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- [00:10]
A
Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives and those of our children. I'm your host, Richard Wolff. I want to begin today with some updates that struck me over recent weeks as extraordinary. The first one has to do with the Trump administration's admission that the deficit in the United States for 2019 topped $1 trillion. In other words, the Trump government spent $1 trillion more in this last year than they took in in taxes. Why is this interesting? For a number of reasons. Number one, when running for office, Mr. Trump promised to do the opposite, to reduce the deficit in this country to either a surplus, literally get rid of it, or at least to sharply reduce it from what he accused the Obama administration of having done. The reality is that he has done exactly the opposite. Number two, the biggest single cause, there are two major ones, but the biggest single cause of this catastrophic deficit is the tax cut of December 2017, which drastically cut taxes on corporations and the rich, therefore bringing in less money than before. And the second biggest cause was the size and increase in the military budget in the United States. So you cut the taxes and you spent more money, not just on the military, but particularly on the military, one of the largest outlays, any case, in this country. And presto fixo, you've got a fat deficit. Next item that makes it interesting. A deficit is a boosting of the economy because basically what you're doing is that the government, in addition to all the spending we do as individuals and all the spending done by businesses for their activity, now the government is the third basic spender, and it is spending like a sailor. It is spending way more money than it takes in taxes. That is a boost to the economy. If you put that together with the last 2019 year stimulation from the Federal Reserve, pumping hundreds of billions of dollars of new money into the economy, you have a staggering stimulus, the fiscal deficit spending plus the monetary increase of the money supply. Why is that happening? Well, unless you've not been paying attention, you know, it's to get Mr. Trump reelected. It's a boost. It's like giving a shot of adrenaline to somebody who's already running as fast as he or she can to get them over that last hurdle so they can get themselves reelected. That's all. Please notice that the Democrats are now screaming, look at the deficit. That's what the Republicans used to scream at the Democrats for. It's like musical chairs where we replace one another. The Republicans are acting like Democrats and the Democrats are acting like Republicans. And what's the lesson there that the difference between the two of them in economics, it isn't there. They're just changing roles because they're just playing games to get in and out of office. The impact on the economy played by one is similar to the game played by the other. And since one is in office and the other one out, and then vice versa, of course they end up saying the same things to one another. It's why we need a real other political party. Cuz the two we got literally are Tweedledum and Tweedledee. My next update has to do with a tragedy. Here's a statistic that says 14 out of the 15 countries who spend more than 18% of their tax revenue paying off debts, 14 out of 15 of these countries, the worst indebted countries in the world, on average, cut their social spending for their people by 13%. Here's the point. If you get yourself into debt as a foreign country, if you're so desperate that you have to borrow in your society, you will regret it. Or to be more accurate, the mass of people will regret it. Because the government will have to raise taxes to pay off the debt. And it'll do that by cutting services, by cutting money for schools and hospitals and roads and all the rest. Now let me take it the next step. Here's a the countries that the 30 countries with the lowest amount of debt raised their public spending by 14% over the same period. You couldn't have it clearer. Go into debt, you will hurt your people. Keep out of debt, you will be able to help your people. So then why do third world countries, Asia, Africa, Latin America and beyond, why do they go into debt? And the answer is capitalist corruption. Let me explain. The banks in New York or London or Paris have every interest in lending at high rates of interest to governments in the third world. All you have to do is convinceand that's a polite word for bribelocal officials to cut a deal. You can make it sweet for them by giving them a little extra under the table or in a Swiss bank account. So those local officials sign an agreement, they take out a loan that allows them to do all kinds of fun things for a year or two in their country so they look real good and get elected. Meanwhile, the country is saddled with debt, and that'll be paid over the long run by cutting back on social programs and using the money instead to pay off those bankers. As long as you allow private banking and corrupt officials to get together and put a debt on the mass of people, you will See the tragedies we have all around us.
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My.
