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Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives. Jobs, debts, incomes, our own, those looming down the road, those of our kids. I'm your host, Richard Wolff. I've been a professor of economics all my adult life, and I hope that that has prepared me well to go over these economic changes all around us as we do that each week. Let me jump right in by giving a shout out to the City of New York where this program is produced. The City of New York has taken remarkable steps in this last week or so, and you should know about them. New York City is the first in the nation to do what I'm about to describe two things. One, it has gone into court to sue the five major oil companies in the world for lying about climate change and fossil fuels and damaging the city of New York by doing so. And the second thing they did was to declare in New York that they are going to divest the city's pension funds by getting rid of selling $5 billion worth of the shares of those fossil fuel companies that they are also suing. By the way, the New York City pension fund, which has $189 billion in it, is invested in 190 fossil fuel companies whose shares they are going to sell. Well, let's first mention who the companies are so we all know. BP or British Petroleum, Chevron, ConocoPhillips, ExxonMobil and Royal Dutch Shell. They are being sued for billions. And what is the point? Well, nothing says it better than to read the statement of Mayor Bill de Blasio when he announced these steps taken by the City of New York and I New York City is standing up for future generations by becoming the first major US City to divest our pension funds from fossil fuels. At the same time, we're bringing the fight against climate change straight to the fossil fuel companies that knew about its effects and intentionally misled the public to protect them, their profits. As climate change continues to worsen, it's up to the fossil fuel companies whose greed put us in this position to shoulder the cost of making New York safer and more resilient. Here's what they plan to use the money for that they get from suing the oil companies for damaging new they want to repair all the facilities that have been damaged by higher temperatures, by higher levels of seawater, by the storms like Sandy and others that were generated by the climate changes caused by fossil fuel burning over all these years. They want to make New York City resilient. They want to protect it from the consequences in the future of the damage to the climate already done. Here is a city proactively moving to deal with this problem. Not another conference, not another report, not another well meaning meeting of politicians to say they are concerned. And for heaven's sake, not another meeting with these companies hearing about how committed they are to doing something which the city of New York has now shouted them out for not doing at all. This is action taken by people at the local level when the state and federal levels have let us down in this area so badly. My next update has to do with consumer debt in the United States. It has been rising very, very fast since 2013, indeed to the degree that there's been a so called recovery in our economy. And that's wildly exaggerated as I try to point out nearly every week, but to the degree that there's been some recovery, it has been highly dependent once again on debt, on the rapidly rising debt since 2013, which is about when this recovery is said to have gotten underway. Which means that the well being of the American economy, to whatever degree it has been reproduced, has become again debt dependent. It now the total consumer debt exceeds its previous high in 2008, just when our economy crashed. Let me say that to you again, that total consumer debt just went over at the end of 2017, just went over where it was when the economy crashed in 2018. Now it is true that there is less outstanding credit per family now than there was then, even though the total of credit is larger. We do have more families than we did 10 years ago in this country. But most of the reason that the debt per family is lower is not because families haven't taken on too much debt they have, but it's because we wiped out the debt of the most indebted. They were declared bankrupts and got out of being counted in that way. And so they're not there. And so the overall results look a little bit better because we're not counting the worst of them. But the bottom line is, and this has been documented particularly by the Federal Reserve bank of New York, that we now have fast rising consumer debt. It's rising most quickly for credit cards, secondly for auto loans, third for student loans, and finally for mortgages, since Americans can't buy houses the way they once did. The mortgage indebtedness isn't going up as fast as the other forms. But Americans are relying on debt at a rising, accelerating rate. And given what that meant 10 years ago, it would be foolish not to understand that this is an important economic reality now. The third economic Update takes us back to Greece. What is happening in Greece, as always, is important on this program because it is an advance notice of what is happening elsewhere in Europe. What will be happening in those parts of Europe where it hasn't happened before and likewise for the United States. That's why we talk about