Socialism and Puerto Rico - Economic Update with Richard D. Wolff

Economic Update with Richard D. Wolff

Episode: Socialism and Puerto Rico
Date: March 4, 2021

Overview

This episode, hosted by Richard D. Wolff, critically examines the persistence of economic inequality in the United States, the ways policy responses to crises have favored the wealthy, and then shifts focus to the multifaceted economic and political crisis in Puerto Rico. The guest, Senator Rafael Bernabe, a long-time socialist and activist, provides a detailed analysis of Puerto Rico’s economic hardships, political shifts, and the growing momentum of leftist and socialist movements on the island. The episode explores both the structures of exploitation and the emergence of organized resistance.

Key Discussion Points & Insights

1. U.S. Economic Inequality and Policy Failures

(00:10–14:39)

Critique of Policy Rhetoric vs. Action:
- Wolff calls out the Biden economic team, especially Janet Yellen, for “talking a great deal about their concern for inequality,” but not implementing meaningful change. He criticizes Democrats for repeating a pattern of talk without substantive action, leading to worsening inequality.
Role of Monetary Policy:
- Massive monetary interventions (e.g., by the Federal Reserve) benefit those holding stocks (“the 10% of Americans who own 80% of the stocks”) and worsen inequality, as highlighted by Wolff:
  - “If you pump vast amounts of money into an economy that's not in good shape, that money can end up going into the stock market... It's going to worsen inequality.” (01:02)
Impact of COVID-19 Relief:
- Relief programs disproportionately favored big businesses and higher-wage workers, while retail and restaurant workers suffered most.
Ballooning Debts in Public Institutions:
- Example: University of Washington selling bonds just to pay off old debts – a sign of systemic crisis in higher education funding.
  - “If you're borrowing to pay off the bad debts you already have, your debt problem is going to get worse.” (04:52)
Explosive Wealth Gains Among the Ultra-Rich:
- Hedge fund managers like Chase Coleman ($3 billion in 2020) thrived during societal crisis; Wolff breaks this down to $58 million per week, highlighting the disconnect with mass unemployment.
  - “Chase Coleman does not have to buy lottery tickets because he wins the lottery every day, seven days a week...” (07:05)
- On Jeff Bezos and MacKenzie Scott: While their philanthropic donations are huge in dollar terms, they pale compared to the astronomical increase in their wealth during the pandemic.
  - “Their wealth has risen from the $11 billion they had in 2010 to $250 billion... Out of that, they've given 7.2 [billion]. In other words, they've kept the overwhelming lion's share.” (09:45)
  - “Bezos...gave only one [billion]. But I should be fair. He recently gave, or said he did, $10 billion. But who did he give it to? The Bezos Earth Fund...he charitably gave to himself. Folks, you can't make this up...” (11:15)
Global Political Dynamics:
- Mention of France’s backlash against U.S.-influenced social movements like Black Lives Matter and MeToo, framing it as a trend of blaming external forces for internal problems.
  - “For those of us like myself who are very familiar with France, the ability to blame outsiders...is an example of blaming foreigners. That for sure they're copying the United States.” (12:45)
Contrast in Policing Movements:
- Wolff notes the disparity in U.S. political repression: Historic overreaction and punishment against communists vs. relatively muted response to far-right groups post-Jan 6th.
  - “Communists then were punished for what they didn't do. Proud Boys and others are not getting punished for what they, in fact, did.” (13:50)

2. Interview with Senator Rafael Bernabe — Puerto Rico’s Crisis and Leftist Movements

(14:39–28:47)

Economic Crisis in Puerto Rico

Multi-layered Crisis:
- Bernabe describes the situation as “a disaster…a crisis that has many layers.” Puerto Rico’s economy is characterized as colonial, dependent, and dominated by U.S. corporations.
- Persistent high unemployment; since 2006, Puerto Rico’s economy hasn’t grown and has lost about 20% of its jobs. There’s been mass emigration and, for the first time in centuries, a declining population.
  - “It's an economy that has never been able to provide enough employment for Puerto Rico's labor force.” (16:53)
Debt Default and Federal Control:
- The government’s solution has been unsustainable borrowing, leading to a 2015 default.
- The U.S. Congress imposed a Federal Oversight Board, which has enforced harsh austerity to prioritize bondholder payments.
- Catastrophic events — Hurricane Maria, COVID-19 — exacerbated the crisis.
  - “So the economic situation is terrible. There's no other way to describe the material and economic situation in Puerto Rico right now.” (18:42)

