in as immigrants. If that's blocked, if American companies have to pay high American wages, you know what that means? It means the incentive to replace those workers with machines will be greater than ever. And you're going to see a spurt of computerization and robots and artificial intelligence in this country, the likes of which we can't even imagine. Capitalism is based on saving money off of working people. It always was. And whether you're protectionist or free trade makes very little difference. Well, folks, we've come to the end of the first half of this program before introducing you to my guests, and I think you will be really interested. I want to remind you, please, to subscribe to our YouTube channel. It's very important. And to follow us on Facebook, Twitter and Instagram, and also to make use of our website, democracyatwork.infox where you can get much more information and get involved. I want to particularly thank you, those of you in the Patreon community that support us, and also to remind you that if you're interested in participating in our local groups or Even in starting one, go to action.democracyatwork.info and there you will find a way to participate with us locally. We'll be right back.
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Welcome back, friends, to the second half of Economic update. It is my pleasure and a service I think I can provide to all of you to have with me today Elizabeth Marciano. She's an elementary school teacher from Kanawha county in West Virginia, and she's here at our request because we were all taken with the extraordinary achievement of the public school teachers in West Virginia earlier this year, who closed the schools in every county of the state to protest the damage that had been done and was contemplated to be increased to the public schools that educate the children of that state in actions, strikes included, that would have made any labor union proud. Those teachers were able to achieve wage increases to prevent horrific legislation from going through and to change the whole way public employees and teachers are viewed, understood and understand themselves. So it's with great pleasure that I welcome one of those teachers to the microphone.
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Thanks very much, Elizabeth, for joining us.
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Thank you very much.
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Okay, here's the question. You did achieve a great deal. How was it done? Tell us, if you can, how the teachers were able to do this, especially when unions are not very strong or haven't been in the state of West.
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Virginia for a long time.
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They aren't in much of the rest of the country, less so than at any time in 50 years. How do you account for what was able to be achieved by you and your fellow teachers in West Virginia.
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I think the first thing that we have to do if we're going to go about this whole thing is we have to eliminate the assumption that this is a teachers strike. What happened in West Virginia is not solely a teachers strike, and it's sort of irresponsible, I guess, from our side of it. If you're within the state, of course, if you're outside, you might not understand as much. The media showed us a lot of red shirts and blue shirts and purple shirts, and those things were by design. It was not coincidence. This was a collaboration that went across party lines and across job lines. So it's teachers, service personnel, public employees. You might have saw more of teachers because there are some folks, corrections officers, for example, who simply cannot walk off the job. And it's not to say that that's what we wanted to do, but the implications of those actions are a bit different, I think we could say. Right, right. So you, you have this. That happens, and then the, the, the other, the other thing to consider is that something really, really important happened. And it almost seems sort of silly. Unions used to be a force to be reckoned with. Right. Like, it was huge. Now they're more decorative in fashion. Right. And you sort of have this idea that, oh, it's this bill that I'm going to pay. So that way, you know, make sure everything's good. And what people forget is that if you want to talk to a union boss and you're a union member, you get up and you go look in a mirror. Because if you're in a union, you are the you in union. And when you are in a climate that is that. That is often stagnant and then turns into something that can be really devastating toward the state. And you just see this blatant abuse on the children in the state through the mistreatment of its employees. At that point, people start to wake up and they start saying, okay, we have to do something, and we start reaching out to our unions. But people, before they start talking to strangers, they talk to each other. And in West Virginia, you're just. I mean, a lot of times it can be very isolating. And the people that you have to talk to are the people at work. You start there and you start talking to other people and you say, what are we going to do? What can we do? What are the ramifications of some of the actions that we might take? You know, what can happen just so that way we know exactly what it is that we stand to lose.
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Tell us a little bit about the relationship between the teachers and the parents of the children, the larger community. How did the. How did that work to make possible the victories you achieved?
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We love our kids. Listen, that cannot be overstated. There is. I mean, if you're a teacher, that is worth your salt. You love your kids. And it's not just love. You have a passion for what you do, and you are dedicated to what you do. And with the wages that we get paid, you better be dedicated. I mean, we often miss a lot of time with our family just to be with these kids, and that's evident in your practice. So we're not talking pedagogy here. We're just talking about how you roll into work, how you connect with the students, how you follow up with parents. A lot of our students are so far below the poverty line that you cannot teach just content. You cannot teach to an elbow or an earlobe. You have to teach the whole student. So you need to see to all of their needs. So that means that even though my job might be reading, writing, and science and those sorts of things, at the same time, I need to figure out a way to make sure that my kids have food, that they have access to books. Because at home, if you can't afford to pay the lot bill, you can't afford to go out and buy developmentally appropriate content and books and things that are interesting and that are going to sort of get rid of this whole achievement gap thing that people like to talk about. So just in that. And sort of things that we do and the way that we connect with our kids and follow up with our families, you just sort of become like just. Just a cohesive unit. You can't nod. It's really inevitable. And I mean, we have students who are. Our kids are talented, they're performers, they sing, they dance. And we. And you got to go. You got to go and see them, and you have to encourage those. Those sorts of things.
