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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 a very brief announcement. I want to ask you to like to subscribe to share the video and others we produce like this one. It helps to broaden our reach far beyond what we could do alone. You are in effect partners with us and we ask you to make use of what we are producing for those of you that have not yet signed up to be part of our Members Only Patreon community. By doing so, you can gain access to members Only content as well as support our work. Go to patreon.com democracyatwork or you can find the link in the description below. You can also support our work by going to www.democracyatwork.info donate or by signing up as a paid subscriber to our growing substack community@democracyatwork.substack.com Our program today involves a number of important current credit card debt, the Venezuela crisis, the disintegration of the Maga community underneath Mr. Trump and then an interview with Gio Marr, a specialist on Venezuela, an American professor, but who has taught and worked in Venezuela and knows firsthand what's going on there and what the abduction of Mr. Maduro will likely mean. So a good program I think. Let's jump right in. A statistic that jumped out at me this last week that I want to share with you is the that of the $1.21 trillion in credit card debt now being carried by Americans 73%. So three quarters of the debt now on the books that is owned by owed by would be better credit card holders in America is used for everyday expenses. In other words, the statisticians went through and tried to separate using your credit card for food, for groceries, for daily events from major purchases. Get rid of the major what is the use of credit cards for literally day by day expenses, food, clothing, shelter and so on. 73%. Wow. Much more than most people, including experts, had thought. And now let me try to make sure we all understand what that means. We are supposedly living through an affordability crisis. A funny long word to use for to too much month at the end of a money. But here's a fact to keep in using your credit card for everyday purchases makes those purchases much more expensive than if you paid in cash. Are you aware that the average interest rate on a credit card used in the United States write down is over 22% per year. It's one of the most expensive debts you can possibly own, far greater than what you pay on your mortgage, what you pay on your car, and so on. It is a very expensive item. It means, of course, you're having affordability problems because everything you buy already at inflated prices caused you another 22% because you're carrying the debt to pay using your credit card. It is a serious problem, and we're going to come back to it when you see the ineffective way Mr. Trump is proposing to pretend he's dealing with it. My second update today has to do with Venezuela. Yes, we're all familiar with abducting their president. That was a kind of made for TV sort of politics. There was no invasion by the United States, not because it wasn't necessary. That remains to be seen. There was no invasion because it is too dangerous for the United States to get bogged down in. In a country that has tens of millions of people, many of whom would look upon an American invasion as what that is and would be fighting it enormously in the woods, in the jungles, in the mountains of Venezuela for years to come. It would be as disastrous a mistake as invading Iraq was, or invading Afghanistan or was. Last thing Mr. Trump wants is another one of those. That's why there was no invasion. That's why it's only made for tv. Abducting a president and his wife. Remarkable. Now, what will happen in Venezuela? We don't know, and Mr. Trump doesn't know either. To whom will he sell Venezuela's oil? Who will buy it? Will you not sell it to the Chinese who have been buying it? The Chinese will retaliate. Every time you do something to the Chinese, they know how to retaliate and they have the economic and political strength to do it. It's not at all clear what this achieves, other than the made for TV look of it all. Very dangerous politics. Very dangerous decision. An alert to every government that the United States doesn't like what it is the United States is prepared to do. And you can be sure that every government that thinks it might be in such a situation in the foreseeable future will be working with every other government or worried about it and with the Russians and the Chinese, who are the natural allies of such folks. This is a desperate kind of politics whose risks we will be talking about for years to come. The most important update I want to bring to you, however, has to do with the disintegration of the MAGA coalition. Republicans and Democrats are coalitions. The Republicans have the Donors, the employer class in America that gives them the money, the bulk of the money, year in, year out. And their job, the Republicans, is to take the money given by the big businesses and use it to cultivate the communities whose votes they need. You know, the evangelical Christians, the people who love guns, the people who hate abortions, the people who hate immigrants, the white supremacists. We know, we really do. The Democrats are not all that different. They take money from the big business donors too, but they use it to cultivate a different group of voters. Women more than men, non whites more than whites, working class people more than others. And that's the game. You collect from the big business and then you buy the votes of the masses. But what that means is you've got to keep a coalition. You can take care of the big donors, which you have to do, otherwise they won't give you the money. And then you've got to do something for the mass of people or they won't give you the votes. That's how the system works for the Republicans. Here's what that has meant. Let's be real. The first priority of Mr. Trump in his first presidency was cutting taxes on corporations and the rich, which he accomplished passing those bills in December of 2017. The number one priority of Mr. Trump's second presidency was what he calls the big beautiful tax bill passed last year. He's taking care of donors first because they're his first priority. Then he takes the money and uses it to keep the rest of his coalition, the mass of voters that are interested and receptive