Economic Update: Winds of Economic Change

Summary

Economic Update with Richard D. Wolff

Episode: Winds of Economic Change
Date: March 8, 2018

Episode Overview

This episode explores the shifting economic winds affecting workers, political institutions, and the social fabric both in the United States and globally. Professor Richard D. Wolff critically analyzes recent labor actions, policy changes, and societal trends, then is joined by Dr. Harriet Fraad to dissect the breakdown of the “traditional American family” and its underlying economic causes and consequences.

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Key Discussion Points and Insights

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1. The West Virginia Teachers’ Strike and Labor Solidarity

[00:10 – 06:50]

• Main Point:
  Wolff opens by highlighting the strike of public school teachers in West Virginia, stressing its “historic meaning for working people in the United States.”
• Labor Rights Constraints:
  Teachers in West Virginia are denied collective bargaining rights by state law, making their strike an example of bottom-up, grassroots worker action rather than union-led mobilization.
• Solidarity:
  The teacher-led organization demonstrates “what a powerful organized labor movement could be.”
• Ripple Effect:
  Other states, like Oklahoma, are watching and may follow suit.
• Notable Quote:
  • “They have organized themselves. The unions may have helped, but it has mostly been the workers themselves… That’s the most important potential transformation of the American labor movement that I’ve seen in a long time.” — Richard D. Wolff, [03:20]

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2. Trump’s Steel and Aluminum Tariffs: Symbolism over Substance

[06:51 – 16:25]

• Explanation of Tariffs:
  Tariffs are essentially taxes on imported goods. Trump’s plan proposes a 25% tariff on steel and a 10% tariff on aluminum.
• Winners and Losers:
  • Producers of steel and aluminum in the US benefit with higher protected prices.
  • Downstream industries (auto manufacturers, canning companies) will be hurt by higher input costs, leading to likely job losses.
• Political Motivation:
  Wolff frames the tariffs as theater: failing to deliver on real improvements, the administration favors symbolism, blaming “foreigners” and stoking domestic support.
• Corporate Influence:
  Trump is seen as pitting industries against each other for political support and campaign contributions.
• Notable Quotes:
  • “This is domestic politics of Mr. Trump in an economic system that is imposing hardship on the mass of people. That’s the fundamental cause and function of these tariffs.” — Richard D. Wolff, [14:47]

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3. Germany’s Move to Free Public Transportation

[16:26 – 21:50]

• Overview:
  Germany has decided to test free public transit in five cities.
• Cost Savings:
  Eliminating fare collection and associated infrastructure/data systems nearly offsets lost ticket revenue.
• Environmental Impact:
  Policy is also designed to reduce air pollution and shift commuters from diesel cars to public transit.
• Critique of Private Automobiles:
  Wolff describes private car use as “an economic irrationality for most of the last century,” driven by corporate profit rather than societal needs.
• Progressive Policy:
  Such moves reveal a growing challenge to the role of private automobiles as capitalist icons.
• Notable Quote:
  • “Germany is taking the lead in actually having to do something about [the negative effects of private cars] and is therefore questioning the private automobile as the icon of our capitalist system.” — Richard D. Wolff, [21:33]

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4. The UK’s “Lost Decade” and Brexit’s Roots

[25:31 – 28:40]

• Stagnating Living Standards:
  New statistics show the decade 2005–2015 as the “worst period… for the declining standard of living of British UK households in 50 years.”
• Public Cuts:
  Over 500 children’s centers closed since 2010 due to budget cuts, exemplifying austerity measures.
• Political Ramifications:
  Widespread deprivation breeds anger—explaining support for Brexit, even as it fails to solve the core problem: a system prioritizing profit over people.
• Notable Quote:
  • “Their problem is an economic system geared to take care of a minority at the expense of a majority.” — Richard D. Wolff, [27:59]

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5. Europe’s Political Earthquakes: Iceland and Italy

[28:41 – 29:30]

• New Leadership:
  Iceland’s new Prime Minister, Katrín Jakobsdóttir, is a self-identified socialist, feminist, and environmentalist.
• Disillusionment:
  Traditional parties are losing ground; voters are rejecting centrist capitalism in favor of new, or even resurrected, parties and leaders.
• Notable Quote:
  • “The middle of politics that supported classical capitalism since World War II is disintegrating.” — Richard D. Wolff, [29:15]

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6. Debtors’ Prisons: A Modern Return

[29:31 – 31:31]

• Modern Mechanisms:
  1-in-3 adults in the US has a debt in collections; legal loopholes now allow debtors to be jailed for missing court appointments, echoing old debtor’s prisons.
• Predatory Lending:
  Payday loans at exorbitant interest rates are common, driven by inadequate wages.
• Systemic Critique:
  Root problem isn’t bad borrowers but a system imposing “unlivable salaries and wages.”
• Notable Quote:
  • “If you don’t deal with that problem, you’re endlessly moving people around from one abuse they suffer as a result of being in debt to the next one.” — Richard D. Wolff, [31:15]

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7. Surging University Endowments and Inequality

[31:32 – 32:44]

• Key Statistics:
  MIT’s endowment returns 7.6% per year (doubles in a decade), and Harvard’s 4.4% (roughly 50% growth).
• Critique:
  Most Americans’ incomes have stagnated, while elite institutions prosper—symptomatic of intensifying inequality.
• Notable Quote:
  • “Did your income go up by 50% like poor Harvard’s? Did it go up by 100% like MIT’s? My guess is it didn’t go anywhere near that.” — Richard D. Wolff, [32:36]

