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Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives. Jobs, incomes, debts, the whole rollercoaster of economic change that's always around us. I'm your host, Richard Wolff. I've been a professor of economics all my adult life. And my hope is that it has prepared me to offer you these economic updates about what's happening. Let me begin by a remarkable shift political In Great Britain, in addition to their left wing and right wing parties, the British, like in many countries, have a middle of the road party. It's called the Liberal Democrats. And they have, like most middle of the road parties, made a big effort to avoid many of the important issues of the day in appealing to voters, which is why they don't do all that well most of the time. And I wouldn't be bringing them to your attention if they hadn't done something interesting recently that I do want to bring to your attention. They made a decision that the single most important issue plaguing the British people in this period is is inequality of income and wealth. The statistic they point to with the loudest attention is the fact that the bottom half of the British people together own 9% of the country's wealth, 50% of the people sharing 9% of the wealth, and at the other end, the top 10%, the richest 10%, together own 44% of Britain's wealth. That's an extreme inequality. And, and they're going to do something about it. And they're appealing to voters to support them, to vote for them on this basis. Hence why I want to talk to you about it. What are they proposing? The following. Anyone who gives a gift to another person, including the gift of an inheritance that you leave when you die, the first £250,000 you get without a tax would be the equivalent in the United states of about $300,000. But everything you leave to anyone over that will be taxed to the recipient at the same income tax rates that apply to any and all other kinds of income. That is drastically different from the United States where the first 10 to 12 million dollars are passed free and the rest of it gets kind of worked out so you don't pay the kind of tax that you might otherwise. So it's a radically different idea. And they go further. The Liberal Democrats, they want to tax the income you earn from work at the same rate that you tax income. The interest you earn on your money, if you have it, to lend dividends you earn on your shares, capital gains you make by buying shares at one price and selling them at another, etc. They don't want to give special low tax rates, as we do in the United States, to people who earn their income not from work, but from owning things. So it's a drastic departure and it's a sign that the levels of inequality around the world are now so extreme that political parties that used to avoid talking about it are now focusing on it. The wind is changing and that will affect the United States later, if not sooner. My next economic update has to do with a company, Sears Roebuck, that almost everyone listening or watching is familiar with. The current CEO of Sears Roebuck, Eddie Lampert, was asked why the company is closing ever more stores. It is a company that frankly, is in the process of dying and has been for years. Well, he answered with something that I need to comment on. He pointed to the problem that there are so many present, but even more important former Sears workers who have pensions that the company has to pay out because those pensions were signed by the company with the unions representing those workers over the decades. And he complains about it. That's why the company is having trouble, because it has to pay pensions, with the implication being he would like to save the company by not paying the pensions. Well, let me respond. A pension is part of the contract between an employer and an employee. Every time that pension was either raised or lowered or put into effect, it was part of a negotiation in which the workers agreed to take less in the way of more wages because they got more in the way of a pension. The reason the company liked it was it didn't have to pay money now. It could pay the money later when the worker retired and became eligible for the pension. So it was agreed to by the company and the worker. It's part of the worker's wage. The difference is that it's to be paid now in retirement for work that was done much earlier. But to offer not to pay it or to suggest not to pay it would be the equivalent of the employer coming to you and saying, gee, we're having trouble here in the company, which you may or may not believe, and so we're cutting your wages. It's exactly the same thing. And I find it remarkable not just that, Mr. Lampert, Sears would have the nerve to say this, but that the media take it seriously, presenting the idea that pensions are are some kind of extra that oughtn't to be the big burden they are. Well, you should have thought of that back when you invented them and paid them to people and got workers to Accept lower wages in exchange for better pensions. And if you want to see really what this is like, imagine the government of the United States, which has borrowed trillions of dollars over the years saying, gee, we're having some troubles here in Washington. So to those of you that lent money to the government who bought a savings bond, say, or who bought a Treasury bond at some point in your life, we're sorry, but we don't want to pay you the interest. That's an obligation