Loading summary
Transcript3 lines
- [00:00]
A
Sam. Saint gonna change. Welcome, friends. Another 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 all the economic news and issues coming down the pike and confronting us, if anything, too soon. I'm your host, Richard Wolff. I've been a professor of economics all my adult life and I currently teach at the New School University in New York City. I want to jump in today with the overwhelming number of economic updates that assembled themselves in front of me over the last week. It's truly been a rush here in the middle of August, so let's get right to it and talk about the economics of the items in the news. Well, a huge item has been the Olympics, for obvious reasons. And people interested in sports of all kinds around the world are watching what happens in Rio de Janeiro. In Brazil, both the sports and the not so sports. And it's the economics I want to talk about. It's already clear that the Olympics in Rio will lose a great deal of money for the country that's hosting them, namely Brazil. That has been true for most Olympics of the last 50 years, and probably for further back than that. That is. What I mean is more money is spent by the country, the city and the country that hosts the Olympics than the city and the country get back. But before you see this as some sort of unmitigated loss, let's look a little more closely. The loss is to the taxpayers, the people who pay the money that enables the city and the country to. To provide the buildings, the grounds, the roads, the improved airport facilities to receive the visitors and all the rest. In the case of Rio, because the Brazilian economy and society are in such deep crisis, the amount of money spent had to include huge sums for vast numbers of police and military to provide even the minimal security that we now know was breached on many occasions. So the money lost is by the government, and that in turn means the money lost is by taxpayers, because they will see money spent on something that will not bring back as much money as was spent. And that means the government is out billions of dollars that might of course have been spent on schools, hospitals, road maintenance, housing, affordable housing and so on. But don't be despairing. There were people who profited from the Olympics, airlines who had much more traffic than they had before, restaurants in Rio, hotels in Rio who could charge, as they did, astronomical prices for people to stay there. And given the wealthy who come to enjoy the Olympics, there was the money to pay for it. In other words, all kinds of Private interests were able to make banner profits, big profits. The loser was the public. And that's how this system works all the time. And there's nothing special about the Olympics. What they can do there, the government often cannot do. It cannot spend the taxpayer's money quite so recklessly to boost private profits at public expense. But the love of sports, genuine in so many people, provides a wonderful disguise, a wonderful cover, a wonderful excuse for that age old arrangement in which private profit utilizes public money to subsidize itself. The next update I want to turn to has to do with automobiles in the United States. And what caught my eye this last week was a release from the Centers for Disease Control, the government agency that keeps track of, of these things. And here's what they reported for the latest reporting year. The number of people killed in automobile accidents in one year, 32,000. Let that sink in. The number of people with non fatal injuries last year, 2 million. So let's do that again. The private automobile kills 32,000 people and injures 2 million yearly. Now, what's the economics here? There is of course, an economic alternative to the private automobile. It has a simple name. It's called mass transit. It refers to buses, trains, trolleys, vans, everything that takes a sizable number of people around the town, across town to the next town, and so on, rather than having an individual car do it. Well, if that's the case, and if we add also that the private car pollutes much more of the air than is the case if we move people in groups, mass transit, and if we remember that the automobile car uses vastly more energy, fossil fuels per person per mile than would be the case in, in mass transit, we're beginning to see that the private automobile is a waste, a polluter, a killer, an injurer of colossal proportions. Well then why don't we have a good quality mass transit system in our country, in our states, in our cities and towns? And the answer is, it's not as profitable. The automobile companies, the oil and gas companies, the plastics companies, the paint companies, all the companies that make a bundle off of servicing or producing the private car don't want a shrinkage of their business and their profits. Were we to move from the private automobile to the much safer, much less polluting and much cheaper mass transit system that we obviously need. That's how capitalism works. The theme, you might say for today, it puts private profit ahead of rationality, social need and social welfare. And it will continue to do that for as long as we let it. The third item, economic Update that caught my eye was an article, a remarkable article this last week, specifically on August 11th in the Washington Post, a leading American. There is a series by Barry, I hope I'm pronouncing his name right. Eidlin, Barry Idlin, E I D L I N in the Washington Post about why unions are so weak in the