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Sam. Welcome, friends, to another edition of Economic Updates, a weekly program devoted to the economic dimensions of our lives, our jobs, our debts, our incomes, the conditions of our work and what they look like coming down the road, not just for us, but for our children as well. I'm your host, Richard Wolff. I've been a professor of economics all my adult life, which I think has prepared me, I hope, for offering some insights as to what's going on in the economy we all depend on and live in and with. I want to begin today with a particular update. Before doing the announcements, I often start with, and this has to do with, yes, our president, Donald Trump. On the 17th and 16th of the month of August, he entered into a major fight with some of the largest corporations here in the United States. Merck in the pharmaceuticals, Amazon in the delivery operations and many others. In some cases, he attacked particular CEOs, in other cases, the company as a whole. And this is interesting and demands a bit of economic analysis. So let me do that. The Republican Party has always been a coalition, as has the Democratic Party. And the Republican Party's basic coalition had two parts. On the one side, business, particularly big business, was the champion, the funder and the dominant influence. Junior partner was what we might call social conservatives, collection of groups that included fundamentalist, religious folks, people who were in favor of all kinds of particular social conventions, usually lumped under the term conservative. And the Republican Party, to be successful, had to hold this coalition together. It had to be the party at the same time of business, particularly big business, and of social conservatives. And this was a difficult coalition to keep together. When the Republicans were able to do that, they would win. And when they failed to do it, they would lose. When Mr. Trump attacked the large corporate CEOs, he was straining to be as polite as I can. That coalition, when he ended the business advisory councils, which he really had to do because the business leaders were quitting, resigning from being on those councils as a protest, particularly of what the president said in the aftermath of those horrible events in Virginia. But let's look at one case in particular to understand what's at stake. Mr. Trump specifically singled out and attacked the the Amazon Corporation, and he attacked that corporation whose leader had been critical of him for not paying taxes and for ruining all across the United States small retailers that were competitors and many towns that depended on those retailers, eliminating many jobs by their high tech approach to the delivery process and so on. And true to form, the defenders of Amazon rushed forward to say there should be no criticism. All that Amazon is doing is bringing progress and higher technology to the particular areas where they are dominant. Well, let's take a closer look. The argument about technological advance is really silly. Sure, technology advances, but what matters is how you use it. Do you use it to make profit for a small number of people? That's what Amazon is doing. Or do you use it to relieve large numbers of people of drudgery of the sort we used to have? The mass of people would like technology to be used for the second purpose. Capitalist enterprises prefer to use it for the first and Amazon uses it for the first time. There's not much more to be said about it. What about taxes? Well, the truth of the matter is that Mr. Trump has a point. Amazon doesn't pay its fair share of taxes and never did. Let me just give you one statistic which for me is kind of overwhelming. Between 2007 and 2015, the average annual percentage of taxes paid on their profits by the Amazon Corporation was 13%. That's not just for their federal taxes. It includes also the taxes they paid to the state governments where they are active, and the taxes they pay to the local governments. You know, if you own a big warehouse in a local community, you have to pay property tax like every other business. And if you're active in a state that has a corporate profits tax, which most states do, you have to pay. So you put together the federal, state and local, and it worked out to 13%, folks. That's a smaller percentage than most Americans pay individual Americans when they put together the federal income tax, the state income tax, the local property tax they pay on their automobile or their home. So Amazon has been getting away with tax evasion, using the law, using an army of accountants, using an army of lawyers. When Mr. Trump goes after them, he is right about their tax evasion. Now, true, he's never done a thing about it. He's never joined any movement, let alone led one that did anything about this. And he is straining the alliance. The business community wanted things out of Mr. Trump and supported him. They wanted to get out of those high taxes that the Obamacare added to them. Mr. Trump failed. They wanted a big tax reform that would lower the tax burden on them. He hasn't delivered yet and it's not clear if he ever will. What the business community got out of him is little so far, and it's not looking good going further. And now with his support of the conservative and even the most right wing of the conservatives, they're facing political social turmoil, which they don't want either. So the coalition of the Republicans is fraying. Meanwhile, Mr. Trump, as he goes and lurches to the right, and Amazon, as they blithely avoid paying taxes, call each other out. It's kind of a modern version of the falling out among thieves. The next update I want to talk to you about is Americans dying younger, a big story in the Bloomberg News back on August 8 that deserves much more attention than it got. Mortality. That's the average length of our lives before we die. How long we live has been falling since the 1950s, a sign of economic well being, a sign of economic improvement of people's conditions. But it stopped rising in 2011 and in the last two years, excuse me, it stopped falling until 2011 and it's been rising, that is we are dying at an earlier age. This is extremely important for at least two reasons I want to bring to your attention. First, it is a stunning statistic undermining the notion that we are enjoying an economic recovery in the United States. We aren't. And one of the stunning demonstrations of that fact