Economic Update: An Unsustainable System

Welcome friends to another edition of economic update, a regular weekly program devoted to the economic dimensions of our lives, jobs, debts, those of our kids coming down the road, the incomes we need to have a decent life. All of that, I’m your host Richard Wolff. I’Ve been a professor of economics, all my adult life, and my hope is that it has prepared me well to offer you these economic updates about what’s been going on in that economy.

We all depend on before jumping in to the updates. For today, I want to remind you of this remarkable event that takes place in New York City June 1. 2.

3. It’S called the Left Forum this year. It will be kicked off by Jane Sanders, the number-one advisor to Bernie Sanders, who regularly scores in the polls.

As the most popular politician in the United States, Jane Sanders, who advises him, will be opening the left forum with a conversation about how politics looks from that perspective, and there will be many many others over 300 panels will be going on during the week. The weekend. Excuse me, and likewise all sorts of activities, organizations, art exhibits and so on. It’S an extraordinary event takes place at the John Jay College of the City.

University of New York starts June. 1 ends June 3. If you are interested in social movements in social criticism, this is the number one event of the year in the United States, and I urge you to look into it and the easiest way to go there to get all the information you might need to register is To go to their website very simple Left Forum. That’S all one word: leftforum dot, o-r-g Let’S turn to our updates and the first one is a kind of continuation.

From an earlier interview I had with Professor Miguel Doron Robles because it touches on what he talked about with us, namely the decline of American cities. This peculiar moment in the history of the United States, when the kind of onward rush to privatize everything to make everything the private event rather than the community or the collective or the state event. This part of the demonization of government to cover up all the shortcomings that afflict the private sector. Well, we’re about to apparently take it one step further.

You know of gated communities, those parts of our cities and towns, increasingly over recent decades, that close themselves off from everybody else. They begin to have their own water system, sometimes their own schools, their own policing, their own. You get the picture well we’re about to take it one step further, an organization called a note. The name free private cities is raising money around the United States and offering itself to wealthy people who don’t want to live with anybody else.

Who isn’t? Who don’t want to be part of any public community event? They want to live with carefully selected people just like themselves in a city literally separated legally jurisdictionally, politically, you name it from everybody else. Their image is the city of Singapore in Asia, which is itself not just a city but its own nation separated from everything else. It’S a city, / nation, combined.

They make Singapore their model. They do not mention that Singapore has been a political dictatorship for many. Many years and has thereby excluded the people that didn’t want shaved out all of the parts of society that rich folks don’t want to see near them.

It’S a remarkable step in the disintegration of collectivity of community of solidarity, private cities from which all who haven’t got the money will be excluded, and you know, of course that when you take the rich folks and put them in their own cities, all that will be Left for everybody else is to make it on their own without the Solidarity of the people whom they made rich by their labor, whom they continue to make rich by their labor, but who will not share with those who produce the wealth what the wealth makes possible. If you ever needed a sign of the disintegration of contemporary capitalism there, it is moving right along here’s, another sign of the problem of capitalism. There’S a freelance marketplace called up work which keeps track of how many of us here in the United States are working without a regular job situation. You know, will you go to the same place 9:00 to 5:00 Monday through Friday, with job security and so on? Here’S what their research came up with, which I wanted to share with you.

There are now, according to up work, 57 million u.s freelancers, that’s 35 percent of the entire workforce do not have a regular job, they freelance they get work where and when they can. For a particular job for a particular period of time during which they can worry about how much space they’ll be between the next job they get and so forth, among Millennials, the younger part of our workforce, the the percentage of the millennial labor force, that is, freelance, Is 47 % just shy of half the freelance category is growing three times faster than the rest of the workforce. You know it doesn’t take a genius to understand that if you are a freelancer, it means it’s very hard to plan your life. You do not know from one week to the next from one month or a year to the next.

How in the world are you going to make the basic commitments of life where to live? Who live with whether to have a family, and so on, becomes impossible situation and has more than a little to do with the fact that the birthrate in the United States has been dropping in recent years in a way that is not replicated in other parts of The world at least not yet the next update I want to share with you the Supreme Court, issued an interesting decision recently. I wanted to bring it to your attention. They basically have legalized sports betting, every state in the United States. All 50 are now allowed to make whatever rules they want governing sports betting. Well, I’m interested in this not so much on the issue of sports betting itself.

I mean we bet on almost everything else. Why not sports, obviously there’s a problem of addiction to all kinds of gambling, and this, of course, isn’t gon na help that situation much I’m more interested in the! Why and the why now parts of the question and I’m an economist, so I’m gon na go after that legalizing sports betting is being done because cities towns, but particularly states, can tax that activity. They can go in and get money. It’S a little bit like the legalization of marijuana.

That was also a taboo like gambling, but it is a way of raising money without doing what without taxing corporations and the rich, that’s the truth of it. You see over the last 40 50 years, the burden of taxes in the United States has shifted at the end of World War. Two, it was heavily focused on corporations and much less on individuals.

