A (0:10)

Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives. Jobs, debts, our own, those of our children. I'm your host, Richard Wolff. I've been a professor of economics all my adult life. And it's always been my hope that that work will allow me to offer you some insights into the economic system all around us and upon which we depend. I want to start by offering you a theme that sometimes when politicians pose for their economic base to get their supporters revved up, they undertake things that have very dangerous long term economic and social costs. And while that's often true, it's never been truer than it is right now. And so I want to talk about that in terms of things that are happening right now. I want to start with the systematic effort of the Trump administration to demonize China. Whether it's the President or Vice President Pence or Secretary of State Pompeo or any of the others, there's a systematic effort to suggest that, that the Chinese are endangering us, are stealing our intellectual property, forcing technology transfers and all the rest of it. And Mr. Trump's administration seems to want to position itself as a righteous combatant, you might say, making the world stop cheating the United States with China as cheater number one. This is largely wordplay. Everyone expects that in all likelihood, after a number of months of this kind of posing, this kind of bullying, some deal will be struck between China and the United States, which Mr. Trump will claim as an enormous victory, even though it changes very little. And the reason to believe that is we just did that with the NAFTA business. We had lots of sturm and Drang, the Germans used to call it, between the United States, Mexico and Canada. And the end result, if you read the new arrangement, which I've done, is that the changes are quite marginal. And yet the posturing that we are now not letting ourselves be ripped off. This image of the United States as some sort of victim seems to play well with his audience. But I want you to understand that it is mostly a play and it does not much substance there, but there is substance in where this might go. That's again, the costs of political posing. And let's take a look at them. The trade war, the tariff war, mostly between the United States and China, is beginning to make a difference. It is hurting the economy of China. It is also hurting the economy of the United States. The farmers are being bailed out by the Trump administration because of the hurt they suffer from being unable to sell soybeans in China. But many other costs are not being helped by the government are being borne. The Ford Motor Company is a financial basket case right now because of some of the impacts and so forth and so on. The important point here comes out of our history. In the Great Depression, when countries could not work their way out, they began beating each other up this way with tariffs, with other kinds of maneuvers. And it was thought really seriously that part of what led to World War II was the failure of the world of capitalism to cope with the crash of 1929 in a collective way to try to take it out on each other with tit for tat trade wars being a major player. And that that led then to a military war, as trade wars have in the past. And one of the reasons the United nations was set up in 1945 after the horror of World War II was to facilitate a getting together to work things out because of the danger of tit for tat trade wars. The United States launched the tit for tat trade war because most of the other things it tried to do left most Americans still unrecovered from the collapse of 2008. It's a dangerous unlearning of history to do this again to very mock, in very stark terms the United nations and the whole effort to work things out, to portray the last years since the Second World War as a time of American victimization, besides being incorrect economically, is also a way of undoing the whole rationale for collectively trying to solve our problems so we don't go to war with one another. Then too, there's another dimension. The Chinese are saying, and with much justice, that the United States seems to want to put a stop to their stunning economic growth. Let me drive that home to all of you over the last 25 years, the United nations keeps a list every year of how fast each economic unit in the world, every country, is growing. And over the last 25 years, the one country that sits as number one over and over and over again almost every year is the People's Republic of China. In a bad year, their economic system grows 6 to 7%. At no time in the last 25 years has the United States economy grown at that rate. That's usually two to three times the way we grow. And so they've become a global economic colossus. It looks to them and to much of the world that the United States is trying to stop that, to prevent the growth of this economy. And that too is very dangerous for several reasons. One, most of the world is like China, not like the United States. And what we're doing to the Chinese is if we're indeed trying to prevent them from growing and becoming wealthy too, like us, will appear to most of the world to be very suspect behavior. But then there's also a self serving reason to prevent the growth of poor parts of the world so they can become wealthy is to guarantee that people in those parts of the world will be looking to come here. Migration is a result of unequal economic development. Capitalism has always produced uneven, unequal economic development. Wealth in some parts of the world, poverty in others, in some parts of the country, poverty in others. And people move when you do that for the obvious reason. So if for nothing else, you ought not to go in that direction for that reason. And then finally the notion that the United States has been a victim over the last 30 to 40 years, that's silly. The world's currency is the US dollar. The benefits to the United States from the fact that most deals between countries are settled in dollars is enormous. The Chinese have nothing like that. Nobody settles their deals in the Chinese yuan and nor is that likely to happen anytime soon. The United States military dominates the world. That gets all kinds of benefits that other countries cannot do. The United States has bases in 100 or 150 countries. The Chinese have bases in none. There's no comparable. The benefits from all of that economically are huge. And the United States favors its own companies. When Trump cut the taxes on corporations from 35% to 21% that helped American corporations, gave them a lot more money to compete with countries on others around the world. This is a favoritism to American companies. Sure, the Chinese do it. Everybody