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Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives. Jobs, incomes, debts, ours, our children's. I'm your host, Richard Wolff. I want to begin today's program with a comment that many of you have asked me to make about the economic team that has now been announced by President Elect Biden. And I'm going to comment honestly because that's the purpose of the program. This is best described as the same old, same old. Some of the people named are literally the people held over from Obama or previous administrations, such as Janet Yellen, the new designated Secretary of the Treasury. Others were in the Obama administration or come from the same circles with the same perspectives. They seem to believe that a return to the pre Trump normal is a reasonable objective for what they plan to do. I don't see or hear of any dramatic plans for changing the inequality that afflicts this country, for changing the business cycle instability that afflicts this country. I don't see any of it and I don't hear it. And these people have no history of doing anything like that or even speaking about it in anything other than the usual liberal tones of concern. So what am I saying? I'm saying to you that this is an economic team that probably will reconstruct what existed before Trump. And what is that? Neoliberal government, minimum intervention, Globalization. Telling the American people that helping corporations is the best way to help everybody else. You know, you're familiar with it. It's what happened under Clinton, it's what happened under Obama. It is the same old, same old. But here's the problem. It was exactly neoliberal economics, laissez faire, let the private sector govern globalization. All those things led to the creation of the base and movement that brought Mr. Trump to power. And here's my honest opinion. If you do with this team what it looks like you're doing, you're recreating the conditions that produced Mr. Trump, only you have a grave risk that the next Mr. Trump or whoever replicates what he did will be less crude, less gross, less offensive, and thereby all the more effective than Mr. Trump was able to be. Could I be wrong? Of course. Is it possible that somehow, after the 20th of January, once these people are in power, they will change and become in a willing and able to make the economic changes that the depth of our current crisis requires? It's possible, but I don't expect it. Why not? Because the comparison with the 1930s, when that happened, has a fundamental flaw. What existed in the 1930s that made the government step up after Franklin Roosevelt was elected so that he would become much more progressive than he had ever been before. Was a movement from below. The greatest unionizing drive in the history of America. The cio. Very strong socialist parties, two of them, and a Communist party all working together, mobilizing millions of working class Americans. They made that happen. I don't see Mr. Biden's team of moderatesand I'm being polite doing anything comparable. Nor Mr. Biden, given his history, because there isn't yet that kind of pressure from below. If that were to emerge, if the Bernies and the Ocasio Cortez's and the DSA and the labor movement, et cetera, et cetera, et cetera, if they got together, if they mobilized, then who knows. But other than that, no. This team is a remarkable failure to come to grips with, to even admit how serious the crisis and the divisions of this country are. My next update has to do with an overlooked document. The National Bureau of Economic Research, one of the most respected economic think tanks in the country, issued a paper in November of 2020 authored by a well respected bank specialist, Lawrence Ball. For those of you who might look beyond it. This paper looked at whether or not the biggest banks in America were adequately covered with capital, could handle a crisis. And he looked at the six largest US Banks in terms of the stress tests that they are subjected to and that have been reported. If I had more time, I'd go through his paper. But I want to just present you with a conclusion based on his research covering the fourth quarter of 2019. The tests he thinks would have to be maybe now under current conditions, to see if the banks could handle a crisis. Suggest, and I'm now quoting from the abstract of that paper, it is unlikely. I'm quoting. It is unlikely that any of the six biggest banks in America would survive a liquidity crisis for 30 days. This negative finding is most clear cut for Goldman Sachs and Morgan Stanley. Those are the two biggest banks in the country. They couldn't survive for 30 days if we had a crisis of the dimensions we have now. That was a finding last month. When you are told that our government has its financial house in order. Please keep this in mind. My next update. I want to take my hat off to the people of India and I want to tell you about what happened on November 26 in India. Because the coverage in the mainstream media of the United States was somewhere between laughable and abominable. 250 million people went on a general strike. That's three quarters of the American population 250 million. They mobilized 250 million farmers and workers together. Many farmers organizations, many labor union federations. The only union federation that didn't participate was the one allied to the Modi government. And that's not a surprise because the Modi government was the target of the general strike. Wow. The government has been using, said the strikers, the COVID catastrophe which they have mismanaged. India is ravaged by Covid as an excuse to attack labor protection, labor regulations and and labor rights. So they made a demonstration against all of this. Protesting the Indian economic catastrophe, the Indian COVID 19 catastrophe and a government not responding to those catastrophes, but in fact attacking. And of course they were furious at the effort of the Modi government to deflect upset by having war with China on the border and particularly demonizing. Yeah you guessed it, Muslims. Again, convenient scapegoat. What did the protesters want? Here's the interesting thing. I want to read to you some of the demands of this general strike which was stunningly a direct cash transfer of 7,500 rupees to every family below the poverty income. Cut off 10 kg free food ration per person every month to all in need. Wow. Expansion of the Rural Employment Guarantee act to provide jobs from the current 100 days to 200 days in both rural and urban areas. Withdrawal of all anti worker labor code changes and likewise anti farmer laws. Stop privatization of public sector corporations. Withdraw the draconian forced premature retirement of government and public service employees and provide a pension to all restoring earlier pension cuts.