That’S all changed the burden of corporations. Taxes have been relieved, they pay less and less and less both at the state level and at the federal level and the burden of Taxation has been correspondingly shifted on to the individual. That’S why we’ve had 50 years of quote unquote: tax revolts, because the burden of Taxation has ridden risen disproportionately on people not on businesses where it once was so you’ve come to the point where the mass of people will not tolerate it anymore.

That’S the secret of the Republican Party’s political success. They champion the no taxes which people feel as a real burden, not only that taxes have also been shifted from high-income individuals to middle and low ones. So if you take the whole 50 years, the last 50 years together, the burden of taxation has been shifted from corporations to individuals and from rich individuals to the middle and the bottom. No wonder everybody’s freaked out about their taxes. Well, then, how are you going to run? The community needs that we have the schools, the police, the fire, the the parks.

You know the things that make communities what they are and the answer is, sooner or later, we’re going to have the tax, the corporations and the rich, who have gotten away with being tax evaders for half a century, and they know it so they’re desperately trying to Find ways that will prevent them from finally being taxed as they ought to have been all along, enter marijuana, oh good. We can get some taxes by charging people who use marijuana and now the Supreme Court decision. Oh good. We can tax people who bet on football games and basketball, games and baseball game anything in the world even violating old, religious and other kinds of cultural commitments of the United States. Long opposed to marijuana long opposed to gambling, sports betting, and so on.

Many of you will remember the enormous scandals that have come up as points were shaved in games to make money for people who gambled on them. All of that is to be forgotten, because the number one goal is to save corporations and the rich from finally having to face the tax burden being put back on them when it shouldn’t have been taken from them in the first place. I want to take a moment before we doing the next updates to remind you that, particularly for those of you that are watching the excuse me listening to this program on the radio that, if you would like to see it as a television program as a video Program, please go to patreon or Aon, slash economic update, the name of the program, and that lets me thank our patreon community for their enormous supportive relationship to this program, making use of what we do, but also helping us along the way in all kinds. Waise.

So hats off to the patreon community, from all of us at economic update for those of you who watch on YouTube. Please remember to subscribe to our YouTube channel for economic update and, finally take a look at our website. The democracy at works store where you will find all kinds of interesting things, especially here in the month of May, the 200th anniversary of Marx’s own work is bicentennial, it’s another way to participate and partner with our project. We also invite you to take a look at the Puerto Rico forward. The podcast that’s also available on Apple podcasts and Google Play it’s a remarkable free analysis of the developments in that very important part of underreported American history, Puerto Rico and again a reminder. The left forum is a thing that is worthy of your interest and support, and you can find out all you need at left forum org.

Returning to our updates. I have to report I’m a little sad about it that yet another company has gotten caught an automobile company cheating on the emissions control. I’Ve been telling you about this ever since the scandal broke around Volkswagen in Germany, this time it’s the Fiat Chrysler Corporation and some of its suppliers such as VM, Motori and Bosch. Many of you are familiar with them. They are all now embroiled in a evolving scandal. In which these kinds of cheating devices were installed, they weren’t this was not explained to buyers of things like jeeps and RAM 1500 pickup trucks, I’m not interested in the details.

It’S the same with all of these companies and that’s the point I want to drive home with you, namely to trust large capitalist corporations not to cheat not to lie. That’S been given the lie by what’s emerged here. All of the oil companies without exception. It looks like, and if there are a couple of exceptions, my guess is, there won’t be exceptions. Much longer have been caught doing this and I want to drive home what they got caught at.

It wasn’t just cheating and lying to the buyers of their cars. It was cheating on something that deteriorates the quality of the air we all breathe. No one can know how many people have gotten emphysema lung diseases of all kinds: lung cancers, how many lives were lost by the extra pollution caused for all of us by the profit-driven behavior of large corporations, even when the government comes in, as it did to try To control pollution for our health, these companies went around that legislation. It shows you that state regulation, however valuable you might think, is no solution here.

That’S what we’ve learned so here’s a suggestion. One of the reasons we endorse and support on this program, a an economy based on worker coops, is for the simple reason that if a business is run by all the workers together, we’ll have a chance that some of them have the decency, the honor. The concern for their own families to not let such a cheat that hurts everybody go through. It’S not a hundred percent, but it’s better than what we have, which is to rely on capitalist corporations whose bottom line is profit and a government tool easily.

How shall I say this corrupted? That might be a nice word to be effective regulators. There’S a lesson here and oh just as we were going to press add another. The Porsche come which just recalled 60,000 porsche suvs for guess what an apparent error that had something to do with emissions controls and if you believe it was an error.

Well then there is the Brooklyn Bridge on which I will give you a very good price. If you wish to buy it this last week for another update three senators in the United States Senate senators, Gillibrand of New York, Booker of New Jersey and Sanders of Vermont, offered a bill to provide a Federal jobs guarantee. This is in a way, a resubmission of an old bill that had the name, Humphrey and Hawkins back in the 1970s, because that bill had the same goal.

