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Sam. Saint gonna change. Welcome friends to welcome to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives, our jobs, our incomes, our debts, how the government is interacting with labor on the one hand and capital on the other, shaping the future, shaping the present, and giving us the network of problems that occupy so much of this program's time. 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. I have a few announcements at the beginning of today's program and so I would like to ask your indulgence to briefly go through them. First of all, a reminder. On the second Wednesday of every month we have a monthly economic update. It's a chance to do what we do on this program, but to take more time to elaborate what we have to say to to not be so constrained in covering so much material in a relatively short amount of time. And I want you all to know that you are invited not only if you live in the greater New York area where it's easy to get to this place that I'm about to describe, but also for those of you that might be visiting New York City on such an occasion, please join us. The monthly event takes place on the second Wednesday of most of the months of the year. So that for example, the next one will be on Wednesday, May 11, 2016. They always start at 7:30 in the evening and they always take place in the church on historic Washington Square in Lower Manhattan. The name of the church is the Judson Memorial Church. It's very old, it's very historic, it's been part of pretty much everything if note that has taken place in New York City of over the last long, long time. So we are very proud to be part of what this church presents to the greater New York community and to anyone visiting New York who is welcome. So once again a monthly event, a monthly economic update. It's a chance for me to meet you and vice versa. 7:30, May 11, 2016, Judson Memorial Church on Washington Square. And that will be a time for us to meet one another. I also want to let you know that I need to make a correction. One of you was very kind and let me know that last week I made a mistake. I referred to the emissions from vehicles, the exhaust mainly from cars and trucks, as the major problem of greenhouse gases. I was corrected and correctly corrected by being told that it is actually livestock, cows, goats, sheep and so on, whose, let's be polite, gas emissions in the form of methane gas are an even more problem kind of phenomena, if you can say that for the greenhouse gas problem and therefore for global warming. So I do stand corrected. It is not only our absurd reliance on the automobile for transportation, but likewise our over reliance on meat and livestock relative to what would be better for our diet that both have these terrible side effects of damaging our environment. And finally, I want to bring your attention to a new project that's on our webpage, democracyatwork.info radio. There you will find on our website an archive of all of these radio programs. So it's a way to listen to us that way to download it and catch up if you can't listen live on the radio. But we are adding features and one of the most recent that I'm very proud of is a program called Left Out. It's prepared by two people working with us, Michael Palmieri and Dante Delaval. And the two of them produce very interesting programs that are available to you on our website. I strongly encourage you to take a look. The new one that starts this program is all about May Day, and it couldn't be, of course, more appropriate as we go through this period of the year. So once again, take a look on our website, democracyatwork.in fox and look there for the radio section. And there you will see Left Out, Michael Palmieri and Dante Delaval. All right, let's jump into the updates for this week. Well, again, there are so many that I must again beg your indulgence that I can't go through everything that deserves attention. Some of you wonder to me in your emails, which again, we very much welcome, why I didn't cover this or didn't cover that. It's a very hard choice between what I figure out myself and what I see and all the wonderful leads that you send to me. It's a kind of overabundance of things that deserve and indeed often scream out for comment. So here's one. There's a billionaire amongst us. You may not know him. We have a few of those these days. This one used to live in the state of New Jersey. His name, David Tepper. You may, if you're interested in these things, know about his hedge fund, which is called Appaloosa Management, and he's lived for most of the last 20 or 30 years in the state of New Jersey. Why is this important? Well, New Jersey officials are in a tizzy. It turns out that he has decided to, he's in his late 50s, to move from New Jersey To Florida. Why? New Jersey has a personal income tax currently at 8.97%, recently raised a couple years ago or a few years ago, a decade ago from 6.37%. And Florida has no personal income tax. Therefore, Mr. Tepper, by moving his residence from New Jersey to Florida, reduces his state income tax, doesn't affect his federal, but his state income tax by a considerable amount. Since he is a billionaire, since in recent years, on multiple occasions, he has brought in, in a year's time, hundreds of millions and even billions of dollars. This is a major tax loss for New Jersey and a