← Economic Update with Richard D. Wolff
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- [00:10]
A
Welcome, friends, to another edition of Economic Update, 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 adult life. And so I hope I'm ready to offer you these insights into what's going on in the economy we live in and depend on, and it's all around us. I want to begin today with a kind of basic lesson and carry it through the program. The problems we have, the economic problems we have, stem fundamentally from the particular economic system. We have capitalism. It's easy to get caught up in the headlines of this or that particular policy and to imagine that the politician speaking or the journalist or the academic really do control in some sense what's going on. They may wish to, but they very rarely do. Let's give some examples. Donald Trump's government, the Republican administration he leads, boasted that it's going to make America great again by hitting foreigners with tariffs, and in particular focusing on the Chinese, our ostensible competitor, or worse, and hitting their goods that come into the United States with a hefty tax. That's all a tariff is. It's a tax on goods that come into the country from outside. Not at all surprising if you know anything about the history of this sort of thing. The Chinese don't stand by idly and watch this damage being done to them because obviously if the United States taxes the goods coming from China, they'll be more expensive for Americans who have to pay the price plus the tax, and they Americans will therefore buy fewer of them, which will hurt the Chinese producers. By the way, that's true of whether the Chinese producer is in fact a Chinese citizen, or as about half of the stuff coming in from China, it's the product of an American company that went over there for reasons we will return to in this program. In any case, the Chinese, surprise, surprise, retaliated. You put tariff on our goods coming into America, we will put tariffs on your goods coming into China. And now, the unexpected. Only again, if you don't follow this material, which is why I'm presenting it to you, it turns out that the three most important German automobile companies, Daimler Benz, who produces the Mercedes, the VW corporation producing vws and Audis, and the BMW corporation, I'm sure many of you are very familiar with them. They all, it turns out, have factories they built in the United States to produce automobiles not only for the American market, but also for export, you guessed it, to China. And if the Chinese Retaliate by putting tariffs on carswhich they've done because the government of the United States put tariffs on their goods coming in. Guess what? It hurts the German car companies because they can't sell cars in China the way they used to because of the tariff. The Chinese retaliated with tit for tat. But here's the problem. China is the biggest automobile market in the world right now. And everybody knows that over the next 10 to 20 years, the Chinese market will grow for cars bigger than any other market in the world. The Germans don't want to be squeezed out of that opportunity. So guess what? They're cutting back production of BMWs, VWS, Audis, Mercedes here in the United States, moving production to China so they don't have the problem of the tariffs hurting their access to the Chinese market. And guess what? That fewer jobs, particularly in the American South, a big bastion of Mr. Trump and the Republican Party's support, which will now lose jobs, lose income, lose taxes paid to local communities because of the reaction, the retaliation, what the President said he would do and what the results are. The results are determined by the system that works this way. Another example of how the system is crucial is we're reading all about Mr. Trump's noisy activities in Europe. He's dishing the Europeans, making deals with the Russians, and everybody is shifting alliances. We used to be with these people. They used to be with those people. It's shifting. The alliances of capitalists are always shifting. When Russia went back to capitalism from the USSR back in 1989, they became a capitalist country like every other, and they're looking around for deals and alliances like every other capitalist country. And so the alliances shift. But for most of us, it doesn't make much difference. It's the same system. It's just that players are changing uniforms and changing numbers. But it's the same game, it's the same system. What happens to working people? The majority will be affected by the system, not by the particular alliances among them. There are, of course, examples where policies do affect the system as a whole, the people, and not just the shakers. And one example is the Chinese, excuse me, the Irish. The Irish Parliament recently made a decision. The government's funds will no longer be invested in any company that is engaged in finding or processing fossil fuels. Their commitment to a future that isn't polluted for everybody is going to be now enacted. Virtually unanimous. All the major parties agreed. There's an example of a policy that isn't about working out some deal among the people. Who run the system. It's an actual real change for most people. Now back to the way the system works. As if we needed the lesson. Well, sometimes good things happen. And when they do, I want to bring them to your attention. You may not know the name Bob Ferguson. He's the attorney General in the state of Washington and he just worked out a deal and got fast food companies. I'm going to give you the list of them to agree to something that he would have imposed on them legally if they hadn't agreed. Anyway, here's the thing that they've been doing that the Attorney General of Washington, Bob Ferguson says is a. No, no. Each of the companies. Let me give you the list of them because you know them very well. McDonald's, the hamburger folks, Auntie Ann's, Arby's, Carl's Jr. Jimmy John's, Cinnabon and Buffalo Wild Wings. Those are the companies who signed the deal with the Attorney General of Washington. And the deal says they will no longer write contracts with the franchisees, the local people who operate the restaurants, the thousands of them that these companies run. What was the deal that these franchisees had going? Well, you'd be interested to know they wouldn't hire people from one another. In other words, if franchise number one, Mr. Smith, who had a McDonald's in a city like Seattle, if someone wanted to leave Mr. Smith's McDonald's and go get a better