[S10 E34] New
On this week's Economic Update, Prof. Wolff discusses the following: Denmark's new taxes on banks and rich people to help workers doing dangerous jobs; West Virginia AG sues Walmart and CVS for complicity in opioid scandal; and US State Department urges universities to sell shares in Chinese corporations. On the second half of the show, Prof. Wolff interviews author and journalist Chris Hedges on signs of the declining US empire.
A special thank you to our devoted EU Patreon community whose contributions make this show possible each week.
Learn more about Prof Wolff's new book, The Sickness is the System: When Capitalism Fails to Save Us from Pandemics or Itself, that comes out mid-September on our books page:
"Richard Wolff in his new book examines frightening and anti-democratic configurations of corporate power, offering not only a blueprint for how we got here, but a plan for how we will rescue ourselves and create new models of economic and political justice.” - Chris Hedges
This 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, income – all of the things that make the world go around, and make it go around the money as well. And I'm your host, Richard Wolff.
I want to begin today's program on a kind of positive note, about an important initiative being taken by the new prime minister in Denmark. She, Mette Frederiksen by name, represents the Social Democratic Party in Denmark, and she has caused quite an upsurge of interest in government when she proposed new taxes. And let me tell you what they were, or what they are. First, a cap on deductions for people who earn over $1.6 million. They can't take the deductions that reduced their tax bill the way they used to because she felt it's unfair. And she likewise put a cap on the deductions that banks can take off of their tax obligations from the income they earn. If they earn over $480 million, they're going to have their deductions capped. This is remarkable, because nothing remotely like this exists here in the United States.
Perhaps even more interesting is why she is imposing these taxes, she's proposed them, at this time. And her answer is that there are approximately 38,000 workers in Denmark whose work is particularly arduous. They are having to work under difficult physical, emotional, or both, kinds of obstacles and pressures. You know, it's the equivalent of the first responders, the people on the front lines of the COVID-19 virus, who take a risk literally every day by the situations in which they work. And she wants to, at the very least, equip them, and pay them extra, to offset in part the extra difficult work they do. What an interesting idea: to pay people according to the difficulty and the social importance of the work that they do.
Well, how have the bankers and the rich people of Denmark reacted? It's not going to come as much of a surprise, but let me tell you. Two things they've stressed in their rageful answers: One – and I'm going to try to snarl a little just to get the flavor across here – they're going to pass the tax on to the public. In other words, they want the people of Denmark to know, if we get taxed by the government, no matter what the reason is, no matter what the fairness might be, we're going to stick you with the bill so we don't have to pay. Hmm, nice. And here comes the second one: We'll cut employment and growth. Well, if we have to give you taxes, well, we're not going to invest it, we're not going to hire people, we're not going to grow, and boy will you suffer. In other words, don't mess with us, because we'll make the pain shift over and hit you worse.
You know what this is like? This is like workers, when they're hit with a tax, saying, okay, we're not going to work. The whole system stops, you can't touch us, you can't tax us. Or maybe saying, okay, we have to pay an extra tax? We will, starting on Monday, so long as our wages are raised by exactly that amount, or maybe a little bit more, for the time and the trouble.
These are threats against democracy. These are threats against the way the system ought to work in a democratic society. There will now be discussions in the Danish parliament, and then there will be a vote. And if the vote is in favor of imposing these taxes, it's the job of the business community to pay them, and not to issue threats.
By the way, let's look at the threats. “We're going to raise prices.” No you're not. That's fake. You know why the banks aren't going to raise prices? Because they'd lose business if they did. They're not free to do that. They don't set the prices. Not quite, not yet. So it's a bit of a fake.
Then there's, what could the government do if they try to carry out these threats? You know, the government isn't powerless. Don't be fooled. You know what the banks and the rich are really doing? They're providing excuses that politicians can use not to vote for this tax increase on banks and the rich by telling the people, oh we're not against taxing the rich, but you see, bad things will happen if we do, so we can't. I'm really protecting you by not voting. What a hustle this is. Don't be fooled.
Very briefly, let me explain what the government could do when threatened by business interests and the rich. (And of course I'm telling you this story about Denmark because it applies everywhere else, including the United States.) Here are some things they could do. The government could issue price controls on banks – what they charge in fees, what they charge in interest. The same congress that passes the tax on the bank can pass the price controls on the bank. And then the bank can't pass on the cost of its taxes by raising the prices of what it sells in the way of services. Problem solved.
