Economic Update: "American Midnight" Democracy's Forgotten Crisis

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In this week's Economic Update, Prof. Wolff presents updates on the French School of Economic Warfare and sanctions against Russia; how asset price declines threaten US pensions, electric replace fossil fuel private cars because of profit motive, instead of for a rational transportation policy; US police in elementary schools: bad for students, parents, teachers and even police; honoring Staughton Lynd, US radical academic and labor organizer who died on 11/18/22. In the second half of the show, Wolff interviews Adam Hochschild, author of "American Midnight" how 1917-1921 was a US rehearsal for a parallel right-wing surge of recent years.

Transcript has been edited for clarity

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. In today's program we'll be talking about a fundamental crisis in the relationships (economic) between the United States and Western Europe, challenging that alliance in the profoundest way. We'll be talking about public pensions for tens of millions of Americans that are heading into an era of serious trouble. We'll look at the boast of the GM CEO about electric cars, that GM is planning for the next decade or so. We'll look at how thousands of elementary school kids below the fifth grade have interactions with the police these days. And we'll talk about the passing of American radical Staughton Lynd.

Okay, let's jump right in. I want to talk about a crisis building but below the radar in the relationship between the United States and Western Europe. It's been coming for a long time, it is about to explode. And one of the things bringing it to an exploding point is the war in Ukraine. But let me go back a little bit and talk about it because it's so important. European countries understand exquisitely clearly that one empire of capitalism is going down and another one is rising. They know the United States's empire is shrinking and the empire of the People's Republic of China is emerging. They know that the United States is trying to block, slow or maybe even, in its fantasy, reverse this course of history. But the Europeans understand they better figure out where they're going to end up or else they'll be sacrificed in the tensions between the United States and the People's Republic of China. Keep that in your mind because everything you read about economics in Europe from now on is really about that. Ten years ago the French, acutely aware of this because of their efforts, sometimes successful, to be a bit independent of the United States after World War II (they're a bit more developed in France than in other parts of Europe...) 25 years ago they therefore established, and when I say 'they' I mean some of the biggest financial and economic interests in French capitalism, established a school in Paris called the Ecole de Guerre Economique - The School of Economic Warfare. Wow! It had a leading thinker who writes much for them and who has come to represent them. And his is a name you ought to know as well: Christian Harbulot.

Here's what they are basically arguing: that the United States has, if not at the top of its agenda, very nearly the top, to save and develop it's empire, it's economy at the expense of Europe. Not just the expense of China and Russia and those demarcated publicly as enemies, no, the allies too. The United States, as they like to point out, is willing to fight to the last French soldier, to the last French politician, to the greatest cost to the French economy. One of the things they've pointed to recently has been the decision by the Biden Administration to offer subsidies to all kinds of goods brought to the United States if, instead of being brought to the United States, they were produced here. This is a direct threat to the French, the Germans, the Italians, the Swiss, the Swedish, all of them. Because they risk being, and this is the word they use, de-industrialized, to favor the United States as it struggles unsuccessfully with the People's Republic of China. The argument is widely heard that the collapse of Great Britain, it's descent into a level of irrelevance and poverty and economic marginality, that creates the need for the United States to have a new servant/ally within Europe, somebody especially close to the U.S. The UK represented that in the past. The French believed the Germans are angling to replace the British in playing this role. Tensions are building. Europe feels threatened by it in it's biggest capitalist centers by the United States' effort to cope, unsuccessfully in their view, with the dangers of China. And they are not going to break their relations with China at all. We may not think about it much but we ought to.

Millions, tens of millions of Americans are public employees protected by public pensions. And, by the way, this is true for many private employees as well with pensions. The pension money taken out of the check every week, that's invested for you by whoever runs your pension. And those investments have been increasingly of two kinds: the majority still invested in stocks and bonds but a growing amount - 1.3 trillion at the latest count - has been put into alternative investments, not listed on stock exchanges. These are hedge funds, private equity funds, real estate funds. Knowing what they're actually worth is very difficult. Even the people involved in them can't really tell you, so we don't know how well they're doing. We don't know whether the pension assets are sufficient to pay for the pensions that they are legally obligated to give to the workers who've put their money in there every week. The stock market is down this year. The NASDAQ - the most important one - down 30 percent, the Dow - the big one, the old New York Stock Exchange - down 10 percent. And who knows what those alternate investments are doing? If money was put into the crypto system which some pensions did, well, we know where that's ended up. Zero is what much of that is now worth. Problem: pensions are something that tens of millions of Americans rely on. Social Security is, at best, a help. Social Security has its problems but what's not understood is that the private pension with the squeeze on the American empire is in trouble, too.

