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 our children's. I'm your host, Richard Wolff.

I want to start today with the coal industry. It's a very sad story. It's an industry that's fading out, for all kinds of reasons — above all, ecology and cost. And it is giving way, as we know, to other forms — safer forms, cheaper forms — of energy. The tragedy of the coal industry is really summarized in one word: capitalism. And what I mean by that is that as the coal industry shrinks, the communities that depend on it — the workers and their families that depend on it — are left behind. It is no surprise that they fight back. They don't want to give up their jobs, their incomes, their communities, the schools their children attend, the towns they live in, the people they know.

There ought to be, of course — and you all really know this, even though the media pretends not to have this in mind — you know that what ought to be done is a national program. If we're going to phase-out any industry, in this case coal, for good reasons — ecological, the health and safety of the American people, and the fact that it's also cheaper to do something else; those two together are powerful arguments — we should help those people. They are our fellow citizens. What's happening to their industry can, and sooner or later will, happen to whatever we are engaged in, and we would want to be helped, just as they deserve to be helped.

And what do I mean by helping? First of all, don't lose your income if the industry is one that we are moving away from. Maintain those people's income, those working families. Number two, have a program in place to help them train for, move to, other jobs that should be guaranteed for them. A program to let them choose the kind of work, the kind of place they would most like to go to. Come on, we know how to do all of that. And if we did it, then the mass of the local people wouldn't fight to keep an industry going that is dangerous and unhealthy for others. They wouldn't become prey to hustling politicians who make up stories about how we shouldn't think it's dangerous when we know it is, and how we shouldn't think it's a good idea to get out of that industry when we know it is.

We are engaged in endless struggles. Look at how Trump pandered to the coal industry for votes, and got them, by promising to end the end of coal, which of course he didn't do, because his promise in that area was as empty as in most others. But we should be helping. That way there wouldn't be an opposition because the mass of people would know that they're cared for, that they're helped, that their families will not be destroyed, that their income will not be destroyed. It's bad enough if they lose their community and have to change jobs; that's enough. The rest should be helped.

My second update has to do with Brazil. Why Brazil? It is one of the worst locations of COVID-19 in the world now. A recent week was the worst week since this pandemic began in Brazil. Where other countries are seeing a downturn in cases and deaths? Not in Brazil. This is a country of 212 million people. It's the biggest country, by population, in all of Latin America. It's got the second-highest pandemic death rate after the United States. If you look at the situation in Brazil, there's a huge variation in what is done for people who come down with the disease. In many parts of the country, next-to-nothing is done for them. The availability of vaccines is very spotty, very uneven, very unfair. The hospitals are overflowing. And I'm using only the statistics that are coming from Brazil, from the officials in Brazil, who have to admit it. Their economic system is a basket case; there's no nice way to put it. And there's no end in sight, especially as the new variants of COVID-19 show up and are resistant, in one way or another, to the little bit of procedure and vaccine that Brazil has.

And then on top of it — and part of the reason why I chose to talk to you about it — were the recent comments from Mr. Bolsonaro. For those of you who don't know him, think of Trump in a Latino version. Mr. Bolsonaro gave a speech — I kid you not; you couldn't make this up — in which he advised the people of Brazil, who voted him into office, to (I'm quoting now) “stop whining” about the disease. What he meant, of course, was stop whining about my horrific mishandling of this disease. Like Trump, he said in the beginning it was nothing. Like Trump, he said in the beginning it would pass quickly. Like Trump, he spent no time, no energy, and no government capital trying to develop a comprehensive program. And now his people are sick and dying from his neglect. It is interesting that the three countries in the world suffering the worst scourge of this disease — the United States, Brazil, and India, ranking one, two, three in horror — are all led by, quote-unquote, “strong-men governments.” Bolsonaro in Brazil, Trump in the United States, and Modi in India — right wingers, anti-immigrant, scapegoat specialists, failures to protect the public health of the people they claim to lead.

My next update goes to the stock market euphoria in recent times in which people are saying something very strange and very, very wrong: We're going to have a boom — I'm told; I read it in the financial press — because there's pent-up demand, you see. Over the last year of the covid pandemic and the economic crash, people have not had money, and they haven't bought stuff, and they haven't gone out of their homes, and they've been scared, and they've hunkered down, and all the rest. And so, the argument goes, as soon as we're out of this, which is going to happen any day now because of these wonderful vaccines (please know that I'm joking — bad joke), we're going to have a boom, because everyone's going to go out there and shop till they drop.

