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Sam. Sa. 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 looming down the road for us and looming a bit further for our children. 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 here in New York City. Well, today we're going to have an interesting program in multiple ways. But of course, given the arrival of a new president, some of what I have to say about what's happened in the last week has to deal with this phenomena about which millions are anticipating with excitement and millions with trepidation. So let's start. I want to start with an advisor, a leading advisor to new President Trump, a man named Anthony Scaramucci. And if you haven't heard of him, let me be the first to introduce you. Mr. Scaramucci, like so many of Donald Trump's advisors, has a long history of working with the Goldman Sachs Corporation, the same company that Mr. Trump excoriated during the campaign. And he has now, of course, surrounded himself with them. And none more colorful than Mr. Scaramucci. But Mr. Scaramucci had a problem. His problem was he runs a hedge fund, a fund of funds, as it's called, one of the kinds of funds that. That are run on Wall Street. And the thought occurred to some people that if he was an advisor to the president and at the same time owned and operated a hedge fund, there might, I stress the word might be a conflict of interest lurking somewhere in that situation. And so he had to sell his company, which is called skybridge. Skybridge. And he had to sell it before Donald Trump took office. And he kind of waited till the last minute. So he had to sell it in a hurry, and he had to make the price attractive so he could sell it in a hurry. But I'm glad to report for all of us that he sold it, apparently sold it in Davos, Switzerland, where there's the World Economic Forum going on. That's where the leading business types and financiers get together and talk business and make public appearances. And he was there because that's a lot of what he does. And he sold his company. And I want to tell you who he sold it to and what the conditions were, because nothing gives you a better idea of what's really going on than these sorts of business deals. Control of skybridge was passed to two companies. The first is called Ron Transatlantic, and the second one is called HNA Capital, clearly with names like that. You haven't the faintest idea who they are. So let me tell you about them. Both of these are Chinese companies. That's right. Companies based in and built in the People's Republic of China, where they have a very close relationship with the Chinese government, which is now the owner through them of Mr. Scaramucci's company. And Mr. Scaramucci is very pleased with it. Ron, in case you haven't heard of it, is very famous. It's a conglomerate, owns lots of different businesses. And among the partners of Ron is a man named Reginald Love, best known as President Obama's body man and close aide. Is it getting murky? Oh, good. We're just beginning. The other company that bought SkyBridge, HNA Capital, was a Chinese airline, and then it went into all kinds of other things, a sprawling business empire that includes a 25% stake in the Hilton Worldwide hotel chain. Is it getting murkier? Oh, good. It gets murkier still. It turns out that SkyBridge runs conferences and was recently excited to announce it revived an old television program called Wall Street Week, which is now a regular running program on the Fox Business News Network. Speculation is abounding whether Mr. Scaramucci will also sell another interest he has, which is his ownership stake in the Hunt and Fish Club, a midtown Manhattan steakhouse. There's an old saying that the more things change, the more they remain the same. Next economic update. Occasionally the scholarly press puts out a paper that is so interesting and so original that it finds its way onto this program. So I found one recently in a publication, a working paper produced by something called the American Antitrust Institute. And you can find them@antitrustinstitute.org if you're interested. This paper was published January 13, back in 2007. So why am I bringing it up now? Because it answers a question many of you have sent to me over these last few years. And now I can answer you the question you sent to me. When companies are busted because they're running, in effect, a monopoly or a cartel and overcharging for whatever it is they sell, and when they get, excuse me, caught and required to pay a penalty, is the penalty effective as a disincentive for this kind of illegal, unethical, extortionist kind of behavior, and in a paper way back then that I only learned about, recently published by John Connor, C O N N O r working paper number OH7 01. If you're actually going to pursue it at the American Antitrust Institute, here's what he found. The study he conducted, looked at cartels that were exposed, monopolies that were exposed between 1990 and 2005 here in the United States. And he measured in terms of their value as of the end of that time, 2005, how much extra these companies were able to get by overcharging us because they were a monopoly. They had gotten together the few companies in this area and they jacked up the prices. So he measured good research. He measured how much money they made and the overcharges he added up came to, well, the number isn't so important, but over a trillion dollars. And then he examined what the penalties were when they were caught and had to pay a fine of some sort to a government. 