major gain for Florida in having a wealthy person, but not much of a gain for Florida because he's not going to pay any taxes to Florida. He will use the highways in Florida, he will make use of all kinds of services, but he will not pay income taxes in Florida. We have come to such a level of inequality that it becomes newsworthy. There were emergency meetings, according to the media at the highest levels of New Jersey's government to deal with the problem of a single individual leaving the state of New Jersey because he is so wealthy, this Mr. Tepper, that it's going to seriously impact revenue for the state of New Jersey. And in what I found to be the most ominous dimension of this horrible story was that the elliptic remark in the New York Times story about this, which was published on May 1, was the remark, quote, state officials are meeting and taking interesting steps. They really weren't very well spelled out to try to limit this behavior. And it turns out other states are targeting their richest people with programs that might dissuade them. Program that might dissuade. Let me translate that into English. Give them something, something the state can hardly afford. Maybe some kind of tax break, maybe some kind of special arrangement to get them from not moving their wealth somewhere else. That means the states of this country, all 50, are being held hostage, aren't they, by rich people who can get all kinds of extra benefits beyond what they already get by threatening to leave. This is also called a race to the bottom in which every state will compete with every other state for these rich people offering lower taxes, subsidies, breaks, supports. And of course, those all come at the expense of all the rest of us. The only thing worse than this story was to read the leader of the Republican party in New Jersey saying all of this is a good argument for why they should lower the taxes on rich individuals in New Jersey even more. That's right, Mr. Politician. Get down further on your knees in front of these people as they Play you against your counterpart in every other state. Another news item this last week, and boy, does this never stop. This time the culprit isn't an auto company. Every one of them have been caught now in the last few years doing illegal, immoral, unethical abuses of their workers and or their customers. But now we have a company that provides parts, in this case, the infamous Takata airbags. It was announced this last week that the recall of these airbags will now go up so that it includes 63 million cars in the United States. That is one out of four cars on the road in the United States. Turns out that in these airbag apparatuses, there is a chemical ammonium nitrate that provides the expulsion that makes the bag inflate when there's a sudden impact. It is a dangerous compound. It can be affected by moisture and other problems, and it can explode in ways it shouldn't and at moments we. When it shouldn't. People have been killed, more than one or two, typically by the bag exploding and sending bits of metal into the air. One man last December, Joel Knight, died in a Ford Ranger. When the bag exploded, the metal went into his neck and he bled to death in South Carolina. Not pretty stuff here. So now Takata is recalling it. Well, all I can say is, according again to the New York Times and other reports, engineers first reported on this problem to the Takata Corporation back in the 1990s. That's right over 20 years ago. We are riding around today in cars that have a dangerous, possibly fatal flaw that was known about over 20 years ago. But the Takata company either didn't deal with it or didn't tell anything about it to the companies, particularly Honda, to whom they sold these airbags. Or maybe the auto companies knew and kept quiet together with Takata. We'll never know. The investigations are proceeding with the usual agreement of the company to cooperate, having, of course, stalled out, lied, and prevaricated for 20 years. The their cooperation and the promises of that should really be taken seriously. When will we discover enough evidence that when it comes to the bottom line of capitalist corporations, that will take precedence even over human life, and that therefore we can't go on with a system that works as poorly as this? That's a question I keep asking, and I have no better sense of how to answer that than anyone else. But at least we're going to keep asking. The next update is a response to questions you have asked me, and this question can be summarized as follows. Although many of you have used different words, here's your Question, which I think is a wonderful one, what would happen, you ask me, if all of the private wealth owned by private individuals here in the United States were just hypothetically, just in our imaginations, to be divided up so that everybody has the same. In other words, we took from the rich, we gave to the poor to just that point where everybody had the same. How much would everybody have if the wealth we have as a nation were split up equally amongst us? Well, there is an answer. First I'm going to give you the answer and then I'm going to tell you where the answer comes from so you can look it up if you're interested for yourself. If we were to divide the wealth per person, that is divide up the total wealth in the United States and divide it by every man, woman and child now alive in the United States, or to be more accurate, these statistics are for the year 2013. It's very similar. Now, it's not that long ago, but the numbers that the calculations were done for 2013. Here's what every man, woman and child in America would have if our wealth were divided equally. Ready? $216,000 and 5. $216,567. Okay. $216,567 per person in 2013 if the wealth were divided amongst us. If we remove the children and ask the question, what would the wealth be per adult in the United States if everything were divided equally? Here's what it would. $301,539. 