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.

Key Discussion Points and Insights

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]

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]

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]

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]

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]

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]

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]

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]

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]

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]

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]

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.

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]

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 |

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.

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.