Here's why that's wrong. The parallel is drawn with 1945, when finally we’re at the end of World War Ⅱ, when people had hunkered down and pent up demand, they exploded with buying things in the late ’40s and ’50s and ’60s. And that was a period of economic growth. There was something to that in 1945. So I'm going to concentrate here by explaining why the situation we're in now is not like 1945, and therefore there's no reason to expect — let alone to bank on — some boom happening now.

So let's begin. Number one: In 1945, Americans had not bought things and had pent-up demand not for one year, as we've had now with covid, but for 15 or 16. Because it was 1929 that the crash, the Great Depression, happened. That lasted from 1929 to 1941. And then we had immediately World War Ⅱ from 1941 to 1945. You put it all together, it's 16 years of not painting the house, not repairing the car, not buying your kid a bicycle — none of the things that people might have some pent-up demand for for 16 years. Nothing like that's true now. We've had pent-up demand for a year. That's an important difference.

Number two: In 1945 the level of debt of the average American family was a small fraction of what it is today. People are now having to spend a significant portion of their incomes servicing the debt — paying the interest, and the principal — of a debt that's accumulated. Mortgage debt, car-payment debt, credit-card debt, student-loan debt. You put all those together, they're in the many, many trillions of dollars. And people are having to shovel income over to take care of the debt before they have anything to spend at the mall.

Number three: The United States came out of World War Ⅱ in 1945 king of the hill. Every other capitalist competitive country — Britain, France, Germany, Japan, any other one you might mention — had been destroyed in World War Ⅱ. The United States had suffered no war on its territory, other than the opening salvo at Pearl Harbor. Other than that, the war was fought in France, in England, in Germany, in Russia, in China, and so on. So we were alone. We had no competitors. We produced; the rest of the world bought. There was no option. That's not our situation now. The United States has a very powerful competitor. If there were to be a boom in spending, a huge amount of it would go to that competitor. It's called the People's Republic of China. And they produce the clothing, and the appliances, and now the automobiles, that Americans will buy, if they buy anything. And that would produce income and jobs over there, not here. We did not have that situation in 1945.

Finally: 1945 was a much less unequal America than the one we have now. Much of the income that this country now earns is concentrated in people who are so rich that they haven't cut back their consumption. They're not going to explode because they never had to cut back. You're confusing your situation, and mine, with theirs. Big mistake.

You put all that together: no boom.

My final update is about Elizabeth Warren's wealth-tax proposal. It deserves a commentary. Her idea is simple: no tax for 99.9 percent of the American people. So let's begin. Her proposal exempts from taxation 99.9 percent of people. So unless I miss my guess, nobody I'm talking to now is in line to pay this tax. It is on one-tenth of one percent — people who have assets over, wealth over, $50 million. Because the first $50 million of everybody's isn't going to be taxed. You can all relax now.

Okay. How is it going to be taxed afterward? Two percent on what you have above $50 million will be taken each year. If you have more than a billion, three percent. To call this modest is one of the great understatements of human history. Let me give you an idea what that means. If you're a person who has $50 million or more, then you are aware (and let me help you if you don't know about this) that you don't take care of that money because you don't know how to do that real well. You give that to something called a hedge fund, or a capital manager, or all kinds of terms of specialized people. They take a fat fee, but they invest your money. And they will tell you, as they will today or tomorrow, that they can do at least five to ten percent. Okay, so if you have more than $50 million, you're gonna make five to ten percent a year — it's gonna grow. Two percent of that five to ten is what you'd have to give the government. Which means even after the tax, your wealth will grow.

And yet the people who’d have to pay that are screaming bloody murder. It is even grosser than what we have that those people shouldn't have decided they ought to pay their fair share. It's just this side of disgusting, and maybe not even this side.

We've come to the end of the first part of today's show. Before we go to the second half, I want to remind you about our new book, The Sickness Is the System: When Capitalism Fails to Save Us From Pandemics or Itself. It's available at democracyatwork.info/books. I want to thank our Patreon community for their ongoing and invaluable support. If you haven't already, please go to patreon.com/economicupdate to learn more about how you can get involved. Please stay with us; we'll be right back with our great guest, Bob Hennelly.

WOLFF: Welcome back, friends, to the second half of today's Economic Update. I am very happy to bring back to our cameras and our microphones a friend, Bob Hennelly. Bob is an award-winning print and broadcast journalist. He is a staff reporter for The Chief-Leader, a New York City-based newspaper that has been covering labor unions since 1897. Bob is also a regular contributor to Salon magazine, where he writes about economics and politics. Over the years, he has done reporting for quite a list of outlets, and here they are: CBS's 60 Minutes, The New York Times, The Village Voice, The Christian Science Monitor, CBS Money Watch, National Public Radio, WNYC, and the Pacifica Network. So, Bob, welcome again. And I'm very happy to be able to pick your brain for all of us.

