A (0:10)

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 topic that's been in the news a great deal recently. It's so called supply chains or global supply chains. And sometimes a partner idea. Just in time, production methods. Let me explain what these terms mean and then let's take a look at what's going on in the to do about them. Global supply chain means that instead of supplying the inputs to any production process from local sources, other companies or individuals producing inputs you need in the environment in which you work, that would be a local or nearby supply chain. Instead of that, and driven exclusively by questions of profit, corporate leaders have tried to find cheaper inputs no matter where they are located. As long as you can get an input cheaper somewhere else. And that has to include of course, the cost of transporting it back to where you are. Well then you move your sourcing of inputs from the local region to the distant global region. Over the last 40 years, as American companies have moved out of the United States in record numbers, there has also been a turning to global supply chains. More and more producers in the United States depend on inputs that come from hundreds or thousands of miles away. And there's only one reason, because it's more profitable to do that. Keep that in mind. Likewise, we have shifted from producing something, storing it as inventory for a while and then selling it as people want to buy it, to what we call just in time, production. You don't produce it until you have an order to sell it. No inventory, no storage, nothing. Okay. Why do you do that? Because storing things costs money. And you can save money and make more profits if you don't have to inventory anything that you produce. But here's the problem with capitalism's genius. When it pursues best profits, you don't take account of all the things you can't take account of. Let me give you an bad weather, climate change, a COVID pandemic, neglect by politicians of the infrastructure. Any of those things can. Yep. Disrupt your global supply chain. Remember the pictures of that huge freighter stuck in the Suez Canal for weeks?

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Why?

