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Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives. Debts, incomes, our jobs, those of our children, those looming down the road. I'm your host, Richard Wolff. I want to begin today by noting a very old blame game that is circulating around major capitalist economies. It's not a new thing, but it's important to realize that it's an old thing being recycled yet again. So let's start with the United States, with Mr. Trump and the Republican Party. Who are they blaming for the difficulties of the United States? Here we go. Immigrants. The Chinese, our trading partners.
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And.
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And now also African Americans, because they are responsible for the decline of, say, Baltimore. And also, of course, his political opponents notice what's missing. The capitalist economic system. No blame at all. Let's shift then to England. They have a new leader, Boris Johnson. What does he do? Hmm. It'll come as a surprise. He blames immigrants and other foreigners. In his case, European Europeans with a little China bashing thrown in for good. And his political opponents, same story, same blame game, same exemption. Nothing wrong with the economic system. And in the European Union, you basically get the same thing depending on which of the many countries in the European Union you look at. They either blame the United States, China, trade war, or immigrants or their political opponents, left or right. In France, the leader, Macron, blames the yellow vest movement that has shaken France for the last several months. In Germany, Angela Merkel, on her way out, blames the far right. The resurgence of a fascism in Germany that is truly scary. In all of these kinds of things, there's always a grain of truth. There are problems for these societies that come from immigrants and from the Chinese, trade wars and so on. But there really interesting thing is they're not facing the problems of an economic system in decline. Capitalism in Western Europe, North America and Japan is having more and more troubles as an economic system as it serves a smaller and smaller rich minority at the expense of everybody else. But it's the job of all of these politicians to point the finger everywhere else but there. It's a blame game. You, you shouldn't be fooled. Then my eyes and ears were caught by a remarkable piece of reporting done by the Wall Street Journal. To give them credit, and based on the work of a professor of law at the Georgetown University in Washington, D.C. by the name of Adam Levitin. Here's what he did. A simple exercise, but boy, does it tell a lot. He asked how much has the median income of an American family changed over the last 30 years, counting from 1987 to 2017, a nice period of 30 years we can look at. And he said, I want to see how much income the 50% middle of the American distribution of income, how has it changed over those 30 years? And here's what he found. When you adjust for inflation, in other words, you adjust for the fact that prices went up. The median income in an American family went up 14% in 30 years. That's less than one half of 1% of a real increase on average for an American family. In other words, very little at all. And then he said, I'm going to look at three specific other things that American families have to pay for to see what happened to them, because it'll give us an insight. And here's what he found and I'm gonna give you the exact numbers. Housing prices, one of the most important things anybody spends money on over the same 30 years, 1987 to 2017 went up ready, adjusted for inflation. Taking account of rising general prices, it went up ready, not 14%. That's what people's income went up, 290%. That's right, tripled. So the cost of housing has taken a bigger and bigger chunk out of Americans income. They're still living in the same place. They're sleeping there and eating there. But the amount of their income they have to spend to be able to do those things has dramatically increased. Then he looked at public, public four year colleges. They're cheaper in general than private. How far did they go up over the same 30 year period adjusting for inflation? And here's what he found, that those kinds of costs went up 311%. They went up even faster than housing. So if you want to live somewhere and you want your kids to go to college, oh boy, have you had to cut back on other things to pay for those things? And finally he looked at per person healthcare expenditures and they went up 51% compared to the income that went up 14%. In other words, those three things, housing, college education and personal healthcare, really took more and more out of people, leaving less and less for everything else. And that's the reality. People have lived in the United States. And why? Because our economic system doesn't produce housing at a rate that will allow people to live in a home without being gouged this way. And what about college? Because our system doesn't provide the funding for four year public colleges that it used to provide. More and more of the payment for that education has to come out of the family sending their children to school. And in healthcare, well, we Talk about that all the time. The medical industrial complex, jacking up