United States compared to labor unions in other advanced industrial countries. We really are an outlying observation of among unions in capitalist countries. And he actually compares the United States in the article on Aug. 11 to Canada, which has so many similarities with the United States but has a much, much stronger labor movement and labor unions than we do in the United States. And he asks the obvious intelligent question, what? Why? I might mention that Barry Idlin is also a sociology professor at Canada's McGill University in Montreal. And in his forthcoming book labor and the Class Idea in the United states and Canada, Mr. Eidlin comes up with an answer. And here it is. Canada, like most advanced countries, has two basic organizations that advance the interests of working people. One of those institutions is the labor union, which we in the United States have, like all other advanced capitalist countries do. But there's a second institution in all other advanced capitalist countries that does not exist here in the United States, and that is a political party committed to, based in and articulating the needs and wants of working people. Whether it's the Labour Party in England or socialist or communist parties, or often more than one party in many other countries that do this, the labor movement and a political party committed to workers interests. Remembering that workers are the majority is missing in the United States. And Eitlin explains why. In the Great depression of the 1930s, when there was an upsurge of the labor movement, the cio, with millions joining unions, when those were allied with two socialist parties and a Communist party in a very powerful alliance, we had the closest we've come to labor unions plus political parties supporting them. And we got Social Security and unemployment compensation and a public jobs program. We got the most progressive program for working people then called the New Deal that we've ever seen. But after the war and already starting in the Great Depression, Professor Eidlin points out, the Democratic Party here made a move to absorb, to incorporate the interests of working people and unions to get the unions to ally with the Democrats rather than to have their own political party. And therein, says Professor Eidlin, both in the article in Washington Post and in his forthcoming book, therein lies the cause of the weakness of the labor movement in the United States. It does not have a partner in politics. It does not have its own party to be a powerful force within. Instead, it has become the junior partner within the Democratic Party, where the word junior gets more obvious and more profound with each passing year. The next item I want to talk about is productivity here in the United States and the condition of our economy because of the presidential race in particular, but also for other reasons. There's a great deal of, well, let me be blunt nonsense being spoken about the economic conditions of the United States. Fundamentally, here's what we've the worst crash of capitalism since the Great Depression took place in 2008. Ever since, the governments of the United States, Western Europe, Japan and so on have been trying to cope with, to overcome the catastrophe of that economic crash. The millions of people who, who lost their jobs, the millions of people whose educations have been interrupted or ended, the debts that people accumulated and are still accumulating that they cannot pay, et cetera. Starting in 2010, we began hearing what is in fact a kind of make believe, namely the word recovery. And all kinds of people, politicians, particularly media spokespersons, academics, began chiming in about, oh, we're coming out of the problem, we're recovering, we're having an economic recovery. Even this last week I had to listen to, for example, just to pick one out, Hillary Clinton tell us about our recovery and the wonderful productivity of, of the American worker. So let's take a look. Productivity recovering? I don't think so. Let's give you the result. On the 17th of August, the Labor Department reported, quote, labor productivity fell one half of 1% in the second quarter of this year, the third consecutive quarterly decline. Wow. The Wall Street Journal was so upset by this that they wrote an editorial on Wednesday of that week which had the following Productivity slump threatens economy's long term growth. Yeah, we're not becoming more productive, we're becoming less productive. Our growth of productivity is so slow that we've actually had falling productivity. We are becoming less productive than we were before. That's worse than a slow growth. That's a reverse. What's going on? The answer is fairly clear. The businesses of this country who are in the position mostly to determine productivity. Why? Because the productivity of a worker, how much he or she can produce in an hour, is particularly dependent on the quality and the quantity of the machinery that they're working with, the computer, the factory machines and so on. So the reason our productivity is slumping, we all know, has to do with the fact that businesses aren't investing their money. And why aren't they is then the logical next question. And here we have a wonderful story that answers this. August 13 Business Insider, an important publication, quotes two people, and I'm going to mention them to you because of who they are. The first one is CEO Larry Fink. He is the president of BlackRock. It's the largest asset manager in the world. Here's what Larry Fink has