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Well, because the companies that use the Suez Canal had been too cheap in their profit hunting to deepen the canal, to widen the canal. Yup. To spend the money. To take account of all the things that can happen when you're dependent on things far away or dependent on being able to produce right away. And don't have an inventory. In other words, the profit drive of capitalism is not the efficiency mechanism its defenders want you to believe it is inefficient. And here's the examples that drive the point home. Today we are not able to get computer chips. Car production is down in the United States. So is the production of everything else that uses a computer chip. And nowadays virtually everything does use a computer chip. What's the problem? It's a global supply chain. See, they come from far away. And with COVID lockdowns and with global warming and with defunct infrastructure both in the United States and abroad, the things can't be moved in time or produced in time, and so they're unable to supply us. But there's no mystery here. The problem here isn't the weather or any of these other things. Corporations don't want to spend the money to accommodate what we all kind of know. The best preparation for an unknowable future is to be flexible and having global supply chains. And just in time, production takes away from flexibility. Profit driven capitalism makes loads and loads of misjudgments and mistakes. My next update has to do with a perennial the student debt problem here in the United States. But I wanted to answer the question some of you have been sending to me about comparing the burden of college costs in this country to others. And I wanted to nail that down with some examples that would make the point for you. Okay. The United States and the United Kingdom are by far the worst countries in the world to go to college in. If paying for it is a problem for you, let me give you an example of how different it could be. I'm going to give you the name of eight countries in Europe where tuition is either zero, which is in most of them, or very close to zero. Trivial couple hundred bucks per semester to go to college. Ready? Here we go. Norway, Sweden, Denmark, Germany, France, Finland, Greece and Poland. These are countries that range from quite wealthy to quite poor. They provide free education right through undergraduate and graduate education. Mexico and Brazil, really poor countries, they do it too. That's right. Don't have to pay for school if you go to college or graduate school. China does require you to pay, but it ranges their tuition from $2,500 to $10,000 a year. Much, much, much cheaper than in the United States. What's going on? Every one of those countries justifies free education on the grounds that educated people make a better and richer contribution to the society in which they live. They learn something and that learning comes back. It's a good investment. It's even better than that. It's about the best investment you can make in the long term, 50, 60 year productivity of the man or woman who gets a good comprehensive education. So of course the society subsidizes it. And you know what? It makes them more productive. And you know what that does? Makes them more competitive in the world economy. But the United States and Britain are cutting back, not doing that, racking up the price of education and imposing enormous indebtedness on students who want to get an education so they can contribute better and more to the society. This is a sure sign of where the world is declining in the US And UK and where it isn't in the societies that are investing in the precious commodity known as our young people wanting an education. And so in the United States, students who still decide to go have to rack up debt. And I wanted to give you an idea in case you're wondering. Yeah. Debt per student is higher in the United Kingdom and the United States than anywhere else. They're not even close. And here's the number to keep in your mind for the United States. In 2016, there are 171 million adults in the United States. That's people who aren't kids anymore, but are 60 years of age or younger. That's what we mean by the adult population. Right? 44 million had student debt. Out of the 171. That's one in four adults has student debt. And here's the averages in 2016. We're five years later. Now all these numbers would have to be adjusted in 2016. The average debt, $37,000. And it was costing the average graduate $400 a month to service the debt. The smartest people, in many ways the ones with the best chance to get an education, borrow money, go to school and are left with tens of thousands of dollars paying $400 a month in order simply to service the debt. You're making college impossible. And part of the reason for all of this is the notion we should make the students pay rather than subsidize this education the way all those other countries do. Privatization of education. Remember Betsy DeVos? That was what her slogan was. And here I hope you've understood what the costs of that are to Those individuals, the 44 million adults, and to our society. Which is the bigger loser for this mentality? My next update. People have been talking about an inflation and I wanted you all to understand what's going on over the last year. The three most important things in most food, clothing, shelter. Food prices are up over 3%. Clothing prices over the last year up 4% and rent in the United States up 7.5%. That is an inflation. That's a general rise in prices. It's wiping out whatever wage gains the vast majority of us were able to get over the last year. So we're not ahead, we're behind. These prices are rising faster than any wage increase we got. And I won't even ask how much extra work we have to do in the jobs we now have. And what does that mean? It means the monetary policy of the Federal Reserve, that's our central bank in America, has achieved two remarkable things by flooding the economy with money which went right to the stock market, bidding up the prices of stocks. And remember with me, 10% richest Americans own 80% of the stocks. So this policy of boosting the stock market helps the top 10%. In a word, it makes inequality greater than it was before. But now we can add a second way. The Federal Reserve is screwing all of us by an inflation. You know what this does? It makes a mockery of the fight to 15. Because if you get $15 an hour by 2025, which was most of these programs involved, at this rate of inflation, the 15% you get then will not buy you what $10 an hour would have got you last year. And the only thing worse than that is reading in the press that the current Secretary of the Treasury Chair, Janet Yellen, is right behind re nominating Raymond Powell, the head of the Fed, for another many years of term. Bipartisanship between Republicans. Powell's a Republican and Democrats. Yellen's a Democrat. When it comes to what matters to big business, and that's having a Federal Reserve. That gives them an inflation and rising inequality and makes us live with the results. The last economic update I have time for this morning before our interview has to do with crime in the United States. Another topic getting a lot of attention. Has crime gone up? Has crime gone down? I want to nail that down for you so we understand two things. I'm going to show you that crime in the United States, whether you measure it over the last 20 years or the last 30, has dramatically declined in the United States, with particular emphasis on violent crime. Murder, robbery, assault and rape. That's what violent crime statistics refer to. In 1992, the peak year, we had 750 violent crimes per 100,000. In 2014, that was down to 400. That's half a drop of 50%, a dramatic decline that's across the same time that millions of Americans were told they need to buy some guns for defense. No, you needed guns for defense less year by year as it fell by 50%. But the NRA told you you needed to defend yourself and out you went and spend the money you couldn't afford. And here's another if police have the right to kill anybody, it has to be in defense against violent crimes which were disappearing in this country compared to what they had been. There's no justification for police killing people when the crime isn't violent, et cetera. Think about it. We've come to the end of the first part of today's show and as always, I want to thank all of you who support Support makes this show possible each week, especially our Patreon community and other regular monthly supporters. If you haven't already, Please go to patreon.com economicupdate or visit democracyatwork.info to learn more about how you can support this show. And please remember to follow us on Facebook, Twitter and Instagram. If you're watching this on YouTube, be sure to hit the red subscribe button below. Stay with us. We'll be right back with today's special guests, David Cobb and Michelle Vassell. Welcome back, friends, to the second half of today's Economic Update. I am very, very pleased and even a little bit proud to bring to our microphones and our camera two folks that are doing very important work that I want you to learn about and think about as I have done and I'm appreciative that they've joined us today. The first is Michelle Vassell. She serves as tribal administrator, kind of like a CEO of the Wiat tribe who have lived and cared for the land in and around Humboldt Bay in Northern California for more times and years and millennia than anyone can remember. She plans, manages and directs day to day operations of tribal government. She was active in the historic return of Tuluat island and the fight to protect Saki Yuwit, a sacred Wiat location. She also serves on the Board of Directors of Cooperation Humboldt. And that brings me to our second guest, David Cobb. He's the co coordinator of the US Solidarity Economy Network as well as being the Executive Director of Cooperation Humboldt. He was the Green Party nominee for president in 2004 and played a major role in discrediting black box voting, which was an even more horrific mechanism to distort our elections than all the others that are at work around us. Okay, let's get to our questions and I would like to ask direct the first question to you, Michel. The collaboration between Cooperation Humboldt and the Wiatt people seems unique. Michel, can you give us an idea of how this relationship developed and what its basic goals are?