← Economic Update with Richard D. Wolff
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Sam. Saint gonna change. Welcome, friends, to 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 what it looks like we're going to be living in, in the way of our economic system in the years ahead. 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. Well, there are so many things that we're going to be doing today that I'm a little nervous at the beginning because I want to be brief to get to all of them. But brevity makes it harder to make things clear. But bear with me. Let's go. The first thing is this week, the Federal Reserve here in the United States now, led by Janet Yellen, announced that there would be no increase in the interest rate. This surprised nobody, and he even hinted that in June, when they meet again, there probably won't be an interest rate hike either. That's kind of funny, because last fall they assured us interest rate increases were coming. That's because we had such a wonderful economic recovery that now they could be put into place. Turns out the economic recovery wasn't wonderful, and as more and more people are recognizing, it may not be there at all. And so they can't raise interest rates. Indeed, the decision not to raise interest rates came together with a report on how much our economy grew in the first quarter of 2016. That's January, February, and March. And that came in at a depressing 0.5%. That is lower than what was expected. That is a very bad report. It indicates our economy is. Is not going very well. And when you look closer and see that part of the reason is that businesses have cut back on investments, then you understand that what the businessmen and women are telling us is this economy looks so weak, the prospects for it are so poor that they're not going to invest the money they have accumulated because there's no point in producing more goods and services when there's no one out there who can afford to buy them. That's a sign. That's a sign that's hard and real. And it puts to rest the silly talk of many presidential candidates on one side of our president as well, that we are all doing just fine. The recovery is on target. None of that is, to put it bluntly, true. And these statistics point it out as if that weren't enough. We also see in the statistics coming out of Europe, in the very seriously negative statistics coming out of Japan that this economic weakness is global and that the United States has not been able to escape it and will not be able to escape it because we are, for better or worse, a world economy, and the United States cannot any longer call the tune. Let me turn next to a story from Yale University. Why? Well, the story is mainly about the efforts of students and faculty, led by the African American students on the campus, to do something about the fact that Yale persists in naming its major schools and colleges after people who not only were slave owners, but but were actually advocates of white supremacy. One in particular, Mr. Calhoun. There's a college at Yale named Calhoun College, and the students had built a campaign over some years to get the name of that school changed in recognition that John C. Calhoun's advocacy of racial supremacy made him a poor choice for the Yale campus. Yale University has now decided to ignore what those students have said and to maintain the name of Calhoun on the college. But they have decided that they're going to build two more colleges. And here's what they decided to do, and here's where I come in with my economics. One of the forthcoming new colleges will be named after an African American woman legal scholar. And that's clearly an effort to somehow offset their refusal to deal with Mr. Calhoun as the namesake of the existing college. But then they did another thing which was so grotesque that one has to comment on it. They decided to name the second of the two new schools after Benjamin Franklin. Now, as students have pointed out, Benjamin Franklin was a slaveholder. And that might make one wonder why, at this moment of intense discussion on this issue, one would choose to name a slaveholder for the new college, given everything that's going on. So I wondered, I did some research, and it was quickly easy to find out. Here's what happened. A big donor to Yale University by the name of Charles B. Johnson, a businessman, of course, and a Yale alumnus, recently donated $250 million to pay for the new colleges. And it turns out, as the president of Yale explained, that for Mr. Johnson, Benjamin Franklin was, quote, a personal hero and role model. So there you have it. There may be debates over the suitability of slavery as a principle and as a role model to follow. There may be questions about how you name buildings at what is supposed to be a multicultural, diverse university. But the bottom line at Yale, as it has always been, is the money. And when the money wants Benjamin Franklin, well, the money gets Benjamin Franklin. All the rest of what students and faculty are concerned about is so much babble. The bottom line at the great universities, we dance whatever tune the people with the money suggest to us. I want to turn next to college athletics. That's right, college athletics. And why that? Because there's an economics angle to all of this that really deserves some attention. And we don't give enough attention to the economics of sports on this program anyway. On April 21, Yahoo published an article by a famous sports reporter, Dan Wetzel. And I'm going to read you the title of his article because it sets the tone how college athletics has become a boondoggle for everyone but the students. And here's what caught my eye in Dan Wetzel's story. Over the last five to eight years, higher education in the United States and United States has taken a terrible hit. Money has been cut back, programs have been reduced, fellowship assistance has been cut back in many cases. In it's a real disaster. Doubly so when you recognize that the United States is now part of a world economy. And in that world economy, the quality and quantity of the trained labor force you educate in higher education is going to make an enormous difference. That the United States should now be cutting back