Transcript
Richard Wolff (0:20)
Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives and those of our children. Your host, Richard Wolff. Again, a quick reminder, Charlie Fabian awaits your communications. If you have suggestions about the program. Charlie.info438mail.com Once again, Charlie.info438mail.com and again, the reminder that we have a companion book for this program called Understanding Capitalism. You can get it from our website, democracyatwork.info I want to spend today on two subjects. Number one, just me for the first half of the program, talking about Trump's economics, the tariffs, the assault on public employees and all of that. And in the second one, fittingly, about resistance that is building, particularly in the labor movement. We're going to be talking with the former head of the Vermont State AFL CIO about what they're doing, getting ready to push back against the Trump policies. Okay, I want to approach the Trump program, the tariffs, the attack on public federal employees from two sides, but they have something in common, and we start with that. Please understand that what Mr. Trump is doing is a classical service to the business community of the United States, something that the gop, the Republicans, have been doing for at least a century. That's what this is. It's more of that, more aggressive, more intense, more. Take no prisoners, but that's what it is, not some detail that you get lost in the weeds about. That's what it is, an attack on the working class. So let me begin in that framework. For the last many, many years, everybody studying economics in American universities, as I did, and everyone pretty much teaching in American universities, as I did and still do, has been telling students, as all the textbooks did, that the market is a magnificent institution that brilliantly allocates scarce resources in such a way to provide us with prosperity now and via economic growth, prosperity into the future. It is just the greatest thing since sliced bread. So imagine what must be going on if we now have a businessman brought up in the same framework at the same kinds of universities and reading the media that are shaped by that view, telling us that the whole market system, globally at home, is a disaster, has gotten us poor Americans cheated. Look at that. The whole world looks at America as the richest place on earth. And here we have a leader who says, no, no, no, no, no, we got cheated, the market system cheated. And to show what he means, he's intervening in the market. A tariff is a massive intervention. It changes everything. Every country, every business is recalculating now and finding the uncertainties we live in so overwhelming that they're kind of frozen and upset. Look at the headlines. So it turns out the market got us cheated. It isn't a great institution. Or if it is, then what's wrong with Mr. Trump? And if Mr. Trump is right, then why were we teaching that for a century? Wow. Economics profession must feel really stupid this morning. It has been teaching something which our president chucks aside as not only wrongheaded, but it got us cheated and badly too. Well, then, what is going on? American capitalism is in trouble. You wouldn't have these kinds of rollercoaster, cataclysmic, desperate actions by the United States presidency if there weren't deep underlying problems. Oh, sure, they'll never say that. They don't want to. They want to say something else. But that's the inescapable conclusion. I mean, who goes to use the image of Mr. Musk, who goes up on a stage with a chainsaw to symbolize I'm getting rid of federal employees and then firing hundreds of thousands of them? That has nothing to do with efficiency. Efficiency, as every corporate leader knows, is something hard to achieve. You usually bring in specialists to help you understand how and where you can achieve an efficiency. Which job can be changed, which position can be eliminated. You don't go in wholesale because that's self destructive. Unless, of course, your goal has nothing to do with efficiency. And it doesn't. Here's Mr. Trump's problem. Back in his first days as president, 2017, he passed a tax cut that favored corporations and the rich. Many, many, many billions of dollars of tax cuts. Was kind of weird to do that because we've just had, in the 30 years before 2017, a redistribution of wealth in the United States from the bottom and the middle to the people at the top. Never did the corporations and the rich less need a tax cut. And they got one anyway because Mr. Trump wanted to show them he was the guy to support. And that worked. That's one of the reasons he got another shot at it last year. But now he has a problem. Those huge tax cuts passed in 2017, they expire this year, 2025. And if they are allowed to expire, then all the corporations and the rich are going to have to pay the taxes they got cut in 2017. They would have had a great eight years. You may have noticed the inequality in America got worse over the last eight years. They had a wonderful time. But given the pandemic and a few other problems, the rest of us didn't. And Mr. Trump has pledged not to let those tax cuts expire. You know what that means? That if you keep spending the way Republicans and Democrats have done and you keep the tax cuts in place, we are due. This is what the Congressional Budget Office tells us, a $2 trillion deficit. Well, the United States can't borrow the way it used to because it's too much in debt already. It is the world's biggest debtor country by far, and the risk is approaching that. There will be a moment when companies, banks, American foreign, aren't going to lend to the US Government anymore. It's too risky. They're too much in debt. Some politician, you