to say about the world of business and investing by businesses. Our clients do not know what to do with their money. They are afraid and they are pulling back, as evidenced by more than $55 trillion in bank deposits sitting in the United States, China and Japan alone. Wow. Let's turn to another leading business spokesperson, Howard Schultz, the CEO of the Starbucks coffee chain. Here's his I think we have a situation where you have a very uncertain election. You have domestic civil unrest with regard to race. And I think the issues around terror have created a level of anxiety. And so we're no longer looking at just an economic downturn. There are a number of things that we are facing as citizens, and this is weighing on sales of every consumer brand. Let's see, what does that mean exactly? Well, the answer is people are not investing money, or rather, businesses are not investing money. And while you can talk about the election, the truth of it is the reason the election is uncertain is that millions and millions of Americans are suffering in economic crises and are wondering whether Trump or Clinton or the other two parties have anything remotely like an answer. The uncertainty goes back to what? To an economic system that isn't working for the mass of people it's producing, on the one hand, huge profits that are, as you'll see a little bit later, the incomes of the super rich. But it also is producing inequality, so that the mass of people. Here we go now, don't have the money to buy goods and services. And that's why there's so much economic difficulty. We have a capitalism that generates an inequality that then come back to undermine the very capitalism that generated the inequality. And since no one dares to talk about a system that works in this crazy way, we simply dance around the edges with politicians given to saying things like, aren't we wonderfully productive just when our productivity is declining, etc. Etc. Final comment. I want to read to you. This is by Mr. Narayana Kocher Lakota and you should pay attention to his name. He's really a very thoughtful commentator. Let me tell you who he is. From 2009 to 2015, he was head of the Minneapolis Federal Reserve Bank. Today he is a professor of Economics at the very well respected University of Rochester in Rochester, New York. And he's a regular commentator for the Bloomberg Business News Service. Indeed, what I'm about to tell you and read to you briefly, is what he has to say about the so called economic recovery in the United States. In his Bloomberg commentary of August 18, 2016, he makes fun, very gently of the comments that many commentators have made that the economic growth measured by gdp, gross domestic product, the economic growth in the United States is faster than countries in Western Europe and Japan and so on. And he says, let me make a small correction to that tongue in cheek. He says the problem with these calculations is they are done on an aggregate basis about the country as a whole, but the population of the United States has grown much faster than in those other countries. So that if you look not at the total output but the output per person, which is much the more important statistic in terms of how people are doing, then the United States hasn't recovered better than Europe or Japan at all. Let me read you the final sentence of his short column on the 18th, Mr. Kocher Lakota there's clearly more the US can do to get people back to work. The prime age employment data suggests that it has done about as well since 2007 as the euro area, a region that includes high unemployment economies such as Spain and Greece. That can't be described as a desirable outcome. Mr. Kocha Lakota recognizes that the only recovery that happened in the United States was to those at the top, the 1% who always take care of themselves. For the rest of us, not at all. And as if to drive the point home one step further, I wanted to read to you from a discussion that comes from the Institute for Policy studies in Washington, D.C. and it talks about another dimension of the difficulties and why recovery is not what we ought to be talking about. It looks at the difference between the experience of white Americans and both African Americans and Latino American citizens. Let me give you a couple of the statistics brought out by the Institute for Policy Studies. Over the past 30 years, the wealth of the Forbes 400, that's the Forbes magazine 400 richest Americans, has grown by an average of 736%, 10 times the rate of growth for the Latino population and 27 times the rate of growth for for the black population today. That's in the middle of 2016. The wealthiest hundred members of the Forbes list alone own about as much wealth as the entire African American population of the United States. Takes your breath away. In 2043, the Institute for Policy Studies calculates people of color will make up a majority of the US Population, but the wealth divide between whites and everybody else will be twice as much the gap as it is today. If nothing changes. The last few years since the crash of 2008 have been even harder, as is often the case on the poorest amongst us than on the rest of us. That's something we should never forget, and that worries anyone with compassion or even a sense of how societies hang together in hard times. The next update is a response to questions I keep getting about Social Security. Isn't the Social Security system some kind of handout, some kind of entitlement, as if somewhere somebody gave to people something