2013. The next time someone tells you that if we divided the wealth amongst all of us, we'd all be poor, you now know just how wrong. And I'm being polite here. Such persons are. Well, where do you get this information? The best place to go is the website Wid Wid World. This is the website maintained by Thomas Piketty, Emmanuel Saez and their colleagues. These are the two economists, one French, one professor at UC Berkeley, who are the proprietors of this website and keep it up to date with the best numbers used around the world by economists to understand wealth and income and its distribution inside individual countries and globally. Wid World will get you those numbers that I just quoted to you because they are the best source of available. The next update is so stunning or was so stunning to me that I figured I've got to tell it to you. On Monday, April 25, two members of President Obama's cabinet representing the Department of Justice and the Department of Housing and urban development together. That is a U.S. attorney General Loretta lynch and HUD Secretary Julian Castro together announced a major event and it got a big press release. Here it is. It's an award of money to help. I'm going to use the words of the press release, justice involved youth to find jobs and housing. Justice involved youth. Somebody spent a long time saying people in trouble. Young people in trouble with the law becomes justice involved youth to help them find jobs and housing. Well, to be even more honest, once young people have a criminal record, it becomes hard for them, or at least harder to find places to live and places to work. This should come as news to nobody. How many of those people do they think there are ready? About 240,000. A quarter of a million of people in America are going to be in that thing and they're going to do something about it. So they had a press release. They had a press conference in Philadelphia. Two members of the cabinet, these are among the most powerful and important officials in the United States met. And how much money do you think they announced are going to be awarded for this laudable purpose? Helping a quarter of a million troubled young people with criminal records find a home and find a job. $1.75 million. I'm speechless. I'm also an economist. So I divided that amount of money by the number of young people the press release says it is targeting to help these 250,000, or to be exact, 240,000 young people. All right, 240,000 young people, $1.75 million. That works out. To get ready now, folks. $7.29. That's what Obama's cabinet is going to deliver to solve the problem of a quarter of a million people having trouble finding a job and finding a home. They're going to allocate $7.29 to each and every one of them. What in the world can I say? Next item, the figures are out about the last race for mayor in Chicago and what these figures teach us, probably we don't need to know, but every now and then it's very useful to have the hard numbers that prove something we may have already figured out but now can be documented with the relevant statistics. Well, in the last race for mayor there was the incumbent. Rahm Emanuel, used to be a close advisor to President Obama and a fellow who challenged him, a Mr. Garcia. Mr. Garcia and Mr. Emmanuel had different donors and I want to tell you about the donors, the people who gave each of them money for their race. Let's start with Mr. Emanuel, who by the way, was the incumbent mayor and was re elected. Now get ready for the Numbers, because they really are stunning. 80%. 8. 0. 80% of Mr. Emanuel's donors earn $100,000 a year or more. What percentage of the people in Chicago earn $100,000 a year or more? 15. So I'm going to do that again. In Chicago, only 15% of people earn more than 100,000. But among the donors to Mr. Emanuel's reelection, 80% earned. Earn more than that. How about Mr. Garcia, the fellow fighting against him? Well, only 38% of his supporters earned more than $100,000. You'll notice his supporters, too, were way richer than the folks general in Chicago. But Mr. Emmanuel really collects it from the big guys from the Richies. Now, if you like, you can of course imagine that who pays you, who enables you to run, who funds your campaign has no impact whatsoever on what you believe, who you are and what you do in office. And if you believe that, I feel for you. Here's a second piece of statistics about it. Okay, for Mr. Garcia, the overwhelming bulk of his donors gave less than $150. Okay, about 80% of Mr. Garcia's supporters gave him less than $150. How about Mr. Emmanuel, gee, 84% of him of his donors gave more than 1,000. Okay, so there it is, folks. Rich people supported Mr. Emanuel overwhelmingly, and he won. And they're happy. And the rest of Chicago can live with the results of a political system that