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Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives. Debts, jobs, incomes, hours, our children's and the whole world of the economy on which we depend on. I'm your host, Richard Wolff. I've been a professor of economics all my adult life. And that has prepared me, I hope, to offer you these economic updates. I want to begin by talking about a small country in Europe named Luxembourg because it has taken a big step and it's one that I think will have reverberations around the world. Luxembourg just became the first country in the world to make all public transportation free. Up until recently, they had already taken the step of making it free for everybody 20 years of age and younger, but they have now decided to extend the free ride on all public transportation to everybody. End of story. The government in Luxembourg that made this decision is a coalition. And because Americans tend not to hear about coalitions that govern European countries when they are of the left wing variety, I wanted to let you know it was one of those in Luxembourg. It is governed right now, that country by a coalition of the Democratic Party, the Socialist Workers Party and, and the Green Party. Let me remind you that Portugal is a country that is currently governed by a similar coalition, the Socialist Party of Portugal, together with the Communist Party of Portugal, together with the Green Party of Portugal, now the party in Luxembourg. This coalition government has also decided that it is now going to consider legalizing cannabis and adding two more holidays. Now, the interesting thing, public holidays, the interesting thing is, of course, these steps don't change the basic distribution of wealth and income, but they are things that left wing governments can and are now increasingly doing, that at least improve the situation, particularly of people at the bottom half of society. For them, the cost of public transportation is a real expense, whereas for wealthy people it isn't. So making it free is a bigger gift to folks at the bottom than it is to folks at the top. That already is a different direction than European governments have been taking for most of the last 30 or 40 years. And that's why it's an important straw in the wind of economic change. There's also something else going on in Europe that I think is important for us all to understand. The Trump administration made a decision to withdraw from the treaty with Iran that got them to stop their nuclear program in exchange for lifting sanctions against them. The United States withdrew, the Europeans did not. The United States reimposed sanctions, the Europeans did not. And then the United States took a further step. It threatened, and it apparently means it that any business anywhere in the world that does business with Iran will also be sanctioned by the United States, even if that business is French or German or Japanese, even if the shareholders are from those countries. In other words, the United States is jurisdiction seems to trump every other country, pardon the double entendre. Turns out that other countries don't like this. I can imagine the American reaction if some other country said they would punish American companies if we did something they don't like. And so the Europeans are now working on what they call special purpose vehicles. Because it turns out that the way the United States can track other companies doing business with Iran in other countries is by means of the international payment systems that have been dollar denominated for a long time, giving the United States all kinds of economic advantages. The Europeans, not wanting to be controlled by the United States, surprise, surprise, are developing new mechanisms of international payments that won't use the dollar and therefore can't be monitored by the United States so that their companies can freely do what the United States thinks threatens them if they dare to do it. And this is part of a larger process. It's called nationalism. It's the United States demanding its way, having other countries demand that way. It's the falling apart of capitalist world economic system into its parts, into its national parts against the unity of what was the capitalist world. We now have the disunity of the capitalist world. And that's going to change the dynamic in struggles between workers and capitalists in each country and between and among the different blocs, China, Japan, Russia, Europe, because it's a fractured, splintered capitalist world. And these special vehicles to get around American sanctions to Iranian business partners is part of that process. Here's a small one, but. Well, it is so seedy that I had to tell you about it Shortly after the 2016 election, it turns out. And this is all taken from the Washington Post, which documented everything the country of Saudi Arabia paid its Washington D.C. lobbyist to buy get ready 500 rooms at Trump's Washington D.C. hotel. Why did the Saudi Arabians buy 500 rooms? There aren't that many Saudi Arabian diplomats or lobbyists. They don't need them. The lobbyists live anyway in Washington and the diplomats aren't that many and don't come that often. What's 500 rooms for? And by the way, average nightly rate in the hotel at that time per room ready, 768 bucks. So 500 rooms is a nice piece of change. Well, it turns out that the rooms weren't for Saudi Arabians. The rooms were for American veterans. They were being brought to Washington by another firm that the Saudi Arabian lobbyist hired. They were being brought to Washington to lobby against a law which was presented to them as a law that might make individual American soldiers liable for damage or injury they caused abroad when they were serving in the military. The veterans didn't want to have that kind of liability attached, so they were coming to Washington to push against the law. Well, the law happened to have another clause to it, namely that it entitled Americans who lost loved ones to sue Saudi