Economic Update with Richard D. Wolff

Episode: Which Way for US Economy?
Date: November 30, 2017
Guest: Stephanie Kelton

Overview of the Episode

In this episode, Richard D. Wolff tackles the question, "Which way for the US economy?" by critically examining the latest economic news and systemic issues facing the US and the world. The first half features Wolff's analysis of current economic events and systemic problems, with special commentary on data privacy, corporate influence, public infrastructure, austerity economics, and global wealth distribution. In the second half, Wolff interviews prominent economist Stephanie Kelton, advisor to Bernie Sanders and expert in public policy, to discuss economic inequality, the Trump administration’s economic policy, international parallels, worker cooperatives, and bold proposals like cancelling student debt.

Key Discussion Points and Insights

I. The Uber Breach and the Hidden Costs of Corporate Profit (00:10–07:30)

• Uber’s Data Breach and Corporate Secrecy

  • In 2016, hackers stole data from 57 million Uber users and drivers.
  • Uber hid the breach for a year, paying a $100,000 ransom.
  • Wolff argues this reflects a business calculation: Is it cheaper to secure data or to pay off hackers and hide liability?

• Gig Economy Lacks Public Oversight

  • Uber circumvents safety, driver vetting, insurance, and now data security regulations traditional taxi companies must meet.
  • Profit is prioritized over public interest and customer safety.

Quote:
“Maybe Uber calculates, like no doubt other ones of these companies do, that it's cheaper to pay off the hackers $100,000 than to make sure that our information... is secure... in its drive for profits, it sacrifices the public.”
— Richard Wolff (06:18)

II. Corporate Manipulation of Science: Sugar Industry Case (07:31–10:40)

• Historical Suppression of Health Research
  • In the 1960s, industry-funded sugar research suggested sugar might be linked to heart disease and bladder cancer.
  • The Sugar Research Foundation halted the research when it became inconvenient to profits.
  • Wolff critiques the dangers of putting nutrition and food production in the hands of profit-driven corporations.

Quote:
“It’s another sign of the danger of putting the food production of our society in the hands of companies whose first objective is profits, not the safety or nutritional value of what they produce.”
— Richard Wolff (09:47)

III. The Blurred Lines of Politics and Business: Trump’s Business Entanglements (10:41–14:00)

• Personal Profiteering in Office

  • Wolff details numerous examples of Trump using the presidency to promote his businesses.
  • Trump visited his properties on 100 out of his first 400 days.
  • Republican groups now hold high-priced events at Trump properties.

• Normalization of Corruption

  • The brazen mixing of public and private interests is presented as unprecedented but now fully visible.

Quote:
“This is a level of mixing politics and business that goes beyond what we've had in the past.”
— Richard Wolff (12:34)

IV. The New York City Subway: Infrastructure Neglect and Systemic Dysfunction (15:00–19:14)

• Deterioration of Public Transit

  • Subway ridership has doubled over 20 years, but real funding is down 75% from 1990.
  • Only 65% trains are on time – worst among major global cities.
  • Deferred investment and maintenance is a result of politicians’ fear of taxing the wealthy or the public.

• Systemic Failure, Not Individual Failure

  • Politicians avoid responsibility, leaving the system to further decline.

Quote:
“There’s no efficiency here. Millions of hours of work time are lost by people who are stuck on slow trains or don’t get to work at all. Where’s that accounted for? Nowhere.”
— Richard Wolff (17:24)

V. Britain’s Austerity & Stagnation: Misleading Recovery (19:14–21:19)

• Record Decline in Living Standards
  • Disposable income in UK forecasted to fall for 19 consecutive quarters—the longest decline in British history.
  • The “recovery” mainly benefits corporations and the rich; the majority struggle.

Quote:
“In other words, we are now in the middle of the longest sustained decline in the household income of the British working class in the history of the country. That's what's called a recovery that only benefits a few at the expense of the many.”
— Richard Wolff (20:28)

VI. Norway’s Sovereign Wealth Fund and Resource Inequality (21:19–24:38)

• Responsible Planning or Global Absurdity?
  • Norway amassed over $1T for future generations from oil wealth, but recently pulled out of oil and gas stocks, anticipating end of the fossil fuel era.
  • Raises questions about the randomness and fairness of global wealth tied to geography.

Quote:
“5.3 million people are deciding through their government what to do with trillions of dollars of wealth... This is a very strange way of using the resources of this planet. It's like a game of lottery.”
— Richard Wolff (24:38)

Interview Segment: Stephanie Kelton (28:56–54:50)

VII. Trump Administration, Bernie Sanders, and Disaffected America (29:16–31:56)

• Economic Discontent Crosses Party Lines
  • Kelton: Economic sluggishness persists; Trump and Sanders both appealed to voters feeling left behind.
  • Little legislative action from the Republican majority; administration “turned their backs so quickly” on their base.

Quote:
“I'm surprised at just how egregious this administration has been in turning their backs so quickly on the people that put them into office.”
— Stephanie Kelton (31:35)

VIII. International Parallels: Jeremy Corbyn and Policy Shifts (33:15–35:48)

• UK as Bellwether for US Populism
  • Corbyn’s mainstreaming of progressive ideas is changing public discourse.
  • Slogans like “for the many” resonate similarly across the Atlantic.