allows the inequality of the economic system to come in there and do what it wants in the political sphere. Let me turn in the little time we have left in this first half to say a few words in response to a question that follows up our discussion of last time, and that had to do with gentrification. And one of you said, well, what could a community do that would in any way stop it, that would allow diversity to survive in a community that would allow prices of apartments and homes not to skyrocket, making it impossible for middle and low income people to live there, to make it possible for diverse neighborhoods to survive. Well, there are a whole host of things that could be done. For example, you could tax more. The higher the price went of an apartment or a house, it could carry more tax burden. And that would be a kind of pressure not to raise the price that much, because anyone trying to sell an apartment that would raise the price that much would find it harder and harder to find buyers because the taxes go up. That method has been tried. You can pass laws that mandate mixed housing, in other words, that say within a certain region of a community or all of it, for that matter. There has to be a mix between high price, middle price and low price homes. And that you can't let the market decide what the price is. After a certain number of units, all other units have to be priced, have to be built, have to be rented at a different price. Rent control here in New York City, it's been here for many, many decades. Rent control is a way in which you do not permit the market to determine what the price, the rental price of an apartment is. You control that. And the rents can't go up faster, say, than the cost of living and things like that. You can mandate that a neighborhood be diverse in terms of its ethnicity, its race, its income. There are lots of ways you could pass laws to do that. And there are plenty of examples both in the United States and abroad where this has been tried and in some cases has worked. Having said all that, let me tell you the bottom line. When you allow a society to have an economic system that produces inequality the way capitalism always has, and the way capitalism in the United States is doing in an incredible way, taking us back to something we haven't seen since the Gilded Age at the end of the 19th century in this country, extreme inequality. Whenever you have that, the rich go to certain places, make them as nice as they want them to be because they have the money. Get the local politicians to make sure their streets are clean, their trees are trimmed, their parks are beautiful, because they have the money to control the politics the way we just saw in Chicago, and, and on and on and on. And so you get the inequality in housing, the inequality in neighborhoods, all of it. Now you can pass laws and rules to limit it and you can control it. You can try. But here's what always happens. The rich use their money not only to create the special favors for themselves, but to protect them, to get around the efforts that people sometimes successfully mount to limit it, to regulate it, to control it. But you know something? It never finally works. Because the solution to inequality is not some law after the inequality happens to try to limit, to control how it infects the society. The best solution is not to allow the inequality in the first place. Then you don't have the problem. You don't have the endless fighting and wrangling to offset what you shouldn't have allowed to happen in the first place. We've come to the end of the first half of this program. I want to thank you for being with us. I want to remind you, please to stay with us. We'll have a short interlude and come back to deal with some major economic issues that have come up in the last week. Please remember to make use of our websites rdwolf.com and democracyatwork.info for all of the other activities we engage in. We will be right back.
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He walked into the party like you were walking onto a yacht your hat strategically dipped below one eye your scarfing was apricot you had one eye in the mirror as you watched yourself go vote and all the girls dreamed that they'd be your partner they'd be your partner and you're so, so vain you probably think this song is about you you're so vain you're so vain I'll bet you think this song is about you don't you? Told you you had me several years ago when I was still quite naive when you said there in made such a pretty pair and that you would never leave but you gave away the things you loved and one of them was me I have some dreams they were clouds in my coffee clouds in my coffee and you're so vain.
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You.
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Probably think this song is about you you're so famous.