Recently the CEO at General Motors Mary Barra boasted the GM plans to produce and try to sell 1 million electric vehicles starting by 2025. I just want to remind everyone all rational analyses will tell you - all - that the best way, the cheapest way, the least polluting way to handle the transportation of the mass of Americans is by means of quality mass transport - trains, planes, buses, all of that, not by the private automobile. Which, let's remember, sits idle the vast majority of the time on the street, in the garage, etc. Therefore mass transportation is what we need. Many fewer people are hurt and killed, much less insurance mess from it, much less pollution. I mean it's just better every which way. But we're not going to have a mass transportation system. It isn't being built up. Nothing comparable is being done for that as compared with subsidies, whether they be for the computer chips that go into the car or subsidies for building the cars here in the United States. General Motors is going to the, yeah, individual private car, electric instead of gasoline. And why? Very simple, there's lots of profit for General Motors in a private electric vehicle system of transportation. There's much less profit for a mass public transportation system. So we don't get what's needed, what's useful, what's logical and what serves the future. We get what serves the profit interests of a tiny corporation that involves many, many fewer people than those who will be negatively affected. Keep the story in mind the next time you hear about how capitalism is efficient.

The next story was so painful for me to hear that part of me said "don't bring it up." Strictly speaking it's not economics, we try to focus on economics here as you all know. But this one touches economics and has to be spoken about. During the last few years something on the order of 1,000 elementary school students (those are young children in the fifth grade or younger) have been arrested and processed, often violently, by the police. Not by professionals trained to deal with children, not by professionals trained to deal with agitated children, mentally challenged children, economically challenged children. We don't have the right people to handle children with difficulties in school younger than the fifth grade. And when you look at the statistics and discover that the overwhelming majority of the young children arrested and processed by the police are either non-white and/or physically or mentally disabled you reach the following conclusion, if you're honest: there's no justice here. There's not even justice for the police, who are called upon in difficult situations to do something for which they lack the training, the experience, the expertise to do in an appropriate humane way. It's once again asking the police to clean up the mess that a society falling apart leaves and has no one else to turn to. So the police are called in and they make a mess of it. If you're interested in the details, and be ready to avert your eyes, the CBS system - CBS radio and TV - have produced a report called Handcuffs in the Hallways. Take a look, it's a few minutes. You will not forget it.

I want to conclude by noting the passing on November 18th of Staughton Lynd. Staughton and his wife Alice Lynd were people who taught me when I was much younger in New Haven, Connecticut, we overlapped there. And I learned a great deal how to understand American history. He was teaching American labor history at Yale University when I met him. But he was always an organizer, always working with unions, with unorganized workers to get a better shake. He was one of those radicals who mixed academic and practical work and was a model for the rest of us. He also had a big part of his life in Youngstown, Ohio which is the city in which I was born. Thank you Staughton, you inspired an entire generation and we will miss you.

We've come to the end of the first part of today's show. Which, for those of you who may not know, is produced by Democracy at Work, now celebrating 10 years of critical system analysis and visions of a better world. For example Cities After, a podcast with Miguel Robles Duran, which is about the future of cities as it relates to the struggles of daily urban life, with the intention of sparking civic imagination into action. To learn more about his show and others we produce go to our website democracyatwork.info. Sign up there also for our mailing list. And reach out with us to get that 300,000 milestone of YouTube subscribers. Go to YouTube, join us. And stay with us as we interview my good friend Adam Hochschild.

RW: Welcome back friends to the second half of today's Economic Update program. It is with real pleasure that I bring back to our microphones and to our cameras a very good and old friend of mine of many, many, many years from whom I have learned a great deal. And whose friendship I value and I think you will benefit from as well. His name is Adam Hochschild. He's a journalist and an author of many, many books, writes frequently about human rights and social justice. The latest of his 11 books is called American Midnight: The Great War, a Violent Peace and Democracy's Forgotten Crisis. It's that last line, the Forgotten Crisis, that made me want to invite him to talk with us. Because it blends so much insight to the crises we are going through now. Adam has also written for The New Yorker, The Atlantic, The Nation and many other magazines. He also teaches at the University of California, at Berkeley's Graduate School of Journalism. So first of all Adam thank you very much for joining us today.

AH: Oh, thank you Rick, it's always a pleasure to be with you.

RW: All right, I want to jump right in and talk about your new book American Midnight. You talk there about the United States during and after World War One as being a "forgotten crisis of democracy." Tell us why you chose those words. Why is it a forgotten crisis? And does it have, or did it have the characteristics of the one we have now? And I'm thinking of anti-immigration, anti-labor, white-supremacy, Christian fundamentalism. Are all of these things the same? Or what is it that made you choose those words?

