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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 our children's. I'm your host, Richard Wolff. I want to begin, which won't surprise many of you, with a small set of comments about the catastrophes in the cold, the failed power, the failed water system, leaving millions of people with absurd electric bills needing to boil the water. A genuine crisis. And I don't want to repeat what you've heard from mass media. I want to focus on some of the particulars. And I might mention that one of the best pieces of journalism I've seen is in the latest issue of Scientific American. If you want a balanced, interesting analysis there, you'll find it. Here's what Texas is a center of the energy business in the United States. As most of you know, oil, gas, and so on. Texas made an unusual decision. Most of the rest of this country, the other 49 states are part of two major electric and energy grids in the United States. That is, they're hooked up together so that they can move electricity and so on from one to the other as their special needs may require. But if you're part of these federally organized grids, you are subject to federal regulations, federal oversight and control to make sure that you are doing it properly, which may not always be the same as doing it profitably. As you will see, Texas didn't want to have its profits limited by federal oversight. Of course it didn't say that. It talked about states rights and the usual noise around something that is other than the real issue. Bottom line, the energy companies in Texas want it to be controlled only by a Texas outfit, not a federal one, because it's cheaper and easier to control the local one, as all businesses have come to understand. So Texas was not part of the grid when a cold snap came. Therefore, they had to rely on their own energy sources, and those weren't enough and they could not get help from the grid they had chosen not to be part of. There's no great mystery here. It doesn't have anything to do with windmills or the Green New Deal or any of the other distractions. Here's the private capitalist enterprises in the energy business led to the Texas disaster, just like a private health care system led to the COVID disaster. In societies that don't permit that, where you have the regulation needed to make sure that the public service is at least partly taken into account alongside of profit. If you don't do that, you get these results and the fact that we have the Texas disaster on top of the coast. COVID Pandemic gives you an idea of the downward slide of the US capitalist system that is in part a result of relying on unregulated private profit driven enterprises. That's the lesson here. I want to turn next to what was called by one of the most astute observers, Mohamed El Arian of Wall street, the near accident on Wall Street. He called it the Robinhood Gamestop Reddit story. Again, I am not going to go over the details. I want to drive home two or three points that haven't been adequately examined. First, let's begin. Make sure we all understand Gamestop is a corporation whose shares trade on the stock market. Something was done to it that is done all the time to all kinds of stocks. At various points in the Wall street saga, people decided some that GameStop's shares are going to fall in value. After all, it's a brick and mortar business. People aren't going to the store the way they used to, et cetera, et cetera, et cetera. So what these people did was say, ooh, it's probably going to go down. And when they do that, when they think that they can engage in a little gambit, a little maneuver that some of you may not know about, you can borrow shares of stock from somebody who owns them with a promise to return them at a specified date, two or three months or longer in the future. You pay a fee to the owner who likes to get the fee because he or she knows they're going to get the shares back at the end of that time. So the borrower gets the shares, pays the fee, and then what the borrower does is sell the shares immediately. You're legally entitled to do that. Why? Because they're counting on the shares to go down in value between the time they borrowed and sold them and the time they have to give them back. So they'll go back into the market, say three months from now, buy them at a lower price, give them back to the person and keep the difference between what they got when they sold them and what they got when they bought them back. Of course, what this does, and here's point number one, it gives these borrowers, shorters they're called, gives these borrowers an incentive to talk down the company because they need that share to go down in price. The further down it goes, the more money they get, because the bigger the difference between what they got when they sold the borrowed shares and what they have to pay to get them back. So suddenly we have people Moving around the world, putting stories in newspapers, making public appearances, spreading rumors, who knows? Because they want the price to go down, has nothing to do with the underlying profitability or viability of the business. It's a manipulation and a maneuver. And people know that. All that happened was some clever young men and women, and some not so young on Reddit, figured out this game and said, hmm, maybe if a lot of us buy the shares when they're low, we can drive it back up and that will be good for us because we'll buy them and then sell them at a higher price. The fact is that that screws the people who shorted it. It's not our problem. So you got two people, both of whom are maneuvering around the stock, pushing it up or down, depending on their strength, the numbers, how many dollars they have to throw into this, and I want you to understand, has nothing to do with the underlying economy. Next point, and the only other major point here, please, all those of you, particularly who are tempted to play around in the stock market, understand how capitalism works. Companies know what they're doing that's different from what they