job at another McDonald's, he couldn't get the job. They had a deal. No poaching, they called it, from one another's workers. Well, you know what that means? It means that a worker who, having gotten some experience at one McDonald's would like to get a higher salary because he knows how to do the job better at another McDonald's, couldn't get such a job. Now, here's what I like about this story and why I tell you. Number one, this is what's called a restraint of trade. You can't do that. Either people are free or they're not. And if you're free, it means you can leave one job and go get another without a deal among the employers that they won't hire you. Those employers are the people who love to tell you about the virtues of a free market. Everybody should be free to buy and sell whenever they want to. Except if it's my employee looking to get a better deal, because then I'll have to pay him more to keep him to because he could get a better job someplace else. So let's prevent him from getting a Better job at another outlet of the company. He's learned to work in restraint of trade. No free market, because it's profitable. The system makes corporations work like this. The system makes employers work like this. It's not that they're good people or bad people. They do what the system rewards them for, and that's why they behave like this. And sure, one state, Washington, got a few of these companies to stop doing something so flagrantly bad for working people and just good for their profits. But there are lots of other companies that haven't signed on yet. And there are 49 other states beside Washington, some of whom do this, but many of whom don't. And so you see, the system works in ways like this. And even if you got it to stop with a federal law, there'd be 50,000 other things that employers would be doing to screw the people. Again, not because they're good or bad people, because that's what the system rewards. Well, as we wind down this first half of the program, there's a new feature. I didn't know quite what to call it. It bothered me so much I knew I would talk to you about it. So for lack of a better term, I've decided to call it stunning crap. Yes, you heard that correctly. Let me tell you what I mean. When Mr. Trump was over in Europe this last week, he attacked Germany and Mrs. Merkel, their leader. In particular, he also attacked Theresa May, the leader of Britain. He attacks a lot of folks, as you've probably noticed. But here's what he did. He attacked the Germans. And here was the argument. They buy a lot of gas. He didn't get the quantity quite right. But who quibbles? They buy a lot of gas from Russia and they pay Russia a lot of money. So Mr. Trump had the nerve to say, you're not an independent country. He said, you've been captured by Russia, you're controlled by Russia because you pay them all that money and you depend on their gas. I found this absolutely stunning, although most of the mainstream media didn't seem to catch it. And so I'm telling you here, what am I telling you? Yes, the Russians sell gas to Germany and get lots of money, billions of dollars from the Germans. But that's small potatoes compared to the amount of money the United States sends regularly to the People's Republic of China. And I notice Americans seem not to want to face that here. Let's go through it. The United States runs a deficit. It spends more money as a government than it takes it in taxes and the way it does that is to borrow. The differ from whom does it borrow? Anybody willing to lend. Who's the biggest lender to the United States over recent decades? The People's Republic of China. They own over a trillion dollars, more or less, of America's public debt. And you know how they hold that money? In the form of treasury securities. And you know what the federal government has to do? It has to pay interest on those treasury securities to anybody who owns them. The biggest recipient of many billions of dollars every year paid out by the United States government for its debt is the People's Republic of China. We are more dependent on them in this way than the Germans are for Russian gas and oil. So who's calling who dependent and captured depends only on having a press and a public that doesn't know what it ought to know and so allows things to be said that have no justification at all. And here's another one. That's why I call it stunning crap. It goes like those nasty Chinese people have been stealing intellectual property technologies that we developed here in the United States. They have somehow, quote, unquote, stolen. Now, let's do the economics, folks. Nobody stole anything. Here's the way it An American company produces some commodity and they want to sell it in China because the Chinese are the biggest growing market in the world. And they say, we would like to go to China to produce it because China has very low wages. That's a wonderful combination. A tremendous growing market on the one hand, and low wages. So the American companies come in and say, we'd like to go. The Chinese say, fine, but in order to come here and use our workers and sell to our people, you have to share your technology, your call. You don't want to do it, don't come. You want to do it. That's the deal. Nobody stole anything. And by the way, this is what all poor countries have always done for a thousand years. The United States did it with England when we were a small, poor country. Well, we've come to the end of the first half of our program. I want to thank you all for following us on Instagram, Twitter, Facebook. Please follow us also on our website, Democracy at Work. If you're interested in our local groups, look@action.democracyatwork.info and finally, our thanks to our Patreon community. Your support is crucial to make these programs possible, and we want you to know how much we appreciate it. Stay with us. We'll be right back. Welcome back, friends, to the second half of Economic Update. Well, I am Very happy today to welcome to the microphone with us Moumida Ahmed. She is the co founder of Millennials for Revolution, which is the new name for what was Millennials for Bernie. Bernie Sanders. She's a digital campaign strategist working in Queens, New York City. She's also a member of the New York Progressive Action Network and of Democratic Socialists of America, generally known as dsa. So it's with enormous interest that we're going to explore what this organization is about, what it seeks to do, and what that might mean for the American economy. Welcome very much, Marina, for joining us.
