Loading summary
Transcript3 lines
- [00:00]
A
Sam. Saint gonna change. Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives, our jobs, our incomes, our debts, those of our children and those looming down the road. 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 the large number of economic updates we have for you here at the end of the month of May, I wanted to make a couple of announcements of particular importance. The first one is we are gearing up the schedule for me to travel around the country over the next six to 12 months, giving talks in a variety of communities to a variety of audiences, civic groups, trade unions, university and college institutions and clubs, and really a broad variety. It's wonderful work that we do because it's a chance for me to meet you, those who are in our audience, those who are working with us, those who would like to find out more. And it is a building of the very partnership that we try so hard to cultivate. So if you are interested, if you are somebody involved in programming, get in touch with us. Use our two websites, rdwolff with two Fs.com or democracyatwork.info that's all one word, democracyatwork.inf o and let us know and we will follow up with you or anyone you designate to work out the details and logistics of me coming to wherever it is you are to work together in a more direct way. And so if that's of interest, let me underscore that. And the same applies, if you're interested in developing a democracy at work group in your area, please get in touch with us. We are working very hard to build those groups and to spread them and to provide whatever support we can to those of you that would like to begin to be an active group in the place where you live or the place where you work. Let's turn then to the updates that we have in front of us today. The first one is so interesting that I want to make sure everybody knows about it and to talk a little bit about what it means. Very recently there have been announcements about something that's been going on actually for a few months. Major automobile companies are taking huge positions that is buying large chunks of stock in ride sharing or ride leasing companies. So for example, the Toyota Motor Company has invested a billion dollars in Uber. And in case you think this is unusual, no, it isn't. General Motors invested half a billion dollars in a rival of Uber. Named Lyft L Y F T. Furthermore, Volkswagen has Now confirmed a $300 million deal with New York based ridesharing startup Get. And then Apple added a $1 billion investment in the recently renamed Chinese rideshare service DD earlier this month. So what's going on? Here's the interesting thing for us to think about. The car companies are running scared. The problem is that the automobile is one of the largest expenditures people in Western Europe, North America and Japan make. Indeed, it's a large expense for most people who aren't in fact wealthy. And as the economies of Western Europe, North America and Japan increasingly shrink, are pinched, slow down in their development if they don't just suffer outright recession, the affordability of an automobile is becoming more and more difficult. The car companies see the writing on the wall. There's already more capacity, more ability to produce cars, then there's a demand for it. And that demand is shrinking, at least in the parts of the world where capitalism grew up over the last 250 years. And the prediction is that this is never coming back. And what that means is people can't afford a car that's really as simple as it is. So they still need transportation, partly because here in the United States, for example, we have a very poor public transportation system with the exception of a few places. And so the question is, how do you provide transport for the mass, say, of the American people in the event that they cannot afford to buy cars anymore? Ride sharing. So the car companies are carving out niches. Toyota is going to be such a big owner of Uber that guess what, you'll be hailing an Uber car and it'll be a Toyota. GM wants the same deal. Now, does that mean these car companies are not going to do the efficient thing and buy the cheapest car? You're right, they aren't. They're cutting deals because other than speaking about the wonders of competition, when the head executive goes on a speaking tour, when it comes to real business, it's not about competition. It's about getting rid of competition and cutting a deal so that the people you cut the deal with won't go to somebody cheaper than you because you'll be able to control them. That's what's happening. And we are going to be more and more in a world where we will deal with the automobile the way we already deal with the airplane. That's right. Only rich people have their own airplanes. The rest of us share the airplanes with other people. We are moving in a direction where more and more of us are going to be sharing the automobile with with other people, not owning one