Economic Update with Richard D. Wolff

Episode: "Tariffs in an Unraveling Economy"
Date: June 14, 2018

Overview

In this episode, economist Richard D. Wolff critically examines the U.S. government's recent tariff policies within the context of global economic protectionism and domestic economic instability. He explains the real motivations and consequences behind tariffs, exposing the hypocrisy in political and corporate rhetoric. Later, guest journalist Bob Henley joins to discuss America's deepening housing crisis, connecting it directly to broader economic “unraveling”—rising inequality, fallout from the financial crisis, and the failure of both political parties to protect working families.

The episode is rich with critical insights, historical perspective, and sharp commentary on topics from trade wars to homelessness, all delivered in an accessible, direct style.

Key Discussion Points & Insights

Understanding Tariffs and Economic Protectionism

[00:10–07:13]

• Definition and Purpose of Tariffs

  • Wolff explains tariffs as simply taxes on imported goods, designed to make foreign products less competitive domestically:

    "A tariff is a tax you put on something when it comes into your country from somewhere else... to make them more expensive for Americans." (01:03)

• Protectionism and Hypocrisy

  • U.S. industries frequently lobby the government for protection, despite public complaints about government inefficiency:

    "They're spending big bucks getting the government to give them protection... Virtually every sector." (02:10)

• Examples Across Industries

  • Highlights include truck tariffs (25%), farming subsidies, and dairy quotas, with Wolff noting these protectionist measures are the norm globally.

• Global Game of Protection

  • All governments, not just the U.S., use protectionist tactics:

    "Every country mixes a variety of protections... There's nothing new here. Mr. Trump's notion is protecting America. America's been protecting itself just ducky fine for a long time." (05:13)

• Risks of Trade Wars

  • Wolff warns that escalating tit-for-tat tariffs threaten the global economy:

    "If we all play this nasty game, we will dissolve the international economy. And believe me, the risks and dangers of that far exceed anything having to do with this." (06:16)

Unintended Consequences and Political Pandering

[12:02–15:11]

• Tariffs’ Real Impact on Jobs

  • Wolff dismantles the argument that tariffs help workers, noting most protected industries are highly automated and job gains are trivial:

    "Steel and aluminum production is highly capital intensive... the amount of extra jobs they create... is trivial." (13:12)

  • Tariffs may actually cost jobs elsewhere by raising prices for consumers and manufacturers.

• Political Manipulation

  • Tariffs as political theater—"America First" rhetoric distracts from real solutions:

    "He is pandering to the America first mentality, bashing the immigrants, now bashing our trading partners..." (06:45)

Systemic Critique: Government, Industries, and Private Profit

[07:13–09:30]

• Wolff uses the example of the Irish Magdalene Laundries scandal to highlight the collusion between government and private profit under the guise of "efficiency,” warning listeners to:

  "Beware the arguments about the private is better than the public. They're phony 90% of the time." (09:12)

• Continues with the Volkswagen emissions cheating scandal as proof that "corporate self-interest" trumps public wellbeing when left unchecked.

Positive Legislative Developments

[09:30–12:02]

• Wolff notes Senator Kirsten Gillibrand’s introduction of the "Main Street Employee Ownership Act," which aims to empower workers to take over small and medium-sized businesses:

  "It's a remarkable, important, progressive move." (11:58)

Special Segment: The Housing Crisis & America’s Economic Unraveling

[16:09–27:39]

Guest: Bob Henley, Investigative Journalist

• America "Unraveling" for Working People

  • Henley describes the post-2008 era as one where economic insecurity for the working class has only deepened, regardless of which party is in office:

    "Working people are working longer and increasingly getting less of the collective wealth that they create." (17:13)

  • United Way's "ALICE" study (Asset Limited, Income Constrained, Employed) reveals that in NJ, 38% of families are struggling; in places like California and Hawaii, almost half:

    "A majority of the families, Richard, are struggling every single month to pay for their rent." (18:27)

• Reality vs. Official Recovery Narratives

  • Despite claims of "recovery," true economic hardship persists:

    "Only 7% of the counties across the country... had experienced an actual recovery... The unraveling continued." (19:18)

  • Labor force participation rate has barely budged despite political promises:

    "There's a million more idle people today than when Donald Trump came into office." (19:46)

• Housing Market Realities

  • First-hand reporting in NJ uncovers college-educated young adults living in cars, with family wealth wiped out by the foreclosure crisis:

    "Both... their nuclear families, had lost their homes to foreclosure and that had started this unraveling... $20 trillion of household wealth is gone." (21:38)

  • The housing crisis is both generational and chronic—foreclosures during and after recessions have long-term impacts.