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B
Thank you for having me.
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A
All right, let's start with the simplest. Why do you call it Millennials for Revolution? Make sure that we all understand what you mean by the very term millennials. Who are they?
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Well, millennials are people like me, young people between the 25, 34, generally people with student debt and the issues facing millennials today, that's the millennials. And then we're called Millennials for Revolution because we are a group of millennials who came together during the Bernie Sanders campaign to support his bid for president. And afterwards, we decided to continue the political revolution. So we kept the revolution in the name of, but we wanted to accept the larger movement that exists that whether it's against Trump, the resistance, whether it's the democratic socialists, everyone that's fighting to make this country a better place to live in.
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A
All right, so let me begin by asking you to tell us, is it your feeling from what you've looked at or your experience that folks your age, millennials are somehow more progressive, for lack of a better term, than other parts of the age distribution? Is there really a difference in the mentality, the attitude towards politics and the society? Is that the case? And tell us a little bit about it.
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B
Absolutely. There's a new YouGov poll that came out that showed 42% millennials would like to live in a socialist world? A greater percentage of millennials lean progressive. They voted for Bernie Sanders, who had a plat, was very progressive and left leaning than most Democrats. So I think that we do. We are more progressive than the previous generation. We are also a lot more diverse. So we care about certain issues that previous generations are not, as, you know, give us an idea like systemic racism. We know that the previous generation, we've passed civil rights, but the work that still needs to be done when it comes to income inequality and the prison system and how people of color and immigrants are treated, how we're institutionally oppressed or not given the same rights as other people and the nuance of it people won't, from the previous generations do not understand because they see it as well. People aren't saying the N word in public. So that means racism is gone. But that's not true. Like we felt. We're like, we have the largest prison system in the world, and we're incarcerating people of color in higher rates than any other race is. So that's something millennials deeply care about. Our group especially care a lot about that.
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A
All right, this is a program about economics, so I'm going to tilt a little bit and ask you to talk about that in a way that hasn't happened almost for half a century in the United States. People are now willing to talk about capitalism, the system that we have, and largely thanks to Bernie. I mean, there were other factors, too, but Bernie certainly did, by not running away from the label socialist, to make it possible for people to begin to think and even talk publicly. Tell me, Millennials for Revolution, what is the approach of the kind of millennials that gather around what you're trying to do? What do they feel about capitalism, the system we have? Before we go to the alternative, is there a position about capitalism or at least can you describe for us how capitalism is understood and what people feel about it?
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B
I think our group specifically are pretty anti capitalist in that we reject capitalism as a system that needs to be saved or fixed. I think as a system, we believe it's unsustainable because of the crises with our environment. It doesn't address the issue of climate change properly. Also, the way the system is designed, it is designed to give CEOs and the bosses more leverage and profit over the workers and the working class Americans who actually provide the labor to keep our economy going, who are actually the ones driving the profit, they're not getting any of the profit or that's being made by these CEOs. They're making 300 times more than the average American worker, which is. It's an unbelievable level of inequality that exists. And capitalism only perpetuates it further, which is why we believe that's completely unsustainable system. And we don't believe in labels. We believe in, like, issues. And so to us, like, under capitalism, we don't have a health care system. Like, we have a market health care system. And it's hurting working class Americans. So these CEOs, they go in, right? And they don't give any. They don't give a living wage to their workers. They don't give the workers Any rights. And then on top of that, they buy politicians to pass policies to benefit them instead of the workers who put in their labor. Right, like the labor that increases their profit. The reason why they make profit is because people are working.