ourselves. Toyota, Uber, Volkswagen, gm, Lyft and get are seeing to that as profit strategies of their own. Next update, another set of interesting statements from Pope Francis. And because these statements are remarkable in and of themselves and because they come from from the leader of one of the world's major religions, they're doubly remarkable and they deserve our attention. Here is a report from Reuters, the international News Agency, dated May 19, 2016 and coming from Vatican City in Italy in Rome. And here's the report from Reuters. Pope Francis and I'm now reading Pope Francis condemned bloodsuckers who grow rich by exploiting others. He referred to them as making slaves, quote, out of workers and setting unfair contracts and that that was a mortal sin. Keep these words in mind because later in the program we're going to have more about workers who are slaves. In any case, returning to Pope Francis, who has often talked critically about unremunerated hard labor, told a story in this latest public statement in the Vatican told a story about a young girl who found a job where she was required to work 11 hours a day for the equivalent of $729 per month and that this was paid under the table. This may have been because she was an immigrant. It may have been because she had some other legal problem. But here's what the Pope had to say about the story of this young this is starving the people with their work for my own profit. It is living on the blood of the people and this is a mortal sin. This was words spoken by Pope Francis at the service in his Santa Marta residence. He went on without a pension, without health care, workers are suspended. That is the contract they have may or may not give them work in July and August. They have to then eat air and in September they laugh at you about it. Those who do that are true bloodsuckers, said the Pope. The Pope is condemning working conditions that are now more and more common across much of the world and he is referring to the people who suffer those conditions as slaves and that this is contrary to the teachings of of the Roman Catholic Church. I want to turn next to an update that will actually be a set of updates. It begins with a quotation from the well known columnist and economist Paul Krugman. He's even won the Nobel Prize, an American. And he recently wrote the following sentence. No, America isn't an oligarchy in which both parties reliably serve the interests of the economic elite. Money talks on both sides of the aisle. But the influence of big donors hasn't prevented the current president from doing a substantial amount to narrow income gaps. And he would have done much more if he'd faced less opposition than in Congress. Clearly, Mr. Krugman is a partisan of President Obama, as he clearly is also of Mrs. Clinton. But what I want to talk about is what Mr. Krugman is here. President Obama has narrowed the income gap, should be credited for that, and could have and would have done more if only there wasn't the opposition in Congress. This really demands a rebuttal, to say the least. So let me try. First, I'm going to give you lots of examples of how President Obama has, in fact, not narrowed the income gap in the United States. There's loads of evidence to that effect. Indeed, if anything, the income gap and the wealth gap and the overall inequality have. Has gotten markedly worse under his leadership. But that's not the only thing I want to say. I want to say something about this. He could have done better, but for the opposition in Congress. Repeatedly in American history, when Presidents have felt strong enough or strongly enough about an issue and have found opposition in Congress, they've resorted to. To another tactic. And that tactic is to go over the heads of a resisting Congress and appeal directly, systematically and consistently to the people themselves, getting the people on the side of the executive, the president, and thereby putting pressure on Congress to be less oppositional. Imagine then with me what might have happened here in the United States had President Obama systematically crisscrossed the United States with every conceivable social group that would have joined him in campaigning against inequality, in calling forth the anger and the determination of the American people to. To turn the growing inequality around, to get us back to places not that long ago in American history when things were much less unequal. Imagine if President Obama, for example, had responded to the Occupy Wall street movement that started in September or so of 2011 when he was the president, a movement that took as its defining definition of what it was about as being opposed to the splitting of America between the 99% and the 1%. If ever there was a movement devoted to this issue of inequality and doing something about it, it was the Occupy Wall street movement. Did the President say, congratulations? Did the President facilitate, help, lead, support the Occupy Wall street movement? And the