institutions of higher education when it needs them for the future shows you a society busily putting bullets in its own feet rather than figuring out a rational strategy for moving forward. But it's worse than that. Here are the statistics Mr. Wetzel opens his story with. And I'm going to read from his story because I couldn't say it better than he did. In 2011, the University of Michigan athletic department employed 253 people. Four years later, in 2015, it was 334 people. So let's see here. At a time when higher education teachers, counselors, students are being cut back, the athletic department rose 32%. Let me continue from his article. During that period, the average salary of people in the athletic department grew 22.4% to $89,851. Over a seven year span, the number of athletic department employ making six figures went from 30 to 81. The whole country is cutting back. It's the worst economic downturn since the Great Depression. But in one area, universities are not only not cutting back, but the champagne corks are popping and the money is flowing. Wow. Here's what Wetzel says. University of Michigan sure spent the money on new workers and new raises and more assistant athletic directors and more construction and additional private plane flight hours and the gold plating of everything. The university likes to tell people it invests in athletics because that makes money. True enough, but the money is used like all businesses to plow back into making more money. Even at a time of educational cutback, the money making athletic department gets the priority. What kind of a society does that? Moving right along, I have been covering the catastrophic words I have a hard time coming out of my mouth. The catastrophic stories from the automobile industry. General Motors, Ford, Chrysler, VW and this week Mitsubishi from Japan added they have been caught lying to the public about ignition problems. Lying to the public about the emissions their cars are dumping into the air to give us all emphysema and lung cancer and all the rest. What did Mitsubishi add this last week? Well, it turns out. Get readyfor the last 20 years Mitsubishi has been faking the emissions test just like VW was caught doing a few months ago. That's right. The automobile companies are showing us as if we needed the lesson that when governments regulate them, that's just another problem for them to solve, another obstacle for them to work around, another ruling for them to ignore for as long as they can. Look, we knew as a people, we in America and everybody else who's paying attention that what cars emit into the atmosphere is bad for us. It's air pollution. It is the number one cause of air pollution around the world. It took years to get the public to understand what that meant. It took more years to get the automobile companies to agree that they ought to do something that might hurt their profits because it was killing us. When we finally got the paid off politicians to do something, the auto companies showed us how they work. They faked it. So for a bunch more years we're breathing air we shouldn't have had to tolerate in the first place. Capitalist corporations are profitable seeking institutions. That's their bottom line. That's their top priority. And if you need evidence that they will sacrifice everything, lives, health, air, you name it, then you have it in the automobile industry. And it's coming out one week after another. Welcome Mitsubishi. To join the club. Let me turn next to another story that caught my eye and I think you will find interesting as well. One of the most successful corporations in the United States producing what is now a wildly popular commodity, namely Greek style yogurt, is named Chobani C H O B A N I. It is not the only company doing that because it's a very popular item these days. But it is very, very successful. And in this last week, the president of Chobani both did something and said something that has deep economic significance. So I want to share it with you. The CEO of Chobani is named Hamdi Ulukaya of Turkish background. The company has 2,000 full time employees. And Mr. Ulukaya announced this last week that not only was his company wildly profitable, but he was very honest. And so he said, I've built something I never thought would be such a success, but I cannot think of Chobani being built without all my employees. And then he put his money where his mouth was ready. He decided to distribute a sizable portion of the profits earned by Chobani. This is a multi billion dollar corporation, so we're talking big time. The estimates in on Wall Street I checked are that this company is currently worth between 3 and 5 billion dollars. That's a very large company. Okay. Based on that, the shares that were given out to the 2,000 workers worked out as follows. Average distribution per worker, $150,000 worth of shares. Longtime employees. Because he gave more shares to workers the longer they had been with the company, some of them will get upwards of $1 million worth of shares. Those are shares they can turn around and sell tomorrow on the stock exchange for that amount of money. Wow. And why did he do it? Well, it's really interesting. He said very clearly. QuoteThis is from the New York Times. Now they'll be working to build the company even more and building their future at the same time. End of quote. Notice what this CEO is. If you give workers a stake in the company, if they become part of owners of the company, you're going to have a more successful company. What an idea. Take it the next step. Suppose companies were organized from the get go as worker cooperatives. Enterprises in which all the workers not only owned the enterprise but made the decisions, functioned as their own board of directors. According to the logic of this successful multi billion dollar CEO, the that would be the most effective way to have a company build itself up and grow. Even some capitalists understand that the usual capitalist game, which is to keep the workers down, give them their wage and tell them to go home, is not smart business if what you care about is producing good outputs, good economic growth and an honest fair sharing economic system. Last brief item before I turn to a couple of