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Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives. Jobs, debts, incomes, our own, and those of our children. I'm your host, Richard Wolff. I want to begin today with a problem of the American capitalist system. It is the capture by business of the government agencies that are supposed to regulate them. The term in economics is called regulatory capture. When an industry or an enterprise that's supposed to be supervised and controlled by the government, usually because of past bad behavior by that industry or enterprise, instead, what happens is the company either bribes or donates to the campaign of or finds a way to capture and control the very regulation that was supposed to control it. It's a serious problem in the United States, bad or worse than in most other advanced industrial capitalist economies. And I want to give you some dimensions of this problem because it is becoming more, not less, severe under the Trump administration. I'm gonna begin with random examples. The cosmetics industry, because cosmetics are something that people put on their body, on their skin, and do so literally every day. It is something that in Europe, in the European Union, has been very concerned about what those chemicals that are in those products can do. And therefore, over recent years in the European Union, they have banned or restricted 1,300 chemicals in the cosmetics industry. By contrast, the United States, over the same period of time, has outlawed or curbed 11. That's right, 1,300 chemicals limited in Europe, 11 limited here. Think about it. Well, it led a Connecticut state senator last year to think about it. He's a doctor, but he also serves in the state Senate of that state. His name is Alex Bergstein, and he proposed a law in Connecticut that the United States, or at least the state of Connecticut, would use the same standards in banning chemicals that are in existence in Europe. Just catch up with the Europeans. When asked about his law, he said given the power of the chemical industry and the power of the cosmetics industry, he didn't think his bill would likely pass. But I thought it was an interesting piece of information. Here's another place where dyes that are basically chemicals are used in the production of cheese, chocolates, and juice. There in Europe, a lot of the chemicals are banned again, because they have been found, particularly the chemicals in artificial colors and preservatives, to hyperactivity. They are linked to hyperactivity in children, and for that reason, they were banned, but not in the United States. The most widely used herbicide, plant killer, in the United States, is called altrazine. It has been banned in Europe since 2003 because it pollutes water supplies. Lead based paints. You know about them, Lead based paints, they were banned in much of Europe before the Second World War, but it took the United States until 1978 to ban lead based paints in this country. Why do I talk about this? Well, once upon a time, liberals, socialists and others looked to the government as a way to control, to limit the damage that is done by enterprises for whom profit is the bottom line and who don't care therefore about these other consequences. But the problem is you can't go that way anymore because the government has been captured by those it is supposed to control. It won't work. That old plan of giving the power to the government, at least not until we have very different governments from those that we have had and more and more of which we have had in recent decades. I want to turn next to the notion that the United States currently has a quote, unquote great economy, something that President Trump repeats and that a great many others seem to acknowledge. Well, no less an authority than the International Monetary Fund, of which the United States is a member, gave a kind of report card, an assessment of where the American economy is and they concluded it was not in great shape. In the understatement for which the IMF is famous, quote, the benefits from the decade long expansion of the American economy have not been widely shared. Okay, plain English, the rich got richer and the poor got nothing. That's what happened over the last 10 years. And it by the way, gives the lie to the old argument again of liberal people that somehow if you grow the economic pie, if we have economic growth, then everybody will benefit. No, the last 10 years show us if at the same time that you grow the pie, cause indeed it grew, you decrease the slice that's given to working people. They're not better off. And the reality is that even though the economic output of goods and services grew very, very substantially in the last 10 years, the real incomes of average Americans barely budged at all. All of the gain went to the rich at the top. Here's a list of what the IMF says are signs that the economic performance in the United States is not good. I'm just going to read you some of their the impact of rising suicides and drug overdoses on falling life expectancy. The United States has now a lower life expectancy than almost any of the other countries in the G7 or the list of major industrial capitalist countries. That's not a sign of economic well being. The actual adjustment in the median income of the United States over the last decade or so has beenactually for the last 20 years has been 2.2% median income rise in real terms over that time, the gross output of goods and services rose 23%. So somebody's getting all that extra output. But the median, the average American isn't among the 40% poorest, 40% of the population. The wealth of that bottom 40% is lower today than it was in 1983. That's not the report card of a great economy. 