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Welcome friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives. Jobs, incomes, debts, our own, those of our children. I'm your host, Richard Wolff. I've been a professor of economics all my life and that has prepared me, I hope, to offer you these economic updates. Before jumping into the updates this time, I want to issue an invitation. As many of you know, every other month I give a public talk in the Judson Memorial Church here in New York City. And the next one is scheduled for Wednesday, September 26th at 7:30. And I would like to invite any of you either living in the greater New York area or perhaps visiting someone here in the city or perhaps even on business, to come and join us. It's a chance for me to meet you and vice versa, and for me to develop some of the ideas and arguments that we present on this show in a fuller way and with the back and forth that that kind of a situation allows. The Judson Memorial Church welcomes all. It's located in Washington Square, a very famous part of lower Manhattan, and the exact address is 239 Thompson street in Manhattan, New York City. So once again, consider yourself invited. Wednesday evening, 7:30, September 26th, Judson Memorial Church. The first update I want to offer to you today has to do with an anniversary, to be precise, the 10th anniversary of the collapse of one of the oldest banks in the United States, Lehman Brothers Bank. It collapsed in September of the year 2008. And it was the kind of celebrated beginning of, of the crash of global capitalism that really got going in those last three months of 2008 and into 2009 and 10. It may come as a shock to you, but that was 10 years ago. We are now September 2018. And so there's a fitting opportunity to reflect on the 10 years since that crash of economics, of a capitalist system, the second worst crash in capitalism's history, exceeded only by the Great Depression that began in 1929 and did not end until 1941. Well, what is a retrospective? What is a sense of the last 10 years? I'm going to take you very quickly through the highlights because it's an important date and an important 10 years. The first thing that happened after Lehman Brothers bank collapsed and basically took the whole capitalist system with it was that the banks, the biggest ones in this country, Wells Fargo, Citibank, Goldman Sachs, all of them did this remarkable thing. I want to remind you of having given speeches all the time. Their leaders who had in their speechifying explained how the government doesn't know what it's doing, and that the best the government can do is let the bankers do their own thing. And private capitalism is its own engine of growth. All that kind of talk, all these leaders of all these big banks discovered by early October of 2008 that they were bankrupt and couldn't function. So they all got in their limousines or their airplanes and went to Washington, begging the government that they had made fun of to save them. And the first thing that that government did was to bail them out. That's what the rest of 2008, 9 and 10 were all about, saving the banks. And they did that by providing them with enormous amounts of money and credit, which they could not have gotten any other way. So we had the most enormous bailout of our financial system, bankrupt by its own actions that we've ever seen. When the government was finished spending wild amounts of money to bail out the banks, it turned around and told the rest of us that now that they had spent all this money on bailing out capitalism, they couldn't spend money on us. And so they imposed on us something called austerity. Well, in Europe, they called it austerity. They tend to call things by what they are. Here. We called it prudent fiscal policy, but it amounted to the same thing. The government went then to work to rebuild the big corporations, bailing them out. General Motors, American International Group, things like that. And there was a recovery for rich people. It's been going on the last 10 years. The result since there was austerity for the mass of people and a recovery and bailouts for the rich. That inequality in this country, itself a cause of the crash, became worse over the last 10 years than it was in the years preceding the crash. It's like the banks in the heat of the crash. We said, my God, they're too big to fail. We have to bail them out. They're too big to fail. Something should be done about it. Well, nothing was. So today those same banks are bigger than they were then when it was thought that they were too big. And so where are we? Where does the retrospective that 10 years leave us? Well, JP Morgan, the largest bank in the United States, just this last week released a report predicting that the next financial crash will happen in the year 2020, less than a year and a half from right now. What a comment. Very little learned. Nothing changed the unstable capitalist system that crashed in 2008, threatening us with doing it again. If you don't learn from history, you will be condemned to repeat it. My next update has to do with my desire to be useful to Alexandria Ocasio Cortez. She is by now quite famous for having defeated a long term incumbent Democrat for the United States Congress in the county of Queens in New York City. This last week. She was on the CNN television program with reporter Jake Tapper, and he gave her a bit of a rough time asking her to explain how she could raise the money estimated by people sympathetic to her at $40 trillion over the next 10 years to pay for the education, housing, full employment, jobs and so on that her socialist platform calls for. And she had some difficulty coming up with an explanation? Well, she's not a professional economist. She's relatively new to politics. I thought she deserves a bit of a pass. But Mr. Tapper seemed to be more interested in suggesting a very old gambit, namely that people on the left propose things and do not understand how expensive they are, which isn't true, but. So let me be of some help. How might we come up with the money to do the kinds of socialist programs