your questions. This got no attention in the United States, so I want to do it back. In September of 2014, there was a meeting between an interesting group of three people. One was the new Pope Francis. The other one was Alexis Tsipras, the socialist leader of the new government in Greece. And the third one was Walter Beyer, the editor of something called Transform Europe, which is a coalition of Marxist political parties across Europe. Wow. And what were they meeting about? They want to open. Actually it's to reopen because this used to exist, a process of dialogue between Catholics and Marxists. Hmm. Well, the first of their meetings took place between 31 March, from 31 March through 1 April. I know you've been reading all about it and watching on TV the reports of this meeting that friends was an attempt at humor. You haven't been. So I'm going to tell you about it. Here's what happened. The Pope sent representatives, and they were very important people. Vincenzo Zanni, Secretary of the Vatican Congregation for Catholic Education, and Stefano Zamagni, a Pontifical Academy of Social Sciences. And the other participants were the Focolare movement. It's an old movement in the Catholic Church, social concern kind of movement. And then the Marxist political parties who. Who sent their representatives. They had what they called was a very good meeting focused on the conviction. Quote, this is a statement at the end of the meeting that the Earth was given to all people, that is humankind as an entirety, including future generations. Thus we want to cooperate, each to contribute so that every inhabitant of our planet is able to live a life worth worthy of human beings in peace, liberty and justice. The environmental and economic crises, social justice, the problem of migration, this is very big in Europe, and human rights were among the main topics discussed. They pledged to meet again. The Pope added a comment. Quote, the environmental crisis is the result of a, and I'm quoting now, structurally perverse system. This was a perspective widely shared by the participants, as well as the need for an alternative to the absurd and irrational neoliberal policies of austerity. Interesting. Who is getting together with whom to fight against what's going on? Okay, let me turn now to one of the questions you've sent me. And before I do, let me remind you how important to us your communications are to this program. We read every one. We ask you to make use of the email capacity at our2rdwolff with two Fs.com and democracyatwork.info that's all one word, democracyatwork.info. you can send us your comments, your criticisms, but your questions. And we build these programs around what you want us to deal with. So thank you for sending them in. My apologies as always, that we get so many from you that while they help us craft the program, we simply cannot answer all of them. But here's one I want to deal with. This is a question about worker co ops, and you've heard me talk about them and you're responding, and that's very gratifying to us. But here's a question that says when you start a small business as an individual, you often have to put up quite a bit of your own money to get the business going. If it's going to be a worker co op, how do you handle the problem that people who join later, who are added to the workforce are basically able to cash in on the work and the money to that those who started it put in? There seems to be an inequality here. Wouldn't this be a barrier to getting these kinds of enterprises going? Very good question. Very good that you sent it in to us. Let me answer not so much by telling you how it might be dealt with, but rather by telling you how existing worker co ops have already in fact dealt with this problem. And there are multiple ways you have to choose among. For example, here's one. When new workers are brought in, the company undertakes, I.e. the company being the old and the new workers together, as an accepted rule of adding new people, that a loan will be now negotiated from a creditor, a bank, or a lending facility, or a government, and that money will be used to pay back those who began the company, give them back, perhaps with a reasonable rate of interest, the lump sums that they contributed to get the business going. So that instead of that being the money of those who began it, it's now, in a sense, a debt that old and new workers together will have to work off to reimburse those who started it. So it's a bit of a burden on the new ones who have to come in and begin with a bit of a corporate debt. But it is a way of acknowledging the initiative taken by those who began the business. Here's another way it's been handled. That new workers have to put in some money too. That a new worker, when he or she is added to the rolls, has to contribute a certain lump of money, more, less depending on circumstance than was begun was used to begin the company. So everybody has a kind of skin in the game of a certain amount of money. Here's a third way if new workers don't have that kind of money, not to make it an obstacle. You bring new workers in and you have a modest but significant deduction from their weekly paycheck, which is not money they don't have, but becomes money that is invested in the company and credited to that worker. In other words, he or she builds up over time an amount of money roughly parallel with what others put in. At an earlier date. There are still other ways of doing this. If a government were supportive, as indeed in places like Italy and elsewhere, governments are specifically supportive of worker co ops as institutions, well then the government could also step in and help in this situation by providing low interest loans to to even up the amount of capital that each person has put in, and so on and so on. In other words, your right to recognize an inequality here between those who begin it and those who come later. And that has to be addressed, that has to be put on the table, recognized. But co ops have very successfully managed that problem. It is not an obstacle to the existence of co ops themselves. Another question barely time, but let me try. This was a person who reacted to my discussion last week on the economics of