answer is an unqualified no, he did not. Indeed, within a very few months, he led, and I mean that precisely, the movement across the United States, in dozens of cities, literally in the same week, to use bulldozers to remove the symbolic center of that movement, which was a completely peaceful, non violent occupation with little pup tents in public parks of people who wanted to make a statement about the 1% and the 99%, far from helping them, far from leading them, far from being inspired to replicate what, what they were trying to do as President, Mr. Obama organized and presided over the violent, I'm talking particularly here in New York City, the violent destruction of the peaceful tent communities the folks of Occupy Wall street had set up. No, the president could have, should've, might've done much, much more. The opposition to Congress needn't have been the end of the story and does not justify his not having done all of the other things he could have and should have. But that's not really the main point. I want to tell you some stories about recent economic events that I believe systematically refute what Paul Krugman asserts, that the President has significantly, excuse me, substantially narrowed income gaps. So let's start. First, let me bring to your attention. A report came across my desk. Thank you to the listener who sent it. This one has to do with Miami, Florida and Dade County. The story was first reported on wlrn, which is a radio station in Miami and South Florida. And I'm going to just read you the headlines and the first paragraph or two because they say it all. Quote, here we go. And this is a report by Wilson Sayre dated May 22, 2016. Quote, Poverty is up in Miami Dade county and wages are about the same as they were back in 2010 when adjusted for inflation. Okay, let me comment. That means there's been no increase in the real wage of the folks there for five to six years. That's what was just said. Let me continue to quote. These are just a few of the findings of a new comprehensive study of prosperity in the county. That's Dade county coming out last week from the Florida International University Metropolitan Center. That report, that comprehensive study, quote, paints a picture of the region that in many ways looks worse than during the height of the last recession. And that's 2009. Okay, where's the narrowing income gap, Mr. Krugman? Not in Miami Dade County. Indeed, between 2005 and 2014 of according to the Florida International University Metropolitan center, poverty in that area grew by 15%. And you know what? Poverty in the United States between 2005 and 2014 actually grew even worse, by 17%. Professor Krugman, maybe it's worth rethinking your statements. Here's the next update. This one comes from the city, excuse me, from the State of Texas. It turns out that over the last several weeks there have been serious strikes by workers inside Texas prisons. That's right, inmates. They are required to work. Wow. They are required to work for very low wages and in some cases no wages at all. And they're protesting that situation. Professor Krugman. And these strikes in the Texas jails these last few weeks are actually part of a string of strikes that seem to have started in a big way back in 2013 with California. And there have been big strikes in Colorado and indeed in a number of other states. Wow. The workers there don't want to keep working for no money or in effect, no money in some cases. They're saying that there's something on the order of tens, in some cases hundreds of thousands of people across America working in prisons. And the prisoners like to point out that not only do they have to work under awful conditions, making all kinds of commodities and being paid next to nothing. In the case of Colorado, prisoners were being paid between 74 cents and $4 a day. Professor Krugman. That's an amazing payment for a human being in the United States, by the way. They refer to themselves, many of these prisoners, as slave laborers. And as I mentioned some time ago, the 13th amendment of the United States Constitution specifically exempts prisons from the prohibition against slavery. And so we seem to have used that loophole to create slavery in Colorado. Things were so bad that people began to protest. And the Whole Foods Corporation, some of you know them, the Whole Foods Corporation has committed to stop selling prison farmed food that they used to sell, particularly the fish, tilapia and trout. And goat cheese. That's right, the goat cheese you buy from Whole Foods was, until recently, if they've kept to their agreement, prison related slave labor in prisons. And as the slave laborers in the prisons like to point out, the jobs they're producing there, the jobs they're working, the goods they produce, which by the way, include shoes, mattresses, garments, brooms, license plates, printed materials, janitorial supplies, soaps, detergents, furniture to textile and steel products. Wow. These are jobs that are therefore