HENNELLY: Thanks for having me, Rick.

WOLFF: Okay, let's jump right in. As we're recording this, it's a few days after the Democratically controlled Senate abandoned the $15-minimum-wage mandate as part of President Biden's $1.9 trillion covid-relief package. This comes on the heels of reporting that the pandemic has caused poverty to go up, food insecurity (that's the current euphemism for hunger) to go up, and to do so dramatically. What, in your opinion, could the Democratic Senate majority possibly say to justify such a retreat, such a collapse?

HENNELLY: Well, I would say that initially, if it hadn't been for Senator Sanders forcing the question by having the vote, they were hoping that the Senate Parliamentarian’s ruling — the $171-a-year Senate Parliamentarian’s ruling — prior to the vote basically had tried to give them some cover by saying they could not vote for the minimum-wage hike from $7.25 (last raised in 2009) to $15 by 2025 because it didn't fit the criteria for the reconciliation bill. I'm sure people are aware that’s this unique circumstance when you have a deadlocked Senate, where the vice president can break the tie, and there's certain room for the Senate, on a simple majority vote, to bring things up. And so they had thought that they wouldn't have to have this moment of truth.

What they are saying now, I'm sure, if you look at the senators that are in there — you have the two senators from New Hampshire, a state that I understand does not have a minimum wage except for the federal minimum wage — and you have a situation where they'll say that small business couldn't take it. That would be their defense. But the reality is, what happened was, we passed, and were on their way to passing, certainly by the end of this week, a $1.9 trillion program that will be taxpayer-funded, that will require significant government borrowing.

Meanwhile, what the Republicans — the 50 that voted with the several Democrats who were against the minimum wage — what they've done is kept the ability of major corporations to continue to amass huge profits of an unprecedented scale, while not paying a living wage to the 20 to 30 million people that would have been directly affected by it. So what this consensus has done, this “corporate consensus” by people who are millionaires, who raise billions to hold onto their office, is to keep capital formation safe. That's it. That's all they accomplished there by doing that.

And so, there are some important things in the program — increased deductions for children, certain important aid to local, county and tribal governments — yes, that's in there. But in terms of the structural kind of change that they promised on the campaign trail — that's what they're not delivering on. And I had a conversation with Rev. Dr. Barber, whose Poor People’s Campaign and Moral Monday was really the political grassroots architecture that the Georgia Democratic movement was built on. And, in fact, an argument can be made that it was those poor, low-wealth voters that turned out — six million more than last time — that put Biden and Harris in power. And yet it appears they have forgotten them. And as Dr. Barber says, it's time to hold those Democrats accountable, just like they held accountable Donald Trump for his abuse of authority.

WOLFF: Yeah, I don't mind adding, as we said on this program, the excuse is so phony. If you want to help the millions who need a higher minimum wage, and you don't want any small business to suffer, there are a dozen ways — and they're all familiar with them — to help small businesses that are confronted with a rising wage bill. That could easily be done. But to use the poverty of the worker, and to beat them over the head with the difficulties of small business — as if you couldn't deal with both of those problems — it's revolting. It’s as phony as a (pardon me) four-dollar bill.

Okay. In the debate over Biden's covid package, Republicans and centrist Democrats have argued that it's too big because the economy is already recovering. But you've done the kind of granular reporting at the local level. Do you find the economy recovering? Is that an argument not to help the mass of people, the one they're making?

HENNELLY: Well, I think this is important, because it goes back to the original sin, if you will, of slavery. And that's that we have remained blind in this country to the vast portions of our country where the economy's not working. This is a congenital problem. And so you have a situation where, even before the pandemic — and this is something Dr. Barber brings out in the interview I had with him — you had 250,000 people dying a year because of inadequate access to health care. That's before the pandemic. And as he points out, you had seven vaping deaths and were convening a White House and congressional conference on it — meanwhile, 750 are dying a day for lack of health care. That's before the pandemic. So this chronic underinvestment, three years of declining life expectancy — now capped by something you can see from space in terms of the decline of life expectancy — is added onto this unraveling that's occurred of the social fabric, on a scale that's hard to imagine.

Millions of women being pressured out of the workplace, giving back a generation of gains, because we have no social safety net. So if someone is sick from covid — and let's keep in mind that we're talking about 30 million infections where we're at today — we know at least a third of those who survive will have some chronic health-care issue, of varying severity. Who's going to be caring for those people? Primarily, in our society, women. And add the lack of dealing with education means that they're dealing with homeschooling. So all of that stuff that was built up, that infrastructure we had that was weak, depending where you lived, has all but collapsed. And there's been no uniform standing it up.