45 million Americans live in poverty. By the statistics on poverty kept by the United States government, social mobility has collapsed in the United states. Back in 40 years ago, half of the young people at the same age as their parents were living better than those parents did. Today, half of today's young Americans earn less than their parents did at a similar age. I mean, it's a real collapse. And finally, we have some of the worst outcomes of our educational system of any advanced industrial economy. So whatever else you think about, if you look in anything like a balanced way at our economy, if you don't cherry pick the statistics that make things look good and carefully avoid looking at those that don't, if you don't do that kind of lopsided behavior, you get much closer to the IMF's assessment than to Mr. Trump's self serving effort at re election next year. The next item I want to turn to is the ongoing crazy theater of the tariff and trade WARS Propelled by Mr. Trump and the Republicans around the world, most notably against China and Mexico, but also against Europe and many other parts of the world. I want to explain what that is about and how it relates, if you like, to another blustery, bullying behavior of the same president and the same Republican Party, namely the effort to get the Federal Reserve in the United States to lower interest rates. What's the connection? Well, here's the problem. Everyone who follows capitalism knows it's a highly unstable system. On average, every four to seven years, capitalism has a downturn. People lose their jobs, businesses go out of business, production is cut back, the government raises less taxes, a catastrophe. Sometimes it's short and shallow, other times it's long and deep. The one after 2008 has been long and, and deep. So it's very present in everyone's mind. Well, if the average recovery is four to seven years, and we note that we're now nine to 10 years since the crash happened in 2008 and 09, everybody who pays any attention knows we're due for another one. And it could happen either later this year, 2019 or even worse for Mr. Trump next year, running up to the election in November of 2020. He doesn't want that to happen because he assumes, in my judgment, correctly, that if a big depression hits next year, he can kiss reelection goodbye. So what is he going to do? And the answer is he's going to cut interest rates. He's going to put pressure on the Federal Reserve to cut interest rates so that businesses will borrow more money, hopefully, and people will borrow more money, hopefully, and they will buy things, and he can at least push that recession, which everyone knows is coming, so it happens late enough in 2020 that it will not destroy his reelection. He tried to get Mr. Powell, his own appointee as the head of the Federal Reserve, to cut interest rates, but Mr. Powell doesn't want to do it because we've pumped so much money into this economy that if things really get going, there's a risk of an inflation, which is what he's supposed to do. So he said no. So Mr. Trump got angry and yelled at him. He did that again repeatedly. But he can't get anywhere. So he has a second plan. He is going to make it look like the world economy is going to crash. He's actually going to propel the notion of a disaster and hope that the incoming disaster will convince the Federal Reserve to stave that off by lowering interest rates, because nothing else will work. So he has to hype the aggressive attitude towards China. He has to hype the aggressive attitude towards Mexico that involved slapping tariffs on them. While he was over there pretending he was a king and queen with those folks in England. The American business community didn't like what he was doing. They let him know right away that those tariffs he was going to hit Mexico with, that might be good for your reelection. But if you do that, we're going to be hurt. And if we're hurt, you can kiss your reelection Goodbye. And in 24 hours, the tariffs against Mexico disappeared. They were all ready to go. They disappeared because Mr. Trump realized, ooh, ooh, this is not a way to get reelected. This is a way to get defeated. So that was the end of the story in Mexico. And immediately he hyped up the. The aggressive attitude towards China. Again, the same plan. I will get her reelected if it looks like terrible economic crisis is coming, because then the Federal Reserve will lower interest rates and then everybody, hopefully, will borrow and we will stave off. We will delay this catastrophe from coming down on us. Here's the global economic problems, Mrs. Lagarde, Christine Lagarde, who's the head of the International Monetary Fund, has announced officially that her agency, and it's one of the most respected agencies in the world for this kind of economics. Her agency estimates that the loss to the world in economic wealth from the United States China trade war, if it continues much longer, will be in the neighborhood of $455 billion. That's half a trillion unspeakable loss that will be, of course, pushed on those who can afford it least. We are watching the Republican Party and Mr. Trump ready to destroy vast sectors of a global economy to get themselves reelected. And the only really interesting question is whether the rest of the American system, the business community, the Democratic Party, the working class, will sit by and watch this theater played out in the way that it has been and the risks being taken to pander to this politician's reelection hopes. We've come to the end of the first half of this program. Again, I want to remind you, please sign up to be a YouTube supporter, where you get informed of what's happening with this program and our activities. Simply go to YouTube and slash democracy at Work and you'll find this program. Make use of our websites where you can communicate to us. Follow what we rdwolf with two Fs.com and democracyatwork.info and finally, as always, a heartfelt thanks to the Patreon community. Join us there. Your support and encouragement through Patreon is of enormous importance. Stay with us. We'll be right back. Welcome back, friends, to the second half of Economic Update for today. I am very pleased to welcome to our microphones and our cameras John Duda. He is the director of communications at the Democracy Collaborative. Some of you may remember Gar Alperovitz, with whom I've worked on and off over the years, works at that and has developed that over the years. John here works at the Research and Development Lab working on the democratization of the economy, which is one of their major projects. In addition to his work at the collaborative and working on models of worker democratic control of the workplace, John has practical experience. 15 years working with a bookshop and cafe in Baltimore, Maryland, known as Red Emma's. It's very well established, very well known. I've been there myself. And so I thought John would be a good person to talk not only about the theory and the idea of worker co ops, but the practical realities of them. So, John, welcome very much to the program.