Quote:
“I do think that what happens in the UK is very much something of a bellwether. It's telling us that the tides are shifting, that people are paying attention and engaging in the politics in a very different way.”
— Stephanie Kelton (34:21)

IX. Worker Cooperatives: From Fringe to Political Platform (35:48–43:05)

• Potential and Popularity
  • Corbyn is pushing co-ops as key policy; Sanders’ campaign included worker co-ops but didn’t emphasize them.
  • Both agree: More education needed to move co-ops into mainstream American consciousness.
  • Excitement grows once explained; business owners (especially retiring ones) often enthusiastic about selling to workers.

Quote:
“All I see is... this is a new idea for many people or a very underdeveloped idea. But as we get into the conversation, the excitement in the audience [is] palpable.”
— Richard Wolff (38:57)

X. The “Silver Tsunami” and Cooperative Conversion (39:46–43:05)

• Long Island Initiative
  • Kelton describes a project analyzing opportunities among retiring business owners to transition companies to worker co-ops.
  • Not just workers, but retiring owners are keen to sustain their companies and keep them local.

XI. Student Debt and Economic Stimulus (43:08–48:24)

• Cancelling Student Debt: Big Boost
  • Kelton’s team modelled cancelling the nearly $1.4T in federal student debt.
  • Results: Immediate household wealth increase, large stimulus as consumer spending rises, wider economic benefits.
  • International comparison—other countries have reversed tuition fees after negative social consequences.

Quote:
“We asked a question which was just a hypothetical... what would happen if we just canceled all of the outstanding student loan debt?... The economy would enjoy a pretty significant boost.”
— Stephanie Kelton (44:26, 46:13)

XII. Public Goods Mindset and Social Investment (48:24–50:47)

• Countering Individualism
  • Americans often resist “public good” policies if they don’t see personal benefit.
  • Long-term education and social investment need reframing as benefits to all.

XIII. Outlook for the US Economy: Risks of Recession (50:47–54:39)

• Are we due for a downturn?
  • Kelton: With sound policy, the US could extend the recovery. Recession is not inevitable just due to time.
  • Current GOP tax cut proposals will do little for demand—windfalls will go to the rich and likely be saved, not spent.
  • Infrastructure stimulation might follow to “cover” for ineffectiveness of tax cuts.

Quote:
“These are not the kind of things that are going to boost the economy and create jobs. I think the Republicans know that. They're selling it as a job creation and a growth bill. I think they understand that's not what it is.”
— Stephanie Kelton (53:51)

Memorable Moments & Notable Quotes

| Time | Speaker | Quote | |---------|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | 06:18 | Richard Wolff | “Maybe Uber calculates... it’s cheaper to pay off the hackers $100,000 than to make sure that our information... is secure... in its drive for profits, it sacrifices the public.” | | 09:47 | Richard Wolff | “It’s another sign of the danger of putting the food production of our society in the hands of companies whose first objective is profits, not the safety or nutritional value of what they produce.” | | 12:34 | Richard Wolff | “This is a level of mixing politics and business that goes beyond what we've had in the past.” | | 17:24 | Richard Wolff | “There’s no efficiency here. Millions of hours of work time are lost by people who are stuck on slow trains or don’t get to work at all. Where’s that accounted for? Nowhere.” | | 20:28 | Richard Wolff | “...the longest sustained decline in the household income of the British working class in the history of the country. That's what's called a recovery that only benefits a few at the expense of the many.” | | 24:38 | Richard Wolff | “5.3 million people are deciding... what to do with trillions of dollars of wealth... This is a very strange way of using the resources of this planet. It's like a game of lottery.” | | 31:35 | Stephanie Kelton| “I'm surprised at just how egregious this administration has been in turning their backs so quickly on the people that put them into office.” | | 34:21 | Stephanie Kelton| “I do think that what happens in the UK is very much something of a bellwether. It's telling us that the tides are shifting...” | | 44:26,46:13| Stephanie Kelton| “We asked... what would happen if we just canceled all... student loan debt?... The economy would enjoy a pretty significant boost.” | | 53:51 | Stephanie Kelton| “These are not the kind of things that are going to boost the economy and create jobs... They're selling it as a job creation and a growth bill. I think they understand that's not what it is.” |

Important Timestamps

• Uber breach and gig economy critique: 00:10–07:30
• Sugar research scandal: 07:31–10:40
• Trump business-political overlap: 10:41–14:00
• NYC Subway & infrastructure neglect: 15:00–19:14
• Britain’s austerity 'recovery': 19:14–21:19
• Norwegian sovereign wealth fund: 21:19–24:38
• Interview—Stephanie Kelton intro: 28:56
• Trump/Sanders populism: 29:16–31:56
• UK's Corbyn, rising progressivism: 33:15–35:48
• Worker co-ops and Silver Tsunami: 35:48–43:05
• Student debt cancellation: 43:08–48:24
• Reframing public goods: 48:24–50:47
• US recession outlook and tax cuts: 50:47–54:39

Final Thoughts

This episode offers a sweeping, critical view of systemic failures and possibilities in the US and global economy, grounded in accessible examples and deep expertise. Wolff and Kelton argue for more democratic solutions, from cooperatives to debt relief, while warning of the dangers inherent in the current capitalist and political arrangements. The conversation provides clarity for anyone seeking to understand not just the news, but the underlying structures driving today’s economic headlines.