Economic Update with Richard D. Wolff

Episode: Reparations and Forgiving Student Debts
Date: August 8, 2019
Host: Richard D. Wolff

Overview

In this episode, Richard D. Wolff examines fundamental economic injustices in the U.S., focusing on the suppression of workers' rights, wealth inequality, public disinvestment in education, and the moral-economic arguments around reparations and student debt forgiveness. Wolff critiques policy decisions, highlights systemic problems, and urges listeners to envision transformative solutions rather than temporary fixes. The tone is passionate, direct, and grounded in historical context.

Key Discussion Points and Insights

1. The Plight of Home Health Care Workers (00:10–06:50)

• Undervalued Labor:

  • "Two million Americans are what we call home health care workers. Mostly these are women and people of color, and mostly they serve older people." (00:30)
  • Home health care workers save society money by enabling the elderly to stay at home, but these workers are paid on average less than $12 per hour.

• Unionization Suppressed:

  • Despite their crucial public service, home health care workers face efforts to thwart their right to organize and fund unions.
  • Wolff discusses the Supreme Court's "Janus" decision, which limits how unions can collect dues from public employees, as well as Trump administration efforts to further restrict payroll deductions to unions, especially for Medicaid-paid workers.
  • "The hostility of [the] Supreme Court, the meanness of the Trump administration is extraordinary in view of the enormous, important, humane, money saving service." (03:55)

• Broader Implications:

  • He frames these actions as emblematic of deeper problems in society—undervaluing essential but marginalized labor.

2. Wealth Inequality: Uber, Mansions, and Homelessness (06:51–09:48)

• Stark Contrasts:

  • Wolff recounts how an Uber co-founder bought a $72.5 million mansion, while Uber drivers struggle to make a living and LA’s homeless population is rousted from street encampments.
  • "Screw the worker, screw the homeless. And why is that relevant? Because not paying Uber drivers so that they can't afford a home and have to live in a tent or they can't afford a decent living even if they have a home, that's what's necessary so that the Uber founder... can live in a $72.5 million mansion." (07:51)

• Economic Choices and Ethics:

  • Wolff poses an ethical question: Should society prioritize the ultra-rich’s luxuries, or the dignity and welfare of workers and the homeless?
  • “You tell me what your ethics, your religion, and your morality suggest is the way to go here.” (09:30)

3. Public Disinvestment: Alaska’s University Budget Slashed (09:49–13:10)

• Major Education Cuts:

  • Alaska’s legislature cut the state university budget by 41% rather than increasing taxes on the wealthy or corporations.
  • Wolff decries this short-sightedness: "Savaging that university is hobbling and crippling the future of the Alaska economy. What kind of a society does that to its young people and its own future to save taxes for people already rich and already successful businesses?" (12:37)

• Broader Theme:

  • He frames the issue as self-destructive austerity that endangers future prosperity and the public good.

4. Political Accountability: Rick Snyder, Flint Water, and Harvard (13:11–17:13)

• Controversial Fellowship Withdrawal:

  • Former Michigan Governor Rick Snyder, mired in the Flint water crisis, withdrew from a planned Harvard fellowship after 7,000 alumni protested.
  • Snyder’s rationale: the "lack of civility" shown by protestors.

• Wolff’s Response:

  • "He has nothing to apologize for. My last update has to do with a little, I don't know, breast beating." (16:53)
  • Wolff condemns the focus on “civility” when the real issue is accountability for harm done to the public.

5. Recognition for Economic Democracy: Influence in the UK (17:14–19:21)

• International Impact:
  • The New Forest East Labour Party in the UK cited Democracy at Work’s advocacy for worker cooperatives as a policy model.
  • "They sent us a copy, sent it to the British Parliament, everybody there proposing that the British use what we do on Democracy at Work... as the basis for British policy." (18:13)
  • Wolff celebrates the spread of ideas for democratizing the workplace and transitioning from top-down corporate structures.

