Podcast Summary: Economic Update with Richard D. Wolff

Episode: The FED's Rigged Money Management
Date: August 6, 2020
Host: Richard D. Wolff
Guest: Nomi Prins (Author & Former Wall Street Executive)

Episode Overview

This episode explores the failures and systemic biases in the US economic system, particularly focusing on the Federal Reserve’s crisis policies, rising inequality, and the real-life impact on American families and workers. Host Richard D. Wolff discusses critical social and economic failures revealed by COVID-19, including shocking outcomes for US families, the collapse of restaurants, looming evictions, and juxtaposes them with the prosperity of elites during the crisis. In the second half, investigative journalist and former Wall Street executive Nomi Prins joins to critique the Fed’s repeated response to crises and examine whether current US economic policies represent a deeper systemic failure.

Key Discussion Points & Insights

1. Shocking Findings on America’s “Family Friendliness”

[00:10 – 04:25]

• Wolff highlights a July 29 Forbes article where the US is rated 34th out of 35 OECD countries for “raising a family”—only Mexico ranks lower.
• Study measured safety, diet, schooling, overall child welfare.
• Even “pro-capitalist” outlets like Forbes are compelled to recognize US systemic shortcomings.

Quote:

“That the United States ranks 34 out of 35 tells you something about a reality so important and so contradictory to politicians celebrating how great we are…”
—Richard D. Wolff [02:34]

2. Pandemic-Driven Restaurant Closures and Economic Fallout

[04:25 – 07:22]

• Major chains like Chuck E. Cheese, Le Pain Quotidien, California Pizza Kitchen, Dunkin Donuts, McDonald’s (in Walmarts), and others filed for bankruptcy or announced mass closures.
• Restaurant workers (among the lowest-paid in the US) are hardest hit.
• Chains that survive will likely cut wages and benefits for workers.
• “Contagion” spreads: landlords lose rent, neighborhood businesses suffer.

Quote:

“This is catastrophe. And it affects restaurant workers who are among the lowest paid in our country. But the contagion from this is even worse…”
—Richard D. Wolff [06:10]

3. The Coming Eviction “Tsunami” and Lack of Systemic Protection

[07:22 – 12:30]

• Many Americans can't pay rent or mortgage; eviction moratoriums (federal, state) are ending.
• No national plan; some states (e.g., Oregon) lead individually.
• Comparison with France: Legal protections prevent winter evictions; US evicts at 23x France’s rate per capita.
• Wolff underscores this as a preventable crisis and systemic failure.

Quote:

“France last year, 2019, had 16,000 evictions…The United States, over the same period, had 1.5 million evictions. The rate of eviction…is 23 times greater…”
—Richard D. Wolff [11:20]

4. Surging Economic Inequality: Bugatti for the Few

[12:30 – 13:44]

• In stark contrast to suffering, luxury carmaker Bugatti debuts a $35,000–68,000 “Baby” model for wealthy teens.
• Rich elites are prospering, showing an economic divide exacerbated by crisis management.

5. Big Pharma’s Unapologetic Profiteering: The Pfizer Example

[13:44 – 15:00]

• Pfizer CEO calls it “radical and fanatic” to expect pharma companies to forego vaccine profits, despite enormous public contracts ($2B from US government).
• Wolff highlights moral absurdity: Profit over public good during a pandemic.

Quote:

“‘Profit is what you need to have.’ Gee, I thought to myself, profit is what led to us not being prepared for the COVID virus…”
—Richard D. Wolff [14:30]

INTERVIEW: Nomi Prins on the Federal Reserve's “Rigged” Money Management

6. The Fed’s Playbook: Crisis Response on Repeat

[15:43 – 18:29]

• Prins outlines the Fed’s consistent response: Create more money, lower interest rates, buy assets to prop up financial markets.
  • Balance sheet ballooned from $3.7T (Aug 2019) to $7T (Mar 2020).
• These interventions do little for the real economy—benefit financial markets and elites.

Quote:

“The Fed has more quickly and with more, let's say exuberance, created more money out of nothing to effectively bolster up the stock markets and just financial assets.” —Nomi Prins [16:46]

7. Bubbles Everywhere: Stock Markets & Corporate Debt

[18:29 – 21:47]

• Financial markets are detached from “Main Street” reality: high unemployment, struggling small businesses, rising inequality.
• Prins asserts this is a classic bubble; unsustainable and destined to “pop.”
• Corporate America has borrowed record sums in 2020, feasting on Fed guarantees.

