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A
Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives. Jobs, income, debts, our own and those of our children. I'm your host, Richard Wolff. I want to begin today with what I think is an extremely important story for the world, for the United States, for Europe, but beyond as well. I'm talking about the last year and two, three months now, almost a year and a half of economic struggles in France. Once again, that country is in an advanced leading position, giving the rest of the world an idea of what's likely coming there, too. Let's quickly review, because these events are momentous. Over a year ago, a mass movement of citizens, not part of the political party structure and not part of the trade union structure either, decided that they'd had enough, that the economic developments of French capitalism were unacceptable. The item that triggered it was another one of those small events, insignificant in their own dimension, but made by history into turning points. The president, Mr. Macron, decided that having delayed for a long time, he would do something about the climate change. You know, that unimportant event that has nothing to do with the fires that are destroying Australia, for example. He decided he would do something, not a lot, you know, something that looked good on tv and that he would pay for it by raising the taxes on fuel, fuels that make the trucks and cars go in France and so on. And the French people who support doing something about climate change decided this was one straw that broke the back of their toleration. They weren't going to have it, of course, do something about the climate, but not on the backs of people who have seen their social programs, their jobs, their incomes, their benefits taken away. They wouldn't have it. And so we've had a year and several months now of what came to be known as the Yellow Vest movement in France. Hundreds of thousands of people in cities across the country, not just in Paris, going out week after week, particularly on Saturdays when they were out of work, to show that they were angry that they wanted changes, they wanted that tax removed, but they were angry at a lot of things. So that when, after saying he would never budge, Mr. Macron was humiliated and withdrew the tax, Yellow Vest won that one. They kept going because by the time he moved, they knew that their grievances went way beyond that particular tax. And they had to do with everything that has happened to them over the last 10 years. They never recovered from the crash of 2008. The rich people did, the corporations did, but the mass of the French people didn't. And they are honest enough to face it and to say to one another, it's time for us to do something. There will not be business as usual in this country, they said, so long as business as usual, governed by Mr. Macron, gives them the raw deal of not only bringing the crisis on them in 2008, but giving them austerity afterwards, while the rich recovered with the help of government, that is the taxes paid by the people. And they made it clear they'd stand in the intersections, they'd stand in front of the churches and the schools. You could not get away from their message. Then it escalated. The government thought as those yellow vest demonstrators got fewer in number, they could just wait them out, a tactic governments like that usually use. But they were wrong. Just like Mr. Macron has been wrong all along. He thought he had beaten them. And so at the beginning of this year, he came forward with a new plan. This one used the following. France has 42 different systems for pensions for their workers. And so he said, I am going to modernize and upgrade and reform. We shouldn't have 42. We should have one, two or three that are systematic and treat everybody fairly. An obvious idea. No one believes this man anymore. They saw the risk that this reform was the mask for cutting their pensions. And as if to prove them right from the beginning, Mr. Macron proceeded to include in his pension reform raising the age when you become eligible for a pension in France, from the current 62 years of age to 64. Let's be real clear what this means. For decades, French workers put money out of their weekly wages and into the pension. What you're saying is having loyally put money in on the expectation they could retire at 62, you're going to make them wait two years. When asked why is he doing this to a working class in France that has had a hard time in the 10 years since the system fell apart on them, he answered, well, we need to make France competitive in the world. We need to have more products without having to pay extra for them. And that we're going to solve by delaying people's retirement. And the French people again said, no, Mr. Macron, you're not going to do that. You want to make French products more competitive in the world so people in the world will buy more of them, bring down the price. And here's how you can do that, Mr. Macron. You can lower the salaries paid to top executives. You can lower the dividends out of profits that are paid to shareholders. The tiny percentage of the French people that own shares that way, you'll save a bundle and you can lower the price and in other words, you can improve France's economic performance and competit without hurting the mass majority of the people. In fact, taking a little away from those at the top who can most afford it. Oh no, said Mr. Macron, that'll never happen. I will be steadfast. The union said. Okay. And on December 5, they declared a general strike. Three out of the four national unions led the strike, invited the yellow vest to join them, which they did. Invited the students of France to join them, which they did, led by the transportation unions, those who worked the subways and the trains. They started a strike on December 5th and as of this report it's still going along the way, they said Mr. Macron, this strike will stop transportation across the Christmas season, which it