And so, as I speak to you now, we have states like Texas and Florida, where the governors have decided to flout any basic public-health requirements. And if you look at the several states that didn't want to invest in Medicaid when they had a chance, it's exactly like [inaudible]. So we keep seeing this same thing played over and over again. And this recovery act is just kind of like the same thing that happened with — I know this might be blasphemy, but — FDR. We like FDR. But the reality is, faced with the political crisis of his time, he wanted to get the Wagner Act through, and the Fair Labor Standards that set a minimum wage. And surprise, surprise, he/they cut out domestic workers and farm workers — leaving out a huge chunk of the primarily female and people-of-color workforce. This has been ongoing.

WOLFF: It makes you really stop and recognize the cost to this society of the political establishment that keeps finding itself a way to stay in power.

I want to ask you about something you and I have discussed. Tell the audience what your research has found about this, quote-unquote, “food insecurity” issue here in the United States, both before, and as a result of, the pandemic.

HENNELLY: It has been largely invisible for a long time. One of the things is that the United Way is a national charity. And it's the kind of place that if your life's coming along, going well, and you lose your job, and you’ve got to feed your kids, you can call. And they pride themselves on providing that kind of spot relief. Funny thing happened in 2008. They're getting calls from Morris County, New Jersey — wealthy place, if you look at it 10,000 feet and look at the analytics and the data. Because the federal poverty number doesn't even show up; there's not even a blip of poverty there.

What they were finding was that New Jersey, because of its high rents and utilities and child care costs, had created this whole missing cohort of a population. And they realized they were employed but had a low income. So they came up with this phrase, ALICE — Asset Limited Income Constrained but Employed. And, Rick, there's an army of ALICEs. People know ALICEs. You may be an ALICE. And these are folks that aren't in the poverty level, but struggle week-to-week and have to give up something in rotation to get by. These are the people the Federal Reserve told us before the pandemic couldn't come together with $400 without borrowing. There was an army of those people before. Now it's off the charts.

So in places like New Jersey, you have some counties where maybe one in nine kids were having trouble knowing where their next meal was coming from. Now it's one in three in certain counties. And it's also aggravated by the fact that, in this country, for a long time now — and teachers know this, and people that are child-centered — many children got one, if not two, meals from their school. So when you get rid of in-person instruction, you've collapsed that critical piece of the safety net.

WOLFF: In other words, the diet of the kids is negatively affected as well, by the school problem.

HENNELLY: Yes.

WOLFF: Okay. I'm worried about the time limit and the amount of material we can get in. Quickly, what's your sense of what's going on with vaccines? Are the vaccines some magic bullet that's getting us out of the woods here, or what?

HENNELLY: Well first of all, despite all of the protestations by the power structure that they're so aware of the vast inequities revealed in terms of racial and economic inequalities by how this covid has played out — well, the vaccine, in terms of access, what we're seeing is white, rich people get access to the vaccine. Oh! It's a shocker! I'm so shocked. But the reality is that depending on where you live — like my experience of it was a totally professional, organized situation; in other states it's random. It's kind of like gambling, in terms of online gambling.

And so this is an example of, while it seems that there's more of it around, you have a situation where we don't have a coherent strategy, even now. For instance, whereas the CDC/Biden administration wants in-person instruction to start again, the president “signaled” that he wants teachers to be vaccinated. But here's an idea: How about saying if you get any federal aid, you can't open in-person instruction until your teachers are vaccinated (assuming they want to be vaccinated). See, we're not acting according to the scale of the problem. That's why we're still reacting to the problem just like we're not geared up for the massive challenge to health care that's from the long-term consequences of covid.

WOLFF: Yeah, it's amazing, this sudden hesitance to do the mandates. It's amazing. Especially after that reporting of the Florida governor somehow making the vaccines available in elegant, upscale, gated communities. Extraordinary.

Yeah, all right. We have almost no time left. Very quickly — you cover labor — how would you assess the labor movement? How is it now? How has it been affected by the pandemic? (And we really only have 20 seconds.)

HENNELLY: Okay. What's happened is, if you're in a union that's activated and is a public union, you're probably faring better. And the unions continue to lead the way around the country for even the basic accountability. The US Postal Service, for instance, will not disclose how many people died who worked for the post office. And the only people pressing for that answer are some members of Congress and the postal unions.

WOLFF: Okay, I sure hope you're right. We certainly need help, and the labor movement could provide it. Bob Hennelly, as always, you're not only a good reporter, but you're a good communicator of what you've learned to report. Thank you very much for being with us.

And to all of my audience, thank you very much for being part of this. And I hope Bob's reporting is as helpful to you as it has always been to me. I look forward to speaking with you all again next week.

Transcript by Marilou Baughman
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