is we are dying at a lower average age than we used to. The improvement in longevity is over. It's now deteriorating. And that is a very powerful comment on the conditions of people's lives, especially because experts tell us that the economic conditions of people's lives, the stresses associated with them, the physical and mental exertions associated with them, are major causes of how long we live. So it's a critical sign that there's a problem with the economic situation. We have not recovered. In fact, it's going the other way. And here's the second economic fact. Corporations, as Bloomberg points out, are making billions by this. And you know why? Very simple. They have obligations to pay pensions. The sooner the worker dies after completing his or her work life, the less they have to pay out. It's even making the Social Security systems crisis less than it was before because the government doesn't have to pay out after you die. So this bad news for the mass of people is, in a perverse way, good news for the very corporations whose work conditions are part of the reason why people are dying earlier. Before I turn to the next updates, I want to remind you by making a short announcement of some important considerations. If you would like to see this program in its full glory as a new, upgraded production, please take a moment to Visit us at Patreon.com P A T R E O N If you go to patreon.com economicupdate you will see the entirety of this program and you will be able to show in an interesting way your support for what we are trying to do. Secondly, I want to remind you of the two websites we maintain available to you 24, 7, no charge ever for any of it, where we upload all kinds of material that you will find interesting that supplements what we do on this program. You will also be able to communicate to us what you like and don't like about this program. You'll be able very simply to follow us on Facebook, Twitter, Instagram, YouTube and so on. Make use of these websites. Be a partner for what we're trying to do by sharing with other folks what you find on those websites, including a complete archive of these programs. Finally, I want to inform you, as I have in the past, that we are now represented by a speaker bureau. And if you would like to have me come to your area and do a public presentation, very simple. Get a hold of an organization called speakoutnow.org all one word. And if you want to email them, Simply write to infospeakoutnow.org and they will work out with you the details of such a visit. Now back to our updates. Once again, I find myself talking to you about the Monsanto Corporation. It's on this program all too often, and in each case, virtually each case, it's because it is doing something that demonstrates what it means. When you have an economic system that puts profit before all else, or to use the other way of saying, it makes profit. The bottom line, the thing that is most to be focused on this time, Monsanto has produced a remarkable herbicide. If I understand exactly what it is, the name of it is dicambo. D I C A M B O. This herbicide, it gets rid of weeds, at least that's the idea, is produced by Monsanto. But there's an interesting story of a new version produced by them and marketed by them that was covered by Reuters, the international news agency, very short time ago. And I want to bring it to your attention. Why? Well, it turns out that when dicambo was used, and particularly on beans, peaches and vegetable gardens, they died. That is not the weeds, but the bean plants and the peach trees and the vegetable plants. That's not what the herbicide is supposed to do. And it devastated the farms, the livelihoods and the natural environment that we all depend on in millions of acres. Apparently startling pictures swirled around the Internet. So Reuters looked into it and what they found is something I want to tell you about. What they found is that Monsanto had departed from the usual procedure. The usual procedure when you have a new Chemical like this, and you want to market it, is that your scientist tests whether it's safe. But of course, not only your scientists. Typically, the company that makes such a thing gives samples to university laboratories and to other independent testers so they can all make the relevant tests and only market the product if all the tests indicate that it's safe to be used on food products. One of the things that every test should incorporate, should test for, is. Is called volatility. And I had to look up what that meant, so let me share it with you. Volatility is a measure of whether an herbicide, if used in one part of a field, is likely to blow over and affect the plants in another part of the field. Volatility is a measure of where the herbicide can go beyond where. Where you apply it. And now we get the interesting conclusion of the story. Monsanto did give the University of Arkansas, the University of Missouri, and the University of Illinois samples, but for the first time that anyone in these universities had ever seen, as the Reuters story makes clear, they gave them them with a strict rule that had to be signed and agreed to no test for volatility. Test for everything else about the safety, but not the volatility. Wow. And guess what the problem was when the herbicide was finally produced and sold and used by unwitting farmers. Turns out the product had a problem with volatility. It blew from those areas where it was initially applied to nearby areas, particularly with beans, peaches, and vegetable gardens. When confronted by Reuters with this story, this story of a bizarre, unusual procedure that made it profitable for Monsanto to sell something which had, in the end, devastating effects, I would like to tell you what Mr. Scott Partridge, Monsanto's vice president of global strategy, hears what he had to. We tested it, and it seemed safe. Ooh. But here's the better. To get meaningful data takes a long, long time. Mr. Partridge said this product needed to get into the hands of growers, end of quotation. Well, that's not very subtle, is it? They were in a rush to make money, and that's what they did. They rushed the product and they made a lot of money. But in the process, they put their profitability, what they could market to growers ahead of what was safe for the human race. And we are suffering as a result. And this happens so often that I just occasionally take your and my time to give you an example. The important lesson here is to see that there's a system in this society that fosters, promotes, incentivizes this kind of behavior that's the problem. I really am not picking on Monsanto, although they do provide so many examples. But I could pick others, as I occasionally do. But again, the important point is what kind of a system functions in this way. Let me turn next to another update that caught my eye and again, it has multiple lessons for us. This one comes for those of you who'd like to pursue the details from the New York Times dated August 16, 2017. The report in the Times says the that 100,000 children in New York City were homeless at some time during the 20152016 period that we are headed for and could already this year, this coming school year be in a situation where one in seven public school children in New York City is homeless part of the year? Why am I talking to you about this? Well, first, it's a stunning statistic. 