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Welcome, friends, to another edition of Economic Update, weekly program devoted to the economic dimensions of our lives, our jobs, our incomes, the conditions of our jobs, our debts, those of our children, and those looming down the road. I'm your host, Richard Wolff. I've been a professor of economics all my adult life. And my hope is that I've learned as a teacher how to understand and present things in a way that makes sense and that holds your interest. So let's turn to some of the biggest events of the last week since I've been on this program. And of course, the biggest one probably is what happened over the weekend, this last weekend, when literally hundreds of thousands of young Americans, high school students in the main, took to the streets, took to the parks of the United States to express their pain, their suffering, their anger, and their demands about the gun violence which is off the charts in this country. We have more shootings, more killings with guns than any other country on the face of the earth. And none of the others is even close. And we all know what happened in Florida a few weeks ago. I want to say something about the economics to contribute something beyond the powerful and the poetic that these high school students have articulated. But before I do, I want to take my hat off. Those young people are acting in the way that a really democratic society can and should applaud. They feel strongly about an issue. They're explaining themselves, they're sharing their commitments and. And they're acting collectively to make a difference. Bravo to them for exposing how many of us don't get together with our fellow human beings to make this society better for all of us. Now, to the economics of this situation. The big pusher for guns in this country is not the gun companies that make the guns. Of course they want to sell more because that's how a capitalist enterprise works. They don't worry about the secondary consequences. It's so much collateral damage. They want to sell guns because therein lies the profit, which is why they're in business. So I understand that. I want to look at the nra. You know, it could have been a typical association, you know, like the archery association. It would then be something that would interest hunters and it would interest people who enjoy target practice with guns. Just like an archery society would have people who use bow and arrow for hunting and people who like to become proficient in using that particular item. And it would be no problem in this society virtually at all. It would be an association for hunters and sharpshooters and people looking to do those things. No problem. But the NRA long ago had ambitions to be much more. And those ambitions have been realized. What did the NRA choose to do? Number to become an ad agency for the gun makers. Whatever the gun makers decided to spend on advertisements in sports magazines, etc. The NRA took them to a whole new level. It explained to the gun makersor maybe the gun makers explained it to them. We'll never know that there was a way to get many more guns sold than you could ever sell to hunters and sharpshooters. Could you get Americans to buy lots of guns, not for hunting and not even for target practice, just to have them? And the NRA's answer was, yeah, we can do that. How do we do that? We latch onto an ideology here in America that is very useful for us. Here's the ideology. Whenever something goes wrong with the economy. Unemployment, bad jobs, low pay, poor benefits, insecure jobs, don't blame the companies. They don't want that. Blame the government. When you lose your home to a foreclosure, don't blame the bank that forced you out. Blame the government. Wow, that would be a wonderful ideology for capitalism because it would allow the company to really screw you. And you don't get angry at them. You get angry at the government. You paint the government as the ultimate evil. The government is behind it all. The government is what's hurting you. Not only does that help capitalism, but it gives the NRA a new idea. It can go to the mass of people and say, you know that evil government? Well, it wants to take away your gun. It wants to threaten you. It wants to hurt you even more than this economy has already hurt you. But here's something you can do to protect yourself. Get a gun. Get two. Get one for every closet, every room. Protect yourself. It's really all you have left here in America. You can buy a gun, and maybe that'll help you. This idea makes the NRA able to be a better ad agency for the gun companies than they could ever buy. It creates a market to buy the guns bigger than anyone ever dreamed of. Americans have more guns per person than any other society on the face of this earth. But it also makes the NRA a real friend of big business because they participate in demonizing the government, making the government the bad guy in all of our life's problems. Not the economy, not the employer, not the store that charges us too much money or gives us bad service or takes away the benefits of our job. No, no, no. The government is the problem. Every capitalist's dream is to make somebody else Take the fall. The second big news of this week had to do with tariffs. President Trump imposed a whole bunch of tariffs, mostly on China, punishing China, he said, because it was hurting America by its economic power and growth and, and achievement. He was cashing in on an opportunity and on a campaign promise he had made. Let's take a look at the tariffs first. Let's begin by being sure we all understand what a tariff is. It's simply a tax with a particular name. Here's how it goods coming from China, let's say Something that cost $100 would now have to pay on top of the hundred dollars that you would have had to pay if there weren't a tariff. There is now a tariff, meaning there's