← Economic Update with Richard D. Wolff
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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. Jobs, debts, incomes, our own, our children. I'm your host, Richard Wolff. I want to begin today's show taking account of the fact that President Biden and his team are now wrestling with ways to deal with the major problems inherited from the previous administration. And though I thought it might be useful to give them some advice, and rather than speculate, I thought I would borrow from what people in other countries are doing to give a sense of the context and also to give a way to evaluate what Mr. Biden's team is coming up with. So I chose an example of one of the largest cities in the world, Berlin, Germany, the center of the most important economy in all of Europe. A major player in the world economy today. In Berlin, there is a government because they have multiple parties. They're not like the United States. They don't think two parties is enough. They actually want competition from multiple political parties. So they have a good half dozen major parties and even more small ones. The government in the city of Berlin is a coalition of three parties because no party came even close to to 50% of the vote. Okay, here are the three parties, and if you didn't know this, well, that's something to do with what the media in the United States do and do not cover. The three parties that together govern the city of Berlin, a city of millions of people, is, number one, the German Socialist Party. Number two, the. The German Left Party, which is what I'm going to come back to. And it is to the left of the Socialist Party and the third party that make up the three party coalition that governs Berlin is the German Green Party. Socialists, Leftists and Greens. Why is this important? Because they've come up with a number of policies, three in particular, that I want to mention to all of you. So you can imagine what that might mean in terms of what Mr. Biden's team is and is not doing. So, let's begin. Two years ago, the government of Berlin passed a law, and that law said there could be no increase in rents in Berlin for five years. That law is now in effect. Landlords are fighting it in the courts, but they have so far failed to change it. The law has a number of other qualities. For example, new renters to an apartment cannot be charged more than was being paid by the previous renters of an apartment. Interesting idea. Does not exist in the United States, and to my knowledge, not never has. Here's the second. This is an initiative. It's not yet the law, but the Linka, this left wing party which is the second largest component of the coalition, they're pushing for a referendum in this September's election. They've already gotten 77,000 signatures. They're going for the 170,000 you need to get on the ballot. Here is what their ballot initiative will have happen. Every real estate company in Berlin that owns over 3,000 homes will have to give them up, sell them to the city, which will make sure to keep them in equality and keep the rents low because it won't have to make extortionate profits from doing so. The largest affected by this is something called Deutsche Wohnen, which means German apartments or German homes. It owns ready 110,000 homes in Berlin. But I thought you'd be interested in the two other enterprises that together own 10% of all the homes in Berlin. One is the American capital company Blackstone, and the other one is the Boston Capital company MFS investment managers. American companies owning and ripping off tenants in Berlin. They would suffer sadly if this becomes a law. And here's the third initiative also of the Linke Party in the Berlin government. They have proposed a law that requires, this is interesting, all city jobs, from kindergarten teacher to garbage collector to courtroom staff, to meet a quota of 35% of employees who are either first or second generation immigrants. And the argument of the Linka Party is that the population of Berlin is 35% immigrants and that therefore the employment should be roughly the same. Currently immigrants are 12%. This is an attempt by the Linke to do something about the ghettoization, the discrimination, the second class citizenship that immigrants who are citizens still suffer in Germany. Interesting for Mr. Biden's team perhaps to consider and for all of us to know our possibilities, not out of someone's head, but out of a practical political project in one of the world's major capitals. I want to turn next to another Biden program raising the minimum wage. There is a new bill before the United States Congress called Raise the wage act of 2021. And it would raise the minimum wage from the current $7.25 an hour to $15 per hour by 2025. I want to look at that. Does it reduce poverty? Yes, of course it does. The United States, at $7 quarter, has one of the lowest minimum wages in the world, friends. Extraordinary for a government to do that. It was last raised in 2009, which means that over the last 1112 years there's been no raise in the minimum wage, even though every one of Those years, prices rose by 1, 2, 3%, thereby eroding what the minimum wage would allow you to buy. And speaking of minimum wage being eroded, we expect roughly 2% a year between now and 2025. That would mean, if you look at it, that the $15 in 2025 would only buy you what $13.80 buys for you now. So we're not even raising it. And by the way, $15,000 at $15 an hour get gets you roughly $30,000 a year. And that's just a couple of thousand bucks above what the poverty level will be in 2025. So we're not doing anything to fundamentally alter the grotesque increase in inequality done over the last 30 or 40 years. It's that which is upsetting the American people. It's that which is driving huge divisions in our society between the handful of super rich, the anxiety of the middle that it's losing its middle, and the desperation of the poor. Going from seven and a quarter, which is abnormally low, to 15, may sound like a big jump, but if your goal is to do something about inequality eating at the United States on every level, economic, political, and cultural, then this is way too little and stretched out over way too long a time. There's no nice