they didn't deserve, didn't merit, didn't pay for? So let me remind everyone, most Social Security benefits are given to people who've spent a lifetime working. And during that lifetime of work, money was withheld from their paycheck every week and put into a fund by the government to accumulate over time so that they could be paid their Social Security benefits as a retirement sum. Most people have paid for this. The government isn't handing out anything. It is returning to people in their old age a portion of their income withheld throughout their lives. And how does the United States compare with with other countries in providing retirement benefits through Social Security? And the answer is not very well. The oecd, the Organization for Economic Cooperation and Development, is the best source of international comparisons. And it looks at 34 countries, mostly the advanced industrial countries of the world, and, and measures things like Social Security benefits for the average worker as a percentage of their earnings. In other words, how much do you get from Social Security as a percentage? How does it compare with what you're getting most of your life, particularly when you retire? Well, let's go in the Netherlands, the country that ranks number one, the Social Security you benefit for the average worker is 90% of their earnings. In France, it's over 60%. In Switzerland, it's 40%. And in the United States, it's 37%. The average for the 34 OECD countries is 53%. The United States is way below average at about 37, 38%. Wow. So we don't do well by our retirees. They work very hard for a lifetime. They put by a lot of money into this fund, but they don't get very much out. That's the truth. And here's another statistic that the center on Budget and Policy Priorities in Washington calculated this last week for the year 2014. The percentage of seniors in poverty. If there weren't Social Security, it would be 41.5% of seniors would be living in poverty. With Social Security it's 10%. The next time someone tells you it isn't important, keep that in mind. We've come to the end of the first half of this program. Please stay with me. We will be back right away with more updates and some analysis of urgent issues in the economy. Now.
- [28:57]
B
Now, you masters of war, You that build all other guns, you the builder that had claim, You that build the bigger bombs, you that hide behind wall, you that hide behind the desk. Just want you to know that I.
- [29:41]
A
See through your welcome back friends to the second half of Economic Update for this mid August warm time in the United States and in many other parts of the world as well. Before jumping into the huge number of updates this week has provided us and that I need to talk to you about, I wanted to remind you that there are ways to follow us, to partner with us, to get more out of the work that we do. And that is all available to you on our websites, rdwolff with two Fs com and democracyatwork.com that's all one word, democracyatwork.info. here's what these websites offer. First, a way to communicate with us. To tell us what you'd like us to cover, to raise questions, to express your disagreements. In other words, to partner with us in that way in designing future programs. Let us know what you think. We read and think about every single email you send us. Number two, by a click, you can follow us on Facebook, Twitter and Instagram. We do a lot of work on those social media platforms and you can have our work at your fingertips in that way. Number three, you can see very quickly where we are on the radio. We are now at 71 stations across the United States who broadcast us regularly. In addition, there are a variety of networks that broadcast us. Occasionally. We have people who work on getting more radio stations to use this program to partner with us. If you have any contacts at any such station that you can share with us, please know that we will follow up. We're hoping to get much more in the way of stations. We've been very fortunate so far. We want to continue that work. And finally, we also have action groups forming around the country, Democracy at work action groups. You can find them on our website. But again, if you're interested in becoming part of one, organizing one, use the websites, get in touch with us. We will follow up. That's a promise. I will be going both to the Bay Area in California both in October and again in February. I'm scheduled to go to Detroit, Michigan and that area in November, perhaps to the Tampa area in this autumn. So trips are being organized. If any of that is of interest to you or if you would like to have me come to the area where you are, you once again use the two websites, rdwolff with two Fs or democracyatwork.info to communicate and work with us. Beyond that, use everything on these websites. They're available 24 7, no charge whatsoever. Loads of material. Use it, share it. That's what it's for. Okay, next update. A federal jury has found US energy giant Pacific Gas and Electric Co. PG&E guilty on six criminal counts following the deadly explosion of one of its pipelines. But why am I telling you this? Is it because a private, profitable utility company has killed people and been found guilty of doing so? No. Horrible as that is, am I upset that they got a fine of $3 million for killing six people? No. That's horrible too. Putting such a paltry sum on a human life, but also putting such a paltry sum in the way of of a multi billion dollar corporation. 