Greece. So what has happened to Greece now? Well, once again, there are massive strikes and demonstrations across that little country. You might be astonished, as I was, to read that since the crash of 2008, 2008, there have been, count them, no less than 50 general strikes in Greece. The people have been active in that country desperately trying to stop something. What? Wage cuts, service cuts, that is public services cuts in their pension, selling off state property to both domestic and foreign corporations and auctioning off the property of those whose debts were so big that they had to basically fold the tent and sell off everything that they own. The damage done to the well being of the Greek household and family is staggering. It exceeds anything that has happened elsewhere in Europe to date. The latest strikes are about the latest action and the latest action tells a big story. The latest action is a law, like all these laws imposed on the Greeks by the Europeans as a condition for getting the loans without which Greece could not continue as a society. In other words, they've made the Greeks dependent on foreign loans. And the foreign loans will not be given unless the Greeks take the steps that the European Community, the European Central bank, the European Commission and so on, the IMF impose on them. The latest one is to increase the number of people in a union that have to vote in favor of a strike before you can have a legal strike. Okay? It doesn't take genius to understand that every single step imposed on the Greeks since the crash of 2008 have increased the power and wealth of the rich at the expense of the mass of people, increased the power of capital and diminished the power of labor. Every single one. What is going on here is a foretaste of what's to come. The Greek business community wasn't strong enough to get these things done. The mass of the Greek people organized in communists, socialist parties and in very powerful trade unions, simply made it impossible for the Greek capitalists to impose this kind of austerity on the Greek people. It had to be done by something more, more powerful than the Greek capitalist class. And so it was. The entire European capitalist class organized into the imf, the European Union and the European Central bank together bailed Greece out of the crisis with loans, made Greece dependent on these loans because they did not have A what? A crisis inside Greece. A fundamental change of the Greek economy to try to rebuild it on a better footing. No, no, no, they didn't do any of that. Instead they solved the problem by borrowing from the Europeans who lent to them, knowing full well that by making them dependent on European loans, the Europeans could dictate the conditions for doling out lo bits and pieces of these loans. And the conditions were to reorganize the Greek economy, not to go beyond capitalism, but to go backwards to a harsher and more unequal capitalism, far beyond what the Greek capitalists could ever have imposed on the Greek people. So now the Greek capitalists can sit there saying, our hands are tied. It's those Europeans without whom we can survive, we who are insisting that we do that. And who's doing it in Greece is just as important as what's being done. The who is the Syriza Party. The Syriza Party is a left wing party. It prided itself on being more left wing than the old Greek socialist party had been before it. And here's what that means, that the word socialist, the meaning of socialist, the meaning of left wing is being transformed in Greece. It's no longer a political movement that stands against capitalism. It's no longer a political movement that is a criticism of capitalism is an advocacy of a fundamentally different system. The socialists have become the party that institutes what the capitalist wants, that makes it happen. When the old parties can't do the job anymore because they've lost the support of the people, in comes someone who says, I can do a different and better job cashing in on what socialism used to mean, getting into power and then turning out in the most cynical way you could imagine, to be more of the same old, same old, maybe even worse. The reason this is important to understand is that it's a harbinger of what is scheduled for the rest of Europe and North America as capitalism shifts its ascendancy to Asia, particularly to China. And that makes that the growing society. What it's leaving behind is the West. And as the west has to constrict itself, the question is, who gets constricted? The 10% at the top or everybody else? And you know the answer. Before I tell you the name of the game of those at the top is to make sure that the adjustment to a declining Western capitalism is foisted off on the rest of the people. Greece is leading the way, and that's why it's important to pay attention. Before I go on with the remaining economic updates, let me remind you As I often do, we maintain two websites and they are available for your use. They're available without charge and they're available 24 hours, seven days a week. The first one is democracyatwork. That's all one word, democracyatwork.info and the second one is rdwolf with two Fs.com both of these websites allow you to communicate to us what you like and don't like about the program, what you'd like to see us do make use of it. Both websites allow you to follow us with a click of your