to the Republicans, happy. That's what's falling apart for Mr. Trump, because the mass of people told him in last year's elections what's on their mind. Affordability. We need help. We can't afford the lives we were promised. The American dream, as George Carlin said, we call it that because you have to be asleep to believe it. It's not available anymore. Do something. So Mr. Trump realizes he's got to do something to keep the coalition together. So he made a number of proposals in recent weeks. Cuz he's getting desperate. He sees the writing on the wall. The midterm elections coming at the end of this year. So what did he do? Let's quickly go through. He wants to propose a 10% cap on interest rates. Remember earlier I told you average interest rates and credit cards is 22.5% roughly. He wants to take more than half of that away from the big banks who are making the money by lending us at 22 point whatever percent. He's grabbing Venezuela's oil, hopefully to cheapen oil. He's telling the government to buy more mortgages to drive down the rate of interest. You have to pay for a mortgage so more people can afford a home. He's blocking big corporations from investing in buying huge numbers of single family homes, which they've been doing in record numbers in recent years. And then there's the big attack on Mr. Powell at the Federal Reserve because he's angry that Mr. Powell hasn't cut interest rates. Every one of those things is an attempt to placate the mass of voters to appear at least to be doing things. Many of these things he will not be able to succeed at doing. And boy, have the big businesses let him know how displeased they are. Jamie Dimon, the head of JPMorgan Chase, Mr. Moynihan at bank of America. Oh, no, you don't cut interest rates on credit cards. And how do they threaten him? If you do, and you see the ugly face of, of big business when you touch its money, if you do, we will respond by taking credit cards away from middle and lower income people because they're too risky. If we can't overcharge, excuse me, charge them 22%. We're not giving them a card at all. And they'll blame you, Mr. Trump, they'll blame you. They couldn't afford to pay the interest on the credit card, but now without the card, they can't afford to buy anything anyway. Whoa. This is not going to help you, Mr. Trump. Don't mess with us is the message. That's in a coalition falling apart. He's not getting enough money from the big corporations to take care of the mass of people. The mass of people are turning away from him. So he has to squeeze more out of the corporations by proposals like those I just listed. But the corporations don't want that. They want a nice political party that gives them the priority at the lowest possible cost in satisfying the mass of people. That's why America looks, acts the way it does. That's why the American dream is out of reach. That's why people are leaving Mr. Maga and Mr. Trump's Maga in droves. He's got a crisis on his hands. He knows it. He told the Republicans recently, you better get me reelected or else I'll be impeached and I won't be able to do all the things the coalition usually delivers to you. Stay with us, folks. We've come to the end of the first half of today's show, but I think the interview with Gio Marr about Venezuela will be an important lesson for all of us. Stay tuned. We'll be right back. 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@infodemocracyatwork.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 our second half of today's Economic Update. I am very proud and glad to bring to our microphones and to our cameras, Geo Marr. He is a writer, a community educator and a coordinator of the WEB Du Bois Movement School for Abolition and Reconstruction in Philadelphia. He has previously taught at the University of Pennsylvania, Vassar College, San Quentin State Prison and the Venezuelan School of Planning in Caracas and Venezuela. He is the author of five books, including We Created Building the Commune and A World Without Police. So let me begin by thanking you, Gio, for joining us today.
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Thank you so much for having me.
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All right. Venezuela, as you know and as my audience knows, is everywhere, all the time on the headlines now, as it has been ever since Mr. Trump arranged for the TV made for TV show of snatching Mr. Maduro. So I want to begin by asking you, how did the whole Maduro story, if you like, impact Venezuela? I mean, of course, his abduction and taking to New York. And I'm interested in how it affects the internal life of Venezuela. The politics, the economics. Give us a sense of what this means first and foremost for the people there.
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Well, first and foremost, I think Venezuelans were shocked. It was an incredibly shocking event. Even though it was sort of telegraphed for months. I don't think anyone expected it to sort of occur in exactly the way that it did. And people were very shocked by that. And the response has been to, of course, you know, mourn. On the one hand, this sort of kidnapping of the president of the first lady to come together in a kind of unity to mourn those fallen. Because we don't talk a lot about the fact that more than 100 people were killed, in fact, massacred, including Cuban, you know, soldiers and bodyguards, in the course of this attack, which is presented to us as a kind of bloodless attack. And people are very much sort of course, unified against this American intervention. That doesn't mean you, you know, everyone was excited about the government and certainly not excited about the, you know, the, the decade long, you know, economic crisis that's been sort of unfolding. But the reality is we've got, you know, a situation in which Venezuela has been under brutal sanctions for a decade and a half almost, and, you know, the people have been suffering tremendously as a result of those sanctions. The economy did improve a few years ago as a result of some of the changes that Nicolas Maduro and others were taking at the governmental level to bypass the sanctions, to make sure people were getting enough to eat, to stabilize the economy a bit. And the worry now, of course, is that this attack and the threats that are being leveraged against Venezuela will lead to another process of economic collapse.