you entered into when you bought and sold the instrument. To decide now you're not going to pay would be remarkable. And if you're going to do it in private companies, well, why not the government as well? And maybe the rule would be we're not going to pay the pensions of people who are so rich that they don't need the pensions or people who have bonds for the treasury but don't need the money because they're so rich. People would yell up a howl about that. Well, why not the same howl for Mr. Lampert? My next update has to do with the JP Morgan Bank. It's the largest bank in the United States and I want everyone to know what their latest report indicates. They believe the next financial crisis will hit in the year 2020. Folks, that's less than a year and a half from now. My point is not that they're right or they're wrong. My point is ask yourself the following question. What kind of an economic system puts people through the catastrophe of the crash of 2008? The 10 years since that time where people have suffered on a scale that is extraordinary. And at the end of the 10 year period, the biggest bank in the country announces that this economic system is headed for another crash within less than a year and a half. By the way, the JP Morgan report indicates they expect a stock slump of at least 20% collapse in the value of shares, which will mean everybody's 401k and a whole lot of other things that you may be relying on won't be there. Extraordinary. If that's not a critique of capitalism, I, I wouldn't know what is the opioid crisis, another sign of a failure of a society to solve its problems? Plunging masses of people into economic dead ends of the sort we describe on this program fairly often leading some people to turn against immigrants as if that were their problem, as opposed to an economic system that doesn't work, but turning other people to try to escape the dead end. Jobs, the poor incomes, the lousy prospects to turn to drugs to turn to that opioid epidemic that we all know about and we all read about. I don't want to talk about that again. I've done that again. I want to talk about something else. I want to give you the example of King county in the state of Washington. It's an important county. It has 2.2 million people and it houses or includes the capital of Seattle, Washington. They have been talking about setting up something which has been the single most effective way of dealing with the opioid crisis. It's something called a safe consumption space. It's literally a place carefully set up where people who are using those kinds of drugs can go. So either they don't overdose in the first place, or if they do, they're in a position to be helped immediately and effectively saved from dying. It is known how to do that. There are plenty of examples of where this has worked. And the people in Seattle and in King county made the decision in 2016 over two years ago to establish them. But because of the difficulty of getting money from the state government and from the federal government, because there is no federal program for safe consumption spaces, Lord knows why not. They haven't done it yet. And in that time in that county, there have been, count them, 664 deaths from overuse of opioids. The failure is not just a country that turns millions of its people to use drugs that are dangerous. It's also the failure to deal with the problem with when it is known and when the solution for it is also known. Next update. The G20, the richest 20 countries in the world, recently had their regular meeting in Argentina. There they decided to issue a statement saying that the reform and strengthening of the World Trade Organization is one of the most urgent things for the mass of the people of the world. I found this remarkable since Mr. Trump has threatened to withdraw from from the World Trade Organization and makes nasty comments on it. The ministers gathered there said they're going to wait and see how Mr. Trump's tariff war and the retaliations of countries like China and Europe and so on, how that all goes. While they were meeting in the very elegant headquarters there in Argentina, in Mar del Plata, to be precise, outside were the demonstrators yelling, protesting. You're having meetings, you're having elegant meals, you're discussing. Meanwhile, we're dying in the third World, in the Latin American parts of it, but Asia and Africa too, because you're not dealing with the uneven development of the world, the inequality that global capitalism has imposed on us. Remarkable. Next, the European Union, particularly Britain, France and Germany, the leaders have worked on and are coming to the close of an agreement to maneuver around Donald Trump's threats. Here are the Trump has said that if European countries continue to deal with Iran, buying oil, selling goods to them, those companies doing it will be sanctioned by punished by the United States in ways that are very costly. Notice, please that the United States decided that Iran wasn't abiding by the treaty. Britain, France and Germany, who are signatories of the same treaty, the United States is, believe that Iran is doing exactly what it was asked to do. We disagree in this disagreement. The United States has decided to become punitive. So the Europeans reacted by saying any company that accepts to not trade with Iran because of the United States will be sanctioned by the Europeans. So the companies have to decide which is the worst one to do it. And now the Europeans