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Welcome back, friends, to the second half of Economic Update. I'm your host Richard Wolff, and in this second half of the program, we are going to deal with a number of larger issues in economics that have risen to the fore in the last few days. Before that, please let me remind you to make use of our websites. We are constantly updating and adding to them. One of them is rdwolf with two f's.com and the other one democracyatwork.info that's all one word, democracyatwork.info both those websites allow you to communicate to us what you would like us to cover, what you like and don't like about the program, questions you'd like us to address. It's a way for us to partner with you. Using our websites is also a way for you to follow us on Facebook, Twitter, Instagram. We urge that you do that because that too is another way of partnering. And while I'm on this theme of partner, let me rattle off a couple of more that we ask you to consider. We are always looking for more stations. We now are in the mid-50s as to the number of stations across the United States that carry this program every week. We are very proud of it. But we are very interested in finding more stations that might like to carry us. Please get in touch with us through the websites if you can help in any way. If you know someone at radio station. If you can connect us to someone, even if you just have a suggestion of where we might look, we will follow up. The same applies if you'd like me or others in our group to come and talk at a church, at a union hall, wherever it might be, at a school, we do that. I do it particularly all around the country and I'd love to hear from you if you are interested in organizing that in future sessions. I'm also going to be talking to you about a new initiative we're taking, which is to start groups interested in what we do. Democracy at work groups, we're going to call them, all around the country who can do everything from listening to this program and using it as the basis for a discussion to mobilizing in support of worker co ops where they are being formed or being considered to being active politically and so on. So if any of the ways of partnering with us that I mention and any that you might have in your mind are interesting, use the websites. Again, the key one to use democracyatwork.info let us know how you might want to partner with us. And please be aware we read every single one and you will get a response and follow up as best we can. Thank you. Well, the first topic I want to go on into a bit was stimulated to me by stimulated in me by an article in the latest issue, the May issue of Consumer Reports magazine. There was an article called A Safer Food Future. Now, the author, Eric Schlosser, many of you will know who that is. He had a famous book a while back called Fast Food Nation, and his most recent book, command and Control, was a finalist for the Pulitzer Prize. He is one of America's foremost specialists on our food industries and how they do or do not work. Let me read to you from how this article opens and then offer a comment. Here's how it severely obese school children, E. Coli outbreaks, salmonella in ground beef, arsenic in apple juice and rice poultry sickened by avian flu, hog farms dumping manure into rivers and streams, meat packing workers routinely injured on the job, the cruelty of factory farms. All of these problems have inspired activists to seek a variety of solutions. But the seemingly disparate problems with America's food system have a common explanation. And then Mr. Schlosser offers what it the handful of corporations that now dominate the system are imposing their business costs on the rest of society. So far, so good. But then, peculiarly, a few sentences later, Mr. Schlosser adds, although it may be tempting to blame those problems on the workings of capitalism. The changes in food production during the past few decades have been largely driven by the elimination of free markets and real competition. I want to address that point. Is our problem capitalism, or is our problem the fact that we don't really have capitalism or we don't have it anymore? That capitalism is about free markets and real competition? That's certainly what Mr. Schlosser thinks. But the capitalism we have, or whatever it is that we have, isn't free markets and isn't real competition. I believe Mr. Schlosser is mistaken and in a way that many other people are also. And so it deserves a few moments of analysis. Every system that has ever existed, slavery, feudalism, capitalism, socialism, has had people in it who are disappointed with its results. Clearly, Mr. Schlosser is disappointed with the results of the system we have in terms of what it has done to the food industry. Look at the way he begins his article with this partial list of one food horror after another. And in his disappointment, Mr. Schlosser has been very inventive. Instead of saying he's disappointed with how the capitalist system, because that is really what we have, everybody knows that. But instead of being disappointed with it, he doesn't want to go that way. He wants to suggest rather that there is a good, a pure, a better capitalism. He imagines it existed in the past. And so what we have, while it's very bad, isn't really to be blamed on capitalism, because if we really had capitalism, you see, we wouldn't have these problems. Well, let me respond. What I taught most of my life as a professor of economics was something we call economic history. That is, we always thought it was important for students to understand economics in a historical way, to study how, for example, the system we have now, capitalism, how it evolved, how it began, how it changed across the centuries, that it has existed to be what it is today. That studying history was a very useful way to understanding the present. It is something