21% was his number. The median penalty was 21% of how much they overcharged. In other words, for every $5 they overcharged, if they got caught, the penalty was 20 cents of the extra buck that they squeezed out of their monopoly position. If you're wondering why more and more companies emerging and more and more industries are becoming cartelized, well, now you know, next item. And this one I do, both for political obvious reasons, I hope, and also because in February we're going to have Black History Month. And this gives me a chance to talk about the intersection of class and race. But perhaps in a way you're not familiar with, the Economic Policy Institute in Washington, a very important source of good research that you can find@epi.org recently collected a group of charts that they say summarizes what happened in the American economy, particularly in 2016. But the chart that interests me the most is the one that compares the rise in workers wages from 1980 to, to 2015. In other words, the last 35 years. How have wages gone in this country? And they compare white men and black men's wages and white women and black women's wages. So let me give you the results of this, but you can get the chart and all the data if you're interested@epi.org the group that did the worst in these 35 years, the worst, bar none, is black men. Their wages went down 6%. That is in 2015, their wages were 6% lower than what they were in 1980. An abysmal experience. Nor did the Obama administration make the slightest difference. Black men's wages fell more during the Obama administration than any other group's. Who was second? White men. Their wages dropped 1% between 1980 and 2015. Compared to their wage declines. Women did much better. Black women saw an increase of 15% over that 35 year period. And white women, 31.6%, they did the best. So the women beat the men and the whites beat the blacks. Before Mr. Obama and after Mr. Obama and during Mr. Obama. So the argument that Mr. Obama privileged minorities, which I hear from time to time, is simply wrong. He didn't. Not in terms of wages, which is probably the key variable in all of this. And men did worse than women, which may have something to do with how this election came out, if you know about the election statistics. But now let me shift the focus, because the graph that EPI does also contains a number for the increase in productivity of all workers. How did the productivity of men and women, blacks and whites, how did it go over the same 35 years from 1980 to 2015? Much, much, much higher. That's right. The growth in the productivity of all laborers went up much faster than the wages of any of them did. It wasn't even close. Now why is that important? Productivity measures how much we as working people provide to the person who employs us or the company that employs us. That's all productivity measures. How much per hour does our labor give to the employer? Wages are the opposite. They measure how much the employer gives to us. So if over 35 years, the productivity rose by much faster than the wages of anybody. Now you know that the system has been working real well for employers. They've done much better in terms of what they get from working people than what they paid to those working people. All of those working people, men and women alike, whites and black alike, have a shared interest in changing that situation. If they're giving more to the employer than he's giving to them, there's a fundamental inequality and exploitation that all working people share as a common interest. And maybe the conclusion that you could draw is that more important than struggling over whether the men and the women should get more or less and the blacks and the whites get more or less. A valid issue for sure. But maybe something even more urgent is that all of them understand that they're all being ripped off by a system that allows the rising productivity to go up so much faster for 35 years, more than an entire generation than what is given to working people. Okay, next I want to celebrate. This is very rare for me, an action by the British Parliament. And even more surprising, it's an action in which the Labour Party and the Conservative Party, that's their equivalent to Republicans and Democrats, are united, at least in a moment. And this doesn't happen very often in England any more than it happens Often here. And you'll be even more surprised by what they're in lightened and united about. Recently, the all party that means both parties all party parliamentary group on social mobility of the Parliament came out with a stunning they are dead set against unpaid internships which they want to get rid of in Great Britain in the United Kingdom. Listen to a couple of the statements made in the course of this group's work. Tory. That's the standard name for the Conservative Party. Tory MP Alex Shellbrook had the following to Interns are the acceptable face of unpaid labor in modern Britain. Wow. There's a kind of blunt honesty. An intern is a way of having labor done for which you do not pay. And he found it Alec did Unacceptable. Let me read you another. Alan Milburn, who's the chair of the Social Mobility Commission, wrote as spoke as follows, quote, Research has consistently shown that people from more affluent backgrounds and who attend private schools and elite universities take a disproportionate number of the best jobs while those from poor, poorer backgrounds are being systematically locked out. Ooh, another breath of fresh honest air. Because of course, an internship at a company or government bureau that