Political Upheaval and the Rise of the Left

Collapse of Traditional Parties:
- Puerto Rico’s two traditional parties (pro-status quo and pro-statehood) are losing support, unable to offer solutions.
- Mass protests in 2019 ousted Governor Ricardo Rosselló — a historic milestone for popular mobilization.
  - “People were in the streets protesting...for 20 days until he was forced to resign. This had never happened in Puerto Rico's history.” (21:07)
- Recent elections (2020): The winning governor secured only 33% of the vote, marking a dramatic decline in the power of establishment parties.
Rise of Progressive and Socialist Forces:
- Bernabe’s Victoria Ciudadana and the Puerto Rican Independence Party now command a combined 30% of the vote. The left increased its seats in the legislature.
  - “Two forces that you could describe as left forces...did very well. They got around...30% of the vote.” (22:35)
- Broad message: Aided by the collapse of traditional parties, new left/pro-working class movements have unprecedented momentum.

International Solidarity and the Future

Connection with U.S. Left:
- Bernabe situates Puerto Rico’s struggle in the context of a broader anti-capitalist movement, drawing inspiration from the rise of U.S. progressives like Bernie Sanders and Alexandria Ocasio-Cortez.
  - “For us, at least for me, it's very important that progressive forces grow and become stronger in the United States...it fills us with enthusiasm and hope that we have allies.” (25:37)
Three Priorities for Puerto Rico:
1. Self-determination:
  Push for a fair process, allowing Puerto Ricans to democratically decide their status (statehood, independence, or association).
  - “There should be a self determination process and Congress should be pushed to take action in that direction.” (27:03)
2. Debt Cancellation:
  The $70 billion public debt is untenable without extreme sacrifice by Puerto Ricans.
  - “Puerto Rico has a public debt which is $70 billion cannot be paid unless you impose on the Puerto Rican people unacceptable sacrifices. So we should struggle to have that debt canceled.” (27:26)
3. Economic Reconstruction:
  Rebuilding the devastated economy will require new policies and significant Congressional support.
  - “Congress should also provide for the economic reconstruction of Puerto Rico.” (27:50)

Notable Quotes & Memorable Moments

Wolff on Monied Interests:
“Chase Coleman does not have to buy lottery tickets because he wins the lottery every day, seven days a week, 52 weeks of the year.” (07:05)
Wolff on Philanthropy vs Wealth:
“Their wealth has risen from the $11 billion they had in 2010 to $250 billion... Out of that, they've given 7.2 [billion]. In other words, they've kept the overwhelming lion's share.” (09:45)
Bernabe on Colonial Dependency:
“Puerto Rico has a colonial economy, a dependent economy, an economy that's completely controlled by very large US Corporations.” (16:38)
Bernabe on Puerto Rico’s Unemployment:
“It's an economy that has never been able to provide enough employment for Puerto Rico's labor force.” (16:53)
Bernabe on Political Change:
“This increased tremendously to 15% of the vote. So two forces that you could describe as left forces...got around 30% of the vote.” (22:32)
Bernabe on International Solidarity:
“For us, at least for me, it's very important that progressive forces grow and become stronger in the United States...it fills us with enthusiasm and hope that we have allies.” (25:37)
Bernabe’s Three Demands:
“Self determination, debt cancellation and economic reconstruction, these three things are crucial for Puerto Rico's future.” (28:15)

Timestamps for Key Segments

00:10–01:55 — Wolff critiques Biden/Yellen & longstanding inequality “talk”
02:00–04:47 — Impact of COVID relief policies and monetary policy on inequality
04:48–06:55 — University debt as a symptom of failing institutions
07:00–11:25 — Hedge fund and billionaire gains during the pandemic; critique of philanthropy
11:30–12:44 — France’s political backlash against U.S. social justice movements
13:00–14:39 — Policing of left vs. right movements in U.S. history
14:39–15:56 — Introduction of Senator Rafael Bernabe
15:57–18:42 — Bernabe’s overview of Puerto Rico’s economic disaster
19:10–23:25 — Political shifts on the island: collapse of old parties, rise of the left
23:26–24:13 — Comparison with the U.S. socialist movement
24:14–26:13 — Importance of solidarity between U.S. and Puerto Rican leftists
26:49–28:14 — Bernabe’s call for self-determination, debt cancellation, and reconstruction

Tone and Language

The episode maintains Wolff’s characteristically sharp, direct criticism of economic inequality and policy hypocrisy, balancing statistics and anecdotes with biting humor (“Chase Coleman does not have to buy lottery tickets...”). In the interview, Senator Bernabe speaks with clarity and urgency about systemic exploitation but also with hopefulness about rising political alternatives and international solidarity. Both speakers emphasize structural critique and grassroots empowerment.

