Transcript
Richard Wolff (0:00)
Sam. Saint gonna change. Welcome friends, to edition of Economic Update, a weekly program devoted to the jobs, the incomes, the debts, the economic futures of our children, all those sorts of issues. I'm your host, Richard Wolff. I've been a professor of economics all my adult life and currently I teach at the New School University in New York City. This program is something that basically emerges from a project. The project is called Democracy at Work, and I want to begin today's program by urging you to take a look at the websites we maintain about this project. There you will find a complete archive of all these radio shows and a great deal of other material. You can sign up for a free newsletter. You can follow us by clicking on an icon both on Facebook and Twitter. See the events where I'm speaking around the country. It's really a repository of information for you, available 247 and without any charge whatsoever. Actually, we maintain two websites that do this. The first one is democracyatwork.info. that's all one word, democracyatwork.info and the second website is rdwolf with two Fs. Rdwolf.com Please make use of these websites. That's why we maintain them. Let me jump right in. We're going to have an interesting interview in the second half of this program with Professor Kathy Mulder, whom I will introduce a little later. But we're going to spend the first half, as we often do, on a series of recent events since last week that I believe merit your attention and your thought. I begin with the sad, the tragic travails of the island of Puerto Rico and the three and a half million people who live there and who have reached the end of a kind of economic disaster road that they should never have embarked upon, that was pushed on them in large part by the United States government and, and by the profit driven decisions of corporations to make use of tax advantages in Puerto Rico and low wages in Puerto Rico. Anyway, having done what most state governments around the United States have done, namely organize their economies to benefit corporations and borrow the public's money to do it, they ran out of options. In a way, the state of Illinois is the domestic mainland equivalent of what has happened in Puerto Rico. But Puerto Rico is a separate place, has a unique history in American society and in American history. So when it reached the end of the line, as announced by its governor this last summer, when it could no longer contemplate paying off the 72 to 75 billion dollars worth of, of accumulated debts and still provide basic services to the 3.5 million folks who live there and who already get lower incomes than anywhere else in the United States and suffer accordingly. They turned to the United States Congress, which they had to do to try to get some help, to try to get some relief. And the Congress has been wrestling with this question, but not in a successful way, and even more important, in a way that teaches us about what the priorities are of the United States government, what its dependence and subservience to big corporations makes them do in a way that few other things do. So that's what I want to bring to your attention. I'm reading now from the summary of the new bill proposed particularly by the Republican Party. But please note that the language indicates the basic agreement of both the Republican and the Democratic parties on what needs to be done in relationship to Puerto Rico's crisis. I'm now quoting from the summary offered by that bill. It's a summary of what's in the bill, quote, consistent with the views of Congress and the administration. By the way, they mean the Obama administration, consistent with the views of Congress and the administration that there will be no bailout of Puerto Rico and the full faith and credit of the United States is not pledged for the payment of debt obligations issued by Puerto Rico. Why did I read that to you? Because what they're saying, the Republicans and the Democrats, is they will not in principle consider a bailout of Puerto Rico. These are the same political parties and basically the same members of the House and the senate, who in 2009 agreed with virtually no discussion on a massive bailout of the biggest banks in the United States, of the aig, the largest insurance company in the world, and of General Motors, one of the largest automobile companies in the world. There was no problem in bailing them out, these huge private corporations. There was no hesitancy. And the full faith and credit of the United States was pledged on like there was no tomorrow. Without any hesitation. What was done for the biggest banks, the big insurance company, the big automobile company and others suddenly, as a matter of principle cannot be done for three and a half poor people in Puerto Rico, let alone the many millions of Americans trapped in, in states and cities that have done the same kind of economic development that Puerto Rico did. It's a sign of who gets the benefits. And let's make no mistake. The bailout of the big banks of aig, of General Motors was done with the money provided by the public in the United States, the very public who in principle will not be bailed out by the elected officials who bailed out Those large corporations. I can't think of a comment that I could come up with that is starker than that reality. Next update Inequality. The Institute for Policy Studies in Washington, whom you can follow on the Internet by looking@ips.org came out with a report recently on wealth in the United States. And while the results are not new and different from what we have heard before, they are nicely collected, stark. And I wanted to go over them with you as a prelude to talking with you about about the state of Wisconsin where two of the wealthiest Americans live and make their money in a way that once again reveals more about American capitalism than all the words I could string together to tell the story. Well, let's first see where does IPS get its numbers from? Well, it relies on Forbes magazine. Forbes magazine, a business magazine in this country for many years, keeps