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So let me push you a little bit. There's been a lot of effort in our society to turn the public served by public employees against those employees, to feel as though there are too many of them or they get too well paid or their pensions are too generous. How did you in West Virginia build the kind of solidarity with the public you serve through the children to overcome all of that? Can you give us some sense of how you built a different relationship? Or was it simply the love that you felt for their children that somehow communicated itself to the parents.
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As a public employee, as a public servant. The nature of what we do and the nature of who we are is service oriented. You know, when I wake up every day, it's not that I'm just thinking about what lesson plan I'm going to write or how I'm going to go clip coupons or whatever it is that I'm going to do. I'm thinking about in every way that I can, what can I do to make things better, Whether it's a small thing or maybe because, you know, we all don't wake up with grandiose visions. And I think just in that nature and the kind of folks that you meet in West Virginia, because I will tell you, I have been a few places and you will not, no matter where you go, you will not meet another person. Like a mountaineer, they are one of a kind and just in their nature, you find this willingness and this desire to serve others. And it's just understood across the board that teachers don't get paid a lot in West Virginia. Public service jobs in general don't get paid a lot. The salary of our corrections officers is disturbing. I think I'll just leave it at that. And I think just sort of being in that environment and interacting with them, I think that's just sort of how you forge that alliance. I mean, you get involved with people and in communities and you volunteer because it's just sort of what we do. It's our natural inclination.
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All right. Do you expect. Do you think that other public employees, both in West Virginia, but beyond elsewhere in America, are listening and watching what happened in West Virginia? Is it having an effect? Do you expect it might? Do you want it to? How do you. You know, I don't want you to be too grandiose, but this is historic, what you all achieved in West Virginia. You probably know that people have been talking about it. That's why we're here today. What do you think about that? How do you understand the possibilities of what you achieve?
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I think if we're going to talk about achievement and success, we need to make sure that we do not invite complacency. Because the pinnacle of what we achieved was this moment that we seized. That said, we're going to educate ourselves, we're going to educate each other, we're going to vote, we're going to be active. And that comes from what was more a formerly passive sort of stance. And that example is what people look at. And that's what I mean. You see signs that say, don't make me go West Virginia on you because you know it's possible.
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Will it be sustained? Will whatever it is that moved you from more passive to more active, is that going to survive? Is that going to carry you? Because no doubt the forces you had to overcome to get what you got will not go to sleep now. The pressures to lower the salaries and to neglect public school education that were there before didn't disappear. If you're not active, you're going to slide backwards. It's kind of that situation. What do you think about that? Will you be able to sustain that in yourself and in those around you?
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C
I think we are already realizing a little bit of that. I can tell you that coming out of the stock market stoppage, we started working with people in our voting regions. And outside of that, when you go to the ballot box in West Virginia in November, you are not looking at a bunch of lobbyist mouthpieces or career politicians. You're going to be looking at somebody, you know who probably lives down the street. And that's because when you get out and you show concern for the common man, and you're not only examining educational policies, you're looking at so many other things. I think what you have to remember is if you make somebody mad, you make somebody angry. Anger's fleeting. Anybody knows that. But engagement, that's going to change your life, you can't get. You cannot get away from it, and you won't. And when you have this many people who get on fire and who get engaged, you can't not. And I know within the primaries, we already saw a few legislative speed bumps sort of. Sort of go away. And to that end, we are continuing to work. And we're also trying to make sure that people understand that the things we fought for are not solidified yet. They are not tangible. And so to sit back now means to say, oh, well, that was a good time. Netflix and chill. And that doesn't work. Like, what you have to do is you have to get out, you have to be active, you have to know what's going on, and you have to talk to other people to make sure that our health care system is addressed and that our kids are provided for. But that happens. We have to keep going right up through November to make those things real instead of just posturing.
- [27:19]
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And beyond November, too.
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Oh, oh, yeah.
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So let me ask you, as we close down because of our limited time, part of me really vibrates to what you have to say, because working people are the majority in this society. If what happened in West Virginia can happen beyond the public employees and beyond the borders of West Virginia, then this country can achieve things and go in directions we haven't thought possible for a long time. It's possible, and that's partly why we wanted you so badly to come on the program, that this is a kind of turning point, that something has happened that made you in Kanawha County, West Virginia, show the rest of us what was possible before. And for that, on behalf of everybody watching, thank you. It's a big inspiration and you should be proud of it because it's part of what you achieved. Let me ask you to stay.
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For those of you who can, we've come to the end of our program. You can get more if you go to patreon.com economicupdate where we will continue this interview. And for everybody else, thanks for joining us, and we look forward to speaking with you again next week.
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Sam.