did. Across the new year holiday, which it did. You're not going to wait us out and you're not going to break us down. On 11 January, Mr. Macron withdrew the pension delay from 62 years to 64. Workers on the streets won. Establishment politician lost. Every working class in every country ought to think long and hard about what the French workers did and what they could accomplish, because the same imposition on working people from the same kind of establishment government, and Mr. Trump is a perfect example, is going on elsewhere. We don't have in this country yellow vest movement and we don't have unions leading general strikes. And therefore we do have cutbacks on our jobs, our incomes, our pensions and our job security. The lesson should be obvious. My second update is to answer a How do you pay for war in this country? An issue that is becoming more urgent each day, as with the assassination of that Iranian general by Mr. Trump. War is paid for usually by debts. And the reason for that is if you made the people in a society like the United States actually pay with taxes for what a war costs, they'd be a lot less pro war than they might otherwise be. So you kick the can down the road, you borrow to postpone the pain, but it just postpones it. It doesn't remove it. Don't be fooled. Your children will pay the older ones with their lives in a war and the younger one with economic problems. The that all wars bring with them, particularly wars that are not won, like the war in Afghanistan since 2003 or the war in Iraq since then. 17 years of war and we are worse off now in those countries than we the US was at the time. And in Libya, we've turned that over to the Turks and in Syria. That's now a Russian process and project. We haven't done well, but trillions of dollars were spent, our tax money poured into the coffers of the defense producers. What a wonderful name could have made this life better for Americans in countless ways. But it was used to pursue two wars that are a disaster, Afghanistan and Iraq, and two that are working to achieve that status. The last economic update we'll have time for today is sad for me to report on, but I have to. The modern world treats us to moments when there is a contradiction between a religious belief, a religious commitment on the one hand, and the lure of money on the on the other. The Roman Catholic Church faces these contradictions as all religious institutions do. It's taken on a poignancy in relationship to Catholicism that needs a comment. On the one hand, we have thousands and thousands of families of victims of priestly sexual abuse. You know all about it. I'm not going to repeat it. Those victims and their families have gone to court looking for apologies, looking for some kind of compensation for the trauma, physical and mental, that their experiences imposed on them. And the church who has said over and over again how moved it is by its victims, how committed it is to them, was exposed in early January by the Bloomberg News Service as having hidden $2 billion of wealth by using bankruptcy laws to move assets from diocese to parish so they could get out of having that stuff accessible by the victims going to court. You can't say your heart bleeds for the victim and then cheat them out of the assets they ought to be able to claim, can you? We've come to the end of the first half. I want to remind you, please, we published a book called Understanding Socialism that answers many of the questions you have sent us. You can get it@lulu.com l u l u we urge you to do so. Please check out our store. We have wonderful items. They are all union made. We ship internationally. You can get them by going to our website democracyatwork.info and clicking on Store. Special thanks as always to our Patreon community. Reminder to sign up for us and be a supporter subscriber on YouTube. Stay with us. We'll be right back with an interview of a fan favorite, Bob Henley, the investigative journalist. Stay with us. Welcome back friends, to the second half of today's Economic Update, where it is my pleasure to welcome back to the microphone someone who has been here a few times already. So many of you know him, he's an investigative journalist, one of the few that we still have in this country. His name is Bob Henley, Robert Henley. He has been a staff reporter for the Chief Leader, a many decades old newspaper covering unions in the greater New York area and beyond. He writes regularly for Salon magazine on both economics and politics. And he has over the years worked for a variety of outlets, which I'm going to read to you now because it's really quite an impressive list. CBS is 60 Minutes, the new York Times, the Village Voice, the Christian Science Monitor, CBS Money Watch, National Public Radio, WNYC and the Pacifica Network. Thank you, Bob, for joining us again.
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B
Happy New Year.
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A
Well, recently. Thank you. Recently we celebrated Martin Luther King's birthday and I wanted to ask you to make a comment about it because I know you've been interested and that your recent writing for Salon kind of took off from that.
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B
Right. What I wanted to do is look at 1968 and Martin Luther King's dream and our 2020 living nightmare. And to do that work, I looked up a book he had written at the end of his life, where do we go from Chaos or Community? And there's just one quote that I wanted to share with you to open this up. When machines and computers, profit motives and property rights are considered more important than people, the giant triplets of racism, materialism and militarism are incapable of being conquered. So that's the prism through which I wanted to look at this. And indeed, he was very prophetic in predicting what would happen if we continued our addiction to militarism. And I'm sad to say much of it has come to fruition with our further notice. Wars and the debt that's come along with it.