100,000 children are suffering homelessness, children enrolled in school. This is one of the richest cities in the world, New York City in one of the richest countries in the world, the United States. What in the world is going on if 100,000 children in one city are suffering homelessness part of the year? Beyond that, I want to talk to you about what this means, since perhaps you haven't thought that through. And when I read this story, I began to try to think it through. And there were things in the story that helped it. First thing in the story that caught my graduation rates. Turns out the school has been keeping records. What is the percentage of students who graduate high school who were homeless part of the time versus those who did not have that problem? The answers are stunning. Homeless students graduated at a rate of 55%, barely over half graduated students who had steady housing graduated at the rate of 74%. A completely different number. My goodness. Here's another statistic. In the elementary school, the first school that a child attends, homeless students missed on average 88 days of school. All right, I don't want to over dramatize this, but if you miss 88 days of school on average, and remember, an average means a large number of students missed even more than that. But 88 is enough. The average just like 60 would be enough and 40 would be enough. In what sense? In the sense that you're going to fall behind, you're not going to be able to keep up. You will have missed this lesson or that lesson in arithmetic or reading or writing, and then you will have the added burden of coming to school school not able to do what the other students sitting around you are able to do and feeling bad about it. And Maybe hiding it either from your parents, your friends, or maybe even from yourself. And if you fall behind early on, that tends to get worse over time, alienating you from the other kids and from the whole educational process. Because it is embarrassing, because it is undermining your self esteem as a human being. We are doing an unspeakable injustice to millions of our fellow citizens children by blocking their ability to access a decent education and a decent life based on on a decent education. But I want to take it another step. There are those amongst us whose response to the awful problem of poverty in this society is to blame the poor, to blame the victim. But what this story shows is how terribly wrong that is. How large numbers of the poor are. People who, at a time when they have no responsibility for it at all, were denied the opportunity for an education from the beginning. I'm talking kindergarten, first and second grade who were deprived, through no fault of their own, from the access to an education, throwing them back in terms of their levels of achievement, making their relationships to the rest of their schoolmates and to the school experience as a whole one full of embarrassment, difficulty, shame, failure to blame them as adults for their poverty without recognizing how much of that poverty is accounted for by a failure of the system. We are not a poor country. We have huge amounts of housing that sits empty. We have the capacity to build housing that is as good as any in the world. What excuse could there be? And then to point to the poverty that we have allowed to evolve and to blame the poor. Once you understand what the condition of our schools is, that really takes a bad problem and makes it worse. Homeless people have 10 times more problems than everybody else because they're homeless. This does not require rocket science. Children, as I've just shown you, suffer especially in something as vital as their education. From the fact that of homelessness, we know from the statistics of homelessness that more and more of the homeless are families, parents and their children. We know where this ends up. What kind of a society is unable to make the decision that those who have extraordinary wealth should be encouraged. And if they fail to heed, the encouragement should be required. Whether it's by tax functions or by changing the wages people are paid. So we don't have to take it from somebody to give it to somebody else. Because we pay good wages and give decent jobs to people from the beginning, whatever it takes, we can solve the problem of homelessness and and in that act do a major thing for social justice for innocent children and to eliminate poverty in the long run. Which flows from that homelessness and its impact on the children of this nation. It seems to me extraordinary to read such a statistic and to not have it create the uproar that it deserves in terms of both the problem it presents, but the solution it crystal clearly lays out for how to solve the problem. We've come to the end of the first half of today's economic update. I would like to urge you again to follow us on Patreon.com and to make sure you make use of our rdwolff with two Fs.com and democracyatwork.info that's all one word. Democracyatwork.info. please stay with us. We will have a short interlude and then we will come right back with the second half of this program which will involve a very interesting interview about the water issues that bedevil the United States in every part of our country in terms of adequate water, in terms of safety, in terms of drinkability. Water, as you well know, is one of the most basic requirements of human life and nothing is more urgent than the human right to have access to clean, safe water. Please stay with us. We will be right back.