not being provided to the people outside of jail, suffering, as we know, for the last five or six years, high unemployment. This is not a society that's narrowing gaps. Professor Krugman, is it, do you think? Next update for the professor to consider. This comes from an important website of the New York City area called the Gothamist. G O T H A M I s t. Gothamist.com is where you can find it. On May 24, Miranda Katz wrote there about a series of prosecutions and deals cut between the Attorney General of the State of New York and the Domino's Pizza chain. Guess what? Domino Pizza has been systematically cheating its workers, not paying them what they were supposed to be paid, not providing them with a proper overtime payment, not providing them with their tips, etc. Etc. And they have been settling for a variety of settlements with the Attorney General numbering in the millions of dollars to pay back the workers for money cheated from them by Domino's Pizza. And by the way, they're not the only one. There were others. Papa John's got into difficulty. The elegant per se got into difficulty. You know what that means, Professor Krugman? It means that when you look at the statistics of what companies are paying, that may not be an accurate gauge of what they're actually doing and what they think they can get away with and what they in fact often do get away with. Professor Krugman, it may well be that the words are and the conditions are much worse than you or President Obama wish to face. Let me continue because this doesn't stop. I have in front of me an article written for the Bloomberg News Service. Hardly a social critic and it was written by Narayana Kocher Lakota. I hope I've pronounced his name correctly. He used to be a member of the Board of Governors of the Federal Reserve representing the Federal Reserve in bank in Minnesota. He's currently a professor of economics at the University of Rochester. And what does Professor Kocher Lakota have to tell us in his article for the Bloomberg dated May 11? I'm just going to read you one sentence Professor Paul Krugman. I'm blanking on his name for some strange reason. Here's Professor Kocher Lakota's summary statement in that article for Bloomberg. Quote, specifically the typical family in the bottom half of the wealth distribution in the United States was worse off in 2013 than it had been in any of the years covered by the Survey of Consumer Finances going back to 1989. Oh goodness. Professor Kocher Lakota is giving us yet more evidence of that. Nobel Prize winning Paul Krugman hasn't figured it out yet. Next item, a recent report by the Pew Charitable Trust, a wonderful research agency which points out that the number of young Americans aged 18 to 34 living in their parents home had has reached a record not seen in this country for a very long time. 32.1%. Roughly a third of young people living together are living in their parents home or living alone in their parents home in 2014 back in 1960. So roughly half a century ago, the number was 20%. So we've gone from 20% to 32. People can't afford to live on their own. Not only that, but the more and more couples are not the way people are living. They're living singly. America is changing and the economics of it are very painful and difficult. Professor Krugman. And finally, a report from the Washington Post dated May 17. The proportion. I'm just going to read it. The proportion of schools segregated by race and class where more than 75% of children receive free or reduced price lunch and more than 75% are black or Hispanic climbed from 9% to 16% between 2001 and 2014. As the story makes clear, we are segregating and isolating black and Hispanic students more than ever. And here's the last part of the story, Professor Krugman. High poverty, majority black and Hispanic schools were less likely to offer a full range of math and science courses than other schools, for example, and more likely to use expulsion and suspension as disciplinary tools. The gaps between rich and poor across the board are catastrophic and worsening. Professor Krugman and President Obama, we've reached the end of the first half of this program. Please stay with us. We will be back in a very short time with the second half and dealing with some major topics at that time.
- [28:17]
B
Move to the city to sell a vendetta Praying for my Stella to the hands of Isabella Was a good earner Got a little butter Moved a cow cutter got rich Bought a summer learner I fought when I made the whole world blind City by city they built Sin City. Mr. Benjamin, Mr. Connie needs a shilling. Cause he'd rather not walk in the cops from the prison and there ain't nowhere this long Leo this alone Leo won't go. What pleases your heart is not always what eases your spirit or your soul forward dollar will you hear she For a dollar will you feed For a dollar will you mind explain it to me why to take up all by tomorrow For a dollar will you hold me? For a dollar will you love me? For a dollar will you.