a tax applied to this article as it enters the United States. Let's suppose it's 25%. That article that you used to be able to buy from China for $100 would now cost you $125. Why is that a good idea? Says Mr. Trump. Well, he says American companies who can't make that good for $100, who can only make it at a profit if they charge $120, weren't able to sell any before because we wouldn't pay $120 when we could buy the Chinese item for 100. By slapping a tariff on the Chinese item, its price goes up to $125. And now we Americans, confronted by having to pay 125 for the Chinese article, will instead buy the American one for 120. And that, we are told, will mean more jobs for Americans in American companies producing that now $120 item we're buying because we can't buy the Chinese one at 100 anymore because it's become 125. That's the story. Let's take a look at the economics here so we aren't fooled. Number one, the Chinese aren't stupid and the Chinese aren't impoverished and the Chinese are not powerless. The first thing the Chinese can do, and they've already proposed it, is, is to do tariffs in return to do the same thing to the United States that the United States has just done to China. And what that will do will be to persuade the Chinese people to buy from their own producers rather than to bring stuff in from the United States because the cost of bringing stuff in from the United States has just been raised by the Chinese tariff. They're particularly going to do that to agricultural goods and various other kinds of things that are going to hurt American farmers and American businesses. Whatever. The extra jobs we get here from a tariff on Chinese goods will be offset by the lost jobs here because we can't sell goods to China anymore. Anyone who's ever learned any economics gets. Mr. Trump and his supporters want us only to think about the jobs you get when you levy a tariff and never ask how it can play out and undo itself. But that's the least of it. Remember what I said about the price going up? We're all going to now pay $120 for that item from China or for the American substitute for it. And that means prices are going to go up. Let me say that prices are going to go up. American people can't afford to buy the things they need. Now, as we all know, if the prices go up because of the tariffs, which is what will happenand it always does, it's going to mean Americans can buy less than they could afford before. It's going to make economic conditions hard, harder for Americans as a buying public. Where does that figure in to all of the discussion? It doesn't. It's left out, but it is childishly obvious. This drives home the central point to keep in mind. This tariff is being discussed in mainstream media in terms of what its effects will be, what the Chinese will do. So stop. No one knows what all the effects it'll take years to figure out. We do know prices will go up. We do know that jobs may go up or down, but it won't be a big difference. So what is all of this about? This is political theater. This is a president doing what presidents so often do. Our problem in the United States is an economic system that's not working very well for most of us. Yes, it's very good for those at the top. They're happy. The 1% to 5% at the top are doing great. The corporations just got the biggest tax cut they could dream of. They're in fine shape. The rest of us. No. And this is political theater. We're not supposed to look at this economic system and say it's not working for us. We're supposed to be mad and at somebody else. And Mr. Trump has an endless list of somebody else's. We should be angry at immigrants, Ladies and gentlemen. This is a country of 325 million people. Roughly. The number of undocumented immigrants in this country may be 10 or 11 million. Do the arithmetic. Our economic problems, we 325 million are not dependent on what happens to to 11 million poor immigrants. It's silly, but he can get people very angry at those foreigners. That's always easy. And tariffs on Chinese, guess what? That's slapping some more foreigners. At least it sounds like that. It distracts you. It gets you focused on something other than the economic system that is screwing you. That's the key message. That's what we need to understand. Don't get lost in the weeds. Those are the basics of what has agitated our economy over the last week. Now some more quick updates. I want to follow up on the stories we've been covering about the West Virginia teachers who won an extraordinary strike in their state and got finally some decent wage increases. Having been among the poorest paid public school teachers in America, so successful was the West Virginia movement that there are now three more states I want to bring to your attention, actually. Yeah, three that are following that, using what happened in West Virginia as a model. Oklahoma, Arizona and Kentucky. I want to take my hat off again to the West Virginia teachers and now to these others who, like the students on the gun issue, are beginning to understand the power of getting together to make economic changes that really matter. Before going on, let me remind you we maintain two websites, make use of them. That's why we prepare them and update them literally every day. The first one is democracyatwork.info all one word, democracyatwork.info the second one is rdwolff with two Fs.com. you can follow us there on Facebook, Twitter, Instagram and so on. You can communicate what you like and don't like about the program, what you would like to see us do. I want to particularly also let you know that those websites are available to you 24 7, no charge whatsoever. I want to urge you, particularly if you're a listener and would like to see the program as a television program, please go to patreon.com p a t r e o n patreon.com economicupdate and there you can see the program as a television program. And I