track of what it calls the Forbes 400, the 400 richest Americans by personal wealth. And they keep track of how the wealth of these 400 people compares to the wealth of the other 330 million million people who make up the population roughly of the United States today. Here's what they the 20 wealthiest people, the 20 individuals whose personal property makes them the richest 20 in America together own more wealth ready than the bottom half of the United States. That's right, the 20 wealthiest people have in together to total among them more wealth than 160 or more million Americans. You have to go back to ancient Egypt, to the pharaohs, when you have millions of people barely surviving slaves and so on, and a handful of people who build pyramids to themselves to get something like this. The fruit of 200 years of capitalism may be progress technologically, but it is the reverse of progress in terms of equality. Economically speaking, this is a system, modern capitalism, that can boast of taking us back to the ancient inequalities which we thought as a people, as a species, we had left behind. Now, the two examples. One is John Maynard, because it's important to put name and address on these wealthiest people who sit in this bizarre circumstance. John Menard, M E N A R D He is the richest person in the state of Wisconsin. His wealth, according to Forbes, $9.2 billion. If he invests that at 5%. And by the way, people this wealthy give their money usually to a hedge fund which delivers much better than 5% rate of return. But let's assume, to be modest, that he only gets 5% on his 9.2 billion. That works out ready. That works out to $460 million a year. He doesn't have to work for that. That's what he gets from the investments he makes. That works out to better. Well, better than $1 million a day, every day, seven days a week, whether he works that day or not. That's why John Maynard probably doesn't play the lottery. Why buy a ticket to get a million dollars when you're going to get it every day anyway? Wow. What have we produced? Well, it's more interesting because Mr. Maynard got in the papers recently when his company, which is a hardware and homewares chain of stores in Wisconsin and the upper Midwest, when it got into trouble because it had required all of its managers to sign an agreement. Here's what the agreement. If a manager's department was unionized by any union at any time for any reason, the manager's salary would be immediately reduced by 60%. Every manager hired by Menards had to sign as part of his or her personal employment agreement that Appendix J in their agreement. That gives an incentive to a manager to do all kinds of things to prevent something happening that the workers might want, that the workers might vote for, but that would cut his or her salary by 60%. That's how Mr. Maynard became wealthy, by preventing unions, by putting unspeakable pressure on managers to do everything imaginable. Wow. The wealth of the few at the expense of the union, the union rights, the job situations of everybody else. The second wealthiest man in Wisconsin, Herbert Kohler, K O H L E R Kohler, you might know, is the producer of toilets, among other bathroom fixtures. The toilet man has $7.4 billion. You may think going to the toilet is a nothing experience, but not for Mr. Kohler. He's become a billionaire by your doing. Well, I won't go there. Mr. Kohler is also in the news because of the activities of his company. On November 15th of this year, 2,300 United Auto Workers went out on strike at the Kohler factories in Wisconsin. Why? Because in 2010 they signed an agreement, because of the dire economic conditions of 2010, to help out the Kohler company by accepting a five year wage freeze. That means the workers of Kohler have not gotten any increase in their pay since 2009 and they wanted to catch up, at least to a significant degree, which with their new contract now. No, said Kohler, we're not going to do that. I could go into more, but the story is the same. The wealth of Mr. Kohler is predicated on squeezing and undermining the wealth of all the other people who make the Kohler industry what it is if that strikes you as unfair. Right on. You're getting it. That's the way capitalism works. And behind the glitzy numbers of the Forbes 400, these are the realities that should not ever escape your understanding of how that wealth is possible. My next story is about a bill that had been introduced into the Senate and a companion bill was introduced into the House of Representatives this very last week. And I want to alert you to it. And my thanks go to the alliance for Retired Americans in Washington, D.C. which sent out this alert. On the Senate side, this bill was introduced. And for those of you that are interested, it's bill number S to 2251 was introduced by Senator Elizabeth Warren, Democrat of Massachusetts, and on the House of Representatives side last Wednesday. The bill There is called HR4144, introduced by Representative Tammy Duckworth, Democrat of Illinois. And here's what their bills propose. That Social Security recipients and Veterans get a 3.9% increase in their money that they get from the government in 2016. That it go up in 2016 by 3.9% more than they got in 2015. Why is this an interesting bill? Because a few weeks ago Social Security announced that by virtue of its calculations of what people need, there would be absolutely no increase in 2016 for Social Security recipients, even though the cost of many of the things that Social Security recipients rely on has gone up. This horrified Senator Warren and Congresswoman Duckworth. They did a little calculation which I want to report to you because it was creative on their part. They looked at the growth in income of the 350 top CEOs in the United States, the chief executive officers of the 350 largest American corporations. These are already people who get between 250 and 350 times what a typical Social Security recipient gets. So they are already much, much, much, much, much. Let me add one more much richer than Social Security representatives. And guess what? They found that the average