• Capitalism’s Instability and Social Consequences

  • Wolff links the recurring economic crises to ongoing social decay:

    "It's the decades of unraveling... it's the decades of unraveling of different parts of society..." (23:08)

• Corporate Tax Cuts & Wealth Inequality

  • Tax cuts have fueled stock buybacks and executive pay rather than job creation:

    "They're buying back their stocks, they're paying higher salaries to the top executives, they're beefing up their dividends to their shareholders." (24:13)

  • Example: Harley Davidson using tax breaks for stock buybacks and layoffs, not U.S. job growth.

• Housing Paradox: Homelessness Amid Vacant Homes

  • NJ has 40,000 vacant homes due to foreclosures, as people sleep in cars:

    "This scarcity in people living in their cars is occurring as... tens of thousands of potentially serviceable homes are being permitted to rot in place." (25:06)

  • Wolff memorably summarizes:

    "This juxtaposition of people, less homes and homeless people is a feature of an economic system that really has lost the right to our loyalty anymore." (25:49)

• Urban Gentrification and Homelessness

  • In NYC, global capital's demand for luxury housing drives up homelessness and eliminates affordable options.

• Grassroots Resistance

  • Local organizing in NJ pushes for foreclosure moratoriums and direct occupation of vacant homes, but efforts remain fragmented:

    "It's direct action applied at the local level." (27:18) "People still are struggling in isolation. And that's why it's so important, a program like this. It gives people a sense that they're not alone and that this narrative does exist." (27:29)

Notable Quotes & Memorable Moments

• On Economic Hypocrisy:

  "Please keep this in mind. The next time you hear the executives or the politicians... They will tell you how the government is inefficient and we need to get the government off our backs... they're spending big bucks getting the government to give them protection." – Richard Wolff (02:10)

• On Tariff Gamesmanship:

  "What the United States wants to do now is renegotiate the game to disadvantage everybody else and advantage the United States. You find it amazing that the other countries are upset and are retaliating. What in the world would you propose them to do?" – Richard Wolff (05:43)

• On Tariffs & Jobs:

  "Any honest economist will tell you we can't tell you in advance whether the jobs gained in the industries that are protected will be more or less than the jobs lost in the industries negatively affected by the rising prices..." – Richard Wolff (14:26)

• On the Fallout from 2008:

  "It's the decades of unraveling of different parts of society and intergenerational [damage]." – Richard Wolff (23:15)

• On Homelessness and Vacant Homes:

  "…this juxtaposition of people, less homes and homeless people is a feature of an economic system that really has lost the right to our loyalty anymore." – Richard Wolff (25:49)

• On False Narratives of Prosperity:

  "The most important thing for the corporate news media is to deny people their own history and sense of the moment, because if they had a sense of what was really going on, they'd want radical change immediately." – Bob Henley (20:34)

• On Organizing for Housing Justice:

  "It's direct action applied at the local level." – Bob Henley (27:18)

Timestamps for Key Segments

• 00:10 – Introduction and definition of tariffs
• 02:10 – Government protectionism and industry lobbying
• 05:13 – Trump’s tariff policies in global context
• 07:13 – State-facilitated abuses: the Magdalene Laundries
• 09:22 – VW emissions scandal; government-corporate complicity
• 09:30 – Gillibrand’s employee ownership legislation
• 12:02 – The real effects of tariffs on jobs and prices
• 16:09 – Guest Bob Henley on the housing crisis and economic unraveling
• 18:13 – United Way’s “ALICE” metric: working families under strain
• 21:02 – Personal stories of housing insecurity, generational impacts
• 24:10 – Corporate tax cuts and wealth inequality
• 25:06 – Vacant homes and homelessness; gentrification’s impact
• 26:37 – Foreclosure moratoriums and grassroots action
• 27:22 – Isolation vs. organizing; value of independent media

Tone & Style

• Wolff’s approach: Instructive yet sharply critical, frequently exposing hypocrisy and urging listeners not to accept mainstream narratives at face value.
• Henley’s contribution: Grounded in reporting and lived experience; empathetic and urgent, giving voice to those left out of the official statistics.

Conclusion

This episode offers a searing critique of both nationalist trade policies and broader systemic failures. Wolff and Henley challenge the audience to see past top-down recovery narratives to the actual, painful unraveling of daily life for millions, particularly around housing. Listeners are encouraged to seek systemic solutions and solidarity—rooted not in divisive protectionism, but in genuine community and worker empowerment.