Economic Update: Covid Criminals, Pandemic Profiteers

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On this week's show, Prof. Wolff presents updates on Mississippi's legalization of pot, US's $30 trillion national debt, Mexican workers at GM plant vote in militant union, and Amazon's 17% price increase (after a year of record profits), as much of nation already suffers from 7% inflation. In the second half of the show, Wolff interviews John Nichols, author of Coronavirus Criminals and Pandemic Profiteers.

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 begin today by talking briefly about Mississippi, and here's how, and why. Mississippi just became the 37th state out of 50 in this country to legalize medical marijuana, and this story is interesting for a number of reasons, as I will explain. Voters in Mississippi, back in 2020, had actually voted to do this ,but the Supreme Court in that remarkable state decided that what the people wanted, and what had to happen, could not be the same, and so it was blocked. Now finally, the Governor, under the mounting pressure of citizens in Mississippi who want access to marijuana, has seen the light. Governor Tate Reeves, a Republican in a state that has a Republican-dominated House and Senate, passed medical marijuana legalization. However, he held on, as have other Republican governors, most recently the one in South Dakota, by denying, at least for the moment, recreational marijuana. And as I'm sure all of you watching and listening know, that if you can get medical marijuana, there is, of course no possible way you would ever use it for a recreational purpose. (I’ll pause for laughter, but we have pressures of time, so the laughter can't go on.

I want to read to you what Governor Tate Reeves said. Quote, “There are also those who really want a recreational marijuana program. That could lead” — here comes the good part — “could lead to more people smoking, and less people working, with all the societal and family ills that that brings.” Governor Reeves. He’s avoiding recreational marijuana, because it will lead to his citizens of Mississippi working less. Notice the problem of marijuana is you work less, in the mind of this genius. Okay. Medical marijuana is now available in Mississippi. It will, of course, shortly be in every other state, as will recreational marijuana. In case you’re wondering, 18 states in the United States, as of now, also allow recreational marijuana as well. Mississippi will likely catch up.

Next Economic Update: the United States has now passed, in January of this new year, 30 trillion dollars as our national debt in this country. That’s how much the government has borrowed, and I want to celebrate, if that's the right word, passing the 30 trillion dollar mark by explaining what this is about, something which the mass media who loved to report on the number 30 trillion, as if it had magic attached to it, don't do. Here. we go: the United States is stunning in its refusal, as a government, to tax corporations and the rich. Not only does it tax them less than in most other countries, certainly most other advanced industrial countries, but we have witnessed a stunning thing in these last two or three years. It begins December of 2017, when Donald Trump's government hands to corporations and the rich the biggest tax cut they've ever had, coming at the end of the 30 years in which wealth in this country was redistributed from the middle and the bottom to those people, who then got a tax cut on top of it. Never has a tax cut gone to so few, who needed it so little, but they got it, because that's what their President was there for.

Consequently, in the last two years, 2020, 2021, the deficit in this country (the difference between what the government had to spend to deal with the depression that we were close to, to deal with COVID, those extra monies that had to be spent, came together with the cut in tax revenues because of what Trump had done) and the only way the government could spend to get us out of the depression, to get us out of the disaster of COVID, was by borrowing the money they no longer taxed from corporations and the rich. And here comes the most important point: from whom does the government borrow the bulk of the money that it borrows? Not all of it, but the bulk of it? Answer: from corporations and the rich. Most of you watching and listening to this program have never been visited by someone from the government asking you to lend the government some money, and I hate to tell you this, but that's because you don't have enough money to make the visit worthwhile. The visits happen, but they go to the big banks, the big corporations, the big insurance companies who have big bundles of money to lend to the government. So the people the government doesn't tax — corporations and the rich — are the ones it goes to, to borrow the money. And why does it have to borrow the money? Because it didn’t tax them. Which means that the corporations and the rich got the best of everything. They didn’t have to pay taxes, and instead, lent that money to the government, which has to pay it back, and while you wait for it to be paid back, you get interest every year.

This is a boondoggle for the rich, which it always has been. Not only that. The 30 trillion that we now owe, that’s going to be a burden. We're all going to have to pay taxes in the years to come, to pay the interest to the corporations and the rich who didn't have to pay taxes, but got to lend that money to government instead. We're going to pay that back, and we're going to pay the interest, and we're going to listen to Republicans and conservative Democrats, like Senator Joe Manchin, tell us that, ‘with such a large deficit, we can’t afford to rebuild our country, to upgrade our infrastructure, to build back better, or anything else.’ What a wonderful gimmick these deficits are, this national debt is.