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In-Depth Segment: Dr. Harriet Fraad on the Breakdown of the Traditional American Family

[29:42 – 55:10]

1. The Disappearance of the Traditional Family

[29:44 – 34:35]

• Definition:
  The “traditional family”—male breadwinner, dependent wife, and children—is rapidly breaking down.
• Economic Roots:
  Economic and social supports that maintained the family wage have “collapsed.” Jobs that paid family wages were offshored or automated.
• Union Decline:
  The decline in unionized, well-paid jobs forced women into the workforce; by 1980s, two incomes didn’t match earlier one-income households.
• Gendered Impact:
  Women, aided by feminism, adapted with greater independence. Men, reliant for emotional and familial fulfillment, struggled more with the change.
• Notable Quote:
  • “For the mass of Americans... what was a buttress and center pole that held up the tent of American life is collapsing.” — Dr. Harriet Fraad, [32:12]

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2. Signs of Family Breakdown

[35:42 – 38:18]

• Divorce & Separation Rates:
  • 50% of first marriages, 60% of second marriages, and 70% of third marriages end in separation or divorce.
• Non-Traditional Births:
  • 42% of children born outside of legal marriage.
• Economic Constraint:
  The “traditional family” has become a “luxury good” affordable mainly for the top 1%, supported by high wages and domestic workers.
• Notable Exchange:
  • Wolff: “So in a sense, having a traditional family is unaffordable.”
  • Fraad: “It’s a luxury good.” [36:53–36:58]

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3. Economic Causes and Global Comparison

[39:14 – 43:49]

• Work Demands:
  Both men and women must work; jobs no longer support family life.
• International Comparison:
  Most advanced countries provide generous paid maternity/paternity leave, childcare, and vacation by law; the US does not.
• Irony:
  US politicians champion 'family values' but do little to create economic conditions that support families.
• Notable Quote:
  • “It makes no sense… the red states have an even higher divorce rate than the blue states… also the highest porno use.” — Dr. Harriet Fraad, [44:00–44:21]

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4. Social and Psychological Consequences

[45:27 – 48:24]

• Latchkey Children:
  75% of kids come home to empty houses; these hours see the most juvenile crime and victimization.
• Obesity & Isolation:
  Children are less active, more isolated, leading to obesity and poor socialization.
• Addiction & Desperation:
  Breakdown fuels adult addiction: “the biggest cause of death for people between 14 and 55 is overdoses.”
• Notable Quote:
  • “It really leads to addiction because people are desperate, they’re lonely, they’re frustrated, they can’t manage in a way.” — Dr. Harriet Fraad, [48:27]

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5. Moralizing vs. Reality

[49:28 – 51:21]

• Blame and Guilt:
  Americans are told to blame themselves for family breakdowns that are actually rooted in economic systems and policy.
• Contradictions:
  Societal ideals and economic realities are out of sync, creating “an exquisite torture of people.”
• International Models:
  France is cited as an example of a diverse yet supportive society that provides afterschool, vacation programs, and universal childcare.

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6. Paths Forward and Alternative Living Arrangements

[51:24 – 55:10]

• Innovations:
  Emerging communal housing models, shared kitchens, and intergenerational living arrangements improve well-being and reduce loneliness.
• Potential for Scale:
  These could become widespread solutions if society acknowledged the real causes of family breakdown and committed the necessary resources.
• Gendered Effects:
  Men, losing traditional roles, are “particularly lost” and more likely to act out violently, while women sustain social ties more robustly.
• Notable Quote:
  • “If you are going to assert family values, you have to assert the money that goes with them, which is the supports for an organization that really can’t survive outside of support.” — Dr. Harriet Fraad, [53:53]

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Memorable Quotes & Moments (with Timestamps)

| Timestamp | Quote | Speaker | |-----------|-------|---------| | [03:20] | “That’s the most important potential transformation of the American labor movement that I’ve seen in a long time.” | Wolff | | [14:47] | “This is domestic politics of Mr. Trump in an economic system that is imposing hardship on the mass of people.” | Wolff | | [21:33] | “Germany is… questioning the private automobile as the icon of our capitalist system.” | Wolff | | [27:59] | “Their problem is an economic system geared to take care of a minority at the expense of a majority.” | Wolff | | [29:15] | “The middle of politics that supported classical capitalism since World War II is disintegrating.” | Wolff | | [31:15] | “If you don’t deal with that problem, you’re endlessly moving people around from one abuse they suffer as a result of being in debt to the next one.” | Wolff | | [32:36] | “Did your income go up by 50% like poor Harvard’s? Did it go up by 100% like MIT’s? My guess is it didn’t go anywhere near that.” | Wolff | | [32:12] | “For the mass of Americans... what was a buttress and center pole that held up the tent of American life is collapsing.” | Fraad | | [36:53] | “It’s a luxury good.” | Fraad | | [44:00] | “It makes no sense… the red states have an even higher divorce rate than the blue states… also the highest porno use.” | Fraad | | [48:27] | “It really leads to addiction because people are desperate, they’re lonely, they’re frustrated, they can’t manage in a way.” | Fraad | | [53:53] | “If you are going to assert family values, you have to assert the money that goes with them, which is the supports for an organization that really can’t survive outside of support.” | Fraad |

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Structure and Flow

• Opening:
  Spotlight on grassroots labor action (West Virginia teachers) as a sign of changing economic winds.
• National and Global Economic Issues:
  Trump tariffs, European transport and political shifts, UK austerity, the return of financial repression.
• Inequality:
  Surging university endowments as a symptom of wealth divide.
• Deep Dive:
  Extended discussion with Dr. Fraad on how the economic system is unraveling the family structure, its consequences on individuals and society, and alternative models for collective living.
• Conclusion:
  The hypocrisy of political and economic rhetoric versus material support, and a call to acknowledge and address the root causes of social distress.