Suppose the banks come up with some other way to threaten. Well, the government counter-threats. That's what it would do if it were our government, wouldn't it? Here's an example: Oh, you private banks are going to threaten us when we try to put a fair tax on you. Okay, we'll set up government banks, and we'll compete with you. And then let's see where the public goes, confronted by your private self-help program for yourselves and your profits, versus the public bank.
That's why private bankers, like those here in the United States, fight against public banks. They couldn't possibly cope with the competition. Their celebration of competition is for speeches on July 4th, not the reality, which is the last thing on earth they want. Just look at the history of the one state in the United States, North Dakota, that has a public bank to see what efforts the private banks have gone to to try to undercut – by the way, they failed – that public bank in North Dakota.
The threats are empty, but the political fallout is real. Politicians are afraid to go against those banks, afraid to go against the rich, so they use these kinds of arguments to do what the banks and the rich want, while pretending it's only to protect us from those empty threats the banks have made. Don't be fooled.
My next update shifts us from Denmark to West Virginia. Why? Because the attorney general in West Virginia, one Patrick Morrisey – a Republican, I might add – has just filed lawsuits against Walmart and CVS, the drug company chain. Why? Because for years they filled obviously suspicious opioid prescriptions in huge quantities and distributed them to pharmacies, retail pharmacies, across wide swaths of the United States. We all know what the result has been: hundreds of thousands of deaths from overdoses of opioids. There is now a set of lawsuits against the producers of the opioids – $26.4 billion worth of lawsuits – but this action by Patrick Morrisey in West Virginia doesn't go after the producer of the opioids but someone equally guilty, namely, the distributors – those who made it possible for those producers to reach the millions of people that have become hooked on opioids, and then the hundreds of thousands who have died from them.
Why am I telling you this story? Because it's the latest in a long list of profit-making capitalism killing people. You know, uh, let's see. The cigarettes? How about that one? Or the alcohol? How about that one? How about all the companies that cheated on the emissions control, filling our air with pollutants while we thought the pollution test was giving us safe air? It was profitable to do all those things. It was the profit motive that drove capitalists to do what they did and kill the huge numbers of people. By the way, we're talking about numbers of people sick and dead that are still ahead of how bad COVID-19 has been, at least to this point. So we ought to be equally upset about it.
The profit incentive is not some kind of wondrous thing that explains the wonders of our economy. It is as often a killer as it is anything else. So the question, can we do better than a profit-motive-driven society is a very good, healthy, and honest question. And banishing it on the grounds that profit is just a wonderful mechanism is somewhere between stupid and evil.
My last update for today, that we'll have time for, has to do with something bizarre and unusual that the United States State Department, Mike Pompeo's bailiwick, just did. Kind of remarkable, you know. The state department is what in other countries is called the foreign ministry. It deals with the relationship, or it's supposed to, between the United States and the rest of the world. So imagine my amazement when I read recently that the state department sent a letter to universities and colleges across the United States urging them, if they owned in their stock portfolios – you know, some universities, like Harvard, and Yale, and Princeton, and so forth, have a big portfolio of stocks and bonds that they have accumulated – anyway, the state department suggested to all of them that they get rid of Chinese companies whose stock they own. Turns out they own quite a bit, because a balanced stock portfolio, as any stock adviser these days will tell you, should include Chinese stocks. You know why? Because it's the second-most important capitalist country in the world, and growing three times faster than the United States. And not to be invested in China is thought to be, as an investment strategy, somewhere between stupid and evil, to stay with the theme.
What's going on here? The government is picking companies. They're going to favor this company, not that one. And if you think it stops at foreign policy, don't be naïve. Next week they'll be sending letters, don't support this company because it's run by a Democrat. Don't support this one because it's run by a Southerner. Don't support . . . you get it? It used to be the philosophy of capitalism that the government has no point, no place, choosing winners and losers in the private sector. It's supposed to be we, the consumer and the producers, who in our competition determine who's doing a good job, who isn't, who deserves to grow, who doesn't. Uh, uh – none of that. We're now going to have the government tell us what to do.
And by the way, lest any of you worry, this is not real anyway. It's all for show. Two recent studies prove it. One study said, how much exodus of companies has happened from Hong Kong because companies don't want to be part of China, they want to keep their independence? Answer? None. They're not leaving because they know the Chinese are going to support them in Hong Kong. And the Chinese-American Chamber of Commerce in Beijing did a survey. Nobody's leaving there either. They understand this is Mr. Trump's election strategy and little more.