mouse on Facebook, Twitter, Instagram. Both websites provide you with material you can use and share with other people with a complete archive of these programs, for example. So make use of these websites, partner with us, be part of the process of bringing this information and these kinds of analysis to the people who need your friends, your relatives, your co workers. That's part of what this project is all about. And let me say a word to those of you that listen to this program on the radio. If you would like to see the television version, because we do this simultaneously, radio and TV is an easy way for you to look at the television program. Anytime you want. You go to a website called patreon.com p a t r e o n patreon.com economicupdate that's the name of the program. And you can see this program anytime you like in that way. So let me return then to our updates. The next update has to do with a British corporation, Carillion, I hope is the right spelling. Carillion Corporation. It's a 200 year old company, employs 43,000 workers. That makes it a very big company. Out of those 43,000, 20,000, a little less than half are in the United Kingdom. That company has in fact collapsed. It has been negotiating for bankruptcy. Compulsory liquidation was announced on January 15. It may survive. Still there are negotiations. But there's some important lesson in this collapse of a huge private construction company. First, the United Kingdom government had employed Carillion on 450 projects including the construction and maintenance of hospitals, of schools, of prisons, of defense sites and of high speed railways. The government uses tax money to make all these contracts with Kareliad Corporation. Now the government has promised to pay the salaries to of many of these workers while they work out the financial collapse of this company. All kinds of other companies that provided services and inputs to Karelia are being damaged by the collapse of this large corporation. Why am I telling you this? The answer is. For years we've been hearing that outsourcing activities that the government used to do, the government itself used to build or at least run schools and prisons and defense sites and railways in England. These are outsourced. We were told that turning these over to private enterprises would give us a much more efficient production of these sorts of things and is the logical thing to do. Everybody knows we heard all this. We hear it in the United States just the same. Well, turns out it isn't. So it turns out that one of the biggest beneficiaries of outsourcing to the private sector, what the British government does has been a disaster. This company has failed. This company is leaving tens of thousands of people without work, thousands of companies without revenue. It is a disaster for all of England. And listen now as I quote to you what two observers of it all have to say. The first is the institute of directors, directors of companies. These are the people that are the kind of people that ran that corporation. It has issued a stinging rebuke to karaon's top executives and directors. Wow. Roger barker, head of corporate governance at the institute of directors, was particularly alarmed that the company changed its bonus rules to protect top bosses. Turns out that over the last year, as they were going down into collapse, they gave themselves big bonuses, these directors. Oh, goodness. Maybe nobody thought about what it might mean if you outsource government activity to. To private enterprise, that the private enterprise are just as capable of taking care of themselves at public expense as any politicians ever proved themselves to be. Well, if you didn't think about it, you can think about it now. And here's another. Meg hillyer, chairwoman of the parliamentary public accounts committee, fears that taxpayers face, quote, a raw deal from this collapse. Here's what she. Carilian's collapse raises grave questions about jobs, the delivery of public services, and the way government conducts its business. We as a committee have previously warned of the risks when contractors paid from the public purse become too big to fail. They get a pass. They get too much money. They mess up. Why am I telling you this? Is it because I want you to believe that private isn't good and government is as the way to do business? And the answer is no, that's not what I'm doing. Liberals do that. I'm no liberal. I'm not here to tell you, have the private do it. It's better than the public, because that's silly. But I'm equally aghast at people who say, no, don't have the private do it. Have the public do it. Because putting a bureaucracy of politics in charge is about as smart as putting a bureaucracy that's private in charge, which is what you do when you outsource it to big private corporations. The solution to these problems is not to have vertical controlled companies, neither public nor private. The solution to this kind of failure and corruption is to have many people involved in deciding what happens in a company, not a few, and to therefore also make sure that there are people to sound the alarm when things aren't going well and to make sure that as things go badly, we haven't got a handful of people taking care of themselves at the top while everybody else suffers and the problem gets worse, which is what happens either publicly or privately. Let's not once