AH: Ah yeah. And there was very much a lot of the things that we see around us today. It's been forgotten. Because I think this country, like all countries, likes to see its history through a rosy glow; things get better and better and better, you know, we formed the Constitution, we gave a Bill of Rights to everybody. Yes, we forgot about the slaves but that was fixed later. And since then things have been sort of steadily improving. So when we look back at this country of a hundred years ago we see the doughboys in their broad brimmed hats heading off to fight the war in Europe. We see them being welcomed home with ticker tape parades. And then you turn the page of that chapter of the high school history textbook and the next chapter is the roaring twenties: prohibitions, speakeasies, Babe Ruth and so on. But a lot gets left out. And I really feel that the four years that stretched from April, 1917 when the United States entered the First World War until the end of Woodrow Wilson's presidency March, 1921 we saw in this country the greatest assault on civil liberties since the end of slavery. Here are some of the things that happened in that time: we had a nationwide vigilante movement with 250,000 members, an organization the American Protective League, chartered by the Department of Justice. We had roughly a thousand Americans sent to prison for a year or more and a far larger number sent for shorter periods of time solely for things that they wrote or said. We had the worst racial violence since the end of slavery within the Summer of 1919 something approaching eight or nine hundred people killed, almost all of them black. These are just some of the things.

And actually one more thing I should add to that period we had press censorship on a huge scale. The United States Government in effect shut down roughly 75 newspapers and magazines because it didn't like what they were saying. This press censorship was begun with the excuse that we were at war. But it continued for two and a half years after the war ended. Ironically, just to bring back the connection to today, you know, Donald Trump and his presidency used to rail against the media and called the press the enemy of the American people. He wasn't able to shut them down, but Woodrow Wilson did so. And moreover the person who managed his press censorship program was the Postmaster General, who operated out of the building that a hundred years later became the Trump International Hotel.

RW: Yeah, you talk in the book, and I remember it striking me, that it was pretty naked. In other words, they used the postal system as a way to destroy the magazines and so on that needed to use the postal system to get to their readers, [they] were blocked from using it. And, you know, it was a direct government rendering it impossible for critical voices to be heard.

AH: Yeah, the law gave the Postmaster General the power to declare a publication unmailable, it couldn't travel through the U.S mail. Now, this didn't affect mainstream daily newspapers, which were sold on street corners and delivered to people's homes. But they, by and large, supported the government pretty enthusiastically. But it did affect weeklies, monthlies, journals of opinion and the vast majority of the country's foreign language press. Because before the internet, before radio and TV there was no other way of reaching subscribers spread around the country except through the mail. And the Postmaster General who carried out this program for Woodrow Wilson, Albert Burleson was his name, was a former Congressman from Texas, extremely right-wing, an ardent segregationist. His family had actually owned 20 slaves at the time that he was born. He was the son and grandson of Confederate veterans. The very first newspaper he shut down was a socialist weekly in Hallettsville, Texas. Which had exposed how on land that he owned Burleson had leased the land to the Texas prison system, which worked it with prisoners in striped uniforms who were beaten when they, you know, didn't pick the cotton fast enough. He swiftly shut that paper down. And then he went after much better known targets. The leading one of which, best known of which, was the magazine The Masses. Which was really the best monthly in the country at that time. It published John Reed, was edited by Max Eastman, published Edna Saint Vincent Millay, Sherwood Anderson, the young Walter Lippman, who was in his socialist phase at that point. And it was shut down because censors objected to some of the things that it carried, one of them being a cartoon that showed the Liberty Bell all crumbling.

RW: Yes, okay. What about racism, particularly against African-Americans? We've seen recently a resurfacing of white supremacy in a variety of forms. Did you have that then? Obviously it was closer to the whole Jim Crow experience and the betrayals after the Civil War and all of that. But was that as integral a part of the crisis of democracy, as you put it, back then as it seems to be now?

AH: I think it was in a different way. Because if you roll back the clock 100 years and look at the United States a century ago... Remember that the vast majority of black people in the South not only could not vote but they were living in a region where there was often an average of one lynching a week. Furthermore they were mostly in extremely low paid, miserable jobs like working as farm laborers or sharecroppers. And the Great Migration had begun - the movement of black people out of the south to the cities of the north. But when they got to northern cities they often found that white people didn't want them there. There was a great deal of tension. Then when the First World War came along black men were subject to the draft just as white men were. And this enraged many southern legislators, who thought this was a terrible thing that black Americans were going to be trained how to shoot guns and to fight. The real trouble came when soldiers returned from the war - roughly 4 million American troops were demobilized during 1919 - [and] they came back to a country that was in economic turmoil because there weren't enough jobs for them. The factories that had been making machine guns and tanks and destroyers and whatnot during the war had shut down. So white and black soldiers were competing for jobs. And white southerners particularly were eager to show these returning black troops that they shouldn't get any ideas just because they'd been in the army. Of the more than 70 lynchings that took place during 1919 11 of them were of black veterans, three of whom were actually lynched while in uniform.

