Welcome friends to another edition of economic update a weekly program devoted
to the economic dimensions of our lives debts jobs incomes the future for us and
for our children I'm your host Richard Wolff I've been a
professor all my adult life a professor of economics and I hope that has
prepared me to offer these updates as to what's happening and on the economy we
all depend on and that is in deeper and deeper trouble as we do I want to begin
today with a shout out to something changing America I'm talking about the
wave of strikes you know now that the working class of the American Society
has understood that a sequence of Republicans and Democrats each one
outdoing the other claiming to be for working people for the middle class for
the needs of average Americans have not been able to deliver if even they wanted
to and so they're beginning to understand an ancient historical truth
the only way the working class can assure its own well-being and that of
its children is if it acts on its own behalf striking is a way that workers
show their solidarity get together which is their strongest suit and fight for
what they need and so it is honorable for us to recognize and appreciate that
53,000 employees of the University of California began a strike May 7th
through 9th in order to demand the kinds of decent salaries and decent working
conditions that should have been given to them by those in charge of this
institution but wasn't available because the business community and the rich
won't pay the taxes and the politicians they put in off
we'll do nothing about it so the workers themselves have to the American
Federation of State County and Municipal Employees local $32.99 the California
Nurses Association and in another Union on the CWA
University professional and technical employees organized this strike strikes
are difficult strikes take a long time strikes require workers to show
solidarity and to become aware that only by their own actions can they make sure
that the promises they gave to themselves and their children will not
be broken by an economic system that already is broken I want also to correct
the small point I made in my discussions of uber over recent weeks yes uber is
simply a way to get around the rules governing taxi drivers rules designed to
protect us the public by making sure taxi drivers are vetted making sure
their cars are insured making sure as their cars are in mechanical order so we
don't take risks uber gets around all of that as I explained nothing new about it
the technology is not what's important it's getting around the taxi Commission
in every city and state that's what's their profit model but I
neglected to mention that uber doesn't stop at all of that if it can make even
more money by pressing down what they actually pay Uber drivers they do that
too in order to out-compete the taxi companies by charging less in some
situations because they have fewer costs and because they squeeze drivers more so
poor people have a chance to get a ride from an uber that's cheaper than a taxi
company that has to be acknowledged but of course if there were the public
transportation system that we need and want it would be a much cheaper way of
moving people giving them the transportation they need and deserve without
ripping us off either by private companies like uber or by overcharging
through the taxi system it's a sad comment on the second best
that this country increasingly imposes on people let me turn now to the regular
updates that I want to discuss with you briefly today the first came across my
desk this last week and it's so shocking to me
that I thought it would be interesting to you I learned that since 2005 wealthy
Americans or Americans willing to pay the extra price of the expensive
insurance can buy insurance policies covering fire damage to their homes that
includes the provision by the insurance company of a firefighting team that will
come to your house or your business if and when you're threatened by fire in
other words where the average American citizen you and me relies on the local
fire department to protect us richer people the very ones who won't pay the
taxes to support the fire department are going around by buying private fire
departments through their insurance company Chubb one of the high end of our
insurance companies in America is one such company and it had to provide fire
fighters to many homes in the Sonoma California area when they had their bad
fires last autumn and so it struck me that here are the wealthy impoverishing
public services for everybody else and then noticing that the quality of the
service is not what they want will not be democratic or patriotic by helping
improve the surface for everybody instead they have found a way to save
more on taxes than it costs them to have a private fire department just for them
it reminded me also since I'm an economics professor of a very ancient
debate it happened 5,000 years ago in Greece and it involved Plato and
Socrates often considered founders of Western philosophy they argued in both
cases both men against markets why because markets divided people in my
example the market if we allow it to be the way you get fire protection allows
rich people to buy it and for people not to it distributes fire protection
according to how much money you have as opposed to distributing fire protection
as a civic obligation the community has equally to everyone in the community
Plato and Socrates argued social cohesion holding a community together is
undone by markets and on those grounds they opposed markets as contrary to what
society needs let me say that again Plato and Socrates agreed that markets
are socially disruptive institutions maybe we ought to go back and read that
stuff once again another shocker this last week it turns out that the Koch