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It's interesting because your story almost flips into reverse. The attempt that has been made for the last decade to blame the difficulties of Venezuela on the socialism attributed to the leaders, as if the United States and, and the sanctions either weren't there or are mere spectators to somebody else's story rather than a player in the process. It's remarkable. Is there a connection of any sort between Mr. Trump's attack on Mr. Maduro, on the one hand, and in Argentina, Milei's declaration that he wants to organize a Latin American campaign or crusade, I believe he may have said, against socialism. What's the link there, if any?
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Yes, no, this is certainly a hemispheric project. It's in fact a global project. Trump, of course, has been cultivating alliances with the farthest right elements of the sort of global scene, whether it's, you know, Modi in India or the former Bolsonaro presidency in Brazil. Trump has had a long project of fragmenting the Latin American left. And, and that, of course, runs directly inverse to the project of the Venezuelan government of what's referred to as Bolivarianism, to build alliances across the region, to build the autonomy and the sovereignty of Latin American countries on the model of Simon Bolivar, but in the sort of modern day, to unify, to prevent the intervention of the IMF and the World bank, to block the intervention of precisely this kind of attack from US Imperialism. And Trump has Seen that, of course, as a barrier to his own regional aspirations and everything that he's doing now, and precisely as you said, the sort of made for TV character of this attack has everything to do with what he even calls projection. Right. The idea is to project an image of power and to then try to use that to create a reality of power in the aftermath. Right. So it means propping up governments, right wing governments across the region, weakening the left, and then carrying out these kind of spectacular attacks and then turning around, as we see he's done, to threaten Mexico, to threaten Colombia, all of which is meant to cow the left in the region, to uphold the right. And of course, this goes hand in hand with the attacks that he's unleashing at home in Minneapolis and elsewhere.
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So let me ask you the question that I know is on the minds literally of millions of people, and I'll be blunt. Will it work? What is your assessment of the chances that Mr. Trump will, will achieve the kinds of goals you've just described by doing things like he did in Venezuela?
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Yes, I mean, of course he's using threats, we see it with tariffs as well. Right. He's using the threat of tariffs as a negotiating tactic. And on some level, of course, it works on another level, you could see it as incredibly risky in the Venezuelan context. What's risky is the fact that Trump's own, you know, stated aim is to govern Venezuela when we know perfectly well he can't do that. Even the so called second wave attack that he was threatening on Venezuela would have been a much different situation than this sort of snatch and grab operation that he carried out within a couple of hours. So while it may seem that the US Government is sort of all powerful in the region, the actual capacity to do the things that he's claiming to do is very limited. And this is precisely why, to the surprise of many, he immediately turned away from Venezuela's sort of right wing opposition forces in exile and turned directly toward the Venezuelan government because he knew, knows that the Venezuelan government is the only force capable of governing. He knows from his own intelligence that the Venezuelan people will not allow a U.S. occupation. And so if he wants access to these resources, if he wants to block Chinese and Russian access to Venezuelan oil and rare earth minerals, for example, he needs to do that through the Venezuelan government.
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Is that because it is, to use your language, the only conceivable government of the place, or which is slightly different, were Chavez and or Maduro able to develop on the ground organization among the poor, the people who benefited Most by what they were trying to do. Have they been organized enough so that they limit what the American government can do in the way that you suggested, they make it impossible to simply arrive there, take over and run it in the way you might have imagined from earlier periods of American dominance of Latin America?