want to also announce that we have a new episode of Puerto Rico Forward that is a special program. It's on our website and it is also available on patreon.com just go there again patreon.com puerto puerto rico forward for the latest episode. And you can also get it as a podcast through itunes and Google Play. Next update, it's the turn of BMW to get caught with emissions cheating devices. Last month BMW quietly recalled 11,700 cars to, quote, fix an engine management software issue. Uh oh. Then later last month, BMW admitted that prosecutors in Germany were looking into, quote, erroneously allocated software in about 11,400 vehicles of the BMW 750D and the BMW 550D luxury models. And then last week, the police, a hundred of them, raided BMW headquarters in Munich and a production site in Austria. They were one of the companies that hadn't yet been caught cheating on emissions, polluting the world for profit. But they now have joined the others in showing that profit dominates over human health in a capitalist enterprise based system. Also in the news this last week, difficult negotiations continue between Britain and Europe. The British, as you know, voted a year or more ago to leave the European Union. The Brexit, it's called, the angry British working people voting against their elite government. The Conservative Party and even the Labour Party supported it. To vote to stay, said the elite. And the people said, we're not voting the way you want us to. We don't like what you're doing in this society. We want out. They kind of fell for the idea that their problem was, was Europe and being part of Europe. It's a little bit like Mr. Trump trying to have us believe that the economic problem in America has to do with immigrants or Chinese prices. All of these deflections away from the core economic problem of a system that doesn't work for most people. And the poor British are now locked in this sad debate and negotiation of British government, European government, on the terms of Britain's departure. Here's one thing that the British people have learned and that the rest of the world has to learn too. In the hands of the business community that runs Europe and in the hands of the business community that runs England, they're working out the separation to make sure that the rich stay rich on both sides and the elites stay in power on both sides. The missing member at the negotiation are the mass of people leaving Europe had little to do with the real problems that British working class faces. And the same is true in Europe. And nothing these negotiators from the two elites work out will change that. It'll have to be a bitter lesson learned that voting about a foreign policy issue doesn't solve your problem. ProPublica, a remarkable independent website that you might want to look at. ProPublica.org did a remarkable study that came out last week about discrimination against older workers. In this case, the target was the IBM Corporation. ProPublica did a big survey of former workers at IBM, particularly older ones. And it's in a remarkable study about systematic discrimination against older people. Here are some of the results of that survey I thought would interest you if either you are an older worker or your parents might be. Pretty much includes all of us, doesn't it? Here are the 183 respondents said the company recorded them as having retired by choice even though they had no desire to retire or flat out objected to the idea. 45 people were told they'd have to uproot their lives and move thousands of miles from the communities where they had worked for for years. 53 said their jobs had been moved overseas. I could go on and on. You get the point. The remarkable thing is many workers are still fighting with the company over having been dumped at various stages in their career. You know, a bill was passed not that many years ago called the Age Discrimination in Employment act ad forbids doing this. And that may have something to do. Why? As ProPublica points out, in the year 2009, IBM stopped publishing its American employment total. In 2014, it stopped disclosing the number and ages of older employees that it was laying off, even though that's a requirement of this bill. In other words, companies find ways to to get rid of older workers and replace them with younger ones. The older workers have more experience. The older workers know how the company works. But the older workers cost more money than the young ones. And therein lies the story. The damage done to these older workers. Who cares? Profit rules and we live with the results of so long as a system like this is allowed to continue. Tennessee public employees did something interesting. They went against the governor there, a right wing governor in Tennessee spearheaded by the United Campus Union of the University of Tennessee. They refused to allow in effect, what Governor Had Haslam there proposed, which was nothing short of the privatization of the university system and indeed of much of the public sector. It was a wonderful example not just of workers pushing back and winning. It's an example that the movement of production from the private sector to the public sector is mostly about saving money for big and wealthy corporations and wealthy people who don't want to pay taxes. We shouldn't be debating so much about public versus private. It's not the issue. The issue is what happens to the mass of people, public or private, in terms of running their own lives. Job security. That's the issue, not the relatively less important detail of whether it's public or private. One of the most interesting updates I want to bring to your attention is the publication by the Congressional Budget Office, cbo, its March report. It did an interesting study, the results of which I need to tell you about. They looked at inequality of income in the United States. But they did it in a new way. They