announce publicly in the SEC forms they have to fill out in the documents they have to make public. They put the best face they can on whatever it is they're doing, and they only reveal what they have to. So there's a gap, I'm being as polite as I know how, between the reality of a company and what it says publicly in its documents. Then there's a second gap between what you and I know, which is a smattering of what gets made public and what you can learn if you're a full time professional, studying all the documents they have to fill out for all the different state and federal and local agencies. And you visit the company and you ask questions, you can know a bit more. You still don't know what the real story is, because for that you have to be one of the dozen executives at the top. So most of us, the vast majority, are two gaps away from the reality, two gaps away from what the real story is. Therefore, when you buy a share of stock, you've got to face something you don't know that's not your fault. It's the situation which prevents you from, from knowing. Therefore, it is, to be blunt, a crapshoot. It's a casino. You're throwing the little ball onto the roulette wheel, and where it comes is the end result for you. And you may have noticed that in the casino, the house always wins in the end. The Wall street is no different. My next update has to do with a remarkable development. College and university campuses have been terribly, hardly hard hit by the pandemic. Students are reevaluating what they're getting out of distance learning. Colleges and universities are discovering that the flow of money into them from students particularly, is drying up. And because colleges in America and universities pride themselves on running like a business, they've been doing what businesses do when business isn't so good. They've been laying off people. To be precise, 260,000 employees of colleges and universities have lost their job during the pandemic. That's 15% more than one out of seven of people working. And the result is that working people, employees of all kinds of universities, are doing what they should have done before, but now they realize it, they're organizing into unions. Here's some American university, Brown University, Georgetown University, Harvard University, Oregon State University, University of Arizona, and I could go on. They're forming unions of all kinds. And one of their slogans, which struck me is called Chop from the top. And what that means is they are angry that the administrators sitting at the top of universities get paid wild amounts of money, which, by the way, is when you make a university work like a business, you give the CEO of the university, the president, the crazy money. I like the example from the University of Arizona, where President Crowell, that's his name, made 1.15 million in 2019. That was his salary, 10th highest salary among US public university presidents. But the organizing young people there point out that the school's football coach made three times as much, namely 3.5 million. And they also boosted pay there in Arizona for the vice president of athletics by 150,000 a year, plus gave him a $500,000 bonus. And here we go. While telling faculty and staff that they won't receive any salary increases because of the pandemic. Oh, think about it. Hollywood is now dependent on China. Whoa. Turns out in this bad year when the Chinese locked down, you know, at the beginning, and so they beat the virus pretty well, they've been going back to movies in a large way, and they became a bigger market for Hollywood movies than the United States, which closed its theaters and never reopened them, it's now the case that more and more blockbuster US Movies have to take into account the income they get from showing them in China, which has the interesting consequence that attacking China is becoming more very unwise decision in any movie being made. This is another sign, if we need it, that the relative positions of the United States And China are changing, even for Hollywood. And my last that I have time for lockdowns, I'm going to use New Zealand. New Zealand locks down very, very tightly. It did that when the first virus arrived. It did it last week again. They shut everything down totally. You know why? They argue that's the best thing they can do for their economy by minimizing the COVID disaster in terms of cases and deaths. The United States was unwilling to do that kind of lockdown, and our economy is suffering much more as it is from COVID and from the consequences. Here's the example for you to think about. New Zealand has five COVID deaths per million. The United States has 1,500 COVID deaths per million. We've come to the end of the first part of today's show. Before we go to the second half, please remember our new book, the Sickness Is the When Capitalism Fails to Save Us from Pandemics or Itself. It's available at democracyatwork.info books. My thanks as always, to our Patreon community for ongoing and invaluable support. If you haven't already, Please go to patreon.com economicupdate to join. Stay with us. We'll be right back with today's guest, Marina Citrin. Welcome back, friends, to the second half of today's economic update. I am very pleased to bring to our microphones and our cameras Marina Citrin. I've known her for quite a while, and I know the work that she does will be of interest to you, as it always has been to me. She is an associate professor of sociology at the State University of New York in Binghamton, working on and participating in societies in movement and collective action. Her latest book, co edited with Collectiva Sembrar, is called Pandemic Solidarity. And I'm going to open my questions on that book. But I also wanted to mention that she has also written about horizontalism, a concept associated with her the book she first wrote about that, or at least one of the books, Voices of Popular Power in Argentina and another book, they Can't Represent Reinventing Democracy from Greece to Occupy. So, Marina, thank you very much for joining us today.