Economic Update: Trumponomics Exposed

Podcast: Economic Update with Richard D. Wolff
Host: Richard D. Wolff (Democracy at Work)
Date: January 27, 2017

Overview

In this episode, economist Richard D. Wolff critically dissects the early economic policies and rhetoric of then-newly inaugurated President Donald Trump, often referred to as "Trumponomics." Wolff exposes the systemic issues in the U.S. economy that are masked by political theatrics and scapegoating, highlights the deepening social and economic inequalities, and responds to listener questions about capitalism, jobs, and political economy. The episode is both an analysis of current events in January 2017 and a deeper dive into the systemic roots of economic injustice.

Key Discussion Points and Insights

1. Two-Tier America & Airline “Basic Economy” Fares

[02:10 - 07:30]

• Context: American Airlines introduces “basic economy” fares, joining Delta and United in providing stripped-down ticket options for lower prices.
• Wolff's Analysis:
  • This is not a genuine service to consumers, but a reflection of the U.S. devolving into a two-class society with one well-paid minority and a majority “being pinched.”
  • Businesses, facing a customer base with less money, adjust by offering inferior products to the less affluent for profitability.

Notable Quote:

“The important news here is that the United States is becoming a two tier society, really fundamentally. One class of well paid people, 5 or 10%, no more than that, and everybody else being pinched.”
— Richard D. Wolff [05:35]

2. Trump, Theresa May, and Delusional Leadership

[07:45 - 10:45]

• Topic: The first official meeting between President Trump and UK Prime Minister Theresa May.
• Critique:
  • Both countries are facing internal economic turmoil; yet, their leaders issue grandiose statements about "leading the world."
  • Wolff sees this as political misdirection and delusion in the face of real crises.

Notable Quote:

“This is a wonderful example of politicians not only out of touch, but so far out of touch that they're downright delusional. And I guess they believe that by saying such junk we're all going to be taken in …”
— Richard D. Wolff [09:42]

3. Trump’s Inaugural Rhetoric: Scapegoating, Not Solutions

[10:50 - 14:40]

• Topic: Trump's “American carnage” speech and his tendency to blame foreigners and a political "clique."
• Key Point:
  • Wolff explains how blaming “foreigners” or a small group in Washington (“scapegoating”) is a diversion from addressing structural problems inherent to capitalism.

Notable Quote:

“This notion that a few politicians are the problem or that foreigners are the problem, that's called scapegoating. That's called running away from the problem of your own system…”
— Richard D. Wolff [12:50]

4. Decline of U.S. Labor Union Membership

[14:41 - 17:22]

• Data Highlight: Labor union membership drops from 11.1% in 2015 to 10.7% in 2016.
• Analysis:
  • This decline indicates a crisis in the ability of working people to organize for their own interests, contributing to worsening conditions for workers.

Notable Quote:

“One of the reasons American workers have done badly over the last 40 years in ways now everyone acknowledges ... is the decline, the weakness of the American labor movement.”
— Richard D. Wolff [16:58]

5. Trump’s Anti-Mexico Policies: Illogic and Consequences

[17:24 - 25:30]

• Policies Discussed: Proposals for tariffs, the border wall, and threats to NAFTA.
• Critique:
  • Moving car production to the U.S. will not bring back jobs; higher labor costs will push companies to automate more, further reducing employment.
  • U.S. carmakers would become less globally competitive, losing out to those still leveraging low wages elsewhere.
  • Damaging Mexico’s economy and blocking migration risks creating instability and expanding illegal economies (e.g., drug trade).

Notable Quote:

“Whatever jobs they might have created here will not in fact be created because of robots. And here comes the best. The world market in robots is dominated—get ready—by Chinese and Japanese producers.”
— Richard D. Wolff [22:20]

6. From Globalization to “America First”: Same System, Different Losers

[25:30 - 27:10]

• Key Point:
  • Whether the U.S. pursues global integration or “America First,” capitalism’s underlying structures remain: gains for the capitalists, losses and instability for workers.
• Trump’s Cabinet:
  • Wolff notes it is composed of billionaires known for anti-worker policies.

Notable Quote:

“These are struggles that working people do not belong in. Worrying about our problem is a system that tends to screw the mass of workers no matter what the governing government's policy is.”
— Richard D. Wolff [26:40]

7. Higher Education: Class Stratification in Universities

[27:11 - 28:57]

• Study Cited: The Equality of Opportunity Project (Saez & Piketty).
• Findings:
  • Elite colleges (e.g., Harvard): Over 70% of students come from the top 20% of families; only 3% from the bottom 20%.
  • Funding cuts at public (working-class) colleges exacerbate the gap.