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Yeah, I think this is all part of the equation, right? The Chavista project, which first and foremost was a project for the empowerment of millions and millions of Venezuelans who had been previously excluded from the political, economic and racial kind of power structure. Right. This was a project for the uplift of millions, for people to engage in what's called a protagonistic way in the political life of the country. Right. Inviting them into politics, to participate, to take their own sort of everyday reality into their own hands. And in this it was incredibly powerful. In the course of doing that, it transformed the hegemonic frame of the country, which is to say everyone believes in national sovereignty. Everyone believes that the state and natural resources should be dedicated to the benefit of the people. Right. That is a transformation, transformation of everyone's understanding of that reality. And in the course of doing that, you know as well as you're, as you're mentioning, Chavismo organized and mobilized hundreds of thousands, if not millions of people in institutions of grassroots democracy across the country, in what are called communes for socialist production and in a whole range of political organizations. Now the economic crisis has taken a huge toll on that organized capacity. But you don't just erase a people's consciousness overnight. It's still there, it persists and it provides a backbone for any kind of struggle, especially as I said, against sort of invading troops, against the occupation of the oil fields and against any attempt to rob Venezuelans of that oil. Because we know that the, the so called Iraq solution does not pay benefits to the people. Right. In other words, inviting private companies in to invest billions on the promise that they will be the ones who will reap the benefits of that money. That means the Venezuelan people would be cut out and entirely. And I don't think that's something that they would expect.
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How does all of this affect China? In other words, if I've understood this correctly, China made pretty extensive investments in Venezuela over the last, the Chavez and Maduro periods. Are they writing it off? Are they assuming it's gone? Or will the future of Venezuela include China with or without the United States?
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I mean, that's, I think that's the million dollar question. You know, China certainly benefited from its relationship with, you know, with Venezuela, access to oil, but Also to steel, to, again, rare earth minerals. And, you know, and this was on reasonably good terms. Right. Venezuela also benefited. These were the best kinds of relationships it could be building, especially under the duress of the sanctions. Now, the question is to what degree China will be sticking its neck out to, you know, to maintain this relationship. Right. And whether the Venezuelan government, caught between the two in this sort of situation of the present, will be able to, you know, maintain that relationship, or whether the fundamental condition that Trump will demand will be a cutting off directly of China. Now, Trump, of course, is. Is returning to this sort of Monroe Doctrine frame. He's doing this because, for some, he has to sort of, you know, do the very difficult work of convincing his most radical base to that he's anti war and anti intervention while intervening. Right. And he's doing so by essentially expanding what US Sovereignty means to the entire hemisphere. It's okay to intervene in Latin America because that's essentially an extension of the United States. Now, you know, whether or not China will accept that as the new status quo, whether it will turn its efforts and take advantage of the situation to turn its efforts to other parts of the world and certainly accept this sort of. Sort of new carving up, I think, remains to be seen.
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What's your guess?
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I think. I think the Chinese, you know, have every interest in maintaining not only the access to these resources, but also cultivating a Third World solidarity among sort of, you know, leftist countries. And seeing that falling away is certainly going to be a challenge. At the same time, I think, you know, part of the risky, you know, one of the most risky elements of the way that Trump does politics is that his flagrancy undercuts the sort of more subtle forms of soft power that the US has spent decades developing. Right. When he dismantles US Aid, he dismantles what is essentially a US Counterinsurgency program that's been deployed across the globe. When he dismantles, you know, systems and structures of aid, he essentially undercuts any country's ability to take the United States seriously as a. As a sort of partner in development. And so I think in the long run, he's. He's playing a very risky game and wagering on the fact that through sheer deployment of power, this sort of crumbling and ailing US Empire can be shored up, at least for the time being.
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It certainly does, to me, as an observer, seem desperate. Seem the kind of desperate actions that you take when you've decided you don't have much left to lose. And so you're going to go and do things you wouldn't have done or necessarily even think about before, including the theatric. You know, I'm reminded Israel does a lot of this kind of theatricalso the decapitation notion that you can solve your problem by killing a dozen people in the right offices at the right time. It's an extraordinary way of thinking about politics in terms of what's going on.
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We live in a moment where things are, of course, very dire. Right. And what we're seeing around us is very devastating. But I think you're absolutely right that it's important for us to read in all of these sort of actions by the Trump administration, symptoms of a weakness. Right. Symptoms of a fear. And the knowledge, the very honest knowledge that the US has been on decline, its power has been on decline, and the far right base that Trump is trying to shore up within the US Is demanding this sort of imaginary projection as a way of justifying its own existence.
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Yeah. And one historical sign of it is Minneapolis, as you mentioned before. I mean, the Central Labor Council of the AFL CIO formally endorsed last Friday a general strike in that city and surrounding areas in opposition to the government's ICE program. I mean, these kinds of confrontations between domestic military intervention in a society by its own government and a mass opposition of the people. Wow. You're talking about things having gone very far out of hand. I wish we had more time, Gio, but I enormously appreciate your sharing with us your insights, the work you've done in Venezuela and since. So thank you on behalf of all of our people. And to my audience, I say I hope you learned as much as I did. And as always, I look forward to speaking with you again next week.