- [29:36]
A
Welcome back, friends, to the second half of Economic Update. I want in this second half to deal basically with two major topics and give them the attention that often isn't possible when you're constrained by time. The first one has to do with the role of markets and in particular with the institution of markets as they might relate to an economy that was based not on capitalist corporations, but but instead on worker co. Ops. And what I'm concerned with here is the number of times it has been raised to me, and even sometimes by critics of the movement for worker co ops, that as long as they are working within a market, that somehow they won't survive, or that somehow the market will simply undo them and force them back into, into being more or less capitalist corporations. In other words, that you can't possibly have a worker co op kind of economy unless you somehow get rid of markets. So I want to talk about that, since I believe that's a mistaken understanding of the institution of markets and indeed of the economic history of the world as we know it. So let's begin. Is it possible to have an economy of worker co ops in which the problems of production and distribution are solved without markets? And the answer is of course, yes. Remember, for most of the history of the world, human beings have produced goods and services and have distributed them amongst one another without markets. The institution of the market has not become the dominant way we distribute goods and services. And let's remember, that's what a market is. A market is not how you produce things. Production happens in the home, it happens in an enterprise. It's when people get together to convert raw material using tools into a finished product. That production has nothing to do with markets. Markets are a way of distributing the resources that enterprises need to them and the products that enterprises produce to all the folks, other enterprises and the public who want to buy them. Markets are a mechanism of distribution. And they're not the only mechanism of distribution. They never have been. Markets are just one of the. Of a variety of mechanisms of distribution. For example, we can distribute things by having a particular group of people, for example, a council of elders. That's how human beings did it for many, many centuries. A priest, a government, a king, a special group of people designated to distribute the goods. Typically, human communities have for eons gotten together, for example, at the end of the harvest when the work was done and the crops were in, and then had all kinds of social mechanisms to distribute what had been produced among all the people who had collaborated to produce it. That distribution process did not involve one person offering so many of one thing to, to another person for so many of another thing. That's what a market is, a quid pro quo exchange of so much of this for so much of that Markets, let alone markets with money in most of the history of the human race were not the way production was distributed, by the way. An easy way to understand that is to think about the work inside your household. Or inside your family, Somebody is in charge of mowing the lawn, somebody else is in charge of cooking the meals, somebody else is in charge of cleaning the dishes, and so forth and so on. You divide the labor among the people you live with and then you deliver the services. In other words, you don't just clean your own dishes, you clean the dishes that are then delivered as cleaned dishes to other people. Just like other people make the bed, or vacuum the rug, or mow the lawn, etc. Human beings have been able to distribute amongst themselves without having a market where they do that. So would a worker co op based economy be able to distribute resources and products without using a market? Of course it could. Human beings have been doing that for a long time. But let's suppose for whatever reason that a group of worker co ops, an economy based on them, did want to use a market system. Is that a problem? And the answer is not necessarily. Not at all. Let's see why. Markets are a system of distribution that has to be coordinated with the system of production. It's not a one way relationship. The market isn't something unique that tells a production system how to be, whether it can exist or not. There's no such thing as the market which would tell a production system based on worker co ops how to be, or whether it could survive. Indeed, just as markets influence production systems, by all means the other way works too. The production system shapes the markets. Indeed, there is no such thing as an abstract market. That's an invention of modern neoclassical economics which has raised the market up to some sort of godlike, absolute unchanging thing, which it never ever was. Let me give you an example. In a slave economic system, do they have markets? And the answer is, sometimes they have in history, and sometimes they've distributed the products of slave labor in another way. Typically on a slave plantation here in the United States, for example, in the early decades of our history, slaves produced all kinds of things on slavery. On plantations. They might have grown cotton, they might have raised tobacco and other crops, they may have made housewares and furniture, they may have done a lot of things. And when they were done, how were these goods and services distributed between the slaves and the masters? Between the slaves who produced and the slaves who consumed? How was this done? Did they buy and