3 million in fines is not only not a pressure to avoid doing this sort of thing, it's almost a green light. Go ahead. It won't cost you much. But that's not why I'm bringing it up. I'm bringing it up for a different reason. You may not remember it, but Julia Roberts was in a very famous film, I believe it was she Erin Brockovich film that many of us saw some years ago about a courageous woman fighting Karen Silkwood I believe was her name, fighting PG&E, it turns out, around the toxic pollution of water and so forth and ground in a part of California. This is the same company. Now they paid a fine, if I remember, over $300 million for what happened there in that Erin Brockovich outrage that hurt so many people. And clearly it didn't do the job. Fining these companies fixes nothing. There has to be a completely different way. These companies are public disasters and they should be reined in by the public. They should be owned and operated by the public as cooperative enterprises in which the public that is served by them as well as the workers who make it all happen together run these enterprises. We got nowhere to go but up. Otherwise people like me will be reminding us of the histories like with Aaron Brockovich that we have to face by an out of control enterprise sector that really doesn't understand any limits anymore. Next, there is a website called the U Economy and I want to thank an alert listener who sent me in some information about it. There was a story in USA Today about it. The U Economy is what's associated sometimes with the sharing economy, sometimes with the gig economy, sometimes with companies like Uber, Airbnb, Lyft and so on. And the idea is that the future of work is this new technologically exciting frontier, and you ought to get with it all you working people, otherwise you'll be left behind as some sort of technologically outmoded dinosaur. And I was asked to comment on that. My comment is very brief. Some of you have heard me talk about this before. Sharing, gig, all of that. That's hype. That's public relations. That's being told that if you only use this kind of soap when you shower, your sex life will be improved on a scale you couldn't imagine. When you hear someone make a claim like that, most of you giggle, and rightly so. You understand this has got nothing to do with the truth. It's got nothing to do with any genuine quality of the item being hyped. This is an attempt to. To get you to think of something that will get you to part with your money a little more quickly than you might otherwise have done, and that they will get their hands on that money out of your wallet. Well, that's all gig and sharing and high tech. And all of that is in Europe. These companies cannot deal with the public the way they can here. There isn't the kind of subservience to advertising that we have become accultured to. There isn't the notion among corporations that they can quite get away with it. Not only that, and more important, there are powerful institutions, labor movements, critical political parties who regularly mock and make fun of these kinds of advertisements and make them look bad so that they turn the advertising against the advertiser, who therefore doesn't do it so quickly. So in Europe, this phenomena is called by a much more honest name. It's called the precariat. That's a substitute for the old word proletariat, a word used to describe working people and the use of the word, the new word precariat is to underscore the truth. Here companies can make more money if they don't have regular employees, people they have to register. They have to pay every week a fixed sum, often protected by a union associated with all kinds of benefits that have to be given to these workers. They don't want that. That's expensive. They want a cheaper worker. That's why they so often move to other parts of the world where wages are lower. That's why they often substitute machines automate for workers to lower their cost of labor. And they found another way alongside of outsourcing abroad, alongside of automation, the sharing economy, giving you odd hours, giving you a new title. You are a consultant, you are an advisor, you are a contract worker. Again, words to disguise the fact that your condition is no longer a secure job. Your condition is now an insecure job. You are part of the new precariat. And calling it fancy names doesn't put dinner on the table, doesn't pay your bills and doesn't change anything. Another update of the many this week the Bloomberg Business news service, which I use and I thank for that regularly, did an interesting calculation which they published on the 17th of August. Here's the the top 20 CEOs with even even bigger golden parachutes than Marissa Mayers. Let me explain. Marissa Mayer is the Chief Executive officer, the CEO of Yahoo and she has just spent the last year basically destroying Yahoo, that is selling it. It's a company that she tried to turn around, she couldn't do it and so she spent most of the last year basically carving it up and selling off bits and pieces here and there to whoever she could find to buy it. An executive like that nowadays in a big American corporation has something called a golden parachute. And here's what it simply means. If the company goes out of business, no matter what the reason, a special amount of money is paid to the CEO. There's the phrase golden parachute. You have to jump out of the plane because the company is dying, is going to crash or is over. But you get a very golden parachute to bring you back down to earth