The idea is simple: if the private sector of the United States, private businesses are either unable or unwilling to hire all the able-bodied adults who want a job, then the solution is not to leave those people without a job. That’S not an efficient solution. It’S horrible! For the millions affected, it’s horrible for the families of those people, it’s horrible for all the rest of us who could enjoy what those unemployed people could be helping to produce if they had a job.

Franklin, Roosevelt, with the support of the Congress back in the 1930s, responded to this situation by saying: okay, if the private sector either can’t or won’t we, the government will we will provide a job guarantee we’ll give everybody a job. Well, that’s what Gillibrand, Booker and Sanders are proposing again and let me drive home the economics of it when a person goes to work for a private employer, the name of the game is you produce as a worker more than it costs the employer to get you To come there, that more is called profit and it is pocketed by the employer. That’S why he hires you. He pays you $ 20 an hour because, whatever it is, you add to his output to sell each hour that you work is worth more than $ 20.

So he sells, it gets. Let’S say $ 25 pays you the 20. He owes you for your labor and keeps the other five you produced it. You just don’t get it.

Who gets it? The owners of the business who divided up amongst themselves, pay off the big executives. You know the story. Well, if you don’t do that suppose the government comes in the government hires. You pays you. Let’S say the same 20 bucks you produce $ 25 per hour for the 20 bucks you get now.

Who gets the extra five bucks? Well, there are no employers in the private sense, so the government takes the money and what does the government do with the money? The answer is, it provides public services or it can lower everybody’s taxes because it doesn’t need to tax us, since it’s picking up the profit that is being produced by all those public employees. We, the people, win, we win by having unemployed people, be productive. They win because they have decent jobs, can keep their homes and all the rest.

And then we win again because the profits of workers in the public sector can reduce our taxes or provide more funds for public services. Not to do. That is a strange decision and depends only on the political muscle of private enterprises.

They don’t want it and you know why, because if you understand it, if you actually live in it and you know what it works like, you would scratch your head and you would say why are there any private enterprises taking the profits workers and giving it to A few people, rather than making it available to everybody in the form of reduced taxes or enhanced public services. They don’t want that process to get going. They don’t want people to think like that.

They want to keep the profits that we all helped to produce in the tiny number of hands of those who own and direct American businesses, and we shouldn’t be fooled to imagine it’s anything else. Next update the Catholic University in Washington DC is moving forward. It was announced with its plan to, and I’m quoting now enhance the university’s prestige and control its costs and the way it’s going to do that is it’s going to be firing, tenured professors.

Now I should explain when you get what’s called tenure in the teaching profession in the United States. It basically means that you cannot be fired. You have enough confidence expressed in you by your colleagues and the administrators of your institution that you cannot be fired unless the need for your services disappears, they closed a department or there’s a financial emergency, or you have misbehaved in some egregious way, but barring those you Have that job until you retire? That’S what tenure means. So it’s a big step for any universities, such as Catholic University in Washington, to say it’s not going to respect tenure and not declaring a financial emergency. They have not done that, but simply to as I’ll quote again enhance the university’s prestige and control its costs.

The professors, as you might guess, are a bit troubled by this situation. Those with tenure thought they had job protection, they’re being told they don’t why the Catholic University would want do this. I will leave to your imagination. I don’t know, but I want to raise the fundamental issue here very fundamental in the United States. Professors are excluded at the Catholic University and indeed at most universities from participating in the management of the university professors.

Job is to come into. The classroom, teach work with their colleagues to manage the curriculum. That’S it they don’t participate in or to be blunt, they are excluded from managing, and this raises a question because how the university was managed by people, excluding professors clearly led to the current situation, where they need to enhance their prestige and control their cost. Obviously they didn’t do enough of that before so now they want the professors to take a cut in their security, because non professors messed up their jobs. Well, I would suggest to you: you can’t have it both ways if you want professors to be taking it on the chin, because quote-unquote the university needs it then you’ve got to let the professors in on all the decisions that led to this circumstance. Otherwise, you have one group of people making the decisions and another group of people paying the price when they don’t work and, of course, this isn’t unique to a university.

It’S what goes on everywhere. The boss makes the decisions, and one day tells you gee. We have to lay you off well, it turns out, they have to lay you off because they made the wrong commodity or they made it in the wrong way or they put the wrong equipment into it or they use the wrong materials or they messed up.

The techni all the decisions from which workers are excluded lead to that moment when there’s a crisis and the workers are told they’ve got to take it on the chin too. Well, if you want the workers to bear the costs of Mis stakes, they have to be in on it. Otherwise, to coin it, a phrase famous from American history, you’re gon na have taxation without representation. Remember that’s what they threw the boxes of tea into the harbor at Boston many years ago. That’S what the real Tea Party was about.

You cannot impose burdens on us if you exclude us from making the decisions that led there to be a need for burdens. You can’t have it both ways, but capitalism is a system that tries to have it. Both ways exclude the mass of working people from all the key decisions and then make them pay the price when those decisions have been made badly. It’S a profound reason why it’s time to think about the basic slogan we can do better than capitalism.

Thank you very much for your time. We’Ve come to the end of the first half of this program. Please stay with us.

After a short interlude, we will turn to the second half of the program you

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