the prices of your drugs, of your hospital stay, of your doctor, of your medical insurance. And then you can see the squeezing of the American family as these three messed up parts of our economy eat up more of the real income Americans have. It is something to understand how this system gets down low into the individual lives we all lead to cause us the pain and the difficulty that's showing up in such an anger in our culture these days. I want to turn next to an idea coming from a number of the Democratic folks looking to be the Democratic candidate for president in 2020. And they're talking about co determination. This comes from Germany. In German it's called Mitbestimung. And here's what it means that the idea in Germanyand this has been true in Germany for decades is, is that because workers, employees are affected in every business where they're employed, they ought to have a say. It's a notion of democracy in the decisions made in that business. So the way the Germans worked that out with their commitment to democracy was to say that a certain number of seats on the board of directors of every company have to be filled by workers who are elected to those positions by other workers. So that in most large German corporations, for sure, a little under 50%, less than 50% of Board of directors, seats are filled by workers who are elected by other workers. And it's a notion of stakeholders, the workers should be represented because they have to live with the decisions the board of directors in any company makes. So they should be there. In the United States, of course, we have none of that. The vast majority of boards of directors have never had a worker on them. And those that have had any of it have had one or maybe sometimes two. So you see that it's absent in the United States, which is why the idea is coming. But lest anyone get too carried away with the novelty of this idea, now that you know, it isn't a novelty at all. It exists in Germany, which has been a very successful capitalist economy. Let's remember this is a minor reform. Sure, it's better than having no workers. But it reminds me of the history of when we got rid of monarchy and kings, when kings used to rule us, particularly here in the Western world, there were no parliaments. The king did whatever he wanted and nobody could do anything about it. People got angry and upset because they had to live with the King's decisions, but had no power over them. So they pressed to have a parliamentary. The King refused. But when he couldn't refuse anymore, he allowed a parliament, but he wouldn't be bound by anything. The parliament decided. So then the parliament pushed for more. And eventually, you know what happened? The parliament took all the power and eliminated the king. There are no more kings, except in a few countries that haven't made it that far yet. It's the same story here. The workers and the community and the customers of a business are the ones who care most about it and who depend on it. And they ought to be the ones making the decision, not simply the people who bought shares in the company. The idea that they alone should make all the decisions, which is how it is in the United States and in so many other parts of the world, is the weird idea like kingdom that ought not to exist in the larger society. Why do we have little kingdoms inside our workplaces? And that issue is being broached at least a little bit by talking about co determination, the workers participating in shaping what corporations do. It's long overdue. My last update that we'll have time for today has to do with what I think is a lesson given to the whole of the American population and maybe even the world by the courageous and politically active people of Puerto Rico who don't get anywhere near the attention and the credit they deserve. The people of Puerto Rico have been suffering from decades of the problem of being a kind of colony of the United States, even though we don't call it that, of putting into power there people who are often very, very corrupt. They suffered terribly and disproportionately in Puerto Rico from the capitalist collapse of 2008. They suffered disproportionately, the austerity afterward. The Trump administration particularly has been very hesitant to provide the support to this day that this society needs. They got very badly hurt by Hurricane Maria. Many of you will remember that afterwards. And then they finally have this leader recently, Rosello, Governor Rosello, who was caught by good reporters being misogynistic, homophobic and corrupt. The FBI arrested people in the cabinet and so on. And the people of Puerto Rico had too much, too many decades of corruption, too many decades of American domination and control without the benefits that were supposed to come with that disaster, from the collapse of capitalism, from the hurricane, and very little help of the sort that was needed. And of the help they got, many of it sidelined into the corruption that has been endemic there. So they went into the streets for a week or two. First 50,000, then 100,000, then 500,000. And guess what? After everyone said this would make no difference going into the streets. It made all the difference in the world. Governor Rosello is gone. His term wasn't over, but the people said, yeah, it is over. Bye bye, you're gone. And they're