Notable Quote:

“Bottom line, American higher education privately is for the rich and publicly...for everybody else, less and less.”
— Richard D. Wolff [28:45]

8. What Is Capitalism? A Clarification

[30:08 - 41:28]

• Definitions Dissected:
  • Wolff explains that private property and markets existed in slave and feudal systems, as well as the Soviet Union—not unique to capitalism.
  • For Wolff, the essential feature of capitalism is the employer–employee relationship: a small group owns/controls production, the majority sell their labor.
• Continuities:
  • Capitalism maintains the master–slave/lord–serf dynamic through “employer–employee,” perpetuating inequality and setting the stage for systemic revolt.

Notable Quote:

“What is distinctive about capitalism is ... the relationship of employer to employee. ... What capitalism is is a relationship of employer to employee. ... A very small group of people, masters, lords, employers, are dominant, have the control and amass the wealth relative to the vast mass of people ... that capitalism has in common with slavery and feudalism.”
— Richard D. Wolff [40:36]

9. The Jobs Question: Direct Public Provision vs. Corporate “Trickle Down”

[41:29 - 49:00]

• Politicians' Justifications:
  • Wolff critiques both Trump and Obama’s use of “job creation” to justify projects benefitting large corporations (“trickle down”).
  • Historical alternative: FDR’s New Deal directly hired the unemployed to rebuild U.S. infrastructure.
• Proposals:
  • Instead of pandering to corporate profits, the government should identify social needs (infrastructure, climate projects, community work) and directly employ people.
  • Trade war threats—such as with Mexico—risk jobs and have unintended consequences.

Notable Quote:

“If you want to produce jobs, if you're genuinely interested in jobs, there's a quick, easy, direct way to do that. And every politician knows it, but they want you not to think about it.”
— Richard D. Wolff [44:23]

10. Capitalists Cheer Trumponomics (Davos Reactions)

[49:01 - 52:09]

• Evidence from Davos:
  • Top CEOs (JP Morgan Asset Management, Goldman Sachs) express excitement about Trump’s policies, touting their pro-business, pro-market “stimulus.”
  • Wolff calls this a confirmation that the principal beneficiaries of “Trumponomics” are capitalists, not workers.

Notable Quotes:

“It's going to be a great several years. It's going to be very positive for businesses in the US which should cascade to businesses around the world.”
— Mary Callahan Erdoes, CEO, JP Morgan Asset Management [50:20]

“If you look at the policies that Trump has committed himself to, they are quite stimulative and quite market supportive ... far more stimulative than what people were expecting had the Democrats won the election.”
— Lloyd Blankfein, CEO, Goldman Sachs [51:16]

Memorable Moments & Insights

• On the American labor movement’s decline:
  "Major institution that fought for their interests … have been shrinking uninterruptedly for half a century. This is a situation that ought to make all of those who work in labor unions who support labor unions, turn inward."
  — Richard D. Wolff [15:58]

• Regarding Trump's anti-Mexico strategy:
  "...The TV or Made for TV Spectacular ... of doing something to the Mexicans is supposed to make us believe that all of this will work out for working people? It hasn't. There aren't any working people involved in any of this."
  — Richard D. Wolff [23:30]

• On the core of economic inequality:
  “Sooner or later, when things go bad, the mass of people figure out that they’re locked into a system where they get the short end of the stick ... rather than begging … what they ought to do maybe, is change the very system.”
  — Richard D. Wolff [40:50]

Episode Timeline

| Timestamp | Segment/Theme | |------------|---------------| | 00:00 - 02:10 | Introduction, thank you to listeners | | 02:10 - 07:30 | Airline basic economy fares and U.S. class divide | | 07:45 - 10:45 | Trump–May summit & “lead the world” rhetoric | | 10:50 - 14:40 | Trump's scapegoating of foreigners/politicians | | 14:41 - 17:22 | Falling U.S. labor union membership | | 17:24 - 25:30 | Trump's Mexico, tariff and manufacturing policies | | 25:30 - 27:10 | Globalization vs. America First—workers lose either way | | 27:11 - 28:57 | Class stratification in U.S. higher education | | 30:08 - 41:28 | What is capitalism? Historical & conceptual critique | | 41:29 - 49:00 | The “jobs” argument and public sector alternatives | | 49:01 - 52:09 | Davos reactions: Capitalist jubilation over Trump policies |

Conclusion

Richard D. Wolff's episode "Trumponomics Exposed" serves as a pointed, systemic critique of early Trump-era economic policies and the broader tradition of neoliberal, profit-driven approaches in American government. With historical context, data, and clear-eyed analysis, Wolff underscores the need to look beyond scapegoating and rhetorical distractions, urging listeners to address the root structures of economic power and consider bold alternatives grounded in genuine public good, democratic control, and economic justice.