doesn't pay you anything is impossible for a person who doesn't have any money. It can only be engaged in by a person who does either their own money or their parents money if they're young people. So those who have more are more eligible to take unpaid internships, which allows those who need at least to get the advantage. And the British, unlike the Americans, have a major governmental push to outlaw internships, that is to outlaw unpaid internships for more than one month. That's the proposal to being presented to the Parliament. You can work without pay for one month. After that you cannot. Next item. I have to go back to the Davos, Switzerland events of the last week. The World Economic Forum brings together leaders of government, leaders of big business, the biggest bankers in the world and so on. And there's been a flood of news coming out about the meetings they're having, the panels they're having, the private conversations that leak into the press because it's profitable for somebody to do it. And I wanted to bring a couple of the interesting items to your attention. One is the statement of a number of major bankers, including Lloyd Blankfein, the head of Goldman Sachs, and the heads of most of the other big banks in New York and around the United States. And what's striking to me about them is the happiness, the glee, and they don't disguise it with which they welcome the Trump administration They say publicly over and over again that he's better for big banks than the Democrats would have been. They are counting on a reduction of regulation, a relaxation of the Dodd Frank rules that came out of this last collapse of capitalism in 2008. They're making it very clear that they are not among those who are worried or upset or frightened or sad about the Trump administration. On the contrary, they're very happy about it. The second thing I found interesting, and there wasn't much that was new or interesting coming out of Davos, Switzerland, by the way, Davos, Switzerland is a very expensive, very ritzy ski resort in the mountains of Switzerland. The other item that was interesting was the fact that a great deal of noise, excuse me, conversation, was all about the middle class that's vanishing, or the other way that they like to put it, the rising tide of populism, which when it comes out of their mouth sounds like a new kind of disease that's really worrying them. And some of them seem to be genuinely worried, worried. And so they're urging each other with moving language to be concerned, to be worried, to take it into account, to do something about it. But as a number of skeptical commentators have pointed out, and I would be glad to join them in this case, it's quite clear that when they talk about that problem and they have it in their minds, that whole issue disappears two seconds later when they're talking about what their companies are going to be doing, what deals they are making, what futures they anticipate. Because in all of them, nothing has to do with anything concrete that would change the very story of growing gap between rich and poor that I just explained by looking at the difference between productivity and wage growth over the last 35 years. And as these commentators have pointed out, and as I want to reiterate here, no one is going to give the working classes of the west and of the rest of the world a better deal if they expect that a government shift between Tweedledum and Tweedledee, between Trump and the Democrats, etc. If they believe that's going to change their situation. But they will be as disappointed in the next 35 years as they have been in the last 35 years. Gains for the working class of people, the vast majority depend on whether they make them happen. Otherwise they don't happen. And that means you have to provide for working people, either a labor movement or a political party or some combination or some other institutions that work in that way, so that working people have the weapons and have the organization, have the clout to change the situation. That's the issue. And needless to say, not one word about that was uttered in Davos, Switzerland, because these folks can't see that far or don't want to. Okay, my last economic update for this first half of the program has to do with an interesting study called, produced and recently released by the United Way, that's the largest social service organization in the United States. And they've been conducting research state by state and they've completed 14 states across the 50 states. And what they're looking at is what they call a more accurate, a more honest, a more socially useful measure of poverty. And in it they do two things. First, they take the government's poverty line roughly for a family of four, $24,000 roughly. And they ask, well, how many people in any state that they're looking at live below that poverty line? But then they ask another question and they came up with a measurement which they call Alice. Like the woman's name, Alice. I'll tell you what it means, but then I'll give you the name first Asset limited income constrained but employed. Alice. Here's what it means. This population of people who get just enough income to get by in life to do a kind of basic survival to cover the costs of housing, transportation, health care, taxes, utilities, food, food and child care. Okay, those issues, what does it really cost for a family of four? That's an Alice number and that's more than the poverty level. A good bit more, as you're going to see in a moment. So let's do the numbers very quickly. And I'm going to use