gentrification, where, if you will recall, I pointed out that gentrification is the working of the free market, the one that we're supposed to think of is such a wonderful blessing to all of us. A free market allows people with more money to push out people with less money from places both of them wish to live. If this violates your notion of fairness, good. Now you have a reason to be skeptical the next time you hear what a wonderful thing free markets are. But the question was what could people in a neighborhood do to prevent all of this from happening? And the answer is to suspend the free market. We don't allow a free market, for example, in sexual services provided by some people. To another, we don't think that's an acceptable arrangement, at least we used to, about that sort of thing. And we don't allow all kinds of other things to happen. We put a limit on how low you can pay a wage and a limit on how high you can charge an interest rate. We could also make a limit on how you change a neighborhood, that it has to be decided democratically by people at all different levels of income and wealth, and that there is not to be a transformation of a diverse community economically into a non diverse because that's not acceptable socially. That would be an interesting way to go to prevent the free market from doing the kind of gentrification that we see around the world. Well, folks, as always, I regretfully need to inform you that we have come to the end of the first half of Economic Update. We will take a very short break, as we always do, and then I will be back with Rob Robinson, who is my guest today, who's going to talk with me about the economics of poverty in the United States. Where the problem comes from, how bad it is, what is or isn't being done about it. Really fundamental questions about a society like ours that has the kind of problem with poverty that we do and that we have had for such a long time. Stay with us. We'll be right back. This is ECONOMIC update.
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Don't you want me to stay? Make a rocking horse get away. The radio says we're in for a fall. The TV says nothing at all.
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Nothing at all, Nothing at all.
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Out of my window it echoes my heart. I've been checking for change since the star collided. To me I could deal with the fire.
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Welcome back, friends, to the second half of ECONOMIC updates. I am very, very pleased indeed. I'm honored to have as my guest today Rob Robinson. So, Rob, first of all, thank you for coming.
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Thanks for having me.
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Rob is a formerly homeless community organizer and activist based in New York City. He is the co founder of the Take Back the Land movement, which was a grassroots response to the foreclosure crises of 2008 and the years thereafter. He has strong ties to social movements in Brazil, South Africa and Europe. He guest lectures on a regular basis at the City of New York University, City University of New York, their graduate center and the Parsons New School here in New York City. Rob Robinson is a co founder and member of the leadership committee of the Take Back the Land Movement and a staff volunteer at the National Economic and Social Rights Initiative known as nesri. Welcome to the program, Rob.
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Thank you.
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Okay, let's jump right into the topic today. You are, and I've known you for years now, so I know really well you are a person who knows both firsthand and through studies of all kinds and activities about the poverty problem, so called. So I'm an economist. I hear all the time about recovery, about how the stock market and corporate profits and the unemployment rate and so forth are all showing a recovery. But I'm also acutely aware that critics, among whom I am, point to the fact that we have stagnant wages, lower labor force participation than we've had for years, very pinched household budgets, overwhelming students, student debts, and a political landscape these days that shows a lot of people are not thrilled with whatever this recovery is. So tell us, how does the economy look these last few years through the lens of someone active in focused on poverty.
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So, Rick, thank you. I think, for when you say the word recovery, I think what needs to follow is recovery for whom? I think there's a certain set of people that this recovery is working for. That's basically the 1% who are dictating our lives through capitalism and the effects of capitalism. But I think if you looked at impoverished people and people that have lived and been mired in poverty all their lives, nothing has changed. In fact, it's probably gotten worse, right? When you look at, you know, pre 2008, the economic downturn, people are saying, well, things maybe stabilize, right? It's not so bad. But, you know, we don't have jobs. Manufacturing is being shipped out of this country. That was the stability in the backbone of people, you know, making a decent living. You're still living within a system that sort of punishes workers, but at least you were able to sustain a certain level of life. But the fundamental causes of poverty are not being addressed. People, you know, wages aren't growing at the same rate that your rent is going up, right? So food is rising to astronomical numbers. People can't afford to pay. Health insurance is going through the roof. People are struggling, and it's getting worse and worse.
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Okay, tell us a little bit, because I know folks, particularly folks who aren't themselves poor. Putting aside for the moment how well we understand our own situation, where is it showing up? You just gave a list. Where does it show up and kind of bite people hardest? Is it in their housing situation? Is it the diets that people are pursuing? Is it their health care? Is it the clothing, their schooling? How does poverty shape people's lives?