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My next update has to do with the city of Amsterdam in Holland. It did something interesting recently that I thought many of you, particularly those of you in between the ages of 18 and 34, might find delicious. Here's what Amsterdam did. The city has decided to buy the debts of young people. That's right, young people 18 to 34 who've acquired debts to go to school, to live, whatever. The city will buy the debts from the lenders. So now the young people will owe the city the money because they own the debt and the city will forgive some or all of it. Why? Because that population, they say, has incurred debts that are dangerous to the community. They're going to bail them out by giving them cuts in their debts, no matter where they acquired them. Wow. Now, many of you hearing this might wonder, gee, you're just helping these people. They contracted for the debts. So let me remind you of what governed the good leaders of Amsterdam. They said something like, over the last 10 years, governments have bailed out the banks who went bankrupt, the big corporations here in the United States, for example, Caterpillar, General Motors, aig, Insurance company, we bail out all kinds of people. Why the hell shouldn't we also bail out the indebted young people who need to get a new fresh start in life and they need to be free of these debts. So they're doing that too in Amsterdam. Just imagine what it might be if they did that elsewhere, too. It might catch on. In the hopes that it might, I decided to talk to you about it. Here's another update. People have asked me, why is Mr. Trump and other folks like him, Boris Johnson, leaders in Poland, Hungary and elsewhere, why do we call these strongman governments? What's going on with their being aggressive in using the government to punish friends or enemies, depending on your point of view, Mr. Tariff Man. That's what Trump calls himself, whacking everybody he can with a tariff, Mr. Johnson, cutting the Europeans off and all the rest. And the answer, you should understand, has mostly to do with their own personal political agendas. When you hit people with a tariff, you create terror among businesses. Those who haven't been hit by a tariff will now give you big donations so you don't go after them. If you have been hit with a tariff, you are now spending big bucks to get the politician to give you an exemption. There are thousands of applications for, for exemptions from tariffs pending right now in Washington. So you get all kinds of people, the beneficiaries, but also those hurt by the actions of the strong man. The beneficiaries want to keep him there and the opponents want him to change his policies. He collects enough money to win the next election. That's what much of this is all about. Last item comes from the Bloomberg News Service January 16th. If some of you want to follow the details. What Bloomberg did very smart was to ask the the big Trump tax cut of December 2017 was promised to kickstart the economy, to boost the economy, and to lead above all to many jobs, and particularly in the banking sector, since the banks were major beneficiaries of that tax cut. And here's what Bloomberg no radical Bloomberg no critic of capitalism, Bloomberg. Here's what their conclusion was as you can see from the Bloomberg News service story of January 16, total employment in banks in the United states shrank between December 2017 and today. All the promises of more jobs, false reality, fewer jobs. What did the banks do with their increased profits? By the way, the big banks, the six huge banks that are dominant in the United States, got more profits in the last two years, 2018 and 2020 19, than they had ever seen before. The tax cut was an enormous benefit to their bottom line. Increasing dividends, increasing their liquid cash, increasing the value of their stocks, you name it. But they didn't hire more people. They reduced their payroll. They took the profits, boosted their own stock by buying it back from the stock market, pushing up the price, and by giving dividends to their shareholders and big pay packages to their top executives. Don't be fooled. The arguments that politicians make as to why they have to do something that benefits the rich are never explained to us as being done to benefit the rich, just like they're never being explained to us as an act to benefit the rich in exchange for donations from the rich to the same politicians. Instead, we are told wonderful, glowing stories about how, for example, the tax cut of 2017 is going to boost jobs, is going to boost employment in the banking sector, is going to have all these women, wonderful social benefits. Don't be fooled. The lobbyists teach the politicians, we want you to do this for the company that pays us. But we know that you're a politician who has to get reelected. So here is a memo with six lovely talking points. You can go on Face the Nation next Sunday and explain to the people why what you're doing for us is actually done for all of them. By the way, that's how the tax bill of 2017 was sold to the American people and their political leaders, where the word leaders is in quotes. We are at the end of the first half of our program. Please subscribe to our YouTube channel, follow us on Twitter, Facebook and Instagram, and go to democracyatwork.info to learn more about our other activities. The two books we published last year, understanding Marxism and more recently, Understanding Socialism, and the store that we maintain on that website, which I think you'll find delightful. Special thanks as always to the Patreon community that supports us. Stay with us. We will be right back. Welcome back, friends, to the second half of Economic update. For today, I'm especially pleased to have with me two guests in a wonderful position to talk about something I've been interested in talking about for quite a while, but we didn't quite have the conditions for it. Namely, a resurgence of the left in American social life, cultural life, political life. Not only new things developing and growing, but collaboration with different parts of the left getting together. That has been as rare as a growth period. So it's really good to have this opportunity and to share it with with all of you. So our first two guests to be introduced. First, Karen Renucci. She is a media activist, journalist and educator. She is a member of the coordinating committee of something called the center for Critical Thought in New York City. That's what she's going to be talking to us about, and in particular, their project of creating what they call a school for socialism. And you can connect with them to pursue this by going to infocenterforcriticalthought.org and my second guest who's been on the program before is Rob Robinson. He was a co founder and member of the leadership committee of Take Back the Land Movement, and he's currently a staff member at the National Economic and Social Rights initiative known as NESRI. After losing his job in 2001, he spent two years homeless on the streets of Miami, Florida, and 10 months in a New York City shelter. He eventually overcame homelessness and has been part of the housing movement in New York City since 2007. He has worked with the United nations, the US Human Rights Network, and with homeless movements and populations in at least the following Hungary, Germany, South Africa, Spain and Brazil. Welcome, Karen. Welcome, Rob.