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Okay, now let me turn it around. The issue of being interested in socialism, well, it raises immediately questions for me and I think for many in our audiences. First, what do you mean by so what, what is like you've answered the question why you are opposed to capitalism, and that's clear. What is it about socialism or the kind of socialism, let's say, that you have in your mind, what is it you mean by that as the thing you're interested in as an alternative? Tell us a little bit about that.
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I think for us, the reason why we believe in immersive that believe in socialism as the humane, sustainable system that needs to replace capitalism is because we believe that government should be organized in a way that takes the, that prioritizes workers and working class Americans and people at the bottom of the, who are at the bottom of like the economic system and organizes our government to help those people. And so we see socialism as just like an approach at ending, you know, tackling certain issues, whether it's income inequality, whether it's racism, whether it's climate change. Currently that is not the approach. Currently the donor class, their views are being taken into consideration over working class Americans. So we just see socialism as a mass redistribution of like, you know, that imbalance, like actually balancing the scale and redistribution of like whether it's wealth or power to working class Americans, who we are the majority. We are the 99%, they're the top 1%. So, you know, that's why I like socialism. It's the approach, it's that Marxist approach of looking at things as like, there is an inequality issue. There is a class, a billionaire class and a working class. And we need to like work government needs to make sure that the scales are like it's even, that's equal, as equal as it could be to help working class people.
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Okay, no, no, that's clear and that's good. Let me ask, let me push you a little bit.
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Okay.
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Here we have now a year and a half or more since the end of the election. And in the election for people who like capitalism, let's say they found at least a person who got a lot of votes named Donald Trump. And folks like you found somebody who got more votes than anyone expected he ever could when he started. Bernie Sanders, what do you think about these two as standard bearers as symbols of which way the country could go. Now that we're a year and a half later, how do millennials for Revolution respond to Trump and Bernie? Now that we've had a year and a half since the vote, I think.
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B
We are responding the way we should be responding by electing millennials who are Democratic socialists into office, like Alexandria Ocasio. Because the argument is Bernie was way too radical and that's why he didn't win. And we are proving the establishment wrong. We are showing them. No, like, everything Bernie was saying resonated with thousands of people, especially people who never voted or weren't vot voting, weren't engaged, but part of this country just as much as all the other people that do vote. So our response is to push people more further to the left, even to the left of Bernie on some issues. And then with Donald Trump, we see him as sort of validating what we already knew about this system. A lot of people treat Donald Trump as an anomaly. We don't see him as the anomaly. We just see him as a symptom of capitalism, of late stage capitalism, essentially. Yeah.
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A
Okay, here's a question in a way that you may get often. I don't know, used to be we would hear this question a lot. And the idea goes like this. When you're young, you can somehow be critical of society, but somehow as you get older, you lose it. And almost with age comes the loss of your radicalism or your social criticism, and you become stodgy and status quo, oriented. From your vantage point where you are now, do you think the millennials of your generation are headed in a different direction? Will they hold on to this in the years to come? And it's a guess. I mean, no one knows the future. But what's your feeling? Is this deeply enough rooted that this really is a change in what America is becoming, both in its head and its actuality that isn't going to be faded away with time?
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B
Absolutely. I would say I can't speak for everyone, but I would say that I started out a lot less radical in my approach to politics than most people. And I would actually, most people are like me, where they supported Obama, I supported Barack Obama. I canvassed for him. I organized for him when I was 18 years old. And I've voted within the Democratic Party. But over time, I just got really tired of their establishment politics where they weren't addressing things that actually working class Americans were dealing with, like income inequality, like, they had nothing to say about that. And the Wall street bank bailouts really, you know, hit it home for me. And with climate change increasingly getting worse and worse, I think more of us are going to be looking towards more radical approach to changing our system. So I don't think it's going to be become less like diluted and mealy mouthed, you know, I think we're going to keep becoming more and more radical as a generation.
- [27:48]
A
Well, you know, I always come to this point in our interviews where I have to apologize to the guests like I'm going to do with you. We've come to the end of this section of the program and I really want to thank you for joining us and telling us about an important organization with an important and society changing orientation. So thank you very much for enjoying, I hope.
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B
Yeah, absolutely.
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A
And joining us today.
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B
Thank you. Thank you so much.
- [28:14]
A
And for all of you, I want to thank you for joining us as well. And to remind you that make use of our websites democracyatwork.info join us again next week when we will run this program again. And I also want to thank the Patreon community for all that it does to support us and to let you know that this conversation will continue behind the Patreon barrier if you like. And you can join us at patreon.com economicupdate talk to you again next week.