all people interested in history understand. My study of the history of capitalism, which I taught for decades here in the United States, in the various universities where I was a teacher, if it taught me anything, taught me the. Throughout the history of capitalism, every capitalist who could tried to become a monopolist, tried to get around competition, tried to do better than the other fellow, which is what we call competition. And when he did, he put the other fellow out of business. And when the other fellow went out of business, you know, who bought the machines, he couldn't afford to keep running anymore. The guy who beat him. And you know who hired his workers when he laid them off because he wasn't competitive enough? The guy who beat him. And when the guy who beat him bought his machines and hired his workers, the guy who beat him was left with without a competitor. And that was a very attractive objective. And it was something a capitalist strove to do because of being afraid that if he didn't, somebody else in the business would do it to him. In other words, competition is a high pressure game that drives every capitalist to a behavior that eliminates competition. That story has been repeated over and over again. Once upon a time we had 50 automobile companies. Now we have a handful. Once upon a time we had dozens of cigarette companies. Now we have a handful. Once upon a time. Fill in the blank. It is the history of every industry. And by the way, the history goes both ways. Sometimes when you have just a few companies, that very monopoly, or oligopoly as it's sometimes called, provokes new competition to enter. In other words, the rise and fall of a competition, the rise and fall of competitiveness, is part of how capitalism works. Likewise, a free market. What in the world does that mean? You mean a market in which the government doesn't intervene? We've never had such a market. Never, ever, anywhere. That's a fantasy, something that might be useful as a teaching device to give you an idea of how all the interventions that have always been part of capitalism work. But to actually take it seriously. We could have a free market. That's somebody who has never studied economic history. Because like a purely competitive capitalism or a free market capitalism, it is a teaching device, not to be confused with an actuality. Therefore, the capitalism we have is the capitalism we've always had. Sometimes it has a bit more competitiveness, sometimes less. Sometimes one industry is a bit more competitive and another one is less. That's how it works. We have the results of a horrible food industry that abuses the mass of people with every conceivable device, regardless of its health effects, its dietary impact, its obesity, and all the other things that flow from it. If it's profitable, they make it, the competitors make it, the monopolists make it, as they struggle with over those things. But it's purely imaginary to suggest that the problems we have are coming from corporations, but not from the capitalism that both gave birth to those corporations. And is the system within which those corporations do what Mr. Schlosser has found so wanting? Let me turn next to the fiscal crises that are now mounting around us. Detroit is bankrupt. Puerto Rico is in Effect bankrupt. Puerto Rico defaulted recently on its loans, billions and billions of dollars. Many other cities are at or close to defaulting and becoming bankrupt. The whole state of Illinois is in deep trouble. And so it goes. I want to explain the how this happened because there are false explanations all over the place as this crisis gets worse, and you're going to be hearing about many of them. Here's how fiscal crises in America happened. Over the last four years, the gap between rich and poor has become extreme. We all know that earlier on this program, we documented it one more time as if it needed it. Okay? As the rich got richer and everybody else didn't, the rich understood that it's only a matter of time before the mass of people use the political power they have or try to to offset the inequality that a capitalist economic system is foisting on them. And in order to protect themselves against the effort of the mass of people using, for example, the tax system to redistribute the wealth that capitalism is giving only to the top, the rich people decided to mobilize politically. They bought the political machines, they bought the politicians, they bought the parties. And the way they got the mass of people to kind of look the other way or even join them was by making a crusade against the government. The government is wasteful. The government is evil. The government is ripping you off. The government is taking your taxes. It's really your money. You've heard it all this way. The rich made sure that tax increases on them were out of the question, were politically impossible. No politician would dare say such a thing. The mass of people likewise, didn't want to pay taxes. So everybody was in agreement. Okay, let's follow now the logic. If you stifle the ability of cities, states, and the federal government to borrow money, they're not going to be able to deliver social programs because they're not getting the money to pay for them. How are they going to maintain the police and the fire and the schools and the roads and the bridges and all of the rest of what we need in our