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B
Thank you.
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A
Okay, let's start by having each of you tell us a little bit about the particular project you're working on, and then we'll go into how they connect to each other and what they mean for America. How about we start with you, Karen?
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Well, for a long time, people have been feeling that we have wonderful teachers, educators, activists who have so many experiences to share as we want to make a better world. So we felt that we needed to pull forces together and create a learning institution. And so we've made the center for Critical Thought and we're working with academics and activists around the country, around New York City right now. The goal is to make it happen everywhere because people need education. We have so many experiences of the past and how do we build this world that we want to build? And many young people want to learn. So that's what we're doing.
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A
Okay, Rob, can you give us a thumbnail equivalent of for the Left Forum?
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B
Certainly. So the Left Forum is a well known conference that has been around for a number of years. We bring together as many as 5,000 people from around the world, folks who identify as leftist. Right. And who want to see a different world. And we always felt education was a big part of this right. We were known as just a conference, but what do we do the rest of the year? So it was interesting when we were approached by the center for Critical Thought to join forces with them to sort of build something that we haven't seen in this country before. You know, we normally see the left fractured, not as united as they should be. And we thought this is a wonderful opportunity to bring the Left together.
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A
Okay, let me go back and really ask both of you to respond as you see fit. I noticed that the Left Forum for the year 2020 has adopted as its topic, its focal topic socialism. And you haven't done that in previous years. What's that about? Why is, in a sense, socialism on the agenda for the Left Forum and socialism is the school for socialism. Tell us a little bit about how your work is related to that.
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B
Well, I think for us at Left Forum, we knew a capitalist society doesn't work for many people in this society. We need something different. And I think Bernie Sanders alerted us to the fact that this world needs a change and you can identify as a socialist and redistribute wealth in this country in a meaningful way. So people are thinking different. It's a time now, and this is something that is coming up from the ground. People are fascinated by this idea of social change. So we thought very simply, let's make this conference about socialism. Let's appeal to the masses. This is a wonderful opportunity as we join forces and again set the example for the Left to come together. Why not give them a real issue to come together around?
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A
Darren?
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C
Yeah, Well, I think if you speak to young people and you say, are you a leftist? It means so little to them because what does it mean? Like, I'm not a right winger, so then I'm a leftist and it's meaningless. But what has happened is more and more young people, like when I was younger, I could get a job as a waitress. It cost me $3 to fill my Volkswagen for the week. And you know, jobs were around and school was affordable. And now people of this generation, they're left out, they're living at home. You know, they're all the problems that. So they understand that capitalism is not working for them and that we need a society where it's built on cooperation. And so if you, you know, young people, when polled, the majority say they're not afraid of socialism. This sounds pretty good to them. So we feel that not to be vague about what we're trying to accomplish. And so our goal is to build a socialist world. And that means built on cooperation. And so we want to cooperate with the Left Forum. Left form has left in its name its legacy. And it's also very broad. It incorporates anybody who's progressive. But the work that we want to do is not just critique capitalism because people know the problems. But what are we going to build and what does that look like? Worker co ops and ownership by workers of corporations or being part of the production system and benefiting from that. And as new technologies are introduced, rather than people being thrown off to die, that our workloads become easier, we get more time off and we still get a living wage. That's the world that we can build. But it takes learning from the past and organizing now. And so education is a big part of it. And we look forward to working together where the work that we do all year long builds towards a giant conference to discuss these issues. And then it doesn't end there. We keep going all the next year.
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B
That's right.