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I think it's all a part of it, right, Rick? So if your wages aren't going up at the same rate as rent, you find yourself in a precarious housing situation. If you don't have stable housing, right, to begin with, a place to put your head at night, a place to call home, your eating habits start to become bad ones, right? People will always say McDonald's is not the place to eat. But for poor people, McDonald's has a dollar menu, right? So I can put something in my stomach for a buck, two bucks, right? It's not the best meal in the world, but it's something. And people are making bad decisions. Those decisions play out through their health. You start to eat the fatty crap that these places sell. You start to look at obesity, diabetes, medical problems. The price of health insurance are rising up. Now you need to take medication to get rid of those diseases and problems. And you start to make some crazy decisions. Well, you know what? If I spend the money on the medicine, on the co pay, even for the medicine, it's going to take a meal off the table. I can't feed the kids. So you know what? We're going to go to McDonald's and you exacerbate an ongoing problem. All of these things are tied and related.
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All right, when we talk about poverty, is it something relative in the sense that poverty is the distance between those at one end of the spectrum of standard of living and those at the other, so that we might all be getting better off, but the gap between those at the top and the bottom is the same? Or are we talking about poverty in a more absolute way as literally not being able to have millions of people live at a level that makes life reasonable?
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So while they sound different, I would say they're not mutually exclusive. And I think, you know, if you look at it, there's a history in this country right from the time that people were born here as slaves, people of color, you know, what we call African Americans or black people. You've been impoverished, you've been held back, you've been closed out of a system. You have a system that is working against you. It doesn't allow you to progress, right? So these things have been happening from the time that this country was created. You fast forward to today, many of these things still continue. There are laws necessarily created that don't work for you. They work against you. We have 1% of the people in this country have 47% of the wealth. And that gap is probably widening. And there's just such a disparity now. You have the capitalists who say, well, I'm part of the free market. I understand how to work in the market. Well, yeah, that is true, but it is that market and the way that that whole thing works that is working against you. It is abusing workers, right? And it distracts everything it can out of the workers. And it's just. There's no chance for you to grow. There's a select few that are going to benefit from that process. And until we start to change. You talked earlier in the show about cooperatives. Until we start to think about a different economic system, we're going to be stuck in this system. We have to figure out a way. And I think it's the people that are directly affected by the issues that have to be the decision makers. That's not the way it's happening right now. The decision makers are the ones in power. And their power says, you know what? Money and profit is like a drug. I want more, more, more. And they just push and push and push so that they can make more in that gap. Sometimes we'll get wider, right? And it's not only here, it's around the world. You know, you See other developed countries around the world going through the same thing. Folks in the EU at one another's necks right now whether we should pull out, whether we should be a partnership. Well, the ones that want to pull out probably are saying, you know what, it's not doing anything for us. And the ones that want to keep it together are probably benefiting. So they're probably the 1% in government. Right. They're doing well. Right. So it even happens in governments.
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Yeah, absolutely. I want to pick up on two things that you said. One, let's talk a little bit about the reality of poverty and that phenomena you mentioned about the people in charge, the 1% being so drugged, so addicted to the making of money and the making of more money that they don't see themselves in a larger community of co dependent people. Are we living in a society that is destroying itself in the following way? Your comment hinted at that those at the top are so hell bent on accumulating ever more wealth that they are literally provoking the mass of people into a radicalism, a revolutionary attitude, that they are doing something which they'll look back on in the future as having killed the goose that laid the golden egg for them, that they destroyed themselves by a kind of mindless hunt for ever more wealth.
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That hunt comes without any compassion for your fellow man at all. It's about me. It's individualistic, it's more that I can accumulate. And yeah, that's the course we're on. But there's also a groundswell now of people rising up and pushing back and saying, you know what, I'm going to push back against this system. We're going in a direction. So you have this system called capitalism that we all live on that's teetering on the brink. Whether or not we can overthrow it, I think depends on people rising up. We have absorbed, especially in this country, that mentality of sort of individualism. Right. In the materials we buy. So we salivate for those products that they produce. Right. So we have to look in the mirror sometimes and say, how do I contribute to this process? Right. And I don't know if we're doing such a great job at that. There, you know, select groups of people are starting to realize that now. But I think if we reached out to our brothers and sisters around the world and started to globalize, right. The forces that are pushing against us are global in nature. So we need to organize ourselves on a global nature and push back. Right. So I think, yeah, to answer your original question, is itare they eventually going to destroy themselves? I think so. I can't tell you when that time is and it might be in the distant future. But I do think you're seeing a certain level of radicalism that you've never expected before. And I will give some credit. I've often been critical in my work in communities around the Occupy movement. Right. But one thing Occupy, if nothing else, gave us a broad economic umbrella of which to organize ourselves under. They weren't the best at organizing. They were great at mobilizing, but they gave us a subject to organize under an umbrella to organize.