that Bernie Sanders, or for that matter, Alexandria Ocasio Cortez advocates? It's not a big problem and the solution is easy to explain. Here we go. We begin with the roughly 10 to 12% of Americans who are not working now but want to. This includes the officially unemployed, the people who are involuntarily part time. That is, they want a full time job but haven't been able to find one. Discouraged workers, people who have given up looking but they really do want a job. And then a good number of those who have left the labor force over recent years but are starting to come back because they really do want a job. Roughly 10%, it's at least that of the American labor force is in this group of people who want to work but have no job. Keep that in your mind, please. Now, the second statistic, the Federal Reserve bank of the United States, the Federal Reserve System, keeps a statistic called capacity utilization. It's a measure of how many of the tools, equipment, machines, factory floor space, office space, office equipment, store space, and so on. How much of it is being used and how much of it is idle not being used. And the current measure, August 2018, 78% of our capacity is being used. The other 22% of our capacity to produce is not being used. Okay, now I'm an economist. Let's do the simple story. Let's take the 10% of people who want a job and don't have them and let's put them into the offices, stores and factories where all the capacity they need to work with tools, equipment, computers, floor space, you name it, is more than enough from what they need, because more than 20% of the capacity is not used. And guess what? If you add 10% of the labor force to what's working now by putting these unutilized unemployed people to work, you would increase output by roughly 10% in this country every year. That's 2 trillion a year for 10 years. That's 20 trillion. That's half of what Ms. Ocasio Cortez needs. And why don't we do that? Why don't we put the people who want a job, who deserve a job, into the places where they can do the work, their brains and muscles more than enough to work with that capacity. It's only capitalism that can't make a profit off these people, that doesn't put them to work. But a socialist society that doesn't have to make profit for the individual producer, that thinks in social terms, that's where the word socialism comes from, would immediately, as Ms. Cortez, excuse me, Ocasio Cortez, would explain, socialism puts those people to work, gives them the job they want and need, not just because it produces all this wealth that can then be used to provide everybody in America with the education and the housing and etc. It's the jobs that's the core measure. And for those of you that are ecologically minded, if that's more production than we need as a society, then everybody can have a shorter work week. We can solve the problem that way. But don't tell the socialist the money isn't there. Capitalism can't raise the money to solve these problems. Socialism can. And Ms. Ocasio should have told Jake Tapper and he should have figured it out, that more than half of it is immediately going to be provided. And here's a final thought about suppose we also knowing that the capacity we have sitting idle is 22% and the number of extra workers who are unemployed but need a job is only 10%. Why don't we welcome immigrants? They can come in and produce still more wealth, allowing even more of the socialist project to be realized. Come on, folks, you know, next update. Colin Kaepernick, very famous football player, was put on an ad this last week and a half by Nike. And in the ad his face is shown and he says, believe in something, even if it costs you everything. Which is a kind of summary of what happened to him in the NFL. I was struck because the statistics show that 2/3 of Nike sneaker customers are under 35. And Nike said that those people would support Colin Kaepernick a lot more than they would criticize him the way Trump has done. Turns out they were right. Sales of Nike went up. Stock price of Nike went up. And by Nike using Colin Kaepernick in this way, guess what? They were also able to hide the fact that they exploit horribly in many parts of Asia child labor to produce their sneakers through direct or indirect producers. And by championing Colin Kaepernick, they were suggesting that they were on the side of social justice. Colin Kaepernick used them and they used him. And that's how capitalism works and that's how change is actually going to come. This does it for the first half of our show today. But before leaving the first half, I want to remind you, please subscribe to our YouTube channel. Follow us on Facebook, Twitter and Instagram. Look at our website democracyatwork.info how you can get more involved. And finally, thanks to our Patreon community for your ongoing support which makes all of this possible. Stay with me. We'll be right back. Welcome back, friends, to the second half of today's economic update. Well, we're going to spend some time with an academic, with a professor, with somebody who comes to us from the world of the university at a time when that institution in our society is under grave attack, is subject to political, economic and other pressures. Big things are happening and big changes are coming. So it is with special pride that I want to welcome you to our guest and introduce him to you before we begin our conversation. His name is Michael Pelias. He is a member of the newly constituted Humanities department at Long Island University in Brooklyn, New York. He taught philosophy there, both ancient and modern philosophy, for the last 28 years. He's a founding member of the Institute for the Radical Imagination, an experimental left think tank in New York. He's a co manager of its journal, which is called A Project of the Radical Imagination. Currently he is working on an essay, disaster the Long Island University Case and Its Consequences, and also on a book, a long study with others, entitled Techniques of Servitude from La Boetie to the Willing Slaves of Capital. Michael, thank you very much for joining me today.