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A
I want to follow up on one thing. What made you and people you're working with on this center for Critical Thought, what made you think this was the right time to build a new school for doing this? Is there something that gave you the idea this is the historical moment?
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C
Yeah, definitely. Bernie has done that for thousands and thousands of people, millions of people in this country. And also I see how the Democratic Socialist Party, all these young people are joining en masse. So they want a change. People voted for Trump because they wanted a change. He knows the language to make them think they were getting a change. And so it is the time people really want change. The New York Times came out to endorse Elizabeth Warren and Amy Klobuchar. Imagine that having women. Everybody wants a real change in this country. So this is the time.
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And talk a little bit about this collaboration, because I really want to underscore, at least as one observer, seeing the different parts of the left in this country, or those interested in socialism getting together institutionally to collaborate and to coordinate their activities. The left is much stronger in this country than most people understand. But it's so divided. If you could become what you're doing, a model, an example for the different parts to get together, boy, this country's politics would change and change quickly.
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B
Well, I think that's the important piece, Rick. As Karen continues to underline, education is at the root of that. Right. But not just education. To a certain sector, the young people are involved, older folks coming together. Right. The elders and the young folks coming together and creating a new world. So there's a understanding of the history, the historical context. But what does a new world look like? The imagination of youthful enthusiasm coming into this and thinking about change in a different way. But education is always at the core of that. As you mentioned in the introduction, I get to work around the world, and I've seen political education in other places outside of the US that looks much different than it looks here. And I think this is getting closer. This idea is getting closer to what we see in places like Brazil, where the Landless Workers movement has their own school, where people are coming together and said, this is what we want to know more about. It's not just something that's held down by a certain subset of society, the academics holding down the theory. Right. It's theory, lived experience, practical experience, all meeting in one place to understand what a different world looks and feels.
- [25:17]
A
Yeah, it's sort of interesting to me. I was recently reading a book about the German Social Democratic Party and how in the 20s and 30s and 40s of the last century, they had an enormous nationwide school system. They had schools in every village and town. And it was very clear they were not the school that gets you a better job. They were the school to make a better world. And that made sense to people. They went to the one school to get the credential for the job, but they went to another school to learn how to think critically and how to move forward. And it was understood by people as part of what it meant to be a member of a democratic society. It would be extraordinary if your thing could become a model elsewhere in the country for others. Yeah.
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C
And the cooperation that's happening between us, I mean, that's the world we want to build is one of. We all benefit when we unite. And, you know, under capitalism, it factionalizes people because there are those who are fighting for $15 wage and they're, you know, for better health care, for free education, and everyone just takes all their time to fight in their niche. And if we had a socialist reorganization in this country, all of those issues, you know, we would end the war, start investing that money into renewable energy and technologies that make our lives better. I mean, imagine. That's what I love is, you know, John Lennon said it years ago, imagine. And that's what we need to do is not only imagine, but then start working towards how do we build that. And it's only through unity. And that's what we're seeing. I think Bernie has made unity among people towards true social change.
- [27:16]
A
It's really interesting if you could get the constituents of each of the movements to understand that an alliance would make them stronger because all the other movements are helping them in exchange for them helping all the other. I mean, you can see the logic. And there are even some people who think that the right wing in America has been a bit better at that in recent years doing that than the left. And it's time to catch up and surpass.
- [27:40]
B
You can go back to the Tea Party, right? They were organized and they pulled themselves together in that way. We need to replicate those practices. Right. As Karen said, people work in silos. Right. And that's not going to get us anywhere. That keeps us fractured. We think we're making change, we get incremental little change, but that's not making the change that we want to see. So this is an opportunity to bring the masses together into one space and see cooperation, what it looks like, what it feels like, touch it and put it to practice. And I think that's gonna make a better world for all of us.
- [28:11]
A
Good. You know, I've been criticized for having programs that are a little bit too heavy on the criticism of what's wrong in this society. It's very good for me and I think for my audience to see that there are people doing the kind of work you're doing and doing it together. So, folks, if you're interested, centerforcriticalthought.org, leftforum.org these are the institutions that are working together. And I think what they're doing is something that all of you out there in the rest of the country and the world can think about, because nothing would make us happier here than to imagine that we were helpful in stimulating this kind of thinking and action everywhere else. Thank you for joining us again. Our thanks to the Patreon community that supports us, and I look forward to speaking with you again next week.