are going one further they're going to develop a system that will either hide or make indirect how these deals are done so that the United States won't even know the cooperation that once was between Europe and the United States, economically and otherwise is breaking down. And that will shape our futures as much as anything else. Last Update we have time for the United States securities and Exchange Commission recently levied a $12 million fine on Citigroup. That's the parent of the monster New York City Bank. Why? For lying to investors. $12 million, I figured out, is 0.001% of the revenue last year of that bank. It's a slap on the wrist that provides no incentive to not do this. And what were they doing lying to investors? The bank We've come to the end of the first half of Economic Update. Please stay with us. We will be. Welcome back to the second half of today's Economic Update. Before getting into our discussion of immigration and the whole burden of issues wrapped up in that problem for the world these days, I wanted to remind you please to subscribe to our YouTube channel, to follow us on Facebook, Twitter and Instagram, and to make use of our website, democracyatwork. That's all one word, democracyatwork.info you will find all kinds of material of interest on that website and you'll also be able to find ways of getting more involved if you would like to do so. And I also want once again to make a special thank you to the Patreon community who whose support for this program and for what we do is absolutely vital to our being able to bring this kind of material to the airwaves on a regular basis. So thank you from the bottom of our hearts the topic I want to talk to you about today is immigration. And the immigration issue has become the dominant political burning point, you might say, of around the world. The Brexit decision, this historic decision of a vote in England to withdraw from the European Community was heavily shaped by hostility to European immigrants in England, from the continent to the little island and reactions to that. Mr. Trump announced his candidacy for president with a diatribe against Mexican immigrants and made the anti immigrant push a central part not only of his campaign, but of his presidency. Ever since recent elections in Italy brought to power in that country the fourth largest in Europe, an anti immigrant politician working very hard to make that the centerpiece of his leadership of Italy, and most recently, an election in Sweden, a country long famous for welcoming immigrants, saw the rise of a new political party. Well, it was old. It was an old right wing political party that got 2, 3, 4% of the vote, but suddenly it got 16 or 17% of the vote because it became a big leader of the anti immigration movement in that part of the world. And in other European countries, similar stories could be told. I want to pose a why have traditionally extreme right wing political parties and movements found in the bashing of immigrants an effective tool to get voters, to get members, and to get lots of media attention? Why have even some relatively obscure politicians, Boris Johnson in England, Donald Trump for that matter, in the United States, and so on? Why have they been able to get a new chance at political power and leadership by making anti immigration a central part of their politics? I want to give an answer to explain that, and then I also want to talk about what an alternative vision of the problem of immigration might look like. So let's first answer the question why the right wing has made so much pay, if you like, out of this. Well, first of all, attacking immigrants is a kind of simple story to tell. If people are suffering economic decline, which they are, extremelyin Britain, significantly in the United States, extremely in Italy, significantly in Sweden, and so on. If the crash of 2008 has left deep scars and and deep suffering, well, blaming immigrants is a nice, convenient story. Immigrants, after all, being desperate, running away from their homes, where they grew up, where they have their families, their schools, their relationships, their jobs, their religions, their ethnicities to go to a new, strange country. Those people are willing to work for very little money because they're desperate. So they're poor. And the story can be they're taking your job away. You're not going to get paid what you used to. You may not have a job at all. Meanwhile, the immigrants are coming and taking your jobs, as if the employer doesn't give jobs, but that the worker takes them. But we'll put that aside. Then there's a further simple story. Being poor, living in poor neighborhoods, immigrants may sometimes qualify for social services provided to poor people in poor neighborhoods. So the story can be told. Oh, see, you're being taxed, you native person, to provide services to those immigrants in general. The story is the immigrant is somehow the, the cause of your difficulties. And if only you could get rid of the immigrant, well, then your economic problems would be solved. And of course, this can tap into the old insider, outsider kind of way of thinking about the world. We inside the village know and trust each other. People from the outside, you always have to suspect. And here's a final reason. The real culprit to the economic problems of people in Europe, England, Sweden, Italy, United States, is a capitalist system that doesn't provide the jobs and incomes people need. It's a system that has