Well, we've come to the end of the first part of today's show. Please remember to subscribe to our YouTube channel, follow us on Facebook, Twitter, and Instagram. And be sure to visit democracyatwork.info. That's our website, where you can see other things that we do, our union co-op store, and the two books we've published, Understanding Marxism and Understanding Socialism. And lastly, a special word of thanks to our Patreon community, the great supporters of ours that we appreciate enormously. Stay with us; we'll be right back with our guest, Chris Hedges.
WOLFF: Welcome back, friends, to the second half of today's Economic Update. It is with great pleasure that I bring back and welcome back to our microphones and our cameras Chris Hedges, who by now has become a colleague and a friend. He doesn't need an introduction, so I'm going to be very brief. He worked for 15 years as a foreign correspondent for the New York Times and won a Pulitzer Prize for doing so. And he's the author of over a dozen books, some of which we have discussed on this program in the past. And the most recent one is called America: The Farewell Tour. So on behalf of an excited group of radio and TV audiences, thank you very much, Chris, for joining us today.
HEDGES: Thanks, Rick.
WOLFF: All right, I'm going to jump right in. Is the American empire, or is the American century — or however you want to call it — is it now in decline? Is there something happening, or some set of things that are happening, that qualify for such a phrase to be used? And if you think so, what are the signs that say that to you?
HEDGES: Well, there are physical manifestations of decline of empire all around us, and we are dying in the same way that empires throughout history have died. The assault against urban centers — that's actually a characteristic of dying empires. The decrepit infrastructure, the abandonment of whole sectors of the population, the hollowing-out of institutions that are unable to deal with the stresses that are put on a country.
So the foundations rot away; the facade remains. And I think the pandemic, of course, is one of those stresses we've lost, or because of this for-profit healthcare system, because of the ineptitude of the Trump White House. But I think we have to go back for decades. The kind of assault on the healthcare system is hardly tied exclusively to the Republicans. An estimated 300,000 Americans will be dead by December, possibly 400,000 by January.
Real unemployment, as you know better than most, is not at 10 or 11 percent but, because of the way they fix the numbers, upwards to perhaps 20 percent. Ever since 2008 there's been assault on the incomes of American households. The average middle-class family's net worth is more than $40,000 below what it was before the crash of 2007-2008. Then, of course, people of color suffer worse. Black families are down 40 percent, Latino families 46 percent. And now we're watching as the unemployment benefits, the supplemental unemployment benefits, are withdrawn, the moratoriums on evictions and foreclosures, and a real ruthless assault against American families.
I mean, before this pandemic four million people were being evicted a year. Before the pandemic one in four tenant households spent half of its pre-tax income on rent. Before the pandemic we had some 2,000 unhoused people sleeping in their cars, sleeping on bridges, on city streets. Twenty-seven million people are expected now to lose their health insurance.
And just to close, the capitalists have reacted; they know what's coming. Banks are not lending. But like my bank, Wells Fargo (I know, I shouldn't be at Wells Fargo), has just a complete moratorium on any kinds of loans, because they need to stockpile reserves of cash for the wave of bankruptcies and defaults on mortgages, and student loans, and car loans, and personal loans, and credit-card debt that they know is coming. So we're headed for a social and political dislocation within weeks, if not months, that we haven't seen since the Great Depression
All of that is symptomatic of an empire in deep distress, unable to deal with any kind of stress that's put on a system that's been essentially pillaged by a global capitalist elite — which you have been one of the most prominent voices in pointing out.
WOLFF: Chris, here's a question that arises when people think about the network of things you just mentioned. How do you understand that at the same time everything you said is the reality for the overwhelming majority of the people, at the top we have a government that celebrates a booming stock market that has more than recovered from the depths of the pandemic crash in March of this year? Do we — and here's what I'm after — do we have now a kind of classic collapsing-empire ruling class that is so besotted with the accumulation of ever more that they've lost all sense of the reality around them? That they are — if I can borrow the old phrase — somehow busily killing the goose that laid the golden egg that they've stolen from everyone?
HEDGES: Yes, that's also a characteristic of dying civilizations, as Joseph Tainter pointed out in his book, The Collapse of Complex Societies. So you have an elite that, as you correctly pointed out, severs themselves from reality. Remember that the oligarchs, who now control both our financial and political system, don't live in America. They live in a bubble of their own creation. A New Yorker writer called it “Richistan.” They don't fly on commercial airlines, they don't have any contact with the working class, they associate only with their own tiny elite.
There was an article in The New York Times a little while ago that pointed out that productivity within the American workplace had increased by 77 percent since 1973, but hourly pay had only gone up 12 percent. This is in The New York Times. And they said that if the federal minimum wage was attached to productivity, it would be more than $20 an hour. Instead, what you have is a third of the workforce — and this was before the pandemic — earning less than $12 an hour. And most of them did not have, do not have, access to employer-sponsored health insurance, which now, of course, many people are losing. An estimated 27 million people, because they've lost their jobs, are expected to add to those without health insurance.