And here's one more beneficiary I don't want you to miss from this boondoggle for corporations and the rich: When you don't tax them, and your government has to spend money to avoid a depression, or to deal with COVID, it has to borrow from anybody who lends to it, not just corporations and the rich. And you know who else lends to the United States government? Countries overseas that have accumulated tons of dollars, because they sell stuff to the United States, but they don't want to buy anything we produce anymore. Two of the biggest countries in the world like that — China and Japan. They send us tons of stuff. Your house is full of the stuff that’s made in Japan and China. You're wearing it, you're sitting in it, you’re driving it, but we send all the dollars to pay for that. They sit there with dollars they don't want to spend, because we don’t have anything they need or want. So what do they do with the dollars? Yeah. They lend it to the United States government, which has to borrow because it won't tax corporations and the rich. But of course, if you borrow from China and Japan, you have to pay interest to them, just like you have to pay interest as a government to anyone else you borrow from.

So here's what I want you all to understand: That a nice chunk of the taxes you pay coming up in April of this year, like April every other year — taxes you pay on alcohol, on rubber tires, on much else — part of that money goes to Washington, which simply turns around and sends billions of dollars of what we pay in taxes, yeah, to the People's Republic of China. We’re supposed to be fighting with them one way or another, and indeed we are, but while we fight (if you understand the bizarre nature of our government and the society we live in) we are also funding the government we are supposedly critical of. We are sending them the money, billions out of our pockets, to the People's Republic of China and, indeed, to Japan as well. Okay, you want to continue to subsidize corporations and the rich, the already richest people, by this crazy system? Well, you’re doing it. The only question is whether you will tolerate continuing to do it.

My next update is a kind of a celebration, if you like. Six thousand Mexican workers working at a General Motors factory in Mexico (in Silao, Mexico, to be exact) voted out their old, tired, incompetent union. And they voted in, by a record 78 percent of the vote, a new union promising to be a militant advocate for improvement in the conditions of the workers. This is part of a wave of unionization and strikes across, not only the United States, but Canada and Mexico as well. A worker in that plant, interviewed as part of this remarkable change, reported that after having been employed there for 11 years, he was being paid $24 a day, and wanted the new union that they voted in to do better for him. Well, in one little statistic you can now understand why your car is made in Mexico and not in Detroit. In Mexico, $24 a day. In Detroit, seasoned workers, after 11 years, get more than that per hour. And that's an enormous difference but that enormous difference means there’s plenty of room in Mexico to get those wages up, and still be an advantageous place for American auto companies to locate. The only question is whether this militant union that came in because of the failures of the old, will really be a militant union and change, or get bought off and co-opted, as so many unions have in Mexico and beyond.

I want to conclude the updates for today by talking briefly about Amazon, who just had a record year of profits and sales. Amazon knows, as we all do, that the country is faced with an inflation that's really a devastating blow after two years of depression and COVID. We need to stop the inflation. We need to fight it. What did Amazon do as a patriotic citizen? And I underscore the word “patriotic”. They just raised the price of their Prime membership, one of their major service products in this country, from $119 a year to $139 dollars a year. I did the arithmetic; it’s a 17 percent increase at a time of inflation that is running 7 percent in the country, and is called an “emergency.” Amazon is not making the problem less; it's making the problem worse. Think about it: After a year of record profits, why do they do that? Because they can.

We’ve come to the end of the first part of today's show and, as always, I want to say thank you to all of you whose support makes this show, and others we produce, possible. To learn more about the different ways you can support Democracy At Work and Economic Update, please go to Patreon.come, slash, Economic Update. Or visit Democracy At Work, dot, info. Please remember to subscribe to our YouTube channel, and I’d like to encourage you to share what you've learned here today with your friends and family, as that also helps us reach more people than we can do alone. Please stay with us. We'll be right back with today's special guest, John Nichols.

[Music]

Welcome back, friends, to the second half of today's Economic Update. I am very proud and happy to bring to our cameras, and our microphones, John Nichols. He's the national affairs correspondent for The Nation Magazine, author and co-author of over a dozen books, and contributes regularly to the BBC and many other news networks. He’s been honored by the International Federation of Journalists and others for his investigative reporting and analyses of media and democracy issues. I want particularly to draw attention to his new book, “Coronavirus Criminals and Pandemic Profiteers.” That’s good lettering there; it works out beautifully. Welcome John Nichols. Thank you very much for joining us.

NICHOLS: It’s an honor to be with you, my friend.

WOLFF: Good. All right, with a provocative title like you gave your book there, tell us why do you use words like “criminals” and “profiteers”? What is it that they did, these folks, over the last, whatever it is, two years now, that brought you to that way of describing them?