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Right. Well, let me push this a little bit. Sure. The strange. Because to me it's sort of strange self destructiveness of the 1% is shown in another way. Those at the bottom, as you say, are beginning to push back, are beginning to recognize they've got to do something about a system that leaves them with the short end of the stick most of the time. But I can't but help. Remember that recorded secret conversation of Mitt Romney during the last presidential race when he was caught pandering to some of his contributors by referring to the Mass half the people of America as being freeloaders, people who don't want to work but just want to ride. This is the way the 1% needs to see the people who they don't care about and whose lives their business decisions are destroying. Mr. Romney worked for Bain Capital. It's really a perfect example of this kind of enterprise. So I think your point is proven. The people at the top are becoming nasty in their attitude towards their fellow citizens. It's not just that they're screwing them the way the system works, but they're becoming hateful toward them.
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Absolutely.
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And you're going to see the same in reverse. And I think you see it in one way around certain Trump supporters and in another way around the extraordinary success of Bernie Sanders.
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Absolutely.
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That people are getting angrier and angrier. The number of T shirts I have seen in the last six weeks that say anyone but Hillary is a remarkable hostility that is focused in this case on her. But wherever it's focused, there is a kind of polarization that already suggests that this explosive gap that you talk about is underway. Is that consistent with your.
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Yeah, absolutely. So the work we did at Take Back the Landrick, we often theorized about what we call social clashes. Some people may call them wars. War is another name for them. Or euphemism. We call them social clashes. One of the first that we theorized happened in this country was the Civil War. The north wanting to profit off of automation and production, and the south still wanting to profit off the backs of slaves. And that caused a social clash that we called the Civil War. Right? Fast forward to the 50s, 60s, in the civil rights era, right? There was a social clash of people saying, I'm not allowed to sit at a lunch counter. I'm not allowed to sit at the front of the bus. And then they started rebelling and said, I'm not moving. What are you going to do? Another social clash. We would always theorize in the housing market that there was going to be a social clash over the right to profit off of land versus the human right to a home and to live off of this land. So I say, yeah, I think, you know, there is this groundswell, there is this hatred out there. We've seen it manifest itself before, but I don't think it's manifest itself to the degree as you just explained it now. And I look at my own lived experience to talk about a lot of this, right? So we've always painted this picture of homelessness in this country. You're homeless because you don't want to work. You're homeless because you have mental illness. You're homeless because you have a chemical addiction. You're homeless because you don't want to work, or you have alcoholism. So I spent two years on the streets of Miami and 10 months in the New York City homeless shelter. But as I was in that homeless shelter, and I started seeing people struggle to get out of that shelter, and then myself having gotten out in 10 months, and people say to me, oh, you got out quick. I'm like, well, what's wrong with this system? Then I look back at my own family, and this is not to target my family, but to kind of build a picture of what has happened in this country. Right. My family raised me that way to say, the person you passed on the street that is begging you for money doesn't want to work. What about a system that works against those folks, that doesn't give them the opportunity to work? Right. That doesn't make it easy. What about a system that has no compassion, that keeps cutting back on things like food stamps and welfare? Right. For people that are needy? Right. What about government's obligation to support the people and sustain the people? So, yeah, I think there is, right? And what's going to happen, I think they're just going to. People on the ground are going to get angrier and angrier. And you see it playing out itself now with social movements contacting each other across borders and say, we need to do this together. Right? Recently here last week at the un, folks are supporting folks in Brazil around democracy and what democracy really means as they try to overthrow the government in Brazil. You see the movements in Brazil reaching out to movements in the US that say, you need to stand with us. We can't come to the un, but all the world leaders are right there, right now. The cameras are on the un get out there and support us. And you saw social movements from around the country. Get out there and support them.
- [45:17]
A
No. It's amazing to me as an economist, you know, that capitalism is such an unstable system that every student learns who studies capitalism, that every three to seven years it has this irrational downturn. Millions of people are thrown out of their work. You can call it whatever you want, business cycle, ups and downs. But the reality is this is a system that periodically destroys people's careers and lives. And if this happens to you once, it can be traumatic. But if it happens to you repeatedly, which is the history of African Americans, for example, well, then you have a system that is knocking you down. To be then surprised that such a person has a hard time managing and then blaming the person is a bizarre logic.
