Economic Update with Richard D. Wolff
Episode: Lessons From A Crisis Year 2020
Date: December 17, 2020
Host: Richard D. Wolff

Episode Overview

In this end-of-the-year summary, Richard D. Wolff examines the economic and social upheavals of 2020, focusing on lessons largely overlooked or misrepresented by mainstream media. Wolff argues the U.S. faced a dual crisis—economic and public health—and highlights capitalism’s failures in responding to these challenges. He also examines popular resistance movements globally, the true state of American households, the impact of government policy on economic inequality, unemployment realities, and the debate around policing and incarceration.

1. Dual Crises: Economic Collapse and Public Health Disaster

• Two Separate but Simultaneous Crises

  • Economic crash began February 2020 (per NBER).
  • COVID-19 pandemic hit in March 2020.
  • Key Point: COVID did not cause the economic crash, though it exacerbated it.

• Historical Context of Capitalist Crashes

  • Capitalist economies historically experience crises every 4–7 years (00:58).
  • Multiple terms for regular economic failures: “Crash, bust, crisis, recession, downturn, depression” (01:57).

• Quote:
  “The COVID 19 crisis shouldn’t be called that. It’s a capitalist crisis that has occurred together with a public health disaster. In a way, that’s capitalism’s worst nightmare, that one of these crashes would happen in the economy together with something in another part of society, and it would be too much. That’s what we’re living through.”
  — Richard D. Wolff [02:25]

2. Capitalism’s Failure to Prepare for Public Health

• Unpreparedness for Pandemic

  • No stockpiles of PPE, ventilators, hospital units despite predictable risks (04:35).
  • Reason: Producing and maintaining large preventive stockpiles is not profitable for private companies.

• Quote:
  “Private companies who could have [prepared] didn’t because it wasn’t profitable... That’s not how capitalism works.”
  — Richard D. Wolff [06:50]

• Contrast with Military Preparedness

  • The government socializes costs for military stockpiles (missiles, tanks), but not for public health (07:28).

• Quote:
  “We are dying at record numbers because the private sector isn’t efficient at securing public health. It’s a big fat failure at doing that.”
  — Richard D. Wolff [09:15]

3. Government Deference to Capitalism

• Ideological Problem

  • Both major parties defer to the private sector's logic and value “efficiency” over preparedness, even in public health (08:56).

• Lockdown Failure

  • Unlike countries that implemented quick, total lockdowns (e.g., South Korea, New Zealand), the U.S. left decisions to private interests (10:38).

• Quote:
  “Why didn’t we have a lockdown? Because private companies didn’t want to lose the profit. They wanted to keep functioning... And the end result is our economy isn’t going because there isn’t a trade-off between the two.”
  — Richard D. Wolff [11:21]

4. Housing, Rent, and Economic Insecurity

• Rent and Financial Domino Effect
  • Tenants unable to pay rent affects landlords, who in turn can’t pay banks (13:00).
  • Suggested solution: Government should have frozen all payments and managed the economic burden collectively.

5. Global Rebellion and Popular Movements

• Uprisings as Response to Capitalist Government Failures
  • France: Yellow Vest movement revived against Macron’s policies and police laws.
  • Poland: Mass protests against abortion restrictions and economic decline.
  • India: Massive general strike (250 million people) against Modi’s government.
  • U.S.: Election of 2020 as a “vote out” of Trump (16:02–19:55).

6. The True State of American Households

• Household Pulse Survey Key Stats (Nov 2020)

  • 33% struggling to cover household expenses.
  • 33% expect household job loss or pay cut soon.
  • 33% (one-third) expect eviction in next 60 days.
  • 12% (one in eight) lack enough food.
  • 5.7 million households frequently go hungry (22:34).

• Quote:
  “This is a country experiencing spectacular enrichment of the already rich in a booming stock market... But alongside of that, much, much larger percentages of our people are going through what can only be called as a system-wide decline in the standard of living.”
  — Richard D. Wolff [23:18]

7. Policy: Who Benefits and Who Suffers?

• Federal Reserve Response

  • Predominant use of monetary (not fiscal) policy.
  • Massive stimulus benefits stockholders (top 10%), not the wider population (24:47).

• Quote:
  “How capitalism in America responded to the crisis... is by doing its capitalist thing: helping the most those who need it the least and helping the least those who need it the most. There’s a perversity that’s extraordinary.”
  — Richard D. Wolff [25:57]

• Federal Reserve Admission

  • Some officials (Mary Daly) admit to fueling inequality with current policy.

8. The Real Unemployment Picture

• Understated Government Numbers
  • GAO and even Dept. of Labor admit official unemployment figures undercount true hardship.
  • Estimate: 27.5 million Americans (18–19% of labor force) are jobless or underemployed, as of late October (27:10).
  • 60+ million filed for unemployment in 2020—40% of labor force—not all adequately supported.

9. Policing, Incarceration, and Social Policy

• Exploding Demand to ‘Defund the Police’

  • Origin in mounting social stressors: unemployment, hunger, anxiety, and decreased social support (31:00).
  • Simultaneous cuts in physical and mental health services, while police budgets grow.

• Incarceration Rates—A Stark Picture

  • U.S. average: 698 per 100,000 incarcerated.
  • Oklahoma: 1,079/100,000; Vermont: 328/100,000.
  • By comparison, Germany: 78, Sweden: 57, Nigeria: 36 (34:32).

• Quote:
  “We put people in jail in this country. That’s our solution to the problem, and it hasn’t worked. It costs more to maintain those prisons than anything else you could do. Defunding the police is a slogan designed to draw our attention to alternative ways of dealing with our problems. Because the one we have, prison building and prison filling, is a big fat failure that no other country has had to resort to. Just us.”
  — Richard D. Wolff [35:11]

Notable Quotes & Memorable Moments

• “COVID did not cause the crash. The crash happened before COVID got here.”
  [01:18] — Clarifies the misconception about cause and effect in 2020's crises.

• “Isn’t that interesting? You know what this is called? The socialization of the costs of the military. But we didn’t have a government that similarly socialized the costs of public health. And we are living the disaster that follows from that.”
  [08:03] — Draws parallel between military and public health spending.

• “If there’s any lesson of this year, that’s the one I would underscore.”
  [14:48] — On the lesson that deference to capitalism has deadly limits and is prompting global pushback.

• “It’s almost as if the whole COVID and economic crash are a process of lowering the expectations and the standards of living of the majority of the American people.”
  [23:26]

Takeaways

• The crises of 2020 were both economic and public health disasters magnified by the logic and structure of capitalism.
• U.S. government policies deferred to private profit over public need, deepening the country’s pain.
• Major popular uprisings in the U.S. and globally signal pushback against capitalist policy failures.
• Federal monetary policy deepened inequality; official unemployment and hardship numbers vastly understate reality.
• The “defund the police” movement is a symptom of deeper social neglect, and U.S. incarceration rates far outstrip the rest of the world, with little effectiveness.
• Mainstream media fails to sufficiently cover these interlinked systemic issues.

For further reading:
Richard D. Wolff’s book The Sickness Is the System: When Capitalism Fails to Save Us from Pandemics or Itself is referenced as a more in-depth exploration of these themes.