NICHOLS: Well, because they are criminals and profiteers. That's the good starting point for such a title. I didn't have to stretch too far and, truthfully, what happened when the pandemic hit almost two years ago, it became very clear even in the first weeks that politicians, including Donald Trump but not exclusively Donald Trump, were going to take advantage of the crisis to advance their own political interests, even at the expense of human life, and that business leaders, both people who ran individual companies as well as billionaire investors, were going to take every advantage they could of the circumstance to make themselves dramatically wealthier. And the truth is that it wasn't hard to to detail this reality. In fact, as an example, Trump acknowledged to Bob Woodward that he lied to the American people about the severity of the crisis. That, I would argue, in the midst of a pandemic, is a pretty criminal act. And then I would also suggest to you that, if you take a look at the record of Pfizer and other pharmaceutical companies, the level of excess profits that they have taken in the midst of a truly dramatic moment in American history, and world history, is so, so far beyond the bounds that it definitely enters into the stage of, or into the realm of, profiteering.

WOLFF: You know, John, before we leave this topic and get into it, there were a few people who did talk like this early on. Quote, “we’re all in this together,” “this is a threat to everybody,” “even if it doesn't kill you, it's a danger of illness, it's a danger of people close to you,” and all the rest of it. So you're basically saying, if I hear you right, that the pulling together was rhetorical at best, and simply didn't operate with political and business leaders in this country. who leapt over that thought, if they even had it, and went to work to make money.

NICHOLS: Absolutely. Look, in the very early stages, there was a lot of talk about “shared sacrifice.” There is simply no question that tens of millions of Americans did embrace that concept of shared sacrifice. You had nurses who went into hospitals without sufficient protective gear, because they wanted to save lives. You had bus drivers who kept on their routes, because they needed to get nurses, and doctors, and other essential personnel to their jobs. You had people, immigrants, working in meatpacking plants who who kept going to work even though they knew it was dangerous. Many of these people died. Their shared sacrifice was extreme, and amazing, and also something for which we ought to give them great tribute and great honor but, at the same time, while they were doing that, literally back in March of 2020, you had the President of the United States lying to the American people about the severity of the crisis, refusing to do things like a national mass mandate, clearly acting in deliberate ways to not respond as sufficiently as was necessary. And even back at the very beginning of the pandemic, you had companies like Amazon firing whistleblowers who said that the warehouses weren't safe, that people were getting sick and dying. And so what we realized is that there was a kind of division of paths, right? You had all of the rhetoric, all of the good language on television, and on radio, but then you had the reality of what our billionaire class, and our political class, too frequently did.

WOLFF: Has anyone been held accountable? I mean, we have two questions really here. Do we have a consciousness of what you've just told us? And has anyone been held accountable, at least to this point?

NICHOLS: It’s a very good set of questions. I’m going to reverse the answer, if I may, and say yeah; There has been some accountability. Donald Trump is no longer President of the United States, and I think that the November 2020 election was influenced unquestionably by his awful handling of the pandemic. So I do think there's a measure of electoral accountability there. I think that the winds of Raphael Warnock, and John Ossoff in the Senate elections in Georgia, which flipped control of the Senate, were clearly influenced by their understanding of the severity of the pandemic, and the ways in which they spoke about it as something that had to be responded to. So yes; There's been some political accountability, but at the much deeper level, at the level of accountability for genuine profiteering, for genuinely criminal, or at least incredibly dangerous and damaging acts, no. There hasn't been a sufficient level of accountability. There's been very little at all, and there's very little consciousness of it, and I want to emphasize that. I think you use the exact right word there, because a consciousness of what happened, an awareness of what happened, and of the fact that people could be held to account, is what's necessary if we’re going to shift our direction and actually get on top of these things.

I’ll give you one example: At the start of the pandemic, America’s billionaires controlled three trillion dollars. Eighteen months into the pandemic, they controlled five trillion dollars, one of the most exponential growths in billionaire wealth in American history, and yet, at the same time, we were asking nurses and bus drivers and factory workers to share in sacrifice. I would argue that billionaires did not share in sacrifice, and I would suggest to you that if people were really conscious of that, we would be demanding a tax rate similar to what Franklin Roosevelt or Dwight Eisenhower accepted for the top marginal tier in our tax lists, and that would be about 90, 95 percent.

WOLFF: Absolutely. I make that point over and over. I did it before the pandemic, and it only makes it harsher. Can you give us a little more about how billionaires did that? How did they turn this global crisis, tragedy, threat to our existence, into an opportunity to make even more money? I mean, I think part of the human brain has a hard time coming to terms with simply the stark, simple reality, either with Pfizer or with Amazon whatever you want. Tell us a little bit how this was done.