So there was a tremendous amount of tension about all this, exacerbated by the fact that Wilson, who was President then, was himself a southerner, the first southerner elected to the White House since the Civil War. [He] deeply believed in segregation. As a historian he took a startlingly benign view of slavery. And he said next to nothing about this epidemic of lynchings and other racial violence that spread across the country.

RW: Yeah, so Mr Trump in his remarkable statements about Charlottesville and all those other incidents had a precursor in Woodrow Wilson. Whose - to go back to what you said at the beginning - reputation has been very sanitized and cleaned over the years. So that I remember as I read through the passages in your book - and I'm a person [who has] been interested in history all my life - was struck particularly by what you had to say about Wilson and about that Postmaster that he put into the position. I wanna pull out your historical studies in two other ways quickly if we have enough time. What brought that so-called crisis of democracy to an end? How and why did it stop being the kind of thing that you write about? And what happened after 1921 that makes you stop at that point?

AH: I wish I could say it was because the people who'd been in power repented of their sins and decided that, you know, we really need to bring back the wonderful civil liberties that are in theory written in the Constitution. But I think a couple of things happened. One was that the repression had accomplished it's purpose. Because even though there were many other excuses given for the vigilante violence, the imprisonments and so on one of the major real targets - in the government eyes there were really two major targets... One was the Socialist Party, which, you know, at one point had won six percent of the popular vote for President. There were a thousand socialists elected to state and municipal offices around the country. This was a threat to to Wilson because he didn't want them even with a small number of members of Congress gaining the balance of power in the House of Representatives, which his Democrats held by a very thin margin. So he went after the Socialist Party. And he accomplished his purpose by putting a great many of its members and leaders in jail. The party really never again was a political force in American life. I mean it was never as powerful a force in this country as socialist parties in Western Europe. But had it not been so ruthlessly crushed in this period I think it might have pushed the major parties towards having something like the better social safety net and national health care system that they have encountered, for instance.

So it accomplished its purpose in crushing the Socialist Party. And the repression seriously weakened the labor movement. The country's most militant union The Industrial Workers of the World, known as the Wobblies, was crushed. Again, never a significant force after this period, hundreds of its members jailed. One mass trial of more than 100 Wobblies in Chicago ended with a judge passing out a collective total of 807 years of prison time. You know, even the mainstream American Federation of Labor - very moderate - lost a million members during this period. So the repression accomplished its purpose, I'm afraid.

RW: I wish we had more time Adam. But I do want to leave with a quick comment. The 1930s that come literally right after what you're talking about did see a shift to the left. And I've always wondered why that happened, in light of the fact that after the crashes of the early 21st century we're still waiting for something like that to happen. But maybe that's in a topic I'll bring up with you if you can, if I can persuade you to come back another time.

AH: Next time we'll have all the answers on that one.

RW: Good. Thank you very, very much. And to my audience these are the kinds of insights that a free and open left can bring to our society. I value them, I hope you did too and I look forward to speaking with you again next week.

Transcript by Brendan Tait

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About our guest: Adam Hochschild writes frequently about issues of human rights and social justice. The latest of his eleven books is American Midnight: The Great War, a Violent Peace, and Democracy’s Forgotten Crisis. King Leopold’s Ghost: A Story of Greed, Terror and Heroism in Colonial Africa was a finalist for the National Book Critics Circle Award, as was To End All Wars: A Story of Loyalty and Rebellion, 1914-1918. His Bury the Chains: Prophets and Rebels in the Fight to Free an Empire’s Slaves was a finalist for the National Book Award and won the Los Angeles Times Book Prize and the PEN USA Literary Award. He has also written for the New Yorker, the Atlantic, the Nation, and many other magazines, and teaches at UC Berkeley’s Graduate School of Journalism.

Links: https://journalism.berkeley.edu/person/adam_hochschild/  


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SOURCES FOR SHOW SEGMENTS:

  1. Ecole de Guerre Economique reports: https://www.ege.fr/
  2. Public pensions: https://www.levernews.com/wall-street-readies-an-avalanche-of-lies/
  3. GM CEGO Barra: https://apnews.com/article/
  4. Elementary school students (5th grade and under) arrested by police: https://www.cbsnews.com/news/hundreds-of-elementary-students-arrested-at-us-schools/
  5. Staughton Lynd died: https://www.vindy.com/news/local-news/2022/11/valley-labor-peace-activist-staughton-lynd-dies-at-92/

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