Arabia because the vast majority of people who did the deed, 9, 11, blowing up the World Trade center, etc. Were Saudi citizens. And they want the right to sue Saudi Arabia. This law might have given them the right. So Saudi Arabia bought 500 rooms in Trump's hotel to put up veterans coming to Washington who thought they were doing something completely different that had nothing to do with Saudi Arabia. I told you it was sleazy. That's pretty sleazy. And now another story, whichand maybe I should have called this program today sleazy. Economic update. Who knows? This is about the Deutsche Bank. Deutsche for many of you is the German word for German. Okay, The Deutsche bank is the biggest bank in Germany, been around a long time, got itself into trouble recently. That is really coming back to haunt it. To tell you about this, I have to explain. It begins with a small branch bank in Estonia, that little country in the north on the North Sea, surrounded in part by Russia. A small bank in Estonia. A branch bank would normally not do much business, but this was an exception. This was a branch of a Danish bank called Danske Bank. Okay, so much for Danske bank, which is a significant Danish bank handling the transactions. For Danske bank, since it's a relatively small bank, was the huge Deutsche Bank. Now here comes the interesting part. Over the last eight years, something on the order. Get ready now. Of $180 billion was funneled through the little branch bank in Estonia, a tiny country with a tiny population and no need for for a bank to do anything big. An enormous amount of money went to the Estonian bank, which was a branch of the Danske bank, which moved the money from Estonia to Denmark, which in turn process it through the Deutsche Bank. And of course each bank took a cut of all of this mass money. What was the money answer? It was wealthy people in Eastern Europe moving their wealth out of Eastern Europe where they felt it was in danger and moving it to the west. Much of this money was criminal or illegal money, either illegally sourced in terms of it coming out of criminal activity or being illegally moved contrary to laws and conventions. And it now turns out Deutsche bank processed most of this money. No way. It couldn't have known, no way. It couldn't have expected to look with a raised eyebrow at a tiny branch in a tiny country doing quantities of business that would be remarkable for the biggest countries in the world to funnel through one bank. But you know, there's a lesson here. If you allow something as important as money, the thing that makes the world go around pretty much everywhere, to be controlled by private companies, we call them banks, whose goal is to make money for themselves and their shareholders. Here's what you can they will do it to make money. They won't do it in order to keep the world safe, to observe laws, to be socially responsible. That's not their job. Their job is to make money for the company they work for. And if they don't, they lose their job. So we have allowed a system to develop that produces these crises and these illegal, immoral, unethical activities by banks over and over again. The last 10 years have seen every major bank in the United States being hauled up in and fined often significant amounts of money for money laundering, for false fees, for manipulating interest rates, for manipulating foreign exchange rates, for overcharging people who have mortgages. It never stops. They do with money what's profitable for them. And we all live with the costly social consequences. The system is the problem. Punishing this or that banker, which is likely what's going to happen with the Deutsche bank to changes nothing. Because the banker who is punished, fired, maybe even imprisoned, will be replaced by another banker who will have the same objectives, the same goals, the same rewards and punishments as the one we are punishing. The system is the problem, not the individual who occupies the position within it. And now the last update for today, which has to do with secretary of state, U.S. secretary of state Mike Pompeo. He gave a speech a few weeks ago in Brussels which was very remarkable. On the one hand, he said, the great problem is Russia and China. On the other hand, he said, we all have to go it alone. The nationalism again. The United States is going to go it alone. Well, here's a joke. The best bet if you want to fight Russia and China is terms of economic development, is to have a unified capitalist world. What Mr. Pompeo is doing is breaking that unity up. That's going to make it harder, not easier. The contradiction is obvious. Mr. Pompeo's awareness of it and that of his speechwriters is not We've come to the end of the first half of Economic Update. I want to remind you please to become a subscriber on our YouTube channel for economic Update to make use of our websites democracyatwork.info where you can follow us on Facebook, Twitter and Instagram. And I want to particularly thank our Patreon community because of its support, its enthusiasm and its solidarity. Stay with us. We'll be right back. Welcome back, friends, to the second half of Economic Update. I want to welcome you to my guest and my guest to you. He's been on the program before. His name is Bob Henley and I want to formally introduce him by telling you about some of the things he's done. He's an award winning print and broadcast investigative journalist. We don't have too many of those left in the United States. And he's one of the best. He's a staff reporter with the New York City based Chief Leader newspaper, which has been covering public unions and the civil service since 1897. He is a regular contributor to Salon, where he writes on the economy and labor. He has been published in the Guardian, the New York Times, cbs, Money Watch, and dozens of other websites and publications. His Broadcast credits include CBS's 60 Minutes, the PBS NewsHour, NPR, C SPAN and the BBC. With all of that behind him, we are lucky to have him. Welcome, Bob.