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Listener Value

This episode delivers a critical, jargon-free examination of urgent economic and social changes. It highlights the intersection of economics, politics, and everyday experience—from policy debates to intimate family dynamics. Listeners are equipped with analytical tools and international perspectives for understanding both systemic problems and potential collective solutions.

Transcript

[A]

Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives. Jobs, debts, incomes, prospects coming down the road. I'm your host, Richard D. Wolff. I'm a professor of economics most of my life, and my hope is that it prepared me well to offer you these updates on what's happening in our economy. I want to begin today by taking my hat symbolically off to a remarkable group of working people, the public school teachers in the state of West Virginia. They are doing something vitally important for them, even more important for the children whose education they're responsible for. But they're also doing something that has historic meaning for working people in the United States. They have been on strike as we go to press for over a week. All 55 counties in the state of West Virginia, the schools are closed because these public school teachers have decided that enough is enough. They have been sacrificed in terms of how they're teaching and how they're treated. Their children. The public future of this country have been sacrificed to save money while you cut taxes for corporations and the rich. It is a scandal. It's been a scandal and we've all known it. But the teachers of West Virginia are doing something about it. So I want to talk to you briefly about it. They deserve our respect, and most importantly, they deserve to be understood. The public school teachers in West Virginia are denied by the law of that state from collective bargaining. They have no contract with the boards of education and ultimately the state of West Virginia, because the law prohibits there from being the bargaining that produces a contract. They have two or three unions, but they are very small and. And very weak, since the unions can't bargain collectively by law and cannot have a contract by law. So what these teachers have done in every One of the 55 counties of West Virginia is to organize the solidarity of working people. They will not participate in a fraud in an attempt to deny young people the kinds of education that schools are obliged to have, that the future of this country requires them to have, and that the economic realities mandate. They will not go to work without the resources that they ought to be given, not just their own salaries, but also the monies to provide the education children need and deserve. They have organized themselves. The unions may have helped, but it has mostly been the workers themselves who show in their organization what a powerful organized labor movement could be. They didn't do it with the unions as much as they did it on their own. And that's the most important potential transformation of the American labor movement that I've seen in a long time. So hats off to the teachers of the public school system. And from what I can gather, the public school teachers of Oklahoma have, have been watching real closely and are thinking of doing something very similar very soon. The next update I want to talk to you about is what has been in the news so much, the tariffs. The decision by President Trump to impose, at least he says he's going to, as we go to Press, a 25% tariff on steel imports and a 10% tariff on aluminum imports. What is this about? Well, let's first be sure we all understand what a tariff is. It's just a special name for a tax. Basically what a tariff does is say if steel comes into the United States, whatever the price being charged, the importer is going to have to pay 25% more than that price. A tax on the steel that will go to the federal government which is imposing the tax. And the likewise 10% for the aluminum. It's very good news for the producers of steel and aluminum here in the United States. See, it turns out they haven't been doing real well. They can't compete with imported steel, which is either of better quality or lower price or both. And of course, when companies can't compete with, one of the strategies they're free to pursue is to get the government to protect them by making it more expensive to buy the better quality or lower priced imports. It will force buyers here to turn to the American companies and guess what? They can jack up their prices so long as they stay just a little bit below what the imported cost will be with this new tax. And that will allow them to raise prices to. To whom? To all the rest of us. To the companies that buy steel and aluminum in this country. Let me give you the two examples everybody cites. The automobile business in this country buys steel and aluminum. The can business, you know, canned soda, canned beer, all of that, canned vegetables. They use aluminum, etc. Also in large quantities. These companies will be hurt because they're going to have to pay higher prices for the steel and aluminum they buy from the American companies that get protected by the tariff. So now let's look at what this means. The reality, as any trained economist knows, on the one hand, you may get some more jobs in the aluminum and steel business because their prices are going to go up and they're sitting pretty. But you will certainly lose jobs in the companies that buy a now higher priced steel and aluminum because their profits are going to go down and their conditions are going to deteriorate and they're going to lay off workers. No one knows in advance how this will play out. There's good reason to believe that the company's buying the higher priced steel and aluminum will be more negatively affected than the few companies in America that remain that produce steel and aluminum. Certainly Mr. Trump and his advisers don't know how this plays out. And this is the most important thing for me to get across. They don't know, but they don't care. And let me explain why. Why Mr. Trump was elected president in good part because he promised Americans whose economic conditions as we document every week have been deteriorating pretty badly for most of the time since the crash of 2008. He promised them to turn the situation around. We have explained to you over and over again that he cannot do that and he is not doing that. That continues the tax cut he gave to corporations and the rich in late December are just part of that story. Well, the poor President Trump, who can't deliver on the promise to improve the actual conditions of the American mass of people, therefore resorts to symbols, to theater, to to pretend activities that make it look like he's doing what in fact he can't do. So he slaps tariffs, so he ejects immigrants. He does all this stuff to blame other people for the economic foreign immigrants notice foreign trade competitors, foreigners always good to scapegoat foreigners. We when your system and your society are in trouble. So he's doing that. And this is just more symbolism. But Mr. Trump has a second reason for doing this. By putting tariffs on steel and aluminum, he makes those companies depend on him. They're going to have nice profits now if he imposes those tariffs because they can jack up their prices since the cost of importing those things has gone up. They will depend on those tariffs staying in place for their profits. So they're going to become big boosters of Mr. Trump. They have to. They will depend on him. At the same time, the automobile and aluminum can companies are going to be going to work to persuade Mr. Trump to reverse himself and not impose or not continue those tariffs. And headlines indicate that the leading economic adviser of Mr. Trump, Gary Cohn, is busily organizing auto companies and can companies to come to Washington. In other words, Mr. Trump