sell things from another? Was a market used inside the slave plantation? And the answer is no, it wasn't. Distribution happened, but not with a market mechanism. Typically the master distributed as he or she saw fit. Was there a market though? With the slave economy, sometimes for example, there was a market in human beings. That's right. People were bought and sold in slavery. Slave owners bought and sold slaves from one another. Notice interestingly that there was a market for human beings. When capitalism overthrows slavery, for example, in the American Civil War, very interestingly, the capitalists who take over, they don't want to have a market the way the slave economy had it. They don't want there to be a market in slaves. So what do they do? They destroy. They outlaw the market in slaves. At the end of the Civil War, through the Proclamation, the Emancipation Proclamation issued by President Lincoln, and because the north won, the slave of the south was freedom. And very importantly, a market in slaves was declared to be illegal. The south was forbidden to have a market in that particular commodity. Let me drive the point home. In capitalism there is a market in the capacity to work. A human being sells his or her capacity to work to an employer. That's how capitalism functions. There's a market in what Marx called labor power. The employer buys your capacity to work and you sell it. In slavery, there was no such market. The slave did not have the right to sell his or her labor power because they were not considered to be the owners of it. There was no market in labor power. There was only a market in people. Capitalism changed it. So you notice market in slavery is a very different thing from market in capitalism. And the same is true of the difference between a market in feudalism, a market in slavery and a market in capitalism. Bottom line, there is no abstraction called the market which would dictate to a production system which whether or not it can exist and how it will work. Production systems are just as capable of shaping the market to serve themselves as the reverse. The economy based on worker co ops, if it decided to use the market mechanism, would no doubt shape the market in ways that would make it be compatible with a worker co op economy. And the reason to assume that is that's what every other production system ever did. The ones that came before. Slavery and feudalism, when they used markets, made them work to reproduce those systems. Slavery developed the market to reproduce it. Feudalism developed the market to reproduce it. Capitalism did it. And worker co ops will do it too. Just to give you an idea where this leads, let me sketch it for you just in broad strokes. One of the things a market in a system of worker co ops would likely do is say basically there is no more a market in labor power. We're not going to have human beings selling their capacity to work, not even to themselves, because In a worker co op, of course, the workers who do the work and sell their labor power are also on the other side of that deal. They are collectively the owners and operators of the enterprise. They are the same people selling labor power as are buying it. And my guess would be they would outlaw that. That is, there would be no more of that. What would there be instead? Well, there would be something in the economy as a whole that's actually not so different from how your family probably works. In your family, this is probably true. Whether or not things are going well for you in your life, the family is going to help you. The family's not going to let you starve because you don't have a job for six months or two years. They're going to help you. You're going to sit at the dinner table just like everybody else. You're going to be considered to be having a rough patch. Everybody helps you until you get back on your feet or you find another job, et cetera, et cetera. Well, a worker co op economy is likely to do the same thing. It's likely to say something like this. You start at this salary and as you get older and acquire more experience and acquire more skills, you move up a ladder of income. Typically in the existing world of worker co ops, the range is between 1 and 5 or 1 and 8. You go up 5 steps, 6 steps, 8 steps, not much more than that. And, and you move up that through your life. And if you're working someplace, you move up at that workplace. If for whatever reason you leave that workplace, the system carries you and helps you find another place. Meanwhile, you keep moving up the ladder because that's what a community of worker co ops would likely believe in. So there might be a market for goods and services produced by worker co ops, but there likely wouldn't be a market in labor power. Just like in slavery. There was no market in labor power, although obviously for very different reasons. A worker co op economy would never allow a buying and selling of human beings which was the norm in slavery. Let me give you another example. Likely in a worker co op economy, every worker co op would have a tax to be paid. What tax? This is special tax to develop a fund whose job it is to pay people when they are between jobs, to make sure they have the training needed by setting up the training so that skills no longer needed can be replaced by skills to that are in demand and that no matter what your age is, the system takes it upon itself to enable you to be a productive member of the community. That's a commitment that a worker co op system would have and they would shape their market, their tax