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So let's get into that. We have been now, at least for the last 17 or 18 years, at war, ostensibly a war against terrorism, but a real war in Afghanistan, in Iraq, and in some ways in Syria and Libya and so on. The cost has been trillions of dollars. And as I noted before earlier in this program, wars are typically paid for with debt because it is too dangerous for a government to say to the mass of people, you're going to have to pay right now for this war. So we borrow to postpone it. That way the children that are older can go fight and die and the children that are younger can pay for it later.
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B
Right, exactly.
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A
Tell us a little bit about how you see in your research, as you did for Salon, the relationship between war and militarism on the one hand, and debt.
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B
I think it's important to look at debt as social control, the sense of you're basically as a society, and this is true if it's your household or if it's a national government, you're making commitments for the long term for a short term gain. If you do that repeatedly as a strategy for getting by, it's bankruptcy. And so what we have here, particularly in the case of the United States, is a point where we're at. I think in the next couple of years we'll be paying more in debt service. That's just servicing the debt, some $700 billion to $800 billion a year, which will be larger than the defense appropriation itself. And this is something that digs us a hole. This is all happening at a time when we need to change radically our priorities because of global warming. And yet what's happening is we're creating this debt. Now. It's important to understand that this is part of the machinery of wealth inequality. What people don't understand is who invests in this debt are people that need to shield in institutions that need to shield. The, the wealthy already have. So as this country has embraced debt, not just at the federal level, Rick. Oh, if it were only that at the municipal level, at the county level, at the state level, the people that take advantage of that are people that park their wealth there where they can enjoy the profits and interest payments, often tax free. You see the mechanism here? So the bigger the debt is, what happens? The bigger the machine is of the concentration of wealth.
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A
Yeah, it's like it's a postponement in yet another way. You fight these wars usually with poor people as your soldiers. We call that the economic draft. Everybody knows about it. You fight the war, but you borrow the money. Well, the only people who can lend money to the government are people who have a lot of money to lend, which means right away we're talking the top five, 10% of the population. So we're all in hock to the rich for decades to pay for the war today. It's an extraordinary burdening of the mass of people disguised with all the patriotic hoop dee doo that you can see.
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B
One of the things that we also need to keep in mind here is that this further notice war which came to effect was wholly different than any prior war the United States had fought. I'm very reliant on the brilliant scholarship of Colonel Mr. Who is one of the. He's a top military historian, West Point graduate, and he's been writing about the change in the way that America has been fighting wars. And it's instructive. It's not just this economic way, because they actually hid the cost of the war, by the way. Not only did they do this borrowing, but then they hid the borrowing because they made it emergency resolution. So we didn't even see it. But a key thing that changed was we relied on a voluntary military which meant that for the first time America was disconnected from the stresses and strains of our military and their families. And this created the kind of notion that it was just a lifestyle choice. Historically, we fought until the war was over as citizen soldiers. We fought until the duration. But if that duration is suspended forever in animation, then you have a further notice war and a professional class that is making their living by keeping the war going. And hence, surprise, surprise, we don't win them.
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A
Yes, because they keep going. I want to ask you to comment on another point borrowing which has traditionally gone crazy during war because you have to keep your population behind the war by not taxing them. At the moment, we currently now have a situation where that war debt comes on top of a not war debt, that is a debt of a different sort of the collapse of capitalism in 2008 led to a terrified government here in the United States fearing a depression coming out of that dropped interest rates to historically unprecedented lows, even negative interest rates. Some which told every corporation whatever problems you have, solve them by borrowing essentially free money, AKA quantitative easing. Yes, the government borrowed at low interest rates because it didn't have to carry the burden of high interest rates. Corporations did, individuals did to the extent that they could. So you have war debt on top of an unprecedented debt that you can ascribe to capitalism's crash in 2008. The combination gives you what the IMF, the World bank and other institutions are saying these days, which is we have no idea what kind of vulnerability this load of debt subjects us to.
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B
Well, and the thing is also they came at the same time as the collapse of household wealth. $20 trillion of American household wealth and the hardest hit were African American households and folks at the lower end of the social economic strata who had managed against all odds to get a home. So when the decision was made, and this is the important thing to understand under President Bush and President Obama, there may have been cosmetic differences, but in two key areas there was an ill advised continuity. What do I mean by that? Well, the further notice war on terrorism. We now have war being fought in some 70 countries, 40% of the nation states in the world and moreover we belved up Main street and that $20 trillion of disappeared household wealth means Americans are in A more fragile state for the next downturn that will surely be upon us. So this undermining, the decision that was made by Obama not to be an FDR and to backstop homes and Main street and to stop and put a moratorium on foreclosures, but to just let it go will nilly and let the free market decide, had drastic consequences, which actually ironically elected Mr. Trump because he exploited the fact that there's been 16 years of this ill advised continuity that had led to the implosion of so much of America.