Main Segments: Reparations and Student Debt Forgiveness

6. Reparations: History, Lessons, and Systemic Change (19:22–31:31)

• Case for Reparations:

  • The demand comes mainly from the African American community, rooted in the legacy of slavery and generations of systemic abuse.
  • "Were the injuries suffered real? No question. Is there a need for some sort of restitution? In my mind, no question. Yes." (20:21)

• Historical Examples and Limitations:

  • Europe post-WW1: Reparations imposed on Germany mainly benefited creditors, not victims.
  • Post-Holocaust: Reparations to Jewish survivors offered some compensation, but did not eradicate systemic antisemitism or prevent further conflict.
  • Quote: "Did this reparation serve to prevent another war? On the contrary... reparations solve[d] the problems of Europe? Not at all." (22:16)

• Dangers of Surface Solutions:

  • Payments alone without systemic reform can breed resentment and be weaponized by political demagogues.
  • "If the average American white person pays an extra tax for reparations, can you imagine what right wing politicians will be able to say and do?... If we just distribute money, we haven't changed the system and that's going to come back to haunt us." (26:30)

• Call for System Change:

  • "The system needs to be changed that produces these horrors... Reparations opens the questions about a system and that should not be brushed under the rug." (27:57)

7. Student Debt Forgiveness: Feasibility, Impact, and Limitations (31:32–43:33)

• The Sanders Proposal:

  • Complete forgiveness of roughly $1.5 trillion in student loan debt, funded by a tax on Wall Street speculation.
  • "Is this a feasible way of going about the problem? There the answer is an unqualified yes, of course." (33:32)
  • The measure would benefit 50–100 million Americans, allowing them to redirect loan payments toward goods and services.

• Economic Logic:

  • "The loss to one part of the economy is offset by the gain to another part. This is simple economics and ought not to be forgotten." (35:09)
  • Wolff frames it as reversing decades of economic policy that favored the wealthy, restoring balance.

• International Perspective:

  • Many European countries charge little to nothing for higher education; the U.S. problem is rooted in broader wage and cost-of-living imbalances.

• Systemic Roots of Debt:

  • "Even if you forgive the existing debt, you're not changing the conditions, which... is why many countries, Germany, France, Italy, Finland... charge next to nothing for higher education." (38:54)
  • Other types of personal debt and broader wage stagnation will continue to fuel indebtedness unless the economic model changes.

• Conclusion on Both Issues:

  • Fundamental systemic transformation is necessary; "The system is the problem, and system change is the answer." (43:23)

Notable Quotes & Memorable Moments

• On Home Health Care Workers:

  • "What a group to choose to penny pinch with. I had to tell you the story. It's emblematic of what's going wrong in this society." (05:10)

• On Wealth Ethics:

  • "The cost to him [Uber founder]... is the benefit of doing something for tens of thousands of Uber drivers and their families and more thousands of the homeless. You tell me what your ethics, your religion and your morality suggest is the way to go here." (09:34)

• On Public Disinvestment:

  • "Savaging that university is hobbling and crippling the future of the Alaska economy." (12:36)

• On Reparations:

  • "If we just distribute money, we haven't changed the system and that's going to come back to haunt us." (26:42)

• On Student Debt:

  • "You're taking away money from the top so it doesn't trickle down, but you're giving an economic boost to the average American who has a student debt... That's money you might call trickling up. And the trickle up offsets the trickle down." (35:24)

• On Systemic Problems:

  • "Look, it's a fundamental system that has to change. These are systemic problems. Those that led to slavery and those within capitalism that lead to unbearable and unsustainable debt. The system is the problem, and system change is the answer." (43:13)

Timestamps for Important Segments

• [00:10] Home Health Care Workers: labor, pay, union challenges
• [06:51] Uber co-founder’s mansion, driver pay, and homelessness juxtaposed
• [09:49] Alaska university funding cuts and broader implications
• [13:11] Rick Snyder, Harvard, and the Flint water crisis
• [17:14] UK Labour Party recognizes Democracy at Work’s worker co-op advocacy
• [19:22] Reparations: historical context, pitfalls, system critique
• [31:32] Student debt forgiveness: Sanders plan, economics, system critique
• [43:13] Closing call for systemic change

Final Thoughts

Wolff urges listeners to look past one-time payments or policy patches, emphasizing the need to transform structural injustices in labor, education, and the overall economy. His critiques are historical, comparative, and rooted in ethics and political economy, calling for solidarity and deep system change.