Economic Update: The Contradictions of 2021

[S11 E48] New

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On this week's show, Prof. Wolff presents updates on Columbia University grad student strike, the contradictions of 2021, Cuba's Covid vaccine, Trump clone and French politics' lesson, why US manufacturing jobs keep vanishing, why capital-labor struggles affect high and low-paid workers alike: the baseball lockout, and Mitt Romney's 100% hypocritical attack on Dalio's China investments.

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: jobs, debts, incomes - our own and those of our children. I'm your host, Richard Wolff.

I want to start today with a couple of little housekeeping items. I want to remind everyone that in an earlier program, I mentioned some statistics about rape and its economic effects in our society and some of you wrote to me. The data come from the number one organization that keeps data on all of this - it's called rain (r a i double n as in nothing). It stands for Rape Abuse Incest National Network, so think of the rain coming down but with two Ns at the end. If you want to explore these numbers and their implications, just go to rainn.org and you will find the information there.

I also want to take my hat off if I had one and do a shout out for the graduate students at Columbia University in New York City; they went out on strike at the beginning of November of this year - the second time this year they've had to do that. I want folks to understand: most American major universities - private and public - have ceased being primarily educational institutions and have become copycats of capitalist profit driven institutions. That's why they've jacked up the prices far beyond the cost of living. The price of an education - that's why they've plunged an entire generation of people into debts they cannot pay in the rest of their lives. That's why they also abuse the graduate students that they hire to do a great deal of the work, including teaching. And so the students increasingly are fighting back, going on strike. And the students at Colombia have done it twice this year, and they deserve everyone's support, and I want to give it right here and right now.

This is also the last show of this program this year. Don't worry, we're coming right back next month, but I wanted to give a little summary in honor of this last program. And I want to recognize that the picture (the political picture) we deal with is very mixed. It's full (in the language I like) of contradictions, ways things are looking up and ways things are looking down, and I don't want to pretend it's one or the other; it's both. Here's some downsides that you all know and that we've been talking about all year: the disappointment of the Biden administration, now a full year into its government, had led to such hopes that the passing of the Trump horror would lead to a brand new world. Wow, has the democratic party establishment disappointed us by failing to fight for what they even proposed, which was too modest to begin with.
Another downside: the persistence of the GOP Trump phenomena. Another downside: the pandemic and all that it has cost us. The deepening inequality that seems to be a kind of death trip of the American economy, and now the inflation that worsens the inequality. And those supply shocks - that wonderful phrase that covers the failure of this system to even deliver cream cheese to the people at the end of the year who need it. And there's a big depression among people that reflects all of this.

But then there's also the upside, quickly: worker militancy in this country has reached altogether new heights compared to anything I've seen in decades in this country. People quitting jobs, because it's not acceptable to be treated this way anymore - wow! People going on strike, like those Columbia University graduate students. Worker militancy is rising all over the place, and with it, it's now possible to criticize the capitalist system that is the cover for all of this. And that's possible in a way it wasn't for a long time.
I want to cite that we ended the war in Afghanistan - a crazy prospect, a crazy project - it came to an end. And for the troops there, for the people there, the horror of a 20-year occupation that failed is over. And that's a plus too, that it's over.

And then there were those elections in Germany - you may have missed those. Iin which the number one political party in Germany was the socialist party, which has now formed a new socialist government in europe's strongest economy.

And if I may say it modestly, here's Economic Update: it's part of the upside. Because we've gained over 100 000 youtube subscribers during this year, and that's an amazing achievement. And I want to thank all of you - who watch, who sign up, who follow us. You are our partners, and we could not do this without your support. And I don't just mean in your letters, your financial support, and so on. I mean in your solidarity, which is what encourages us and enables us to do this work. Thank you.

Okay, let's go to the updates that we have for today. I want to begin answering questions that many of you have sent me during the year. And this one is interesting, many of you have wanted to know whether what you've heard is true about Cuba and Covid-19. And my basic answer is: yes. Here are the statistics for Cuba at the end of 2021: it has vaccinated over 90 percent of the population. That's nearly double the rate of the United States, and to keep the idea in perspective, the United States has 330 million people (population). Cuba has 12 million people. It is three and a half percent of the population of the United States. Cuba produced its own vaccine - this little country. It's called Soberana, and it's a system of three injections - three jabs, three doses. And if you get them, here's the statistic validated by the World Health Organization: 92% effective. You will not go to a hospital, even if you get Covid-19, that's what the vaccine delivers. Cuba now exports that vaccine to six (that I could verify) countries - there may be more. But they are now an exporter of the vaccine they themselves, this little country, developed. And they have had 8,000 deaths. That works out to one-third the percentage of their population, compared to the rich United States. One-third the rate of death of the US - that is the performance, and if you would like more information, all of this information is taken from a global science magazine that many of you know of called nature. Just go to nature.com and you can find it.