comfortably. How much is Marissa Mayer getting as she steps down from a company she failed to turn around and that she has been busy selling? That's right, she's selling a company. And when the sale is completed that she arranged, she will get a payment of get ready. $54.89 million. That's right. More than $1 per week for a year. 54 million. So interested was Bloomberg in this extraordinary arrangement of a CEO selling a company and then collecting the golden parachute because the company got sold that they looked at. Who else has golden parachutes waiting for them if and when they stop? And I thought I'd give you the names of the three, the four biggest, just so you could enjoy their good fortune with them. Steve Wynn. W, Y N N. He's the CEO of Wynn Resorts. They own and operate hotels and casinos around the United States and around the world. His golden parachute what will happen when his companies are sold? Dissolve. Ready $358 million. There's no comment I could make adequate to what I've just told you. Next. David Simon. Simon Property Group is the name of his corporation. They own and operate many, many malls across the United States, shopping malls. If that company goes under or gets sold, his golden parachute, $302 million. McKesson, a major pharmaceutical company. John Hammergren, he gets 198 million. And Discovery Communications, they operate the Discovery Channel, the Oprah Winfrey network. They have 3 billion subscribers in 220 countries for their TV programs. David Zaslav, if that company goes bust or gets sold, his golden parachute, 161 million. You may be having financial problems, but they're not. And none of those problems that you worry about in your future bother them at all. Let me bring you next a recent blog by Robert Reich. Robert Reich was a labor secretary in the Bill Clinton administration. More recently, he has been a professor out in the west coast and he was an advisor to Bernie Sanders during Bernie Sanders primary campaign for the presidency earlier this year. And he had in a recent blog, a warning, a warning to Hillary Clinton and to the people supporting Hillary Clinton. And his warning is that she's going to have a very hard time if she wins, coming into office with as much distrust, dislike and so on. Indeed, one line from his blog I'd like to read to you is quote, on election Day, many Americans will be choosing which candidate they loathe the least. But I didn't bring Mr. Reich's blog to your attention because he writes cleverly, I wanted to make his argument clear to people because I think it's a good one. Whatever Mrs. Clinton may or may not intend to do, and this applies to Mr. Trump equally, they will face enormous opposition. And the opposition comes mostly from the richest people in the United States and, and the biggest corporations who wield authority, whether it be the money they contribute, the lobbyists, they pay huge sums to be in Washington doing nothing else but shaping what the government does and doesn't do. And he gives a statistic to shore up his argument that I found arresting, I had not seen before and I wanted to share with you. So according to Robert Reich, here we go. In the 2012 presidential election, that's the last one before this one, the richest.01% of households. That's really the richest of the rich. That's not 1%. It's not 1/10 of 1%, it's the richest one. One hundredth of 1% gave to Democratic candidates more than four times what unions contributed to their campaigns. Let me say that the tiny richest people in America gave together four times more money to Democratic Party candidates than the total amount given by all unions. Who will control what these politicians do is obvious, and I think it bears understanding that to rely on this or that candidate from any party without some kind of social movement to confront the inequality of wealth and the power that it wields is pretending to yourself that something is happening when you can't stand facing what it actually is. Then There was on the 16th of August, a report, a remarkable report about a change of heart in the International Monetary Fund, the imf, one of the most important agencies around the world that's there to quote, unquote, help countries that get into difficulty find ways out. These are often countries in Asia, Africa, Latin America, but increasingly in other parts of the world as the global capitalist meltdown ramifies and continues, as we reported earlier today. But back in July, there was a report prepared by the IMF itself, a moment of exemplary and strange self criticism inside the imf, and it has now been released. The report's title, quote, neoliberalism oversold three leading IMF economists, Jonathan Ostry, Prakash Lugani and David Furseri. The three say that their look at what the IMF has been doing, what they call neoliberal policy, is a colossal failure. And this is very important. First, let me make sure we're all on the same page about what neoliberal policy is. Basically, what the IMF did for decades is tell every country, no matter what its problems were and no matter where they came from, that there was always pretty much the same solution, which right off should have made people much more suspicious than they dared to say they were. First, your country should open itself up to foreign capital. In other words, your problems are you haven't made it attractive enough for rich capitalists in Western Europe, North America and Japan to come into your country and do what they do to make money. Because that would really help you open yourself