So what you have seen — and again, you've been one of the, you know, most important voices on this — is this assault by a rapacious, oligarchic, global oligarchic, elite that has brought us to this point. And what they've done, of course — the pandemic has not only swollen or bloated the stock market but the bank accounts of the billionaire class. I think what the last figure I read was, they've increased, the ruling billionaires have increased, their wealth by over $500 billion. You know, Jeff Bezos is, well, the last figure I read was increased by $30 billion. So, yes, and because of our money-saturated elections, because lobbyists write our legislation, because the courts are controlled by corporations, there's no redress for the citizenry. And this has essentially created a system where most of these corporations engage in tax boycotts. Amazon didn't pay tax, any federal taxes, last year. In fact, they got money back. But they're hardly alone — I mean, Bank of America, on, and on, and on.
There's no check. There's no — this is why Marx calls capitalism ultimately a revolutionary force. There's no internal or external check on their pillage and their greed. And this is now having very, very dire social and political consequences which are playing out in front of us.
WOLFF: Do you think the election will make any difference to this scenario we're discussing?
HEDGES: No, because the problem with the elections is that — and this election is no different — is that it's all reduced to personalities. And it's really based on fear. It's, you know, you vote for Joe Biden because of the fear of Trump. Biden himself is not authoring or offering anything other than the kind of continuum that got us into this mess. In fact, of course, Biden was one of the architects of neoliberal policies and endless war.
I think you should be clear, we should be clear, that it's not just voting against Trump. You are voting for something. And, you know, I teach in a prison. We can begin with the Violent Crime Control and Law Enforcement Act of 1994, which Biden pushed through, which gave over $30 billion to police and prisons. Biden pushed all the death-penalty issues. He was one of the architects of NAFTA. He was one of the cheerleaders of the war. And we can go all the way back to his misogyny in terms of going after Anita Hill. He was a segregationist. He had many times called for assault on Social Security.
Look, there is no way within the American political system to vote against the interests of Goldman Sachs. So whether you have the more civil and palatable face of Biden or the narcissistic, divisive, racist rants of Trump, the actual system of corporate power is untouched.
WOLFF: And would you say that the Trump-versus-Biden is also a symptom of an empire declining? That in moments of crisis like this, this is the best you can come up with?
HEDGES: Yeah, of course it is. And let's be clear that Biden was selected by the Democratic oligarchic elite. Figures like Lloyd Blankfein, the former CEO of Goldman Sachs, and others made very public that if Bernie Sanders — to a lesser extent Warren, but particularly Bernie Sanders — was the nominee, they would vote for Trump. So the whole least-worst issue only applies to me and you. It doesn't apply to them. And so they anointed Joe Biden because Joe Biden serves their interests in the same way Trump does.
And in that sense, the political and economic system is completely fixed. I want to add that it's not a solution because a continuation of the kinds of policies the Democratic Party has — after Clinton sold out to corporate power — has imposed on the American people is inevitably — and I think history bears this out — going to result in a fascist with brains, a competent fascist.
WOLFF: What do you see as positive going on? What hope is there that we can find a way forward, other than the trails marked out by the Republicans, the Democrats, and all of that?
HEDGES: Well, the street protests. And I think what has struck me about these protests — triggered by the kind of indiscriminate police murders disproportionately targeting people of color, well, African Americans in particular — is that there's a sophistication. They aren't being gaslighted by Nancy Pelosi in a kente scarf; or police taking a knee; or Muriel Brower, the mayor of Washington, painting in 35-foot-tall letters “Black Lives Matter” in front of the White House at the same time she calls for a $45 million increase in the police budget and the building of a $500 million new jail. They're not buying it. And that kind of gaslighting by the elite, and in particular by the Democratic Party, isn't working. So any hope comes from sustained mass civil disobedience, the kind of uprisings — and it's interconnected, because neoliberal economics is global — that we've seen around the world: Lebanon, Chile, and everywhere else. That's where the hope lies.
And I think there is an understanding, in my sense, of those who are leading these movements, that they grasp that these are systemic problems that have to be addressed. They're not reduced to the political personalities of Donald Trump or Joe Biden.
WOLFF: Chris, we've come to the end of our time. Thank you, as always, and I look forward, both on this program and on yours, to continuing the conversation.
HEDGES: Thanks, Rick.
WOLFF: Take care.
Transcript by Marilou Baughman
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