NICHOLS: Well, I'll give you a very good example. With Pfizer, they benefited tremendously from research that was done in the public sector, research that was done in the United States and other countries around the world, and by global health groupings that got the data out there, did a lot of the initial research. There's simply no doubt that Pfizer's position, Moderna’s position, was advantaged by what the public sector did, what we the people did. And yet, when the decision was made to start producing those vaccines, Pfizer got all sorts of sweetheart deals, for lack of a better term. They were given permission to opt out of certain programs, and out of certain standards and, at the same time, when they did bring the vaccine on to the market, they got contracts that were at exponentially higher rates of repayment than was necessary for what their costs were, and they kept extending, and have extended, those contracts. So the end result is that we now live in a situation where researchers who have studied the amount of profit, and the amount of money that’s gone into the bank for these pharmaceutical companies, have so told us that Pfizer, Moderna, and their partners were making a thousand dollars a second, 65,000 dollars a minute, 93 million dollars a day, every second, every minute, every day, and yet they refused to support efforts to share the vaccine globally, to lower those prices to make things work in a more equitable and fundamentally humane way. So the bottom line is, that’s how they made those profits. They got tremendous advantages from government, and they also refused to, in any way, realistically bend to the human demand, the human need, not just in the U.S., but around the world.

WOLFF: Tell me how do you account for the fact that, to go back to something you said a little earlier, that there isn't a broad-based consciousness of this? That Americans either don't know it, or they know it, but don't know what to do, quite, with the knowledge of it? How do you see that whole problem of public awareness and response?

NICHOLS: Well, look, we live in a system that rewards profiteering, that rewards political calculus, that is not respectful of human needs, or of, frankly, human suffering. And so, as a result, much of our media, and much of our political class, tends to treat huge crises in our lives that affect all of us, as natural disasters. Now the fact of the matter is the pandemic was a global phenomenon. It hit countries around the world, but how you respond to that crisis, that's the key. And in the United States, the response was disproportionately on the side of the political elites, and the economic elites, not on the side of the great mass of people. As a result, we had a dramatically higher level of death than other countries in comparable circumstances, and in fact, The Lancet, the British Medical Journal, estimated about a year into the crisis, that 40 percent of the deaths in the first year in the United States did not need to occur. They were unnecessary. And so we're looking, literally, at hundreds of thousands of people who died unnecessarily, because our system allows economic and political elites to think of their own advantage, rather than to think of doing what any decent human being would do in in such a circumstance, which is to care for others.

WOLFF: How do you account for the shift of awareness? Shifting, kind of, the discussion away in this culture from the disease and the response, or lack thereof, as you just put it, on over to the question of mandates. How was it accomplished? These are people who are told, “You must have a driver's license or else you can't get into a car, you have to obey the red light at the intersection…” — the government mandates all kinds of things, which these people do umpteen times a day. What happened to allow the conversation about this crisis to become a ‘demand for freedom,’ instead of a demand for the accountability of a response to a threat to our lives? How are we to understand that?

NICHOLS: That’s a perfect question, and it's not hard to explain as I write about it in the book, and I do 18 chapters on different political figures, and economic figures, and corporations that failed us in the course of this pandemic. And what becomes clear across the board is that we had political leaders who took advantage of their positions to peddle a line, as regards the pandemic, that they thought would benefit them. We'll use Trump as an example, not because he's the only bad player, but what Trump did, when he lied about the severity of the pandemic, when he said “oh, we’re going to have to reopen quickly,” that it would be “over by Easter,” literally saying that in March of 2020, that it would be over within a matter of weeks, or at least dialed down significantly. When they did that, they began to create a chaotic and confusing situation, where people were getting all sorts of mixed signals, where there was a lot of entry points for, frankly, bad players who wanted, for a variety of reasons, either to profit off it, or to advantage themselves politically. And so because of a failure of clear and coherent messaging from the top, we created a dysfunction in America that, frankly, didn’t exist in a lot of other countries.

WOLFF: John, I wish we had way, way more time, but you've been very clear, and the point is wonderful. Let me urge everyone, not only to thank you for joining us, but to go get a copy of “Coronavirus Criminals and Pandemic Profiteers” to elaborate on the points John just summarized. Thank you again.

And to all of you, I look forward to speaking with you again next week.

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About our guest: John Nichols is the national affairs correspondent for The Nation and the author or co-author of more than a dozen books. A regular contributor to BBC and other global and domestic news networks, he has twice keynoted congresses of the International Federation of Journalists and has frequently been honored for investigative reporting and analysis of the media and democracy issues. His new book is Coronavirus Criminals and Pandemic Profiteers (Verso).


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Showing 1 comment

  • Carole Oleniuk
    commented 2022-02-23 10:51:17 -0500
    I hope it’s okay to support the Mexican unionists even though they took the jobs of American workers. I support Professor Wolff’s defence of the Canadian truckers even though these are the same men who would not hesitate to intimidate those of us who oppose the filthy rape of the tar sands and the creation of pipe lines to destroy and threaten to destroy clean air, water, and earth. We need the brains and muscle of every working person to rid ourselves of imperialist capitalism. Argue the politics but don’t start excluding those who do not meet the working class purity test. Am I not a worker if I make clothes on my sewing machine and oppose abortion?
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