public sector. If we don't give them the money to do that, the answer is they can't. So they begin to cut back. Then the screams arise from all the people who are damaged. People watching their children's education being pinched, people seeing that the fire department office near them is being closed. People who observe, feel, suffer from the cutbacks of social programs, and they then become angry at the politicians. A mistake, by the way, because the problem isn't the politician. The problem is the capitalist system. That produces the inequality that corrupted the politicians. The worst you can say about them is they didn't do anything against it. They're willing and complicit. In any case, the politicians are worried. If their voters get angry about providing social services, they dare not raise taxes because then they'll be voted out of office. But now they dare not continue with cutting back social programs because that will get them voted out. What's a poor politician to do? And they have found the answer. Borrow money. That's right. If you borrow money, you can keep funding the social programs without having to tax anybody. And the rich and the corporations particularly love it because they've then succeeded not only in avoiding to pay the taxes they would otherwise have had to pay, but by keeping that money into their own hands, by not paying the taxes, they can turn around and get ready now lend it to the government that has to borrow for the very reason I just laid out. So for the rich and the corporations, it's a double benefit. They don't have to pay taxes and they get a nice borrower to lend the money they save from taxes to the same government that wouldn't tax them, the government to whom they lend. Because of course, from the point of view of a rich person or a corporate executive, it's much better to lend to the government than to pay a tax to the government. Because when you pay a tax, the money's gone. It's the government you lose. But if you're a lender to the government, why then not only do they pay you that money back, so you never lose it, but they pay interest for the interval between the time you lend it and when they have to pay it back. So now we have the political solution that modern crazy capitalism has. Build up the debt. Federal debt goes crazy, state government debts go crazy, city government debts go crazy until the poorest among them can't pay anymore. They've borrowed more, they've than they can pay. It's only a matter of time. And the poorest ones go first, like Detroit, like Puerto Rico, etc. Etc. But there's no mystery here. There's no wondering, gee, what happened? And there's certainly no reason to blame pensions for public employees. What are you talking about? Those pensions have been in place for decades. Why are they suddenly the problem? They're suddenly the problem. Not because pensions went crazy. They didn't. What went crazy was an economic system. Capitalism went crazy in the inequality it produced, thereby giving an incentive and the resources to corporations and the rich to cripple governments Everywhere for fear that taxes would take away what had been drawn into their hands. And by crippling the government, they forced it into debt. And by accumulating the debt, we're at the crisis we face now. You can't borrow anymore because these cities can't pay it back. They dare not tax corporations and the rich because it's politically impossible. They dare not cut services because the mass of people are furious about it. And they can't borrow anymore because there's no prospect of their having the ability to pay. That's a crisis situation. That's why you read about the teachers in Detroit having sickouts, because they cannot face what is being done to the children of Detroit. The same in Chicago. The same in Puerto Rico. Look at Puerto Rico, the poorest sector of the American economy with a sales tax now of 11 and a half percent. How in the world can you justify anything like that? And the answer is you can't. But at least you can understand where it comes from. This is not about incompetent public employees or lazy employees or excessive pensions or all of the other nonsense being spewed by those who are cashing in on this system and are afraid, as they have been for 40 years, that the mass of people might figure out what's going on and finally get out of them the wealth and income that should never have been concentrated at the top in the first place. And that is the cause and origin of the so called fiscal crisis of this state. Let me conclude today by responding again to some of your questions. Many of you have been interested in worker co ops. It's becoming a more and more important topic in the United States or what we prefer to call worker self directed enterprises, enterprises that are not capitalist. They don't allow a small group of people, major shareholders, boards of directors, to control a big enterprise, a big factory, a store, an office where hundreds or thousands or tens of thousands of people are working. That's fundamentally undemocratic. And worker co op rejects that. And the whole point of worker co ops is to say the that if you believe in democracy, if that's what you think is good in a community, then it applies as much to the community at work as it does to the community in the neighborhood where you live. Communities are communities and democracy, if you believe in