I want to turn next in an update to France. I want to tell you about what's happening in France, because of the light it sheds on the problems of capitalism everywhere in the world, including the United States. French politics has been shaken up recently by the rise of a new right-wing political actor who has declared that he is joining the race for president. That election in France is scheduled for April of 2022, so it's four months away. His name is Eric Zemmour (z-e-m-m-o-u-r). He's a tv broadcaster, you know, sort of like Trump was a tv character. He's currently polling around 13 to 14 percent in the polls in France, about who you're going to vote for in the presidential election. Here's what he's most famous for: his comments about immigrants in France. I’m quoting now from CN News, that's a major french broadcaster, “immigrants are thieves, murderers, rapists; that's all they are.”

Okay, should sound familiar. Starting a political career by a big speech in which you call poor immigrants, because that's who comes to France, names. The only current candidate for president, and there are seven or eight of them in France, the only one who polls higher right now than Mr. Zemmour is the other right-wing candidate, Marine le Pen, and the President of France, Mr. Emmanuel Macron. Now let's take a look because there's the lesson - what is going on? Well here's the first interesting thing that foreshadows something I suspect is coming here too: the split in the right wing. The right wing has been dominated by Marine le Pen. She was the great right-wing leader, anti-immigrant, all the usual. She's done something interesting recently, because she kept losing the national election to whoever was in the middle or the left. She moved to the left. Marine le Pen is now in favor of lowering the retirement age in France. She's supporting rising wages in France. Mr. Zemmour doesn't want any of that. He's a big neo-liberal. He wants to lower taxes on corporations. He's the big business right-winger, she's the popular right-winger, and they're splitting the right wing. Gee, maybe we can see something coming down the pike from Marco Rubio, or maybe Josh Hawley, or maybe all the other republicans who are going to figure this out. Maybe not as quick as the French, but they'll get the idea.

Then there's a second thing: Mr. Macron is polling around a quarter of the votes in France. A quarter of the people want to vote for him. Let me put that another way: three quarters of the French people don't want him, want someone else. You can govern a country like France with one quarter of the people supporting you, and that's not unusual either. And now why is that interesting? Well, here we go: there are four left-wing parties in France, each of them with a presidential candidate. I'm going to go through them with you and then tell you what they add up to if they were ever to get together. The Socialist Party, a very big party in France for most of the
last half century or even century. Currently, the mayor of Paris, a woman named Ann Hidalgo, is a Socialist Party leader. But they're only polling 5% in the presidential. Further to the left, Jean-Luc Mélenchon is his name, he gets 10%. The greens get 7%. The communists are there. Four parties: socialist, far left, green and communist. Together, they get a percentage larger vote than Mr. Macron does. He polls, as I said, 23 - 24%, they're pushing 24 - 25%. If the left got together, they would have a quarter of the support. They could run their society. What the French Left can’t do is get itself together and develop a clear vision, and that ought to surprise nobody, because that's the problem of the American Left as well.

We've come to the end of the first part of today's show, and as always I want to thank all of you as I did earlier - you make this show possible. To learn more about the different ways you can do that, please go to patreon.com/economicupdate, or visit our website: democracyatwork.info. We've also recently released the new hardcover edition of Understanding Marxism, and it is available now. To get your copy of this new edition or other books, please again visit our website democracyatwork.info/books. Please stay with us, we'll be right back.

Welcome back, friends, to the second half of today's Economic Update. My first update in this second half has to do with manufacturing jobs, and manufacturing as a sector of the American economy. Starting with Ronald Reagan, every president in the United States has been telling us that we are in trouble because our manufacturing keeps shrinking, and they, starting with Mr. Reagan, they're going to turn all that around. Republicans promise it. Democrats promise it. The winners of the presidential election promise it. The losers promise it. It's a constantly repeated promise that every single president has failed to deliver on. This is important because it raises the question: what is going on? Well, the number of manufacturing jobs peaked in this country in 1979, just before Mr. Reagan got into office and made the promise he failed to keep. What is it today? Well, I looked it up, and manufacturing workers in the United States today who are not supervisors and not people who are executives, they're called, in the language of economics, “production non-supervisory workers,” get ready: 20 million in 1979, 8.5 million today. Okay, so the United States has 330 million people in it, 8.5 million of them work in any kind of manufacturing. We produce lots more than we did in 1979, but we've destroyed the jobs. The jobs aren't there, we've replaced the manufacturing jobs with machines.