positions himself in the middle and so he can let the car and can companies on the one hand compete with the steel and aluminum companies on the other. Who's going to back him more? Who, who's going to contribute to his reelection campaign, which is already underway? More he can have them bid for him because they will Depend on his decision. He likes to be in that position. It will help him run for office. As usually is the case. Countries that impose tariffs are doing it for domestic reasons. They don't care what the long run international effects are because they won't be in their offices that many more years. That's true for Mr. Trump as well. And as a result, don't look at the details of the international effects because that's not what this is about. This is domestic politics of Mr. Trump in an economic system that is imposing hardship on the mass of people. That's the fundamental cause and function of these tariffs. The next thing that caught my eye this last week was a decision in Germany. I want to talk to you about it. The German government has officially decided to make public transportation in five major cities free. That's right. You can get on a subway or a bus or a, or any other public transportation run by the government and the cost will be nothing. It will be free transportation. Why are they doing this? Two reasons. The first one has to do with saving money. It turns out that when you look at the cost of public transportation and you have all the costs of charging money for it, tickets, ticket takers, people on the transportation to take a ticket, to monitor ticket, to check whether you have the right ticket, these people all have to be paid. This is an enormous cost. There have to be computers to monitor the details. There have to be computers to print the tickets and to catch all of that is saved if you make it free. The issue disappears. And they're discovering that the savings there are are very close to what they take in. It makes no sense. And they could find other important work for those people to do that would make German society better. And they're thinking rationally like that. What an interesting shift of the mentality. But there's a second reason, and this one is very important, because it's having other effects. The rules against air pollution in Europe are strict and unlike many other places, they're actually enforced. And the Germans are falling short of the rules they helped to write and they are being required to adjust. And by making public transportation free, they are giving an enormous incentive for people to leave their private cars at home and to use public transportation for since it's free instead. And that's a major goal here. They've also passed rules that allow German cities now under the law to ban all diesel driven cars. Germany relies on the diesel engine in its automobiles much more than the United States, for example. It's a major part of their private car fleet. Well, the combination of banning diesel cars from operation in these cities, which has the interesting effect of rendering the value of a diesel car in those cities worthless or nearly so. Being accompanied by free public transportation. It's unquestionable where things are going. And I want to make a comment as an economist. Using the private car for transportation has been an economic irrationality for most of the last century. We have done that in order to profit private automobile companies and all the associated industries who have prevented us from having the quantity and the quality of public transport we could otherwise have had. Not because it's good for us, but but because it's good for their profits. You do know, I hope, that the private automobile is the largest cause of air pollution in our society, that the private automobile is one of the largest causes of death and injury every year to the population of countries that rely on the private car. You know that it wastes an enormous amount of energy, fossil fuels particularly. It wastes an enormous amount of material, metals and other things that go into it. Public transportation is safer and cheaper as a way of getting people per mile of where they have to go. It is true. It has been proven a hundred times now under the current conditions of a capitalism spinning out of control. Germany is taking the lead in actually having to do something about that and is therefore questioning the private automobile as the icon of our capitalist system. As usual. At this point I want to remind you that we maintain two websites that I urge you to make use of. Today. I'm going to tell you something about them that is special. I normally mention that you can communicate to us through these websites or rdwolf with two Fs.com and democracyatwork.info that's all one word, democracyatwork.info. these two websites not only allow you to communicate to us, they allow you to follow us on Facebook, Twitter and Instagram. They carry material that will be of interest to you. They are available to you 247 at no charge whatsoever. But before moving on today, I want to tell you briefly about DemocracyAtWork's newest podcasts. Again, democracyatwork.info. we are proud to add to our lineup two new and exciting podcasts. One is called Left out and the other one is called Puerto Rico Forward. Left out, hosted by Paul Sliker, Michael Palmieri and Dante Della Valle, creates in depth conversations with the more interesting political activists, critical economists and organizers. The next episode is with Stephanie Kelton, who has been on this program, a modern monetary theorist who worked closely with the Bernie Sanders campaign. Please go to our website and indeed to most podcast platforms and also on patreon.com leftout to obtain and follow these podcasts and and be sure to follow left out on Twitter eftoutpodcast. The second podcast we're excited to announce is Puerto Rico Forward. It aims to educate listeners about the archipelago's vast economic and political history. It's hosted by Andre Mercado Vazquez of San Juan, Puerto Rico, and the Puerto Rico Forward provides fascinating insights into the legal and economic battles that have made Puerto Rico what it is today. Listen or watch the podcast on our website or [e-mail] Puerto RicoForward. We really are proud to have these podcasts available to you on our website. Next update has to do with the United Kingdom the statistics are now out and the decade from 2020 to 2015 has now gone down the history books as the worst period of time for the declining standard of living of British UK households in 50 years. Of course it helps explain why angry workers at such a lost decade, a deprived decade when the rich got richer in Britain and everybody else had these results, that they were angry that often this was managed by a Labour Party government, Tony Blair and what he represents. And of course it explains in part why angry British workers voted for Brexit. Of course, they now understand that voting to get out of the European Union is not a way to deal. That wasn't their problem being in or out of the union. Their problem is an economic system geared to take care of of a minority at the expense of a majority. To give you just one idea, a statistic that caught my that the local councils. It's an important part of British government. Local councils closed more than 500 children's centers since 2010. Government funding for the children's center was cut from 1.7 billion in 2010 to less than 10, $850 million now. That's a 50% cut in the program for children. This is part of the decline of capitalism in Western Europe, North America. As capitalism moves its center of activity and dynamism eastward into Asia and as that shrinks the well being of the capitalist economies of North America and Western Europe, there's a scramble in those societies. We who's going to lose? Who's going to take it on the chin? Who's going to have to adjust downward as capitalism finds more profits in Asia than it can squeeze out of Europe and