brothers through their Koch foundation were exposed giving a lot of money to
George Mason University it turns out that for years they were given in
exchange for their money influence over hiring of professors in the Economics
Department and elsewhere this is a university that likewise maintains close
ties to the Trump administration
having private corporations give money to universities is a serious problem and
always has been to imagine that the universities needing this money wanting
this money do not seek the favor of these wealthy donors is naive and silly
of course they do they always have but to give them direct influence over
hiring professors that kind of takes it another step it makes a mockery of the
claim that academic institutions are open objective there's no one on the
Left comparable in their donations to what the Koch brothers are doing unions
aren't doing this workers can't do it big corporations and the super wealthy
like the Koch brothers are in a position to do it and they're doing it big-time
that controls the curriculum our students learns from it controls what
people understand and how they think it has nothing to do with a democratic
educational system it is the negation of all of that another sign in the wind on
the opposite side for the first time fast food joint workers have won an
election to establish a union of fast-food workers that's right
McDonald's said it couldn't be done Burger King was sure it wouldn't happen
but it did because America is changing and working people as the workers at the
University of California have understood have to begun begin to take their own
destiny into their own hands thus it was that at the Burgerville fast-food joint
in Portland Oregon workers recently voted 18 to 4 with 3 abstentions to form
a union this is the to do that since the fight for 15
struggle began five years ago workers realizing they have to band together to
confront their employer as a unified group to get the kind of salaries
working conditions that working people need hats off to people with that
courage with that solidarity of course now having voted to join a union
they must bargain with the employer allowing the employer all kinds of
stalling techniques and other methods to try to undo this victory of the workers
by blocking postponing delaying a union contract but the workers are smart
they've shown by this 18 to 4 victory that they are very strong maybe they
will be able to bargain with their employer
maybe they'll have to strike to give the employer the understanding that the days
of telling workers what to do and when to do and how much you're not going to
pay them those are over working people are not marching to the tunes that once
enthralled them and this country is changing my attention this last week was
also caught by the results of a poll and there's almost a kind of sadness that
comes over me in reporting this to you was released on May 1st by the Cigna
insurance company a poll conducted by Cigna and lip source another famous
polling company and they used the UCLA loneliness index an index of how people
feel whether they feel lonely isolated alone in life and they show in their
polling just released that over 50% of Americans feel seriously lonely we
the mental and physical health effects that go with that why am i reporting
this to you this is a program about economics yes
well economics includes what the economy does to people and economics also
includes what happens to an economy when people are in trouble mentally or
physically what this poll shows us is that the American people are in very
deep trouble you know when you want to understand whether we have quote unquote
recovered from the crash of 2008 and 9 in our economy you tend to look at GDP
and other numbers that economists like to talk about but they're not the only
numbers that measure particularly measure what counts fifty percent over
of Americans find themselves lonely now many of them lonelier than they have
ever felt that too is a result of the crash of 2008 and all its consequences
that too is a measurement of the recovery we don't have for most
Americans from that crash and you know when you take many things away from
people so that they feel isolated alone and lonely you know they hold on to what
little they have left and they discover maybe that they have to hold on more to
the fact that they are white that they are US citizens that they are
churchgoers and so the tendency might develop to be hostile and critical
towards the people who aren't white who aren't US citizens and who don't go to
your church it's the little you have to hold on to it's what makes you feel
maybe just for a little bit less lonely economic down
turns have always threatened large numbers of people with economic decline
with loss with serious depression economic but also mental physical that's
why economic downturns are associated with the rise of scapegoatism turning
against your fellow citizen blaming him or her for the troubles you find
difficult to account for in any other way and that scare you in the news last
week was a particularly horrific example of where this can go this one happened
in Great Britain in England it's there called the wind rush scandal and for
those of you that don't know about it let me briefly summarize back in 1948
after the shortly after the end of World War two Britain had to set around
rebuilding itself the City of London had been bombed by German Rockets England
had gone through terrible sufferings and it needed literally to rebuild its
society an appeal to and welcomed roughly 50,000 West Indian immigrants
who left the Caribbean and went to England to work they were part of the
British Empire welcomed at the time because their labor was going to help
rebuild England and they've lived in England and worked in England over the
last sixty years in the rush of the British government to serve the