Quote:

“Bubbles with nothing beneath them at some point pop, and that's what we'll see.”
—Nomi Prins [20:58]

8. Systemic Myopia and “Desperation”

[21:47 – 24:00]

• The US economic elite display a short-term mindset—focused on “surviving” the crisis, not long-term restructuring.
• System adapts only enough to sustain current power structures.

Quote:

“They don't have to think as much. They're allowed to get lazy about plans…Because this backstop…has been proven time and time again to exist…”
—Nomi Prins [22:34]

9. Are We Witnessing “End of Empire” Dynamics?

[24:00 – 25:45]

• Wolff questions: Is the US exhibiting signs of systemic decline or end-stage empire behavior?
• Prins: The system is desperate to rejuvenate itself, but globally, new powers are emerging (China, India) with more strategic planning and investments.

10. East vs. West: Strategic Planning and Shifting Power

[25:45 – 26:34]

• The West, especially the US, lags behind Eastern powers in infrastructure investment and forward-thinking economic strategies.

11. The Trump Administration’s “Desperate” Externalization

[26:34 – 28:26]

• Actions like closing Chinese consulates, TikTok ban, and tariffs described as “desperate” distractions from domestic failures.
• Such policies hurt US farmers, small businesses, and the broader economy—prioritize political optics over economic reality.

Quote:

“It’s that desperation…trying to figure out ways to sort of create a larger enemy out of an external country, as opposed to paying attention to what's happening internally.”
—Nomi Prins [26:36]

Memorable Quotes & Moments (with Timestamps)

• “That the United States ranks 34 out of 35 tells you something about a reality so important and so contradictory to politicians celebrating how great we are…”
  —Richard Wolff [02:34]

• “This is catastrophe. And it affects restaurant workers who are among the lowest paid in our country. But the contagion from this is even worse…”
  —Richard Wolff [06:10]

• “France last year, 2019, had 16,000 evictions…The United States, over the same period, had 1.5 million evictions. The rate of eviction…is 23 times greater…”
  —Richard Wolff [11:20]

• “The Fed has more quickly and with more, let's say exuberance, created more money out of nothing to effectively bolster up the stock markets and just financial assets.”
  —Nomi Prins [16:46]

• “Bubbles with nothing beneath them at some point pop, and that's what we'll see.”
  —Nomi Prins [20:58]

• “They don't have to think as much. They're allowed to get lazy about plans…Because this backstop…has been proven time and time again to exist…”
  —Nomi Prins [22:34]

• “It’s that desperation…trying to figure out ways to sort of create a larger enemy out of an external country, as opposed to paying attention to what's happening internally.”
  —Nomi Prins [26:36]

Important Segments & Timestamps

| Timestamp | Segment | |-------------|-------------------------------------------------------------| | 00:10–04:25 | Forbes/Asher & Lyric Ferguson study on US family ranking | | 04:25–07:22 | Restaurant bankruptcies and economic ripple effects | | 07:22–12:30 | Eviction crisis and France comparison | | 12:30–13:44 | Bugatti “Baby” + Wealth divide | | 13:44–15:00 | Pfizer, vaccine profits, and public outrage | | 15:43–18:29 | Interview: Fed’s money creation and who it benefits | | 18:29–21:47 | Analysis: Market/debt bubbles and lack of real economy aid | | 21:47–24:00 | Systemic myopia and elite complacency | | 24:00–25:45 | “End of empire” and systemic desperation | | 25:45–26:34 | East vs. West strategic economic planning | | 26:34–28:26 | Trump: anti-China maneuvers as political desperation |

Tone and Style

• Wolff adopts a critical, sometimes sardonic tone, emphasizing the moral and practical failings of capitalism as implemented in the US.
• Prins offers a mix of technical analysis and accessible critique, blending insider knowledge with sharp, systemic criticism.
• The discussion is urgent, direct, and challenges mainstream economic narratives.

Summary Takeaway

This episode forcefully argues that the US economic system is structurally unsound, lurching from crisis to crisis with increasingly dramatic and ineffective interventions, while elites benefit and vulnerable populations bear the cost. The Federal Reserve’s crisis management is portrayed as a rigged game that inflates financial assets and deepens inequality, while broader American society and its institutions fail to adequately support families, workers, and the real economy. The episode concludes with the warning that, absent systemic reforms, the relentless pursuit of profit, short-term thinking, and unwillingness to invest in long-term public interests may signal a historic restructuring of economic power—from West to East—and a possible crisis in “empire.”