way to say this. On the other hand, hearing another pundit tell us about, gee, it's going from seven and a quarter to 15 as if the Red Sea is parting and in come all the Israelites is really a little much, given the scope of the problem. Which is also why I wanted you to know about what the government of Berlin is doing for tenants and for immigrants compared to what is barely even discussed here in this country. My next update is really just a report to you about some research that at least blew my mind, and I hope it shakes up yours. The research was conducted by the National Bureau of Economic Research in cooperation with Duke University. So I assume you understand the credentials of these researchers are above reproach. Here's what they did. They asked themselves the question, if you evict a person from his or her apartment, or if you cut off their water or their utility, you know, their electric, their gas and so on, what impact will it have on Covid cases and on COVID deaths? And there's lots of statistics that they have to show what the experience was of people who did die from that disease. And here's what their research found. Had the federal government banned evictions and banned utility shutoffs From March of 2020 through the end of November, that's the period they studied it would have saved ready tens of thousands of COVID deaths. We could have avoided them and even more, hundreds of thousands of COVID cases. Instead, what we had was, was a kind of random collection of cities here, counties over there, whole states in some cases that had some ban on eviction for part of the time, some bad on some utility shutoffs for part of the time. And they took account of that. They asked only what would have been the improvement in battling Covid if there had been a decision by the federal government to ban evictions and and ban utility shutoffs from March to November. Look, there's no nice way to say this. The failure of the federal government to save the public health of the United States was a fatal failure not to do what has been done in many other countries and explains why many of them have much lower cases and deaths than the United States. That could have been avoided. It should have been avoided. And it will stand as a blot not only on the dominating Trump administration, which certainly deserves a big part of the blame, but on all the others who did little or nothing to make this happen. Last and perhaps the most important, the Biden administration is now reconsidering policy towards China. As you all know, Mr. Trump waged a trade war against China, imposed tariffs against China, went after corporations like Huawei that are owned and operated by the Chinese, punished in various ways, other corporations as well. This was supposed to change the Chinese government, make them behave in different ways. It is a 100% failure. I saw a new January 2021 report by the US China Business Council. That's basically big businesses in the United States and China that get together to coordinate their needs, explaining in their words the total failure of the Trump war on China. I want to drive it home. In 2020, China grew much faster than than the United States. In 2020, China handled the COVID disaster much better than the United States. In 2020, real wages went up in China. They didn't in the United States. I could go on. It didn't work. And the question is, are you gonna continue attacking, provoking a country with nuclear weapons, risking all that that means, or are you gonna be able to face the failure that that policy was and come up with a live and let live cooperation with the second biggest economic power, now scheduled to be a bigger economic unit by 2028, which is not very long from now. We need to see real change and we need to see a government that if it is blocked by Republicans, gets us out in the street to make the differences. We need to happen, whether it's China or minimum wage or a proper attack on Covid. 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 also want to thank our Patreon community, as always, thank you for their ongoing invaluable support. If you haven't already, Please go to patreon.com economicupdate to learn more about how you can get involved. Please stay with us. We have an extraordinary interview coming up. Welcome back, friends, to the second half of today's Economic Update program. It is with exceptional pleasure and a really good feeling that I welcome to our microphones and to our cameras, an old friend of mine for more years than I want to remember, Professor Arlie Hochschild. She was for many years a professor of sociology at UCAL Berkeley, a position from which she is now retired. But as I knew would be the case, she's probably working harder now than she did when she was a professor. She is the author of nine books, including, and that's our topic for today, the most recent book, strangers in Their Own Anger and Mourning on the American Right. It was a New York Times bestseller and a finalist for the National Book Book Award. She's currently working on a documentary film underway in which respondents are being interviewed about the events of January 6th in Washington, D.C. and she's also continuing the research we're going to be talking about with interviews conducted, of course, through zoom, with people around the country today following up. So first of all, welcome, Arlie. I think our listeners and our viewers will be in for a treat to hear what you have to say.
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B
Thank you, Rick. It's wonderful to be here.
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A
Okay. I want to focus on the research you did, as you poetically called it, anger and Mourning on the American Right. So I want to begin by saying, look, we are still recovering, in a sense, from the election. It's still obviously an urgent issue. So I want to ask you to tell us about your interviews, your research in the American Right. What's going on now? How have they reacted to the election? And of course, now we have to ask also about the events on January 6th and the obviously different assessments of what all this means, what's happening on the American right, which the rest of this country and the American right would like to better understand.