it, is applicable at the workplace just as much as at the residence place. Well, some of you have been worried about some dimensions of this argument. For example, is it an attack on small business? Not at all. Small businesses have nothing to do with this. A Small business can be organized in a capitalist way with a single owner, for example, who makes all the decisions, or a group of people getting together and running the enterprise democratically in a fair, open, competitive society. If I dare say the word, we would have both small businesses that were capitalistically organized and small businesses that were organized as worker co ops. We would have the same with medium sized businesses and with big businesses and we would have both kinds. We would have a capitalist sector and let's call it a worker cooperative sector. And, and that would be wonderful. Why? Because it would give the American people freedom of choice. They could choose which of these two to buy products from that they consumed goods and services. They could likewise choose between them in terms of where they would prefer to work. Would you rather work in a top down hierarchical capitalist enterprise or would you prefer to work in a collectively democratically organized enterprise? And then let's let the economy go in whichever direction the mass the majority of people would prefer to see it go. This is the sort of freedom of choice we say we favor in the United States. But the only way to give the American people such a freedom of choice is to have a cooperative sector of the economy in place. We don't have that now. That is we have 8 million laws, customs, rules of governing bank credit and government purchases. All are in place to support, to favor, to subsidize and to give all kinds of breaks to capitalist enterprises. All I'm really arguing is if you're going to do that for capitalist enterprises and if you believe in freedom of choice, then you ought to be doing the same for the alternative to a capitalist top down enterprise. And that has been, and that is a cooperative worker democratic enterprise. One in which workers democratically govern themselves just as they do as residents of a town or a city or, or a state or a nation. Wow, what an idea. That it ought to be policy to develop and to do it quickly, a worker co op sector in the United States, a segment present everywhere to let everyone see and choose between these alternatives. There ought to be a political movement advocating that. There ought to be a political party advocating that. And you know what? In my remaining two minutes today I'm going to tell you that there is one. It's really interesting. It isn't in the United States, it's in Great Britain. That's right. The British Labour Party has taken the lead and begun to advocate in a firm way the development, with government support of a large growing worker co op sector in the British economy. The Labour Party promises, if it wins, the next election to pass a bill through the House of Commons and the British Parliament. The bill would have the following. Anyone can start a small business the way they always have. Everyone can stay with that business as it grows, in a capitalist way, as they always have. But here's a new rule when it comes to that business. Selling itself to a bigger company or deciding to become a stock company by issuing shares and becoming listed on the London Stock Exchange. At that moment, the law will require every company simply to do the following. To give a right of first refusal. You know what that means? It means going to its own workers and saying, before we sell this company to somebody else and before we send this company onto the stock market where it can be owned by everybody who has money to buy shares, we are going to give you, our workers, the right of first refusal. If you want to buy this company and run it as a worker democratic enterprise, you will have first bids to do it. If you can't, if you don't want to, the company's free to look for buyers elsewhere. But we, the government, believe you should have that right because that's a way to build a worker co op sector in our economy. Ah. And the government will help provide the financing to workers to make such an arrangement to buy the company from their employer. And the government will provide technical assistance and low interest loans. The government will do for these worker co ops what it has always done for capitalist enterprises, and that will build up the sector and that will give people a freedom of choice about their economic future that workers had never dreamed of before, but that now could become the most profound challenge to capitalism in centuries. We've come to the end of today's program. As always, I want to thank you because for me, this is a pleasure and an excitement to prepare these programs. I hope you find them useful. I hope you partner with us in all the ways that are available. I want to thank truthout.org, that remarkable independent source of news and analysis, who has been a partner with us for quite a while now. And I want to urge all of you, make use of our websites, rdwolf.com and democracyatwork.info make use of all that's available there for you to partner with us and for you to make a difference in this country and in the world at a time of fundamental historical change. I look forward to talking with you again next week. It.