North America? And in each of the societies it's organized to put the burden on those who can least fight back the middle class, the working class, the poor. And that's what's happening in England. And you can see from these numbers what kind of effects it's having. And of course it is making the British people begin to question and to begin to find meaning in a critical perspective on British capitalism, which at this point is the strong suit of Jeremy Corbyn and his wing of the Labour Party there. Politics in Europe again take my attention. Iceland has a new leader. Prime Minister Catherine Jakobs Doter, 42 year old woman, is the fourth Prime Minister in two years. I mention this because of who she is. She isthis is her own self definition, a socialist, feminist and an environmentalist. She leads the left Green movement and she's in a coalition. But here's the surprise with two conservative parties that have traditionally run Iceland but can't do it anymore because the mass of the Icelandic people will not support the traditional old parties because they're hooked up with the traditional old capitalism that has made such a mess of the world in the last 10 years and especially of Iceland. Her famous statement the other day was, quote, people don't trust politicians. Well, she got that part right. Question is whether she can carry through and understand that the problem of Iceland is its capitalist system and actually chart a course to get beyond it. And much the same I can say about the recent election in Italy where once again the old traditional parties were thrown out, were voted down new parties as the Italian people explore. And even some old parties, yes indeed they the old Berlusconi with his dye blackened hair to try to pretend he isn't the old political machine that he once was. They too are discovering the British people, the French people, the German people, they're not voting for the traditional. The Germans did the same recently in the two old parties, Merkel and the Socialist party of Germany getting together to run a combined government. Because together they barely get 50% of the vote when once they rule the roost with nobody challenging them. The middle of politics that supported classical capitalism since World War II is disintegrating as the capitalism moves east and leaves North America and Western Europe in a declining situation. My next update has to do with the return of something we thought we had done away with decades ago. I'm talking about debtors prison over the years and we're talking centuries. When people have been unable to pay back debts, the angry creditors often put them in jail. The debtors pointed out that if I'm in jail I certainly will not be able to pay off my debts. It's crazy. For you to put me in jail. Let's work out a deal where I can try to continue working and figure out some way to pay at least part of the debt. But. But putting me in jail is shooting yourself in the foot. Most people figured that out, but of course the lenders are still angry. Why am I telling you this? In the United States today? Listen to these statistics, folks. One in three adults has a debt that has been turned over to a private collection agency. And here's what those clever folks have figured out. You can arrange in the courts not to put a person in debt prison because he or she has a debt. But here's what you can do. You can use the courts to force an appearance for that person in court on such and such a day to deal with their debt. And if they don't show up, then they have a probability of being in contempt of court. And for that they can be put in jail. So by this little maneuver, the collection agencies are able to threaten millions of Americans. You better pay or else we're going to do things that land you in jail, which is what the whole debtor prison was all about anyway. This, of course, has hurt poor people more than others, people of color more than whites. The usual story of kicking the can down in the population and hurting those who can tolerate it least. Well, what's the solution in this system? Not much of one. Because you might say, well, if we tighten the laws, you can't use this abuse. Well, then the loans won't be made and these people need these loans. The major category of loans that fall into this dilemma are what called payday loans. When you borrow money before getting paid, promising the lender that you'll use your pay next week, next month to pay him or her back. If you deny these people loans, you again make their lives difficult. The fundamental problem, we're not paying the mass of people the kinds of salaries that would make them no longer need to pay payday loans, which often raise interest in the neighborhood of 400% a year. This whole scandal has to do with a system that, that imposes unlivable salaries and wages on a huge portion of its population. That's the problem. If you don't deal with that problem, you're endlessly moving people around from one abuse they suffer as a result of being in debt to the next one. And you're making lenders have the incentive to figure their way around the laws and limits that you might otherwise impose. The last item we have time for has to do with what happened to rich Universities Endowments. Endowment is the name given by universities lucky enough to have some money, if they can put that money aside, invest it in stocks and bonds, and make interest off of that as a way to build up their wealth beyond what they would otherwise have to get from the students who, who come there and pay fees. I was interested to discover that over the last 10 years, a very difficult decade for American working people, the universities with endowments, that is the richest ones, most public universities have no endowments and even most private universities don't have much of one. But I wanted you to know that mit, which was one of the best, did the following. With its wealth, it rose 7.6% per year. Year, folks. That means over the last 10 years, its income from investments doubled. Harvard, which did way worse than most of them, did 4.4% a year. That's a roughly 50% increase over the last 10 years. Did your income go up by 50% like poor Harvard's? Did it go up by 100% like MIT's? My guess is it didn't go anywhere near that. The mass of people have had a harder and harder time. But the richest universities that have money set aside, like the richest people everywhere else in this country did real well. That's why the inequality problem is so bad and getting worse. We've come to the end of the first half of this Economic Update. Thank you very much for being with us and I urge you to stay with us. After a short interlude, we'll be back with Dr. Harriet Frad because it's the beginning of the month for us, and so she will be here to discuss the economics and the psychology of families in our economic system. I'll be right back. Welcome back, friends. Greetings to the second half of Economic Update. It is my pleasure at the beginning of each month to welcome Dr. Harriot Fraad to the microphones and to the cameras in order to explore the crucial intersection between economics and psychology, between what is happening in the economic parts of our lives and what is happening in the innermost and intimate parts of our lives. Dr. Harriet Fraad, as I think you by now probably know, is a mental health counselor and hypnotherapist in private practice in New York City. Her work explores the intersection of American personal, economic and political life. Her most recent articles have appeared in Alternate and the book Knowledge, Class and Marxism without guarantees, published in 2018. She appears regularly every month on this show and also on other television shows, most recently redacted Tonight with lee Camp on RTTV. Her work can be found at her website harrietfraud.com and I'll spell that for you. H A R R I E T F R a a d harrietfraud.com so it is really with great pleasure that I welcome to this program again, Dr. Harriet Fraad.