Okay, let's take a look at it. Who made this happen? Who shrank the manufacturing sector in America? Who did those things, which made liars out of every one of our presidents since they undid what these presidents had promised to do? Okay, workers didn't do this. Why not? Well, workers in manufacturing were among the best paid in this country. They had no incentive to get rid of these jobs, quite the contrary. Many of them hoped to give their sons and daughters the jobs they had occupied, which by the way they often got from their parents because these were well-paying, secure, long-lasting jobs. Workers didn't do this. You know who else didn't do this? The government. The government has no incentive to remove manufacturing jobs, not at all. It gets blamed for it enough, that would be a reason alone. We do know who did it: employers did it. They're the ones who made the decision to close the factory in Cincinnati and move it to Shanghai. To close the factory in Pennsylvania and move it to India, etc., etc.

The manufacturing jobs left, and we all know why: because you could pay people in India and China a small fraction of the wages you had to pay an American. And the other thing American employers did - because who else does it - they decided to replace workers with machines because it's more profitable to have a machine than to pay a worker, especially a worker who gets well paid. So we know who did this, who made a liar out of the presidents of this country. It was profit driven capitalist employers who did this. Now of course, they like to blame the workers - “the workers wages were so high.” Really? What you wanted the American working class to do was, what? Accept the wages that exist in China and India? That was the price of your staying? No wonder the workers gave you the finger. And you in turn did the favor back by leaving, didn't you? So, yeah, we have a problem with a very small manufacturing sector, but let's be crystal clear why it happened and who made the decision. Not workers, not the government, not the target of the libertarians, not the target of the corporate bosses. No, no,no, no, no. You know and I know, and let's think about what that means.

My next update has to do with the first labor management blow-up since 1994. And where is it? Among some of the highest paid workers in this country. Isn't that interesting? The class struggle, the fight between the employer and the employee, happens at the lowest level, you know, the fast food joint that won't pay you 15 bucks an hour. And it happens at the highest level, and in this case, major league baseball. What happened in major league baseball early in December was a lockout. Very important that everybody understands what a lockout is. It comes from a long history in the United States. It's when the employer locks the door so the workers can't get into the workshop. They can't get into the factory, the office, or the store, because the door is locked. That's where the phrase lockout comes. So, there isn't any baseball going on, no negotiations, no practice in the gym, none of it. But that's not because the workers struck, that's different - that's a strike. It's because the employers want to terrorize the workers. They want to say “hey, we're closing, and maybe when spring training comes around we'll stay closed, because if we don't start the season, we don't pay you at all.” Whoa now, let's take a look. What's going on? Here's the facts you need to know: over the last 17 years up until 2019 (I stopped there because there was no season in 2020 because of Covid-19), but for the 17 years up until 2019, major league baseball had larger revenues each year than the year before. They are doing really well. And who are they? The owners of baseball teams? And who are they? They're among the less than a thousand billionaires that this country has. That's right, the richest of the rich, they’re getting more and more money. Meanwhile, let's take a look at the workers. And I want to give you these numbers exactly: on opening day April 2021, the average major league baseball player's salary was 4.8% lower than it was on opening day of 2019. Since the 2017 season, average major league baseball player salary has fallen 6.14%.

So, rising revenue for billionaires on one side, and falling average salary for the player on the other side. And guess what? The negotiations aren't going well. You know why? Because the owners want to keep the contracts the way they are and just sign them to continue. No surprise there, they're making money hand over fist, these billionaires, while declining the income of the player. And after all, we don't go to the game to watch the owner, do we? Cause usually kind of fat and out of shape. We go to watch the players. So the employer, to keep this hustle going, is sticking it to the workers by locking them out. Make no mistake when you hear the public relations that they are paying big bucks on, because they don't want to expose what they are doing. You see the class struggle between workers and employers is everywhere in this system, whether you're paid a lot or a little or somewhere in between. That's why we say sure, help those who are not getting paid enough, but it's the system that's the problem. And it's your problem whether you're paid a lot or a little. The sooner we realize that, the sooner we can do something about it.