capitalist class in England by blaming the collapse of capitalism not on a
system that broke down in 2008 not in a system that has lowered the wages of
British people for the last decade not a system that is now about to implode as a
result of brexit no no blame it on immigrants
was the achievement of the May government Theresa May was Home
Secretary before she became prime minister in both capacities
she has waged a war against West Indian immigrants it went so far as to say that
if one of those wind-rush fellows men or women couldn't come up with five or six
documents to prove they were in the country illegally after fifty to sixty
years of labour rebuilding England they would be deported and some were and many
were threatened with it the current home secretary or the recently departed Home
Secretary amber Rudd went even further and she was forced to resign as the
British people rose up and said this is outrageous you're going to deport people
who helped rebuild England in your rush to blame people whose skin is brown and
who can be portrayed as immigrants anything to save the system from getting
the criticism it so badly deserves well the Windrush scandal is still
roiling British politics as the scandal of what mr. Trump is doing to immigrants
here is doing in the United States and will continue to do it should be a
warning to everyone my attention was also caught last week by a speech given
by Hillary Clinton she explained that her endorsement of capitalism and
portrayal of her as a capitalist hurt her with Democratic primary voters in
2016 she said and I'm virtually quoting capitalism's reputation is pretty much
in tatters big companies she even says are disrupting what she calls our econ
me by promoting inequality and she is in favor of capitalism with quote
appropriate regulation and quote appropriate accountability hello mrs.
Clinton we've been having appropriate regulation and appropriate
accountability often brought to us by Democratic politicians just like you for
a hundred years and look where we are it doesn't work does it it hasn't worked
our inequality promoted both by Clinton Bush Obama and Trump administration's
one after the other is worse than it has been in a century the instability of our
economy horrific the inequalities percolating down the loneliness I just
summarized for you capitalism is the problem and mrs.
Clinton if you really want to suggest that the socialist ideas that led many
Democrats to not vote for you is a terrible problem are you asking them to
leave the Democratic Party do you think you have a chance folks like you if they
did do you count on them to follow this advice and to reform the Republicans
immediately seized upon what she said to try to portray the Democrats her
included as socialists with that care for detail that they typically exhibit I
want to take a moment to thank particularly not only those of you that
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Play our our last updates have to do with two things first Martin Winterkorn
he used to be the CEO of VW he was indicted this last week by Jeff Sessions
the Attorney General of the United States for placing emissions testing
evasion devices onto VW diesel and other vehicles 11 million of them across the
world and a large number here in the United States of course this kind of
indictment is a bit of theater since Germany will not extradite mr.
Winterkorn who
lives there now so this is publicity hound hunting and not much else but
there's more to this blaming an individual for the problem is bizarre
it's very normal in capitalist society because capitalist society is a kind of
religion where God is in the hands of or played by the corporations and they have
to be kept free and clear the system that ties these corporations together
capitalism has to be kept out of the light of any criticism so we blame
individuals if we blame anybody at all the first events of the corporation we
didn't do anything second defense it was a few bad apples
third defense it was the leadership but it's always this individual or that
individual we're not gonna solve the problem of these corporations by blaming
individuals if we do they will resign as mr. Winterkorn did or we even put them
in jail which sometimes rarely happens and they will be replaced by other
people who behave in the same way because this system has its ways of
rewarding you for this bad behavior and punishing you if you don't automobiles
pollute they pollute so badly that Germany like many other countries
installed emissions control devices made the mandatory to save society from the
bad results of automobile pollution but these companies wanted to profit off of
this situation because that's what they're in business to do profit so they
came up with defeat devices ways they could avoid putting in a device that
might slow the car down or slow its acceleration down so they could still
sell them while pretending to do what the society needed for the profits of
the small number of people that are shareholders of VW all of us suffer more
lung disease more emphysema for cancer and everything else that we know
comes from this pollution this system is no good if you want to run businesses
the workers in them and the public served by them should together run them
because that's a much better chance that society's concerns our concerns get on
the table when they make their decisions that tiny number of people who run
corporations now have shown that leaving the running of capitalism in the hands
of capitalists is not the way to go thank you all we have come to the end of
the first half of economic update I hope you found these updates interesting I am
sure you will find the interview that follows even more interesting and I ask
you therefore to stay with us we will be right back
you
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