favors their own country's corporations. The United States is not the victim. It plays that game just like everybody else. We ought to stop. The playing is dangerous. The next example is very brief and very simple. It simply builds on what I said. You don't solve the problem of migration of massive numbers of poor people running away from poverty and from the violence that usually accompanies poverty by means of walls and police and armies and persecution that never stopped it before. It's not likely to do it now. You want to get at the root of the problem of migration. It's that uneven development. If one part of the world is very rich and the other part is very poor, it dawns on people in the poor part to move. It's difficult. You tear yourself away from your community, your church, your neighborhood. But you do it because you want a chance. You're not going to stop that with police. You're going to make it ugly, you're going to make it violent, but you're not solving the problem. And I won't even bring up just exactly how Christian it is to punish the poor for wanting not to be poor, to just like you and me. Okay, my next update is a kind of a shout out to a remarkable essay that appeared in the New York Times on September 21st of 2018 by a law professor named Michelle Alexander. She's getting to be quite famous around the world and around the United States for the work that she has done calling the American prison system these days a kind of new Jim Crow system. That's her most famous work. But in this article, she makes a point I also want to underscore here. She says she doesn't like the term resistance, which is being used by all kinds of social groups in response to the Trump administration. She says we're not the resistance to history that Trump wants to play us as, and that we kind of say he's the resistance, we're not. What's happening in America is the growth of a multiracial, multi ethnic, open ended, changed society. And what Trump represents is the effort to resist that forward motion. He's the resistance. We're not. I thought this was a marvelous way of condensing a vast mass of interesting information into a central concept, which is what good intellectuals should always do for us. And I just wanted to thank her for doing it and to share it a little bit with you. The last topic is one that we return to fairly often on this program, but I cannot resist. I saw a statistic recently carried, of course, not by an American news agency, but by a British one, Reuters, about the amount of spending in this midterm election that's coming up in early November. It turns out that political spending on television spots is up 19% from 2014, the last midterm election, and it's now at the rate this year of ready 2.9 billion, with a B billion dollars. That's closer to levels we used to associate with with presidential elections, which cost the most money for obvious reasons. So now we are spending 3 billion. Well, economically speaking, why would people spend $3 billion? Well, most of that money comes from wealthy people and large businesses. And for them it's an investment. It pays to spend billions because the rate of return on those billions, if you get your friendly politician into office, must be very high. To risk all of that. You must get a really good return, which they do. The old phrase that democracy in America is the best system that Money can buy has never been truer than it is now. It would be naive to expect a government to be neutral that is so heavily dependent on. On cash inflows. It is going to go where the money comes from, unless an awful lot of people, such as the person we're going to be interviewing a little bit later, get involved in politics and push it in another direction. But I want to say something as an economist about it. Besides the obvious corruption of our political system by money, I want to talk about how to deal with it. We seem to think most of the time in this country as though another rule, another regulation, another law that limits or forces the exposure of who's giving money to whom and where it comes from. That's not going to solve this problem. The problem is we have such inequality in America, such a dominance of rich corporations and rich individuals relative to the rest of us, that all of those rich corporations and individuals understand that in a society that has real democracy, where everybody votes or has a vote, we could use our dominance at the voting place, our majorities, to undo the inequality of economics. A capitalist system produces inequality. A democratic political system undoes it. That fear is why they have to control politics. So they will continue to find ways of funding politicians legal, illegal. The solution is not another law they'll get around. The solution is to do something about the inequality that lies at the base of this problem. Stay with me. We have a remarkable interview to follow. I will introduce them to you when we come right back. Welcome back, friends, to the second half of today's economic update. Before I introduce our remarkable guest for the interview today, I wanted to remind you please to remember that if you sign up for and subscribe to our YouTube channel, it's costless to you and it is enormously helpful to us. So I would ask you to do it. I would also ask you please to follow us on Facebook, Twitter, Instagram, to make use of our website, democracyatwork.info where you can learn about other things we do and also about how you can partner with us in making what we do on this program available to the largest possible number of people. And finally, I want to specially thank our Patreon community, whose support and interest sustains us in multiple ways. And we want you to know how appreciative we are. My guest today is Lee Carter. You may already have heard of him. If not, you will soon. He won an election recently to the Virginia House of Delegates. He's the representative for the 50th district, which includes the city of Manassas and western Prince William County. He was inspired to run after an industrial accident, and he wasn't treated properly by the authorities that are supposed to help folks in that situation. It got him going and thinking, and he ended up running for office and defeating a longtime Republican incumbent. And what was remarkable and why he's here today, is that he included in his campaign a position critical of capitalism as an economic system. He's a socialist. And despite the efforts of his Republican opponent to call him every name in the book that has been learned so well over 50 years of this sort of thing, he not only won, but he won by 9 percentage points. No mean achievement. And that's why he's here, and we're gonna talk about it. Welcome.