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B
Yeah. Wonderful. I welcome the question, Rick, and let me Back up from the moment of this alarming stress test of American Democracy, January 6, and say that that event has, permit me to use a metaphor, has made the United States like a river that's divided the population. And there's been a flood in the river and the banks, people are receding from the banks and the bridges are down. And there's even a discourse that why build a bridge if you get to know the other side, where you're just encouraging bad behavior? And so the people on the other side must look like the people you see on television. And all you could get is a kind of rope, a dope conversation going, that's a fool's errand. So I guess that what I think I've tried to do is cross that bridge and listen, simply actively listen. I, I've been doing it in the south, Super south, since 2011, and now I'm doing it in Appalachia in eastern Kentucky. And what I think we have to just begin with the idea that 47% of Americans voted mostly enthusiastically for Donald Trump. That's 73 million people. So the banks are pretty evenly divided, the people on the two banks. And let's remember that Republican voters are in red states, which are poor states. They're states with worse medical care, education, more disruptive families, more pollution, lower life expectancy. So they're from those states. And many of those states used to be Democratic states, South, the Midwest, Appalachian, where I am now. So the people I'm talking to make a distinction between country club Republicans and populist Republicans. And they tell me they are the populist Republicans. They think that Mitch McConnell is a country Republicans. So they are to the right of Mitch McConnell. And let me give you an example of a man. This is in Kentucky, which was coal company and a point of pride and that, you know, coal has kept American lights on. It's gotten us through words. There's once a sense of pride and a very well paid, blue collar job. Those jobs are now gone. I talked to a man who said I was a coal miner. I lost my job when the company filed for bankruptcy. I had an injury. I went to the doctor, I was given OxyContin, which is a highly addictive drug. He became addicted, severely addicted. He lost his wife, he lost his children, the custody of him. And he said, I met him in a recovery facility. And he said, I voted for Donald Trump. He said he would bring coal jobs back. I knew he was lying, but I felt he saw me. Okay, so this is a first glimpse across the river of an experience in a place where the Democratic Party used to speak to needs. But one guy even said, oh, I think Joe Biden has a recognition problem here in Eastern Kentucky. So, okay, what can we learn? I think just to back up that the populist Republicans I'm talking to, you could say that you could understand it if you take a journey on a narrative of a grievance. I've been talking to people on the right since 2011 and when I first talked, this was in the South. They had complaints, but it hadn't yet been converted into grievance. And their complaint was saturated in a sense of loss. So let's take chapters of the story and chapter one is a complaint with a sense of that they were doing all right, these people. They were not the abject, but they were on a blue collar decline story and they felt afraid of further loss. And I put it as kind of a metaphor in my book Strangers in their Own Land, that they're like facing the American dream. They feel like their feet are tired and that the line hasn't moved in 20 years. One guy said, I've been at the raise of 20. They are not looking behind them at the many African Americans who have been waiting, whom they are replacing. And they're not looking there, they're just looking ahead. And they feel that. They felt that Obama in these early interviews was waving to people who were cutting by and who were cutting away. Women were cutting in line for good jobs because they were now through affirmative action, being made available to women, jobs that had been reserved for men. Blacks were cutting in line because they were getting jobs that had previously been reserved. Whites, immigrants and so on. So they felt being pushed back. So it stood like that for chapter one. But chapter two of this narrative is what one guy described as lightning in a jar, lightning in a jar that Donald Trump had come to town and what he was offering them was hope. Like the man who said, I knew he was lying, but I thought he saw me. Some acknowledgement of loss. They didn't want to be told a happy American dream story. They were the globalization's loser, blue collar losers. They were worried about the offshoring of industrial high paid jobs and the insuring of cheaper migrant flavor.
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A
So Arlie, could I push you a little bit? Tell us, because this is wonderful how you're explaining it. Is your sense that the events of January 6 and or the loss of the election by Trump, is it making any of this change, Is it getting better in the sense or is it getting worse? I mean In a sense, that's what everybody wants to understand. Good.
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B
Okay. So speeding up these chapters, Trump gets beatified. He becomes seen as a religious figure. And he says, oh, I'm suffering for you now. You suffer for me. And now we're up to the moment where the break end, the capital happens, and there is chaos, there is a sense of betrayal. And also they feel people I'm talking to now in a box. On the one hand, they feel criminalized by the Justice Department and reviled by the left, and they feel abandoned by the right. Okay, Donald Trump did not issue in his 74 pardons any for those who broke in to the Capitol. And one man told me, oh, those 74 pardons, I read every one. And some were to drug dealers. He thought there were 10 people who had been apprehended for drugs. So, okay, they are between a rock and hard place. And there are those who say, no, the break in is a moment. We're moving to a better new normal. We don't have to be afraid. And there are those like myself who say, no, watch out. Trump is gone. And they believe he is gone. The people I'm talking to. But Trumpism is, is like this lightning in a jar. And now the jar is gone. And there's. I think it's going to go two ways. And just impressionistically, for some, the anchor will condense and the paranoia will increase. For a hardened core and without much of an off ramp, there are others who are going to dissipate. So it can go a bunch of ways.
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A
All right, Arlie, as usual, this is this awful moment for me where I have to say that time is up and we can't continue. But this has been very, very helpful. And I want to ask if you would be willing to come back in a few weeks and continue this conversation because your research is ongoing, the topic is urgent and will continue to be. Can we get a commitment out of you?
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B
Sure enough.
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A
All right, thank you very, very much for your time and for your research and for sharing it with us. And I want to thank our audience for being part of this and thinking about this vital insight into what's going on all around us. And I look forward to speaking with you again next week. Sam.