My last update that I'll have time for today is an example of the kind of hypocrisy that this country now is drowning in. And I felt because of the particular hypocrisy it is that the Christmas season would be the right moment to talk about it with you. So here's what happened early in December: a person from whom we don't expect much,and who has never disappointed us in this regard, said something extraordinarily stupid. Who am I talking about? Mitt, as in “catcher’s mitt” Romney, a former republican candidate for president who now represents the state of Utah in the senate. He exhibited a selective example of christian morality that was so stunning it caught my attention, and I want to make sure it catches yours. He attacked the CEO of the biggest hedge fund in the world. That man's name is Ray Dalio (d-a-l-i-o), a very intelligent fellow, by the way, who periodically makes very interesting, well-researched statements from which Mr. Romney could learn much, but clearly hasn't. He attacked Ray Dalio, by the way, his firm is called Bridgewater Associates, if you're interested. And here's what he attacked Ray Dalio for this Christmas season. He accused Ray Dalio of - you'll love this - a “moral lapse.” A moral lapse? And what was the moral lapse that Ray Dalio had committed in Mr. Mitt Romney's mind? I’m being generous here. It turns out that Bridgewater Associates during November of this year had raised money - that's what hedge funds do - for a big investment in the People's Republic of China. And here was Mitt Romney, beating his breast for the Uyghur people, and for the citizens of Hong Kong who have suffered at the hands of the People's Republic of China, said Mitt Romney. And how, how could Ray Dalio, as we head into Christmas, be so morally lapsed that he would raise money for China? Mr. Dalio, who is in fact smart, retaliated quickly and made several points which everybody in this business knows: a) everybody in this business is making investments in China. Goldman Sachs just recently invested a huge ton, so did many other investment banks. And the reason they do that, Mr. Dalio reminded Mr. Romney, is because it's profitable. It's more profitable to invest in China than almost anywhere else, and that's what they're in the business to do: make profits. Because that's what they were taught in business school, Mitt Romney. So I did a little research, because you know Mitt Romney used to work for hedge funds most of his life. That's what he's done. And the one he's associated with is Bain (b-a-i-n), based in Boston where he used to be based, because he was the Governor in Massachusetts. And I found a delicious little factoid, back in March of this year, Bain capital, Mr. Romney's firm, made a 200 million dollar investment in the People's Republic of China, because it was profitable. And this was long after all the news about the Uyghurs, and all the news about Hong Kong was well known around the world. So what is Mr. Romney doing, singling out Ray Dalio? He's looking for headlines. He's probably thinking of running for president. The hypocrisy of a man who lives the world of profit all his life, and profits from it, wanting suddenly to call some selected other for doing what his firm and every other one does? That's the kind of gross hypocrisy our political leaders practice daily.

Thank you for your attention to this program, to us, all year round. It is a pleasure doing this work, and we value you as partners. And very much I look forward to talking with you again next week.

Transcript by Lauren Shiel

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Showing 1 comment

  • Benjamin Schroeder
    commented 2022-01-07 11:01:58 -0500
    Deceit and Deception – Trust and Truth
    Deceit – the act of representing as true what is known to be false; deceiving or lying – a dishonest action or trick, fraud or lie
    Deception – the fact or condition of being deceived – something that deceives, as an illusion, or is meant to deceive, as a fraud.
    This past weekend I listened to your program(s) about the Chinese companies coming to America to setup business. Three examples you used were in: Arkansas, Massachusetts and Wisconsin. In all cases it sounded like Jobs, Jobs and Jobs, which sounds good. The Governors, state officials, congress and the former President Trump hailed this to show the American public what a wonderful job they are doing to get American going again. But at what cost to the American people.
    You did well in pointing out what the real costs are going to be. Talk about deceit and deception! Is America that stupid not to see what is going on? I know I was until I heard your recent programs. I have been a listener of your programs for several years
    What is America going to look like when former President Trump finishes his term in office? I believe that if conditions continue, America will become like Venezuela and “all hell” will break loose. I believe, America’s way of life will disintegrate very rapidly. When conditions are ripe, all of America will lose all hope and the rule of the mob will ensue. Then “Marshall Law” will be imposed. Talk about the people that are employed by the various political parties and other organizations to put a “spin” on the news to deceive and shift the truth about what is really going on in the world.
    The news media (most forms of communication) and anything vital to living is being manipulated to deceive. What can the average American do?
    Only the “rich and big monopolies” will rule the world – thus a return to the middle dark ages.
    All I can do is get ready for the worst!
    Ben
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