[B]

Thank you. Glad to be here.

[A]

Well, as we discussed in preparing for this program, we're going to talk about the American traditional family. And by traditional family I mean the kind that we used to take for granted. An adult male who goes out of the home each day to the workplace, comes back at the end of the day, a dependent wife who stays at home in the house and cares for children, if there are children, manages the household and so on. This traditional family, we are being told, and this is what I want to begin talking to you about, is literally breaking down. More and more Americans cannot or do not want to, to live in that institutional setting. And we know enough about American history to know that the family, that traditional family used to be a mainstay, at least for large portions of the American people, as part of the institutional structure of our society. So I want to explore with you what's happening, why it's happening, and what some of the consequences are about all this. And to begin, I want to make what always strikes me as a crucial point and please of course, comment on it. If, as I know, you are going to tell us, that traditional family is disappearing, I know from my own personal experience in my life that for many people going through the breaking down of these traditional families, it is excruciatingly painful. It was not expected. We were not prepared for this sort of thing. And so being Americans, many of us turn inward. In other words, we blame ourselves for the end of an institution we came to rely upon or to expect. And now I'm urging you and others to confront that this isn't really a personal story. There's too many millions of people that it's happening to. This is a social process. It has social causes, it has social consequences and it may have social solutions. And those are what I want to explore with you. So let's begin. Give me your take. Is the traditional family breaking down and what signs are there that would lead you to believe it is or it isn't?

[B]

Well, it certainly is breaking down because the economic and social conditions that supported it for the families and for the mass of Americans have broken down. Now, what used to be the mass Americans was white people. We have had greater mingling. Now, African Americans could never afford dependent wives and children and wage earning men because African American men did not earn family wages as a whole. However, for the mass of Americans, what was a buttress and center pole that held up the tenth of American life is collapsing. And it's collapsing because the social and economic conditions that held it up are collapsing. Of course, there's some psychological role, but the basic problems are social and economic. Because the family wage no longer exists for the mass of people.

[A]

You mean by family wage an amount of wages that allows the man not only to reproduce himself, but to take care of the wife, the children, the dependents. The dependents at home.

[B]

That's right. That doesn't hold up anymore. Those union fought and won. Well paid jobs have been exported, robotized, mechanized, computerized by capitalists seeking greater profits. They're the culprits here, and they weren't stopped. And that's what they've done and continue to do. And so what happened was in the 1970s, as male wages collapsed because their jobs were exported, mechanized, robotized and computerized, is wives had to enter the labor force. Black women always had a greater participation in the labor force. But mass of whites doubled. The number of women in the workforce doubled starting in the 1970s. Including mothers, everyone. Because two wages didn't even earn what one wage used to in terms of the real wages that support a family. Now, sex and gender roles were polarized. At that time. Women were taught to be nurturant. Little girls played with dolls.

[A]

You mean in the old traditional family?

[B]

In the old traditional family. And unfortunately, these gender roles in many ways continue. Boys played with guns, boys did boxing and football, Girls played jacks and jump rope. Very different kind of acculturation for boys and girls. Now, with the breakdown of the nuclear family, women had a huge advantage. We had a women's liberation movement, later called a feminist movement, that encouraged us to get out from under dependency on men, to fulfill ourselves or at least make money in jobs, to be equals in the household and outside of it. Whereas men, who depended on women for their emotional support, for their social connection, for their connection to their children and their relatives were and are lost. Which is one of the reasons why all the mass murders are committed by men, overwhelmingly white men who are lost.

[A]

Are there signs you can give us of the sort of the breakdown of the traditional family? You know, basic statistics?

[B]

Yes, I certainly can. In the 1960s, about 1/4 of marriages ended in separation, legal separation or divorce. Now it's 50% of first marriages, 60% of second marriages, and 70% of third marriages end in separation or divorce. And between 15 and 20 of couples who are married split without having anything to fight over in terms of assets. They just split. They don't bring the government into their split.

[A]

So the percentage of traditional households that break up is a clear majority.

[B]

It's a clear majority. And the only marriages that tend to remain are the marriages of the 1% where dependent wives are sustained by their husband's high wages and where nannies and paid servants do the domestic labor and the cleaning and the cooking and so on.

[A]

So in a sense, having a traditional family is unaffordable.