- [46:03]
C
It's a very strange logic, Rick. And I think, which is why when we formed Take Back the Land, we were. We weren't so theoretical in why we were doing it. I think we had an idea why we were doing it, but we were pushing the tactic to say, we're reclaiming this. But then we started to sit down with members of academia and sort of putting our thoughts together. It came to just that there's years of this and years of this and how do you overthrow it? And which was why we start to understand why your organizing has to be transformative versus reformative. We don't want to change or we don't want to fix an already broken system. We want to create a new system, something new, throw out the old, bring in the new. This is not going to work for us. And we're constantly going to be in these clashes. And you know you're going to have people constantly pushing down on you. And whatever capitalism has to do to mash you like a little bug, it's going to try, right? But it's not a system that going to sustain itself. You go through these cycles, right? It was also our argument in the housing movement when people were fighting for principal reduction on mortgages, we never denied anybody the right for some immediate relief. But three to seven years down the road, you're back Knocking at the bank's door again, hey, I need principal reduction.
- [47:24]
A
The statistics prove that over and over again.
- [47:26]
C
Right? So then your thinking has to be, how do we change a system? And I think we're really having concrete discussions and creating spaces in this country on the ground like never before to have those discussions. And that's part of that groundswell of pushing back.
- [47:41]
A
That's very hopeful, too. I know you travel a lot, so tell us a little bit. How would you compare the poverty problem of the United States, your home, with that, that you encounter and work with activists around in other parts of the world? And where particularly can you tell us something about that?
- [48:00]
C
So, you know, obviously I have a lot of experience with Brazil. You know, you see big cities like Sao Paulo, Brazil is supposed to be going through this great economy at one point, but now there's a downturn. Right. Folks are struggling in Brazil, 12.1 million people in Sao Paulo. You know, homelessness is at record numbers. So it's replicating itself. Right. And that's, again, the results of capitalism. I think the other thing that compares is this. The US has always looked to as this great economic power. And I think policies created here are transported around the world. So when you start to pull back on resources and entitlements for people in a welfare state, you see the same thing. If it worked in the US it can work anywhere. Right. So the 1% again are saying, we're going to extract everything out of here and just push back. And, you know, there will be a few of us that benefit from this problem. So you see the struggles in big cities in Brazil, you know, I work closely with housing movements in Spain. Right? Spain, while they have a progressive government rising up, that is part of that pushback. But Spain has gone through some tough economic times. Greece, you talked earlier in the show about Syriza and his government. Right. You know, it's really stressing folks around the world. Economies are struggling, and for the same reason, manufacturing is an abuse of labor. Wages just aren't rising. So you see the same problems replicated in big cities. I just read reports from Japan, you know, in the wake of the earthquake, and they're trying to move resources to recover this area. Japan is suffering economically. Right.
- [49:34]
A
Very serious.
- [49:35]
C
Right.
- [49:35]
A
They have this. They're the leader in the world with this phenomena of negative interest rates. And things are so bad that the government punishes banks who keep money there in the hope that that will drive them to invest. But it's not working, as the latest numbers from Japan show.
- [49:52]
C
I think Rick, there's another issue, too. You talked earlier in the show about interest rates. And I always, like, I think now, at one time, when things were a little bit better here, there were some good interest rates. Now, go to a bank now and for a certificate of deposit, putting your money away for seven years, they're giving you 1% if you're lucky. If you're lucky, you know what? I'll put it under the mattress. I know where it is. I know you're not finagling with my money. Right. It's right here. I sleep on it every day. So it's just, it's a phenomenon that's so strange. And, you know, why would I put it in one of these institutions when you're almost gambling? I've seen what you've done to people's lives, and then I'm going to be complicit in that. I don't think so.
- [50:30]
A
Especially not if you're not paying me. There's also another phenomenon which I will talk about probably next week, called bail in. Now, we've all heard about bailout, when the bank does something illegal, inappropriate or stupid and the government comes in and bails them out. But what about when a bank wants to solve its problems not by leaning on the government because that's politically dangerous, but by taking the money of its depositors? That's called a bail in. Now, you've got the problem that putting your money in the bank earns you next to nothing, but now exposes you to a risk you never thought about before. And this is going to have ramifications, but I don't want to take our time. Let's go back. Do you think poverty is an issue in the election that's going on in the United States? And tell me how.