know, maverick, sort of like Trump, might not pay back the debt as a way to handle the deficit. Oh, my goodness. And that was already true before Mr. Trump hit the whole world with a tariff. If you think they were not inclined to lend to the government before, think again, because those are very angry politicians. They hooked their wagons to the United States, which is now dumping them, and they are angry. You read the words of our former allies around the world. Those things come back to haunt you big time. And one of the ways they may is they may not lend to the United States, which may not enable the United States to borrow, and then what nobody wants to say. Laying off all those workers as a way of saving money. Saving money where desperate. That's saving money by cutting back on everything the federal government does, saving us from bad food, conducting crucial health research, you name it, the federal government supports it. Not now, not anymore. We have a desperate government. You know what that's like running out of firewood in your house and it's still winter. So you take the clapboards off the outside of the house. Well, that'll make a fire. But will it get cold? As soon as that fire burns out, you're desperate. You can't wait for the future. Mr. Trump is desperate. And there again is the evidence that we have serious problems. Let me turn to the tariffs. A tariff is like a sales tax. Everybody pays the same percentage more for whatever comes into the country from outside. That, of course, is regressive. What that means is it hurts poor people much more than rich, rich people. Another 10 or 20% for everything I buy. Who cares? That's what it means to be rich. If you're not rich, you care. And you better care because we're talking about cars and trucks and coffee and sugar and you name it. Wow, this is a very big attack on the working class. Let's go back for a minute to firing all those federal Employees, guess where they go when they're fired to look for a job and where? In the private sector, where the rest of us are. And they're going to come in desperate to get an income and they're willing to work for lower wage and they're willing to work in poorer conditions. And that's what we're looking at, lower wages, poor working conditions for the whole private sector. Which is why the business community watched, why Mr. Trump and Mr. Musk did all this and did basically nothing thing not to stop him, not even to criticize him. But once the tariffs went into effect and once the rest of the world said back to Mr. Trump, uh, we're not taking this, oh sure, we'll negotiate with you. But if you think we're just going to roll over and pay, no, no, no, no, no. And that's going to hurt us also, that's a very desperate act and it isolates the United States because, you know, the rest of the world is a much bigger economy than we are. We are not the dominant economy the way we were from the end of World War II to the end of the last century. That time is over. As I have said on this program, the American empire which became the powerhouse at that time is now over. You know where a lot of the countries are going to go if they can't sell their goods here? To China, because that's a powerhouse now. And if you put China together with its allies in the so called brics, it's a much bigger economic powerhouse, wealthier. And then the little statistic all Americans should never forget, the United states population, roughly 330 million, comprises 4.5% of the world's people. China and its allies in the BRICs now comprise nearly 60% of the world's people. Four and a half to 60. Don't be stupid. This is not a fight you want to undertake. Doesn't matter how many missiles you got, this is not a fight you want to undertake. Not only not militarily, but not economically, here's what we're watching. If you want the big picture to stay in your mind when empires go down, you watch as the people who are the richest in the empire and the people who are the most powerful, the leaders use those positions of power and wealth to hold on to that wealth and power as long as possible, which being in those positions, they can do. And that means they offload onto the rest of the people, the middle classes, the working class, the poor, all the costs of a declining empire. And that's what Mr. Trump is doing. Don't be fooled. Stay with us. We'll be right back to see what working people are doing who are not fooled, and especially in the state of Vermont. Before we jump into the second half of today's show, I wanted to thank you for your very generous response to our fundraising efforts this year and in particular in the last couple of months. And in part responding to that, we are extending the availability of our limited edition, linen covered hardcover version of Understanding Capitalism, the book I wrote and that we have been making available now for quite a while. If you are interested, I will be signing copies of that hardcover and they will be available to you as they have been over the last few weeks. Just simply send an email to us@info democracyatwork.info and put in the subject line limited edition. We will send you all the information you need to order and receive your copy, signed copy of Understanding Capitalism in its hardback. And thank you again for your kind attention to the fundraising dimension of what we do. Welcome back, friends, to the second half of today's Economic update. I am very pleased to bring back to our microphones. He's visited with us before, David Van Dusen. He's president emeritus of the Vermont AFL cio, co founder of the United Caucus, author of a book published last year, Insurgent labor, and as he told us, a socialist. So welcome, David. Very pleased and happy to have you on the program.