system and so on to get those results. Bottom line, again, there is nothing fixed about markets and nothing unchangeable. They have changed in dramatic ways and nothing more often is the case than a production system that people want to move to then shapes the market to make it consistent with that production system. But it is simply wrong to believe that a market is some absolute which the worker co op system can't use, must succumb to. These ideas really are ahistorical and are not something that should worry people who are interested in pursuing the notion of a worker co op based economy. The other major topic for today is again the ongoing tragedy. It almost leaves me speechless. It's so depressing to me personally of Greece. We just had this week an announcement and it's an absurd announcement about an absurd situation. The European Commission, the European Union, the IMF have agreed to literally kick the can down the road again, this time merely to October. And what's the problem? Well, in order to explain the problem, we, we have to review yet again what was done in and to Greece. Okay, let's go twice before the Europeans have bailed out Greece, they said. That is twice in the last five years. Huge amounts of money, hundreds of billions of dollars were given to Greece because it was in severe economic straits. That was the story that was told. What had happened? Greece had borrowed money, or to be more accurate, leading Greek politicians had done what politicians everywhere do, try to solve the problem of a difficult capitalist system in deep trouble by using borrowing to get out of it. It's a little bit like irresponsible people can sometimes choose to borrow money rather than to solve their economic problems. Irresponsible politicians do exactly the same thing. Here's their dilemma, which is, by the way, typical across capitalism and stands itself as a critique of the capitalist system. Politicians are put under pressure by business and the rich to do all kinds of things for them and by the mass of working people to do all kinds of things for them at the same time. Corporations and the rich do everything they can to avoid paying taxes. We report on that all the time. And the mass of people don't want to pay taxes either. This puts a politician in a ridiculous situation. He or she is supposed to deliver services to corporations and the rich on the one hand and and the mass of people on the other, while the same two groups refuse to, excuse me, to provide the taxes with which the politicians are going to then produce the jobs and the services that everybody wants. What is a politician to do? If he or she doesn't raise the taxes, they can't provide the services. And if they don't provide the services, everybody's angry at them and they get voted out of office. But if they raise the taxes and everybody's angry at them and they get voted out of office, what do they do? Here comes a big surprise. They borrow money. They've been doing that for the last two and a half centuries of capitalism. So there's nothing new and nothing shocking and nothing awesome about any of this. It is boringly repetitive, which is why governments get themselves in over their heads so often. Well, anyway, Greece did like everybody else did in the go go times of the 70s, 80s, 90s and into the early years of this century. Borrowing money to keep themselves in power, to be popular, to be able to go to their people, as so many do, saying, gee, look at us, aren't we wonderful? We're doing all these wonderful programs and we're not only not raising your taxes, we're cutting your taxes. Isn't that great? Right behind this smokescreen is the reality. They're borrowing money like there's no tomorrow. And who's lending it to them? Big banks. Because they see here an enormous pot of money. They know they have these politicians in a place the politicians can't get out of. The politicians have to borrow. There's no other way to play this game. So the lenders make a fortune. They attach fees, they attach conditions, they slap them with high interest rates. They make these loans, a big profit industry. The politicians are building their careers by borrowing, the lenders are building their profits by lending. This is a marriage made in depending on what you believe, the place above or the place below, it all keeps rolling along until it doesn't anymore. In 2008, when the world capitalist system crashed, suddenly everybody was in deep trouble with enormous accumulated debts but no revenue because of the collapse system and the people unemployed who don't pay taxes. And Greece, like so many places like let's pick a few, Detroit, Camden, Cleveland, Youngstown, Puerto Rico, you name it, the state of Illinois. And on and on and on. Desperate trouble. They haven't got the revenue, but they've accumulated all these debts. To whom were the Greeks indebted after 2008 with the inability to pay? Mostly to the big rich lenders, above all Greek, German and French banks who had made a fortune for off of lending to the Greek politicians. Left wingers, by the way, right wing politicians. They were all caught in the structure of this absurd system. And they were scared. These lenders, they had already needed to go to their governments to be bailed out. In the immediate aftermath of 2008, French banks had gotten bailed out by the French government, German banks by the German government, Greek banks, all of them, they couldn't go a second time. They couldn't go to their governments and say, hey, we lent all this money, this shady money with the shady deals to Greece