- [51:22]
C
Absolutely. You know, I think you have Bernie, who is a progressive, right, and is thinking of socialism and thinking of government in a different way. Right. He is the true one. He's the true voice behind that. I think everybody else in the platform is aligned sort of with big business and big government. Right. Even the Democratic Party, which traditionally says otherwise. But, you know, I think Bernie is the hope for the future. He may not win this election, but he has people mobilized and organized and thinking differently. Right. And as you said earlier with the T shirts, with the slogans, there are messages. Young folks are out in record numbers again. Almost like Obama saw a new wave 2008. There's a new wave sweeping, and people are now conscious of this. Occupy plays into this. Right. You know, it was young Folks rising up, school debt. And it's not so much just the very, very poor, but it's quote, unquote, what used to be the middle class is suddenly eroded and people who were told to go to school and, you know, if you go through five years of school, six years of school, and you come out with a graduate degree, you're going to make a six figure salary. Well, you know what? There are no jobs. When I come out, I got $200,000 in loans I got to pay over the next 20 years. This sucks. And that's what people are saying. And people are starting to realize and people are fed up. So they're thinking, yeah, Bernie will have a tough time, you know, as we're seeing some of the results in some of the states. But there is a wave, right? And that means what happens the next time around are people mobilized, people energized? You know, I think, yes, I think, you know, people are at a different place right now. And I think this is in the forefront of the election. I don't think Hillary is going to escape a lot of this conversation. Right. You know, when it comes to that convention, there's going to be a lot of talk there and she's going to have to.
- [53:12]
A
And if she wins, then she's going to come into office with a level of distrust, absolutely disgust, you know, you know, kind of wonder, whoa, Obama came in with all the legacy of what it means to be the first African American in that position, but she's going to come in not just with being the first woman, but she's going to come in with social problems on a scale.
- [53:39]
C
It also speaks to how this works in our country. Right. So, yeah, Obama was the first African American, but he had a Congress and a Senate that wouldn't work with him. Right. Basically wouldn't give him power. And, you know, you wonder if it's a racial thing, me being an African American. First thing I'm going to say is, yes, right, we're not going to give him power. Right. And it just goes to show that the strings are being pulled elsewhere. Right. And it limits what you can do. So to appease the people, we change the color of the face of the president, but we're still pulling the strings back here.
- [54:09]
A
And now we may be at the edge of changing the gender, but with the same objective lying rightly behind it. Last thing, as an economist, I can't but remember 1960, that's half a century ago when a socialist, Michael Harrington, wrote a book called the Other America, in which he Reminded Americans who needed it that there was an enormous poverty problem in this country. And here we are half a century later, still reminding Americans that there's an enormous something about this society is as successful in reproducing poverty as it is in accumulating wealth. It's just different parts of the community have the one experience from the other. I wonder if that's a sustainable arrangement and what your final thoughts are about that.
- [55:03]
C
You know, it's hard to say whether it's sustainable. I do think part of it is access and education. So, for instance, I use my own example. Right. I didn't think a lot about economics. I was raised in a household, working class family from Long island and, you know, African American. My dad believed in that whole American credo, work hard, buy a home and all that. Then this thing that happened to me in my life, going homeless transformed me and I started to read and I had exposure to books and people were pushing stuff to me to read. And I started to rethink the world and look at it differently. And I think that's important. Right. It's hard, you know, for me, I think I try to carry this message to African Americans. Education was important for me even late in my life, you know, at a very advanced age. Right. You know, you think of it in the early years, but I have more.
- [55:56]
A
You're not that old, Rob.
- [55:58]
C
Well, but I have more education now or access to education or thinking about it differently. Right. You know, so when you talk socialism, people would say that's communism. And I would still argue if I went in the African American community and talked about socialism, there's this, you know, oh, you know, what are you, communist? You got to get out of here. So I think it's an understanding. A big part of it is education. But then you have to be careful with the word because people are politically correct today. Don't say you're going to come in here and educate me. Right? Yeah. But you know what? You do need to read a little bit of history. So it's an interesting. It's an interesting dynamic and hopefully things will change. But we have to keep fighting, Rick. We can't, you know, we can't sit down and listen to that message. We have to push back.
- [56:39]
A
Good for you, Rob. I agree with you and we'll continue to do it as we've been doing it. I want to thank everybody. Remind you to make use of our websites, rdwolff with two Fs.com and democracyatwork.info Send us your thoughts and ideas. Partner with us. Follow us on Facebook, Twitter and Instagram, which going to those websites makes it easy for you to do. Get in touch with us if you'd like us to speak in your area, help you with converting a business to a worker co op. All of the things we do, we do together with you and invite you to do it together with us. I look forward to being with you again next week.
- [57:23]
C
You.
- [57:26]
A
Your time, not Bab but after why gonna be my time my time babe they ain't gonna change, change, change, change, change, change, change. It.