up, get rid of barriers to capital flows. That's the lingo of the imf. And the second major policy was you've got to reduce wasteful government spending. That's right, you got to stop spending as much money so your government's budget isn't out of whack, so you should spend less on schools and hospitals and roads and infrastructure and all of that. Get your budget Back in line. Sounds like we're talking to the United States Congress here, aren't we? Get your budget back in line and open yourself up to foreign capital. What did this report conclude? Well, the conclusion is it has been a disaster. Let me read to you the two big conclusions. The IMF program has not delivered increased economic growth. Neoliberal reforms have increased inequality, and the increased inequality caused by the neoliberal reforms have undermined the level and sustainability of economic growth. There you have it, folks. The exact replica of what we talked about a few minutes earlier in this program. Capitalism, through the imf, but also on its own, generates inequality. Inequality deprives the mass of people of the purchasing power to keep the system going. You can delay it for a while by artificially pumping up the purchasing power with debt, but that's a limit that can't go very long because you can't carry more and more debt on an underlying low wage, low salary, insecure job foundation. The very capitalism that creates those conditions, creates that inequality, thereby eventually undermines itself. And that's where we are, and we're there whether the IMF does it or not. The IMF has given this bad advice to country after country, and now, thankfully, at least a few people inside are able to say the economics equivalent of the emperor has no clothes. All right, in the time we have left, I want to talk about another outrage. Today is kind of full of them, if you think about it. This outrage has to do with a press conference given by the CEO of Apple, Mr. Tim Cook. He has been criticized, Apple has, as have other companies like Google and so on, for keeping huge amounts of money outside the United States, sitting in bank accounts out there, not investing it to create jobs, even though they like to call themselves job creators, but simply holding onto that money there for a very obvious reason, which Mr. Cook does not deny, the taxes that they have to pay on money earned in other countries. The country he mentions, which indeed is a popular place to do this, is Ireland. The rate of taxing corporations there is around 15%, whereas the official rate in the United States is 35%. He prefers to keep his billions, and they are many, many billion, hundreds of billions abroad, because he can pay 15% there. But if he brings that money back to the United States, he has to raise it to 35% that he'll have to pay. Okay? That's his choice, and he wants to be free to do it. And. And he doesn't like being spoken of as, get ready, you'll love this. Unpatriotic can you imagine people have said it's unpatriotic to his fellow American citizens to keep that money in Ireland where it's useful to the Irish economy, rather than in the United States, which is where the Apple Corporation was born, where it grew up, where it achieved its global prominence. You get the picture. They Americans think he ought to pay back America for all that it has given him. But he doesn't think so. No, he's not going to be patriotic. It's not about money. He suddenly got this wonderful insight. Well, besides the outrage of it, I want you to be aware of something called transfer pricing with invoices because many corporations use it. You have to know the innards inside of a corporation to be sure. I do not know the inside of Apple. Nobody does other than them. But let me guess that they wouldn't not use this because so many other companies do. Here's how it works. Imagine an Apple product made here in the United States cost hundred dollars. And if they sold it in the United States for $200, they'd make a $200 profit here in the United States and they'd have to pay tax on it. But what they do is something different. They set up a subsidiary in Dublin, Ireland and the American company sells the product to the subsidiary in Ireland, the hundred dollar product for $100. Therefore, the American branch of Apple was records no profit at all, cost 100 to make it, they sold it for 100. The subsidiary in Ireland sells it who knows where in Asia, in Africa and Europe, even sells it back to the United States for 200. And that's then recorded as the profit in Ireland for the Apple subsidiary in Ireland. By arranging for the profit to show up in Ireland, it is only subject to the Irish 15% tax. You get the picture? So it's not just money that isn't brought back. The whole point of much of what's going on around the world is tax avoidance. A serious American presidential campaign would have said this is outrageous. We will stop it. Neither Mr. Trump nor Mrs. Clinton has done anything of the sort of. But for Mr. Cook to publicly say that he's patriotic when he is for sure not bringing that money home just to save taxes, even though he owes everything to the society here that enabled that company to grow and to do God knows what in the way of transfer invoice pricing takes your breath away for sheer arrogance. Thank you so much. Please remember to make use of our websites rdwolf.com and democracyatwork.info in all the ways that those websites make available to you. Work with us, partner with us. And I look forward to talking with you again next week. Sam. Sa.