keeping their activity going. They want to make a fundamental change. The lesson here, political action in the street made the difference. Nothing else has. They made a statement the people of Puerto Rico that others around the world, including on the mainland, might want to think about. And in that final thought about Puerto Rico, Jeff Stein of the Washington Post pointed out a wonderful know a lot has been said about Venezuela and how bad the conditions are there that something like 13%, the UN says of people from Venezuela left Venezuela because the conditions are so poor and the enemies of Venezuela have liked to use that number. Mr. Stein quotes the UN saying the percentage of people that have left Puerto rico just since 2008 isn't the 13% that Venezuelans are leaving, it's 15%. The people of Puerto Rico are in worse shape than the people of Venezuela. Puerto Rico is protected by the United States and Venezuela is attacked by the United States. Think about it. We've come to the end of the first half. Please stay with us for a remarkable interview that will follow shortly. Please remember to subscribe to our YouTube channel, which is an enormous source of support and help to us. Make use of our websites rdwolffwith2f's.com and democracyatwork.info and as always, special thanks to our Patreon community for the continuing support you provide which is crucial to for everything we do. Stay with us. We'll be right back. Welcome back, friends, to the second half of Economic Update. It is my pleasure to welcome back to our cameras and microphones a friend of mine, Rob Robinson. He is a very active citizen here in the city of New York. He works particularly on all kinds of rights organizations, social rights, economic rights, but with a particular emphasis on homelessness, on the right to the land, the right to housing. He's been doing that here in the New York area, but he also does it all over the United States. He's worked with the city of New York, he's worked with the United nations. He's been active in Brazil, in Spain. He really is a kind of expert who even has his own personal experience to build on and working on this question. So I've asked him to come today and talk with us about homelessness in the United States. Rob, welcome very much.
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Thank you. Thanks for having me.
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All right, start by giving us a thumbnail. Your overview of the homelessness problem in the United states right now, 2019.
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So I think it's a huge problem. During the Obama administration, it was a focus. They identified it as a huge problem in this country. We had, nationwide, when Obama first took office, about 2 million homeless people, and a considerable chunk of that was veterans, and it was a focus on veterans homelessness as they created what is called the Interagency council on homelessness. 30 US agencies coming together to combat this issue and hopefully end it by in 10 years, 2020. I think in some aspects, they've attempted to do a good job, but this is government having to meet each other at different levels, local, federal, and state. And that's been somewhat of a problem.
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Is it getting better, getting worse? What's your sense?
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My sense is it's getting worse, Rick. And there are a number of factors that feed into it. Wages don't rise as fast as rents. That's a fundamental issue in this country. There was just a study released that said wages, including inflation, haven't grown over the last 20 years. As a matter of fact, rents have grown at five times the rate of wages over the last 20 years. That's problematic. People can't keep up, and it pulls the working class or the middle class into homelessness, the working class into homelessness. So it's a big problem in this country.
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Yeah. It's always struck me as very fundamental economics here. I mean, people become homeless because the relationship between the income they have and what it costs to have a home isn't working. So it's like a direct barometer of a dysfunctioning economy that isn't creating jobs and incomes adequate to what people need.
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Absolutely. And there's the underlying problem of poverty never being addressed in this country. There are folks that were born in poverty, lived through poverty, continue to live through poverty, and will need some type of a subsidy to maintain a certain level of living, a certain standard of living here, and they just can't make it on its own. For some of the reasons that you just labeled, there were no good jobs out there. You know, this country, the job base has been eroded by manufacturing moving outside of the US into other countries around the world where those companies are exploiting labor in those other countries.
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Would you say there is or there isn't a government program at any level, local, state, or federal government, to deal with this? I mean, you hear this, that, and the other thing. But is there anything, particularly under the Trump administration, any kind of dealing with this?