the state of New York, the most recent state that they covered all 62 counties in the state of New York. And here United Way found, quote, the average annual household survival budget for A family of four, $62,472. Family of four needs $62,000 just to get what's called basic household survival. We're not talking any luxury, we're talking basically getting by. Doesn't even include college education, et cetera, et cetera. How could it, given what colleges cost? And now here are the numbers across the state of New York in the last year or two that they did the study, 44% of households were either living below the poverty line or in this week to week survival situation. In the Bronx, the poorest county in New York City, the percentage was 71%. In New York City as a whole, 20%. Because there are rich and poor in New York. What does this mean? Well, it matches other numbers that I have quoted to you recently. Numbers like the percentage of American families who, if confronted by an unexpected $500 emergency bill for something medical or something that breaks in the car or the home, can't cover it. They would have to find an emergency solution because they don't have $500 in a reserve to cover that kind of unexpected eventuality. Well, this is the same measurement coming at it from another angle. And United Way is a very respected old organization that does this in a systematic way through all of its local offices. Bottom line, the American recovery since 2008, like the American economy of the last 35 years, is an economy that has functioned more and more for an ever smaller slice of the population and has left a growing percentage of the people in really difficult economic circumstances. 44% of the people of New York State, one of the largest states in the United States, are either living below the poverty line or living at or below bare survival at a minimum level. For a country that has grown as wealthy as ours has, this is a moral, ethical, as well as political and economic horror story. And there is nothing being proposed by any of the incoming political leadership that recognizes, let alone deals with this issue. So much for the short updates. I want to take a moment before we have our mid program break and shift to a very, very interesting interview that I think will excite my audience, which is why they're here. But before I get to that, I want to remind you and ask you to partner with us. This is a program that now reaches between 1 and a half and 2 million people every week. That's an amazing fact that we stand in awe of all the time. That's counting both the radio audience and the television audience and the audience that gets this through the Internet. We are very proud of all of this and it's mostly the achievement of all of you who've been listening for the five years that we've been on the air, starting with one small station in New York City, WBAI, and expanding now to 75 radio stations, two major television stations, and more to come. So I want to thank you. But I also want us to learn the lesson. You partnering with us is the best possible arrangement. And by partnering, I mean use what we do on this radio program. Talk to your friends, your coworkers, your family about this. Make use of what we do here, copy it, go to our websites, which provide all of this information and much more. Rdwolf with two f's. Com and democracy at work. That's all one word, democracy at work. Those websites are yours 24 7. No charge for anything on there. You can contact us with questions like those I answer on the air. You can tell us what you like and don't like about the program. You can follow us on Facebook, Twitter, Instagram. Lots of things to do there. Interviews are posted up there. Articles are posted up. There's a blog with all the information about worker co ops you could imagine being posted all the time. Make use of it. Let others who might be interested know about this. Be our partner and if you know of a local radio station that might be interested, let us know. We'll follow up. If you would like me to come to wherever you are to give a talk, let us know. We'll follow up. If you'd like to sponsor any of the things we do, let us know. We'll follow up. We need you as partners. You have been enormously helpful to building this project. We'd like you to continue. Stay with us. We'll be right back. And I think you'll find the second half more interesting even, I hope, than you found the first. Be right back. Stay with us. Sam. Months awake. Well, at the coming of dawn. Yes, as this earthly stage is cooked. Well done. Let's climb upon this hill without. Oh, yes, pick a flower, but don't let it down. Welcome back, friends, to the second half of each economic update. I want with great pleasure to welcome to the Microphones here with me in New York, Becky Bond and Zach Exley. So welcome, Becky. Welcome, Zach. Let me tell you who they are and why they're here. Both Becky and Zach were senior advisors to the Bernie Sanders campaign for president inside the Democratic Party over the last year or so. Plus, Becky, in addition to that, has previously been a political director at credo, where she was particularly involved in developing techniques and styles of organizing using technology and so forth. We're going to learn more about that shortly. Zach Exley, likewise was a senior advisor in the Bernie Sanders campaign. He has a history of working in this kind of organizing for Howard Dean, for John Kerry, and he also worked for Wikipedia. Becky lives in San Francisco. Zach lives in the Ozarks. Welcome to the Microphones.