moved jobs to faraway countries where they can get away with paying lower wages. It's the people who have replaced jobs with robots, with artificial intelligence, with computers, all in the name of making more money, because that's how this system works. That's where your real problems come from. But it would be dangerous for the people who sit on top of the capitalist system if the suffering caused by it was blamed on it. So it is always important in times of economic decline of the sort now afflicting Europe and the United States to come up with something else to blame, to deflect the potential of anger against the system, to be focused elsewhere. And the immigrant, the other, the different person or people, is a good target. It's been used many times in history. But now let me turn to the question of how people who see at least some of this have reacted, call them, for lack of a better term, the broadly defined left wing of political points of view in America and Britain, Italy, Sweden and so on. Their first reaction has often been to see the cruelty in all of this, to see the discrimination, to point out that all of these countries have welcomed immigrants for hundreds of years, that places like the United States are literally a country of immigrants, since we eradicated the people who were here before the Europeans came. And so there's something amiss in suddenly blaming the very immigration that made the country what it is. And then you get the next step, a kind of blame, a blame of the native people who are anti immigrant for intolerant, for being racist, for being discriminatory, and of course this only makes those folks angrier. They already believe that their jobs and incomes and taxes are the fault of immigrants. Now you're blaming them for being critical or hostile. They're going to get even more upset. Well then, what should the left position be? What should it have been all along? Let me offer some suggestions. First, it is crucial for the left to go right after the premise here to make it clear that blaming immigrants is a cynical, cruel and inaccurate assessment of what the problem is. The United States is a nation of 325 million people, give or take. The number of undocumented immigrants the focus of all the upset in this country, maybe 12 million, give or take a little bit because the counting is obviously difficult. All right. You don't need an advanced degree in economics to understand that the difficulties plaguing tens of millions of Americans in a country of 325 million Americans cannot be explained by anything having to do with 12 million undocumented immigrants who are the poorest paid in our society, who live in awful conditions a large portion of the time, who are excluded from lots of public services and anyway, etc. It's crazy, it's absurd, it's mean and cruel and is wrong. That has not been made clear anywhere. Like it could have and should have. But here's the more important point. Here's a program that the left could advance. It could say the the way to welcome an immigrant is the way to treat everybody in this country who isn't an immigrant as well. A guaranteed job at a decent income that you and your family can live with to enjoy the so called American dream, to send your kids to college, all the rest. If we provided full employment as a right of everybody in this country, every native and any immigrants that we choose to let in, we wouldn't have the competition over jobs. We wouldn't have the competition over social services. We wouldn't have the setting of native to immigrant against each other. In the awful pattern that has happened so often in American history, we would welcome immigrants the way they ought to be. The way that Christian and other religions say you should help the less fortunate around you and how to pay for it. Well, let's see. We have an enormous wealth concentrated in the top of our society. The taxation of that wealth so that we have less inequality can raise more than enough money to provide the jobs and the job guarantees and the full employment. That would be a far better arrangement for managing immigration. And if pushed, the left should say the if wealthy folks do not want to do their share of bringing decent lives both to the American people and the immigrants, then let's not have immigration, but let's not bring immigrants in, cram them into poor neighborhoods, provide them with inadequate education and housing, put them in a competitive situation with domestic laborers, and then have those who are wealthy, who are making extra money by paying those low wages, do a tsk, tsk and tell the rest of the society how they ought to behave. They should pay for what it is that in the end, benefits them as much as it does anyone else with the difference they have the ability to pay. It would be a different program. It would make immigration something that goes together with taking care of the people here and making those at the top pay for it, which is what we should have done long ago and would be a much better way to handle this situation. Well, we've come to the end of the second half of today's program, and I want to thank you all for being part of this, for sharing this with us. And I particularly want again to thank the Patreon community for its support and to remind everyone that this discussion of immigration will will continue on Economic Update Extra, which you can find at patreon. Com Economic update. Thank you. And I look forward to speaking with you next week.