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And what people I think don't sometimes grasp is when you have a regular economic downturn, bad as that is, it ramifies. If the company going out of business or the family that loses a job is up to here in debt, it means the people who lent are suddenly told, you're not getting any interest payments, you're not getting your principal back. That's how it ramifies. That's how the downturn becomes a general crisis. And with a level of debt we've never seen before. The prospect of that happening is now a kind of grim reality that hangs over all of these phony protestations of Trump and other leaders, including Democrats, that we are in a, quote, great economy.
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B
And I think that this disconnect is evidenced, and we've spoken about in this space before, but it bears repeating, there is a sign of the wear and tear in the social circumstance of Americans. What do I mean by that? We have had for three years in a row the declaration decline in life expectancy. If we were a developing nation, the World bank be huddling with us and say, well, you know, you're not doing so well because that's considered an indicia of being a going concern as a country improving a lot of your people. We now are in a circumstance, even post, dare I say it, the Affordable Health Care act, which Democrats act like it was the Ten Commandments. And we can't say anything bad about it. The reality is Big Pharma and the insurance companies were present at its creation and have reaped a windfall ever since. One out of four Americans, according to Gallup, not a Marxist organization, put off critical health care treatments during that period of time. 137 million Americans have trouble managing the medical debt related to their household income. So that's where we are. Yeah.
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It's extraordinary. The disconnect that seems now to exist between the actual economic circumstances and the kind of drumbeat of it's all great, it's all great, it's all strikes me as unprecedented. Kind of what Martin Luther King might have been pointing to as well.
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Well, and that's the thing too, that we see that he was a principled critic of capitalism. Even with the tremendous coming out of the McCarthy era reading what he was that was attributed to him is really heroic. He was really the proponent of a kind of social democracy, if you will. He had issues with Marxism, he had issues with capitalism. But he noticed that capitalism unmoored from fundamental human principles would be devastating, particularly when it was married to the military imperative. And that's what we're living through now.
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A
And I think the military have also had this impact. They've been very clever. They've understood how to make all of America, every state has its military bases. So every local and regional politician is afraid of offending. So they get the money which allows them to build the bases, which gets them the support. That this has become a model. So that, for example, the medical industrial complex produces the same game on the American people for spending on medical that we spend on military. So it isn't, for example, a coincidence that the United States spends more on military than the next 10 countries in a row. And the same is true in medical.
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B
Exactly. And one of the things also to keep in mind is this is pretty sinister. Back to the volunteer army came out of the Nixon administration and they knew, and this might, for people our age, it's no news. But for young people, the fact that it was a popular resistance to the Vietnam War that slowed it down. And what it had to do with is that Americans, 2.2 million Americans were subject to this conscription process being drafted. So everybody had skin in the game. Yes, if you were Donald Trump and Bill Clinton, you could find a way to screw down a bit. But the broad segment of of the country had this hanging over them. And so they really wanted justification for the war. And so what's happening now is they actually, the military is using. Vice did a very good report on this cited in my latest Salon piece, where they're actually using the student debt crisis of $1.7 trillion to drive young people to volunteer into the military so they can avoid the debt shackles. And that's why I tell you we need to see this debt as the new slavery.
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A
Explain to us a little bit how the student debt works to make people.
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B
Well, because so many students, particularly if young people have younger brothers and sisters that are caught up in this, they can have spent hundreds of thousands of dollars in an education and debt, and then they can be working someplace and they see this and so they decide, well, oh, look, if the military is advertising a four year hitch, I can have college debt free. And so we're linking those two things together. Then add in the fact that the United states Congress is MIA for 18 years and extra no oversight to the point that we lost troops in Niger, Africa. And John McCain mentioned that. He admitted they didn't know they were there in the first place. So, I mean, it's important to understand Donald Trump is a symptom we got here by 18 years of our Congress being entirely missing in action.
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A
Thank you again, Bob. Very important, more than ever, as these war vibrations overwhelm us. Thank you again.
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B
Thank you.
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A
And to all of you, thank you again for listening. And I will look forward to talking with you again next week.