again go from the public to the private, followed by the private to the public. We've been back and forth this way for decades, and it doesn't solve the problem. That's what the carillon collapse teaches us. One more time. My last update for today is a little different, but it raises so important a question that I wanted to leave the time to develop it with you for a little bit. It has to do with an action taken by the CVS Pharmacy Corporation, one of the largest drugstore chains in the United States, may indeed by now be the largest one. I haven't kept track. There's only three or four, and it's one of the largest ones for sure. CBS was in the news this last week by telling us something. They are no longer, they said, going to be touching up the photographs of women wearing beauty products on their faces and so on. Turns out they touched these things up to make these women look unnaturally flawless in terms of their skin. And just so with their eyebrows, their hair, you know, you really do know what I'm talking about. They're not going to do that. They've had so much protest, particularly from women, that they're not going to be touching up their advertising. Now let's talk about touching up advertising. Why would you do that in the first place? Why would you take a picture? Remember, the pictures that are taken are taken mostly of models. Models are unusually attractive, beautiful, whatever words you want. That's why they're chosen. That's why they're models. So now you have an exceptionally beautiful model of something male, female, doesn't really matter. Why would you then touch it up? Why isn't it sufficient that you found a beautiful example of whatever it is you're looking for? Here comes the answer. And if it offends you, then you're offended by the way this system works. This advertising is not about celebrating beauty and it surely is not about making beautiful, more beautiful. Advertising, let's remind ourselves, has a simple basic to sell more stuff. The advertiser is a producer of something and that producer wants to sell more of it. And the way you do that is you advertise the product. How do you get beauty products to be sold more, to be purchased, for example, by women or men, for that example? Here's how you do it. You create an image of beauty that is precisely beyond what a human being can produce. Flawless skin, perfectly shaped eyebrows, unbelievably fluffy hair, or whatever else it is. You make it more by touching it up in the picture than any human can achieve. And then you make a none too subtle appeal look, you say to the individual buyer, you fall short of this, you're not as beautiful as you could be and you should be. But there's a way to solve the problem we've just created for buy our product. Buy this beauty object product, this cream, this lotion, this spray. It will overcome how bad we've made you feel by creating an image of beauty no human being ever achieved. This is a cruelty every woman who has reflected on growing up as a young lady knows about anxieties about are you pretty enough, Are you beautiful enough, Are you attractive enough? Men also increasingly go through this. It's important to understand you're not going through it because it's normal to adolescents or puberty. It isn't. That's normal to capitalism. A system that systematically will use anything and everything in your psychology to play on it, to get you to buy more stuff. If it means suggesting you're not pretty enough or beautiful enough or good looking enough or thin enough or whatever it is, that will be done. You'll be made to feel bad about some dimension of yourself so that you will buy whatever that seller is selling. Capitalism needs to make money by selling and advertising is its way and the social consequences have always been awful. Yes, it's nice that CVS is going to be doing less touch up on its beauty products, but that's a tiny fraction of what the problem of advertising has been and and continues to be. We need to understand that if we're ever going to get out of a society that puts that kind of cruelty out there as a matter of course, every day. We've come to the end of the first half of Economic Update. Thank you so much for being part of it. Please stay with us after a short interlude. We will be right back. Welcome back, friends, to the second half of Economic update. I am very, very glad to tell you that we are going to be joined in this second half by an old friend, Bertel Ullman. He is a professor of politics, or what we call political science in other departments, but he works in the Department of Politics at New York University. There he specializes in Marxism and other schools of socialist theory. His main scholarly books include Marx's Concept of Man in Capitalist Society, Social and Sexual Revolution, Dialectical Investigations, and Dance of the Steps in Marx's Method. His more political works include how to Take an Exam and Remake the World, the Class Struggle Board Game, and the Autobiography that Followed it. Class Struggle is the name of the game, True Confessions of a Marxist businessman. In 2002, he won the first Charles S. McCoy Distinguished Career Award from the New Political Science section of the American Political Science association, the mainstream association of the political science profession. So I am very glad to welcome Bertell Ullman to Economic Update. Thank you for coming, Bertell.