Summary

This episode is a compelling analysis of the mechanisms deepening economic inequality in the U.S., illustrated further by the dire and layered crisis in Puerto Rico. Richard D. Wolff exposes the failures of policy and the grotesque enrichment of the economic elite during periods of mass suffering, before the show pivots to Senator Rafael Bernabe’s illuminating breakdown of Puerto Rico’s economic and political collapse — and the corresponding rise of the left and socialist movements. The episode concludes with a call for allied struggle across borders, centered on self-determination, debt cancellation, and economic justice.

Transcript

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 jump in today by calling out a little bit Janet Yellen, the Speaker, Secretary of the treasury, and indeed the whole Biden economic team. And here's the problem. They are talking a great deal about their concern for inequality, but I'm afraid that we can't have that anymore. We've had a lot of talk about the problem of inequality ever since Clinton. Then we had it again with Obama. The Republicans don't talk that much about it, the Democrats talk a lot about it, but they don't do much. And I want to get hammer at that. When Janet Yellen was head of the Federal Reserve, she knew, as all good economists do, that if you pump vast amounts of money into an economy that's not in good shape, that money can end up going into the stock market where it bids up the prices of stocks. That's very nice for people who have stocks. The 10% of Americans who own 80% of the stocks, they're the richest ones, they're doing real well. But if the system favors them in that way, it's going to worsen inequality. So talking about it as a problem while you're worsening it isn't very attractive as an approach. And yet it's what they're repeating now again, Yellen, Biden and others are talking about it. And now we have 2020 with the COVID We know who's been damaged by Covid. Restaurants, for example, retail outlets. Those are some of the poorest paid workers in, in the American economic system who do fast food, who do retail, who do all of that kind of work. They were hurt in a way that upper payment people, people at high end of the wage system were not. The statistics all prove it. The programs, if it were decent, would have helped more, those at the low end rather than those at the top in order to offset the inequality. Not only was that not done, the reverse was done. The more help was given to high end industries who kept up their high end wages rather than the middle and the bottom. The big businesses were even able to grab some of the special money that was supposed to go to little businesses with a minimum of effort being done of that sort. It was corrupted and that could have been dealt with, should have been dealt with, and still hasn't been. So the gap between upper end wages and lower end wages got worse. And the gap between those who own Stocks and bonds, the 1%, the 5% at the top. And the rest of us also got worse because of the monetary policies that flowed into the stock market. This is a disaster. And if you keep doing that, which is what the Democratic leadership has done, while you talk about your concern for inequality, the end result is not pretty and it has to be called for what it is. My second update has to do with a little story, but a big meaning. The University of Washington, the state of Washington is selling bonds these days. $325 million. What are they raising money that way for borrowing to do what the university normally does. And note this, pay off the debts for that they earlier incurred. Uh oh. Most people know that if you're borrowing to pay off the bad debts you already have, your debt problem is going to get worse. You're seeing this in more and more institutions of a capitalism that is in trouble and declining. They can't or won't solve their problem now. They will not tax the rich, they will not tax the corporations. Instead they, they go deeper and deeper in debt. If you're anxious about rising debt, which you should be in your own life with the government, then you have to be worried that universities are sooner or later going to come to that point where they have an enormous debt. They're not getting the support from the states that they would like, and the mass of the people will be called upon to pay higher tuition, higher fees. We already have students in greater debt than ever before. Now we're seeing the universities where they go to study also getting themselves into deeper and deeper debt. This is a story that never ends well. Now, to make you happier, I wanted to tell you how some people have been doing real well. I want to start with a group of hedge funds, the 15 best performing hedge funds in what year? 2020, the year that millions of Americans came down with a horrible disease. Hundreds of thousands died from the disease. 25 million people as I speak to you, collecting unemployment disaster, public health disaster, economic disaster continuing. But over the same year, 2020, Chase Coleman, I want you to get to know his name of the Tiger Funds, that's a group of hedge Funds took home $3 billion in the year 2020 was a great year for Chase Coleman. You know, all that money produced by the Federal Reserve flowing into the stock market, well, he got a big piece of deciding where that money gets invested for the rich people who brought that money to him. Wow, 25 million people unemployed while, while Chase Coleman brings in $3 billion. By the way, I thought you'd be Interested in how that works out as a weekly income. You ready? $58 million per week. You see, Chase Coleman does not have to buy lottery tickets because he wins the lottery every day, seven days a week, 52 weeks of the year. He won the lottery where you and I didn't. But I also looked, as I said, at the other 14 out of the top 15. Sadly, number 15 who didn't do as well as