[B]

It's a luxury good. College educated couples tend to have greater longevity in marriage. And it's an interesting thing that the biggest development, the fastest growing development among married couples is married couples without children. Because if both people have to work and childcare isn't provided by this government and has not been provided since World War II when they wanted to get women in the munitions factories, There really was a good system of federal daycare, but there isn't and hasn't been since. So that people don't want to have children. It's too expensive. Childcare is ridiculously expensive. It's more than a community college tuition every year for each child you may have. And people are exhausted when they get back together at night. College educated people tend to have take out food or go out to a restaurant and hire somebody to do the cleaning. And so that the conflicts between men who expect their wives to love them by doing this domestic labor and women who can't stand to do that after a long day, those contradictions don't appear as often among couples who have more money, higher wages, more education, and so on.

[A]

I was struck also by the statistic I believe you mentioned once, about the percentage of children that are born in a traditional household versus those who aren't, and how that has shifted.

[B]

That has totally shifted. Now, 42% of children are born outside of a legal marriage. Some of them are born to cohabiting parents. Some of them are born to people whose partners have split or never existed. Because some women want a child but not a man, or some men want a woman but not a child. And children are the great loser losers here because the kind of stability and support that would help children grow up is something Americans don't have, even though other wealthy countries routinely provide those.

[A]

Now, I know that there are many causes for the breaking down of this traditional family, and you've documented those statistics to kind of prove it that it's happening. And as again, I say it's many causes, but this is a program about economics. I want to explore the economic. Is there anything you can add to the basic argument you've already made that the unaffordability, the stagnation of wages in the face of rising costs of having a family make it an impossible decision for people who want to have children, but want also, understandably, to be able to provide properly for their food, their clothing, their shelter, their education, their recreation, and so on. Is there more to say about the causes?

[B]

Yes, there is. If you look at these interesting phenomena that are brand new for the first time in our history, the majority of people of prime fertility age, when people used to have kids between 18 and 35 years old, are not married. Partly that's because the economy demands that both people attend to their jobs, whether they're careers or jobs. The seniority that you get depends on your being there and working. That's why in some big cities, women actually earn more than men before the age of 35, because they're not getting married and having children before, but they're working on their careers, and one has to do that to survive. Marriages don't last. Women have to provide for themselves and perhaps for children, because they don't have the security of a lifetime marriage. And although marriages were often miserable before, children did have greater support in terms of the stability of of a unit, no matter how unhappy.

[A]

Michael Kirk, let me interrupt you because it strikes me what you're saying has enormous impact on a story we did in an earlier program about the union, the IG Metal Union in Germany, which carried out a major strike last month where the chief objective was what they call work, life, balance, and the fury of the German workers. This is a huge, huge union with over 3 million workers that their biggest demand was to have hours and working conditions that will allow the workers to have a balance, which they meant time and support for family life, not just work all the time for the employer. I mean, really underscores your point.

[B]

It absolutely does. And where America is very far behind is that every other western industrialized country offers maternity leaves, and those leaves are paid for by the government. So the companies that people work for are not fighting that surreptitiously because they are compensated. All they have is the inconvenience of temporarily replacing someone. Those leaves are also usually accompanied by paternity leaves so that men can bond with their children, family leave. We are the only western industrialized country, or even an industrialized country like Brazil, that is poorer, that has no paid vacations that are guaranteed.

[A]

We're the ones who don't but they do.

[B]

We don't. And they do. In France it's five weeks that are guaranteed. In Brazil it's actually six weeks. Weeks, but whatever, you know that weeks of paid vacation where families can be together, plus family leave, which is now being discussed, but and is not paid, paid family leaves. These are things that allow people to cope with the problems children have. They don't feel well for the day, your sick mother needs attention, whatever it is. And families need time. And they don't have time because we, unlike the other western industrialized countries, don't have up to five years of a maternity leave paid or excellent childcare centers. People are juggling these impossible schedules. One works during the day, one works during the night. Both of them are overwhelmed.

[A]

Has that ever struck you, as it strikes me that the country that does arguably the least to support families is the one whose politicians talk endlessly about family values, their commitment to family values. And they don't do any of these things that have been demonstrated in country after country to be crucial family supports. There's an irony here that is stunning.

[B]

Well, one of the things that the right wing has done is push family values, which means the government and rich taxpayers don't have to pay for things like childcare because the family should. It was the right that opposed public education. That was the role of the family. And that touches an emotional nerve as Americans are working, worried quite correctly, that their families are weakened.

[A]

But what sense does it make sense to give the responsibility to the family without giving the wages and other resources to be enabled to carry out the responsibility?

[B]

It makes no sense. And it's interesting that the red states have an even higher divorce rate than the blue states. So the Republican states with their family values have even more divorces than the blue states that don't assert that so regularly. These also the highest porno use is in the red states, with the highest of all in Utah, the most religious state.

[A]

Okay, let me switch the conversation. I want to explore with you the consequences, what flows from this breaking down of the traditional family. What are some of the major economic and political consequences that we can connect, can see coming out of this disappearance, we might almost say, of a traditional family as part of the institutions of this society?

[B]

Well, 75% of kids go home. School age children go home to an empty house at night.

[A]

You mean in the afternoon?

[B]

In the afternoon and in the hours when school is over and their parents come home are the greatest hours for crime against children. And crime by children, it also means obesity. One in five children in The United States is overweight to obese.

[A]

And how is this connected?