and they can't pay back. And so we need you to bail us out again. They went to those politicians, they told them that. And the politicians said, we can't do that again. Our own people will vote us out of office. They're already angry at us for having battle. Bailed out our own French and German banks one time. They're not going to let us do it twice. So they came up with an ingenious scheme. The European governments together, the European Union, the European Central bank, the imf, all institutions funded by the public governments of Europe and beyond, would make a loan to Greece. And they would say to the Greeks, here's a lot of money, but you have to use it to pay off your loans to the private banks you borrowed from. They're not going to lose anything because we can't have them coming to us to be bailed out. So public money was given to Greece, which in turn was required to use it to pay off the private bank lenders to the Greek government. It's important that everybody listening to this understand it. Another bailout of the French and German banks was accomplished by the French and German governments through the intermediary role of Greece. You sent it to Greece and they were required. So all that money that went to Greece, that was explained to the European people as helping our Greek brothers and sisters was nothing of the sort. It was money designed to help the very bankers that bankrolled the politicians that arranged this hustle. Okay? So that's why Greece is in the terrible shape it's in. The big bailouts it got weren't bailouts of Greece. They were bailouts of Greece's creditors. So now Greece is finally coming and saying, hey, we are in worse shape than we were three, five years ago because those bailouts didn't work. But that's not because we Greeks don't work hard. They do. Or that we Greeks aren't productive. They are. But the money was simply shoveled back into the banks who had lent it, banks who had made those weird loans. So Greece is in terrible trouble. And it goes now again and says, please relieve us of our debts now, our debts to these European institutions, because all the private banks have been paid off and the European institutions suddenly not so interested. The Germans refuse, they don't want to, because now it's actually money that is going to go to Greece. And their own people are angry. The workers in France and Germany are furious. They thought they were helping the Greeks. They probably still think so, but they weren't. They were helping their own banks, but they're angry that they're suffering through the economic contraction since 2008. And they can't be told by their leaders we're going to now help the Greeks. They, they think they have already been doing that and they think they themselves are needy. And when you add to that the influx of millions of refugees from the Middle east, then the workers in France and Germany are enraged at the thought their lives are being shrunken to help these Greeks whom they imagine have been helped because they don't know this story or these immigrants who are being put ahead of them. No wonder they're turning increasingly to right wing anti immigrant political movements springing up and giving some vent to their frustration. Meanwhile, the Greeks savage some more being told now they're not going to get debt relief. The new debts they have to the Europeans aren't going to be relaxed by the Europeans. The International Monetary Fund this last week came out with stunning report. It says if something isn't done about the Greek debts, this is a savage country which will not get back to normal perhaps as late as the year 2040. That's an old another generation, a million people have left Greece already. The conditions are so dire. You know why this is done? Because the politicians in Germany and France and elsewhere cannot face their own people. They cannot admit what they did to bail out the banks twice by using Greece as an intermediary. They can't dare say that they have sacrificed their own working class to keep their banks and big businesses in office, that they did nothing for the Greeks, that, that this has all been a charade, above all at Greece's expense. They are driving Europe into a dead end. And this has happened before in Europe with consequences that are now being prefigured by the rise again of a radical right alongside often a radical left. Both of whom know that something terribly rotten and inappropriate is going on in their part of the world and they're being shortchanged and they don't want it and they will not tolerate this situation. Greece, in a way is that famous canary in the mine telling people there are very bad. Dangerous social explosions, building run by a European establishment utterly self controlled in serving itself first and letting everybody go where they will. Very serious stuff, folks. This is Richard Wolff. This is Economic Update. I'm going to make the same appeal I always do. Please make use of our websites, rdwolff with two f's.com and democracyatwork. They're full of materials. They allow you to partner with us to follow us on Facebook, Twitter, Instagram and so on. We're particularly making appeals now for those of you who'd like to become active and or bring me into your area to do a speaking engagement. And as usual, I want to thank truthout.org that remarkable independent source of news and analysis, a longtime partner that we value especially. Thank you very much and I look forward to speaking with you again next week. But after a while gonna be my time, my time, babe. They ain't gonna change. It.