Chase, he only took home 846 million. So instead of $58 million a week, he only got 16.3 million a week, every week. Now, there is no excuse, and there is no need for this, that some people are desperate on living on unemployment or worse, have run out of unemployment, while somebody else is raking in $50 million a week. There's no need for that. In a society that already had inequality, that says it doesn't want this much inequality, that says that has a leadership that says it is committed to reducing inequality, why was this allowed? Why is there not, as we have had in this country, what's called an excess profits tax or an excess income tax, that says during a time of crisis, you know, like a war, like a catastrophic public health disaster, like a crash of our capitalist system, we're not going to allow some people, millions to be at the end of their economic rope while other people are collecting, as I said, $50 million a week. No need for it. No morality can justify this that I know of in any of the major kinds of morality. And staying with this one more time, I thought I'd talk yet again about. About Jeffrey Bezos and Amazon. This time I want to talk about Jeffrey Bezos and his ex wife, Mackenzie Scott. Together, I want to be fair to them. They have given a total of $7.2 billion in charitable gifts. Very nice. Puts them right there at the top in terms of charitable gifts. But if they're at the top in charitable gifts, let's compare that to the top they occupy in terms of their wealth. Stay with me. These numbers are easy to keep in your mind. In 2010. That's not that long ago, folks. Their combined wealth, they were still married then was $11 billion. Today it has risen. During the time of COVID and crisis and all the rest, their wealth has risen from the 11 billion they had in 2010 to $250 billion, which is what they have now. Out of that, they've given 7.2. In other words, they've kept the overwhelming lion's share. They can't even spend that money. How could you? You'd have to be spending millions and millions of dollars every day, which I know is a fantasy, but it isn't real. Why haven't they given away? We're at the worst economic crisis in a century. We have the worst public health disaster in more than a century. If ever there were time to give some money, according to what you have, you know, the Scott and Bezos could give away half of their money to help this country in a time of need. And after giving away half, they'd still be the richest people on the planet. It's amazing to me as a critic that just to preserve themselves, they don't give away more money so that people like me could not point to statistics as grotesque as what I just did. And by the way, for those of you interested in gender, out of the 7.2 that Jeffrey Bezos and Mackenzie Scott gave to charity, MacKenzie Scott gave 6 billion. Jeffrey Bezos, who has several times what she has gave only one. But I should be fair. He recently gave, or said he did, $10 billion. But who did he give it to? The Bezos Earth Fund, named that way because it's his he charitably gave to himself. Folks, you can't make this up, but it has a lesson, and I won't spell it out because you already know it. Next update, I want to shout out to the President of France, Emmanuel Macron. He and the conservatives in his country, led by the nationally conservative newspaper Le Figaro, have decided to be anti American in a new way. Here's their America is threatening French politics and culture. You know how this may surprise you? Because we have exported from the United States, they say, the ideology of black lives matter. Yes, you heard that right. Black lives matter. Sensitivity, as in the MeToo movement, to discrimination against women and all of that stuff has come to France. Surprise, surprise. And the conservatives want no part of it. They're coming here with their ideas. We don't have a problem of discriminating against women, they say, or racially, they say. For those of us like myself who are very familiar with France, the ability to blame outsiders for the problem France has had in the relationship of men to women and whites to non whites of many decades is an example of blaming foreigners. That for sure they're copying the United States. That's like Trump on immigrants or Trump on the Chinese, only they're reversing it and making Americans the fall. Guys, my last point for today that we'll have time for. After 1945, the United States went on a tear against communists. It arrested the Communist Party leadership, the Smith act, deported lots of Communists, imprisoned a whole bunch of them. And you know what? For advocating that was the claim you advocated overthrow of the United States government by force and violence. That was the charge. It wasn't that they did anything. They didn't do anything. And what I want to stress is they didn't do anything like what was done on January 6th at the US Capitol in Washington. But they were arrested, they were deported, they were imprisoned. Nowadays, if you're a proud boy, you can organize and you can assault and you can kill in an attempt to overthrow the election and the results, but somehow you don't see the government and the whole country mobilizing to punish you. Communists then were punished for what they didn't do. Proud boys and others are not getting punished for what they, in fact did. And in that difference, I think you will see a lot. We've come to the end of the first part of today's show. Before we get to the second half, I want to remind you our new book, the Sickness is the When Capitalism Fails to Save Us from Pandemics or Itself, is available@democracyatwork.info books. I want to thank, as always, our Patreon community for their ongoing and invaluable support. If you haven't already, Please go to patreon.com economicupdate to learn more about how you can get involved. Stay with us. We have an important interview and we'll be right back.