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Well, I think under the Trump administration, there's no focus on it. But, you know, prior administrations have to take some of that blame Also. You hear the Democrats, there are 24, 25 running now, you know, and none of them are speaking about this issue. Right. So it's going to take the ground up effort to bring this into the forefront. And I think that's part of the problem where people just aren't talking about this because basically we've shamed you in this country if you run into that problem. Right. If you can't, you know, you can't pick yourself up by your bootstraps in this country, you're a failure, it's your fault. But they don't look at the underlying causes of it. And I think those are the problems in this country. Right. Not being addressed from a fundamental point of view.
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Is anything happening among the homeless themselves? Are there movements developing? Are there efforts? Or is everybody just dealing with it as an individual problem living on the street or living in a shelter? I'm always struck in America that people tend to think that these problems can be solved individually. Each individual can somehow escape or somehow get out of it without seeing that there's a social problem. When you're talking about millions of people.
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Well, I think that's where it has to be addressed. There has to be popular and political education to make people understand the root causes of this issue. Right. Again, we'll go back to the shaming issue. People don't talk about it because they've been shamed into it. You've heard me say in the past, yeah, I lived through this and I understand the social causes. And we try in this country as best we can to paint this issue with a broad brush. Right? You're homeless because you don't want to work. You're homeless because you don't have an education. You're homeless because you have mental illness. You're homeless because you have a chemical or an alcohol addiction. So we paint everybody in a corner and people are shamed by that and won't talk about it, don't want to discuss it, even amongst close family and friends. They just don't talk about it. I made it a point after I came out of homelessness to say, okay, you're not going to paint me with that broad brush. But I also have to find others that I can encourage to share their stories. Because when you share those stories, trends start to develop and people understand that it's not their fault. And you're not going to be able to realize, quote, unquote, American dream in this country. If you're Never given an opportunity from the time you come out of the womb.
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Is there a movement developing? Would you say that? Or is that an exaggeration? Is there a movement to do something in which the homeless themselves are the.
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So right here in New York, I started my organizing with a group called Picture the Homeless. That's where I got my foundations for organizing. So the quick answer is yes. Is there enough? I don't think so, but there are huge movements that are developing. I was in Brazil last year and found a homeless group of street homeless folks organizing in six states in Brazil. 2009, I got to go to Budapest, Hungary as a member of Picture the Homeless and learned about the homeless problem there. There's an organization called the Varus Mendeke that folks are saying is one of the strongest social movements in Hungary at this particular time. I think on the west coast there's some organism. West coast of the US there's the Western Regional Advocacy Project organizing homeless people in Colorado, in California, in Oregon and up in Seattle. There are huge problems out on the West Coast. You look at a city like San Francisco and the city is just flooded with street homeless folks. And so our government is not getting at the root cause of the problem. Right. And while you have a city like New York who has over 550 shelters and some folks think it's a great idea, New York City has a right to shelter law which argues the point that if I go to the city on any given night and say I need a bed, the city must provide. Well, that's good in a way, but it creates this infrastructure of shelters. Right. You have 550 in New York. Right. In other cities you may have 10. Right. So I think it exacerbates an already ongoing problem. People get stuck in there. You know, it's serving as a home. A shelter is not a home. Right. A home is more than a roof, you know, it's a sense of community. It's all these other things that surround that. Right. And I think we have to think a little bit differently. Outside of the box of getting it.
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To root cause, what do you say to a person who says, look, a home is either an apartment or a house and we ought to be in a society which says if there are, as you point out, millions of people without a place, either houses and apartments that are empty have to be made available, or if they're not available, they have to be built. We seem to have a housing industry that can't provide housing, even though there's lots of vacant housing and doesn't build enough. And what is this in an economic system that simply can't solve a fairly obvious problem?