[B]

I am connecting that because kids used to be able to play outside with a watchful parent looking on if they went just right downstairs, if they lived in a place where they could go out, or a parent who took them to the playground. Now they have to stay home and in order to be safe, watch TV or do video games because the streets are scary and unsafe and their parents aren't home. So it means that they're sitting there when they should be outside playing the way kids did traditionally. So it also leads to obesity. It also leads to children watching porn. The majority of children have seen all sorts of porn by the time they're in high school. And that deforms their idea of what intimate contact should be. It makes it a kind of eroticizes of violence against women. And that's certainly a bad hazard. Another thing that's happened is that there's more and more drug use by parents and children left orphaned because their parents have overdosed. We can't forget that the biggest cause of death for people between 14 and 55 is overdoses. In spite of naloxone emergency crews that can come and help you. 64,000 people died last year of overdoses. We should mention that 55 people died of Muslim terrorism and note the difference in resources for each group. But you have mass deaths. The newspapers are peppered with pictures of parents who've OD'd and their kids are in the back, back of the car.

[A]

Is your argument that the collapse of the traditional family contributes to a loneliness.

[B]

And isolation and an impossibility of life? I had a client who made a big impression on me because she said, you know, if I weren't taking oxy, she was an oxycontin addict. If my kid says, which her child did, oh no, tomorrow's Valentine's Day. I need a valentine for everyone in the class. She'd be absolutely upset and bereft. But she said, thanks to OxyContin, I say, okay, honey, we go to the all night drugstore and we get a whole big bag of Valentine's. And she got her oxycontin from her husband who was a dealer, instead of child support. But you know, she said, look, I know it's not good for me, but I can't cope with a full time job and a child without oxycontin. So it really leads to addiction because people are desperate, they're lonely, they're frustrated, they can't manage in a way.

[A]

Would you say the following Is a fair statement that the political and religious authority pushes the family, the traditional family, but at the same time the economic underpinnings of the society prevent people from having the resources with which to do it. And they are torn apart because they blame themselves, when in fact this is a social problem that has denied them the resources needed to live out the life they the way they are supposed to in the church and in the official ideology. This is a terrible torture of people to put them, to tell them this is the way you ought to live and then deny them the means to do it.

[B]

A possibility. You know, we are the only society and we should really look at France because people say, well, the Scandinavians, which have near equality women, earn 98% of men, they have housing allowances for single mothers. They have fabulous childcare, after school care, summer care, et cetera. They say, yeah, but they're more homogeneous, they're almost all white. Well, France is at least as diverse as we are in terms of race. However, after school programs and early childhood programs are everywhere. Every town, no matter how little, has an athletic center with a huge range of programs, not all of which are athletic, but programs for after school and weekends. We don't. Every other country has this. France has vacation programs that are full time programs for the summer and on vacations where if the parents don't have a vacation, the child gets a chance to be in a vacation camp. So, and that cannot cost any more than 15% of your income.

[A]

Let me push a last dimension. This is obviously a huge topic. What would you suggest are things that we could do if this traditional family is falling apart? Are there alternative ways to organize society that we could begin to move into to relieve the pressure, the torture that we are imposing on our people by this absurd capitalism that won't provide the resources for a lifestyle it tells people they ought to have?

[B]

Well, there are a lot of things you can do, I mean, which are short of all the things that country like France does. Free daycare before three, a dollar an hour for excellent daycare before that. Okay, you don't even have to start there. What is already happening in the United States is that they're copying programs in Sweden that have a big communal kitchen. This is housing structures in a housing structure and nice dorm rooms which people can decorate however they want for adults so that those majority of people between 18 and 35 who are not hooked up with anybody have a way to get together. They have social programs, they have movies, they have televisions. And there was a very successful experiment that Wasn't copied sadly enough for older people where they redid a single room occupancy hotel had rooms for the elders and a big collective kitchen and big televisions in the lounges. All sorts of programs where people could leave their little apartment and come and be with other people. And the Medicare bills tumult went way down. They tumulted down because they were healthier, people were happier. They were happier because they could connect with other people. There's also co housing in the United States where people with and without children buy a big housing complex and have different apartments. And you have systems of signals if you would welcome children to come over at one point or not. And there's a lot of sharing. Now, those are things that are already.

[A]

Happening, but they could be done on a massive basis, on a massive scale if there were an awareness of this breaking down and a commitment to provide alternatives.

[B]

Absolutely. And what you could do is push that. If you are going to assert family values, you have to assert the money that goes with them, which is the supports for an organization that really can't survive outside of support because the traditional roles have really broken down. And what's happened is men, who are particularly lost in their school was women's job was connection. So when a marriage breaks up, women connect with their friends, they connect with their children, they connect with their relatives. Often their lives are harder because women are the poorest Americans, adult Americans, children are the poorest Americans, but they have some emotional connection. Men are really lost. And what often is they put more pressure on sex to connect them because they don't have the kind of ongoing emotional social connection that they got through their partners, through their female partners and their wives. And they're very lost, which is why they are committing the crimes in our society and doing the mass murders as usual.

[A]

I wish we had more time, but we've come to the end. Thank you very much and I will see you and speak with you again next month, hopefully.

[B]

Yes.

[A]

Thank you all for watching. We've come to the end of another program of economic update. I hope you have found it as interesting as I have. This absurd situation of demanding our people live in an institutional, traditional family without providing the means for it is an exquisite torture of people, an exquisite failure of an economic system to live up to the politics and morals it espouses. I want to thank truthout.org, that remarkable independent source of news and information that has been a partner with us, as I hope all of you will be, is making use of this program and what it has conveyed. I look forward to speaking with you again next week, Sam. Sa.