didn't just measure who, who gets how much income. Looking at it in terms of the poorest 20%, the less poor 20%, and all the way up to the richest 20% and even up to the richest 1%. That's how it's normally done. But here's what was new and different. They took into account the taxes we have to pay. They took into account the inflation we all face. And they also looked at who got the benefit of, of social safety net programs, antipoverty programs, because they wanted to deal with the right wing argument that we shouldn't be looking just at the money people earn, because some people, the poor get in kind help in terms of food stamps and things like that. So the cbo, responding to this criticism, took all of it into account and here's what it did in its report. It looked at the distribution of income. How did income change between 1979 and 2014? Okay, so that's 35 years, basically the last 35 years. And they looked at how did the different parts of our income distribution, how did they do when you take into account the taxes they pay, the inflation they face, and all the social welfare programs we have in this country. Here we go. You might be interested in this. The poorest 20% went up over those 35 years. 69%. That's what they got over 35 years. 69% works out to 2% a year. Not very bad, not very good. The next 20%, not the poorest 20%, the next to poorest, they only went up 39%. They did 1% a year. They went nowhere. And that's true for almost everybody else, right? Except the top. Let me give you the top 1% of Americans. When you take it all into account, here's how they did over the last 35 years. Their incomes, including the taxes they pay, the inflation they face, and the social welfare programs that other people get, their income went up 227%. There is no way for me to exaggerate the horrendousness of what I've just told you. Over the last 35 years, the rich got richer and, and everybody else didn't. And that's true whether you just look at the money or you adjust it for all the other social programs. The social programs in this country don't undo our inequality. They don't even come close. And inequality has become the overwhelming problem of this society precisely because we have an economic system that works that way. And that's the basic problem we have to face from which everything else is mostly a diversion that you shouldn't be diverted by. We've come to the end of the first half of today's Economic update. Thank you very much for staying with me, and do stay with me for the next half hour because we will have a very, very interesting interview for you that I think will capture your attention as well. Welcome back, friends, to the second half of Economic update. Before introducing my guest for today, I want to talk a little bit about the topic that we're going to be discussing. Discussing. As I've mentioned, I'm a professor of economics. I've been doing that all my adult life, and I've had to face and struggle, as everybody else has in this profession with a difficult, sad fact about economics education in colleges and universities in the United States for the last half century. Basically, the story is because of the Cold War, because of the long years of struggle between the United States and the Soviet Union that began in the late 1940s. The previous way of teaching economics, which included the presentation of alternative theories, of those theories that thought capitalism was a really good system and efficient and effective, and those who didn't, those who were critical, those who preferred alternative ways of thinking about economics and alternative economic system, that kind of an economics that debated those questions was pushed aside. Instead, everything got narrowed to a very simple orthodoxy that excluded everything else. And the orthodoxy was the capitalism, the economists told us was the greatest economic system since sliced bread. It couldn't be improved upon, it couldn't be bested. It had no alternative that was worth studying in a sympathetic way from which lessons might be learned. None of that. Marxism, which is the most developed critique of economic orthodoxy that exists in the world, it's the most developed critique of capitalism that exists in the world, was simply excluded from 99% of all economics curriculums as it is today. It's an extraordinary narrow orthodoxy. And the reason I'm telling you this is I've asked to come and join us today a professor of economics who is one of those brave souls growing in number across the United States. And there were always a few who doesn't want this orthodoxy to go on, who wants to open things up? And the phrase he and his colleagues use is heterodox economics, opening economics up to alternative perspectives, having students learn what's good about capitalism and what isn't, what the theories suggest might be a better system and what the theories suggest can't be improved on, but to open the space up. And that's a really important contribution to this country, particularly at this time when so many Americans understand why all too well that capitalism, whatever its virtues, is not doing all that well by the majority of people. So let me turn to my guest and introduce him to you. He is Professor Ian Theda Irizari. He is an assistant professor of economics at the John J. College of the City University of New York. There he teaches Introduction to Economics and Global Economic Capitalism, Political Economy, Economic Development of the Caribbean, and Economics in Historical Perspective. He got his PhD in economics from the University of Massachusetts at Amherst, and his current work focuses on understanding the economic crisis of Puerto Rico. And his popular and academic writings have appeared in outlets inside and outside of the United States. So it really is with pleasure that I welcome to our program. Professor Ian Zadeh Irizarry. Thanks very much for joining.