increase between 2015 and what they're scheduled to get in 2016 of the 350 richest CEOs is, you guessed it, 3.9%. They concluded that if you freeze the income growth over the next year for Social Security representatives, recipients, excuse me, but you raise the already super rich incomes of the top 350 executives, you make the gap between rich and poor bigger, don't you? Well, the answer is yes, unless arithmetic has changed. So they had the modest proposal. If we're going to let the richest people get a 3.9% increase, on what conceivable basis would you deny that to the Social Security recipients who need it and the veterans who need it. So they've proposed to increase Social Security outlays and veterans outlays by the same 3.9%. Good for them. But as they themselves said to the press when asked about it, given who controls the Congress on both houses, do not hold your breath for the prospects of these two bills. Let me turn now to a question. It's actually the amalgam of a set of questions that you have all been sending to me through our websites, which by the way, is another way to to make use of our two websites, rdwolff, with two Fs.com and democracyatwork.info both of them provide you an easy way to communicate to us what you like and don't like about the program. Questions you'd like me to address, responses to whatever you see on our websites and also invitations for me to come speak in your area, local radio stations you can connect us to who might want to carry this program and so on. This question has to do with the gun controversy that keeps jumping into our consciousness because we live in the United States of America, where there are more gun violent assaults on people than in any other country on the face of this planet. And nobody's even close. What is it about the gun proliferation in the United States? Why is it that after the last both of the last explosive events, those in Colorado Springs, Colorado, and that one in San Bernardino, California, the sale of weapons and guns in large stores in America surged? What is going on? Well, I think there's an answer to that question I'd like to offer for your consideration and indeed to give you an example a few years ago, that's very similar to the answer I'm going to give in regard to guns. Guns in the United States, as you all know, are commodities. They are produced by corporations whose purpose is to make a profit off producing bullets, guns, and everything having to do with cleaning, maintaining, repairing, etc. The weapons, like all capitalist corporations, the gun producers, the weapon producers, the ammunition producers, are eager to find ways, through advertising, to get the people of the United States, and indeed in other countries too, to buy as many of the goods they sell as possible. Because that's how they maximize their profits, as all advertisers do. The advertisers working for the gun producers try to find ways to get people, wherever they are in their consciousness, in their ways of thinking, to imagine that they will be better off by buying whatever the client is who buys the advertising. How do you get people to buy guns, lots of them, to keep them in a closet or hanging on the back of their truck or wherever they store them. The answer is try to find a way to make them think that buying a gun is important, urgent, advantageous, a way to be safe, a way to be free. And they found it. They found it. They translate all of the problems and dangers of the United States, and they are many, into something you can try to persuade people they can protect themselves against by having guns in the closet. They latch onto the fear of people living in America. But because of the conditions here and the way people respond to them by accumulating weapons, that's a clever ploy. You know what that's like? That's like the manufacturers of soap bars of soap giving you an advertisement in which a 3/4 naked young lady standing in the shower, of course, because it's America behind frosted glass. So you don't see too clearly what it is that's being shown to you. And the words in the advertisement suggest if you buy the soap and use it properly, your sex life will improve dramatically and overnight. Well, we giggle when we see those advertisements because we mostly know what they're about. They're not about your sex life and they're not about your soap. They're really about trying to get you to buy and use something being produced by a profit making capitalist corporation which paid for the advertisement. And so it is with how we in the media and so on handle gun violence. It is carefully worked out to be a mechanism for getting you to buy more guns. Eight years ago, in fact, for the last 20 years, as Americans wages stopped going up. The banking industry did a version of this too. It said, you know, you want the American dream here, we'll lend you money because it's the only way you're going to get that dream. Your wages aren't going up anymore. And they used the anxiety of Americans who had promised the American dream to themselves, to their children as a way to sucker them into credit cards and student loans and car loans and mortgage loans and home equity loans. All of it the abuse of our psychology by advertisers to make profit for their clients. That's what's behind a lot of suffering and it certainly is behind the accumulation of guns. We've come to the end of the first half of this program. Not only do I want to thank you for staying with us and listening to us and hopefully through the websites, making use of what we do here, but we also want you to share what we do here. Take a portion of this program or all of this program there archived on our websites and share it with other people who might be interested in it. Builds the listenership and it makes you a partner with us of getting the message out. Finally, I want to ask you stay with us. We're going to have a very short interruption and then we're going to continue with what I think you will find a remarkable and exciting interview with the author of a new book you might want to take a look at as well. Stay with us. We'll be right back.