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Is it that we don't have enough, Rick? Or is it that there isn't the will to do it to fit the needs of the people? Right. I would argue that we'll never build our way out of this problem. What we need to do is think a little differently and use vacant spaces. Right. And I always use the foreclosure crisis during that time period because it's a key indicator on how we operate as a society. Right. During the financial crisis in 2010, 14.4 million vacant homes, 2 million homeless people. So you just put the homeless people in the people's homes. Problem solved. Right. I don't think we can build our way out of this. And I say that because you only have an infinite amount of land. And how you know you're gonna start building New York cities all over the country. Not everybody wants these towers in their particular states or cities. So there is an organized effort. Picture the homeless has started to push legislation within the New York City Council where they have to do a vacant census count, which I think is important. And now they're pushing to find landlords who keep those buildings vacant for a certain amount of time. I think you have to disincentivize people from doing the wrong thing. It sounds a little, you know, a little tricky the way I just laid that out. But I really think you have to penalize people. Right. Because what's our relationship to space? We have to think differently. And then it's a little bit difficult in a capitalist society, in a society that bases itself on profit. You know, there are some elected members of Congress, particularly four women, who are being targeted now because they think outside of the box. But I think that's the direction we need to go. We need to think about giving people who have a certain income limit certain subsidies so that they can realize that that right to housing that everybody deserves.
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Or we ought to have a proper jobs program that gives everybody a meaningful function in our society, helping one another and pays them a proper salary. Why not both, rather than giving some people. You know, I like to pick on Jeffrey Bezos. Some people have hundreds of billions of.
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Dollars and you give them a subsidy. Right. And so the thinking fundamentally is wrong. Right. We have a mortgage tax deduction in this country to the tune of about $150 billion a year for people making with incomes of $250,000 or more. If you took that away and put it into public housing, you would start to recreate or regenerate public housing the way it should be. It used to be there for a social purpose. Right. So what we're doing in this country is we're subsidizing wealthier people more than we are poor people.
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That's been done for a long time. Absolutely. And American history also gives us lessons because after World War II, the returning veterans who had fought a war, we created a public education program, the GI Bill, helping people pay for college, if you were a soldier. We created a housing program. Public housing was built all over the. To the idea we don't know how to do it or we can't do it. We did it. Now you can't do it with the private profit system. So. Well, but that's not what we relied on back then. No one said you have to have private profit. We said, the government is going to come in and subsidize a college education.
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I would agree to you, Rick, but we can't leave out the racial implications of this. Right. So some of those same GIs didn't get access to some of that housing, and that's a problem. Right. You know, so we have that underlying current that is always out there, that thing that just exists that we have to talk about. Right. It's something that we have to discuss. We don't often want to do it. It's challenging, but those conversations need to happen. You know, me growing up on Long Island, I saw it with the Levitt houses when everybody was moving from the city and moving out to Levittown. The GIs that were of people of color couldn't get access to those houses. They weren't allowed. Right. And some of that still is a current that presides over banking and how we racialize the housing industry. It's still problematic in the little bit.
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Of time we have left. What would you want? These Democratic. The 25 hopefuls, what should they be talking about in terms of homelessness that they aren't?
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I think we have to understand that this is not the true democracy that we claim it is. And we have to understand if the rest of the world can live by international human rights standards and law, which guarantees the right to housing, we need to adopt those standards here. Right. South Africa, when. When apartheid was taken down and a new constitution came out in 1996, it guaranteed a right to a home. Actualizing it as something else is still struggling a little bit, but it's changing it. Brazil says land has to serve a social function. Right. So housing people are getting access to housing, because that's a social function. You build housing, you grow food. Right. So these things are related. And I think we have a constitution that was constructed off of 400 years of good old boy language that just doesn't work for certain people. A constitution probably needs to change. Big task, big ask. But it's something we need to think about.
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Thank you, Rob. This is a topic that needs a lot more attention, not just by Democratic candidates, but by everybody else. A society that leaves millions of people without a home is a society that isn't working very well. It's an economy that isn't doing what an economy is supposed to do. I hope you found this of interest, and I hope you will remember. Just talk with us again next week.