Economic Update: Persuasion vs. Polarization

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In this week’s show, Prof. Wolff discusses the massive strike of Canadian public employees; economics of the unemployed; business owners, executives and lawyers dominate US state legislatures; and how rising interest rates push the most vulnerable to the margins of US capitalism. In the second half of the show, Wolff interviews Anand Giridharadas on his new book, The Persuaders.

Transcript has been edited for clarity

Welcome friends to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives and those of our kids. I'm your host Richard Wolff. Today we'll be talking about unemployment; what the realities of it are, some interesting results from elections past, present and future, the story about who our elected representatives really are. And then finally more about the inflation and rising interest rates. And in the second half we'll be joined by Anand Giridharadas, who is an important commentator on events these days and has agreed to join with us. So let's jump right in.

I want to talk today first about an important strike north of the border in Canada. In Ontario 55,000 people, CUPE members, which is the Canadian Union of Public Employees, they are fighting a very basic strike. They have fought it now for weeks, maybe months leading up to it. It's been characterized by the effort of the Ontario government to impose, first in the bargaining sessions and then trying to do it by law, a settlement that involves two and a half percent for one group of workers per year increase and one and a half percent [for another]. I want to situate that: two and a half percent for one group of workers one and a half for another. Canada's current inflation rate is 11% per year. So offering workers this kind of an increase is a slap in the face. It means you're guaranteeing them a 10% loss in their standard of living, in their real income if inflation is going up by 11% and you're offering them one to two percent. Okay, the government tried to impose it by an obscure law. There was a reaction in which other unions came to the fore and threatened a general strike in that province, very important province of Canada, if they didn't withdraw that law. The government backed down, withdrew the law, but didn't basically address the issue.

And now they've come to a new contract, which is going to be voted on by workers as we go to press. The new contract is better. It offers workers 3.6 percent, proving, by the way, that militancy, strikes and threats of general strike have real effects. But they're still going to be (even if they get the 3.6% - way below what the inflation is doing to the whole working class, but to public employees, particularly...) And that's why the President of the Union has said how disappointed and unsatisfied she is with such an offer, even though they're taking it to their members to vote. Militancy north of the border, like that below, is a sign of a waking labor movement flexing its muscles and figuring out that that's an important thing to do.

I want to turn next to unemployment. And here I just want to get the facts out there, so that we stop talking about unemployment with that bizarre minimization that characterizes most public discussions of the topic. First of all, are there many or few? There are many. At a time when the President of the United States boasts, as he does repeatedly, that unemployment is down to the lowest in long time. That's correct, but that's not much of a statement when I tell you that 5.8 million of our fellow citizens - that's right nearly 6 million Americans - are unemployed by government count. These are people who lost their job through no fault of their own. They weren't fired for not doing the job or not coming to work on time or anything else. They lost their job because their employer made mistakes running the business and now is in trouble. And solves it, at least in part, by firing workers.

What is the unemployment benefit that people talk about? Well, let's be honest (which is what our political leaders have such trouble with,) the average weekly unemployment benefit in the United States in August of 2022 - that's the most recent data I could be sure of - was 389 dollars per week, very different from one part of the country to another. In Mississippi it was 215 dollars per week. In the state of Washington six hundred and twenty dollars. I'll put aside the bizarre reality that how well you do if you lose your job for no fault of your own is a coin toss that happens to depend on where you live and where your job was.

But I want to look a little closer. 389 dollars a week if you worked a whole year, all 52 weeks, no vacation would get you twenty thousand dollars. Okay, what is the poverty line in the United States for a family of three? Here we go: twenty three thousand dollars. If you earn less than twenty three thousand dollars and you're part of a family of three you're in the poor people category - the bottom of the barrel in our society. And unemployment puts you below that. That's right, unemployment pays you very badly in this economy.

There's something called the replacement rate, which the government keeps. And that measures how much of the wage you were earning before you went unemployed, before you lost the job. How much do you get in unemployment insurance relative to what you were earning? Here we go: as of the first quarter of 2022 that number was 39.2 percent. That's right, 40 percent of what you were earning before you went unemployed is what you get. So when someone tells you how the unemployed have it good look at them and realize you're talking to someone who's either ignorant or has some kind of hustle to pull by pretending unemployment is anything other than the scourge we impose on six million of our fellow citizens who lost their job, and I quote, through no fault of their own. I mean, it's extraordinary what we are doing to these people.

And now let me point out also that the number of weeks that you're eligible to get it varies in this country. It goes from roughly 26 - half a year - down to 13 in some states. After 13 you're on your own, Jack. You now qualify for the most extreme poverty kinds of help. You know, standing online at the church in order to get that free meal once a week. Or going on charity supports of one kind or another. It's a remarkable way of treating, again, the six million plus (because that doesn't count to people who are out of unemployment and are not any more counted,) who are living under these conditions in a country that boasts it's one of the richest in the world.

Massachusetts voted, it turns out, to overturn an amendment that they had made to their constitution back in 1915. That was a big year for votes in Massachusetts. Two things were voted. Number one: they would never have a graduated income tax. In other words, the rich people wanted to make sure that what we do in the federal income tax - you pay a higher rate the higher your income - did not happen in Massachusetts. They fixed it at a flat rate. So the vote this year - 2022 - took over a century to undo that service to the rich. And for those of you that are history buffs [in] 1915 the vote also was passed in Massachusetts to deny women the vote. That is they had to keep fighting to get the vote later. Because in 1915 the good people of Massachusetts wouldn't let the women vote. Well, if Massachusetts now passes that bill it's going to impose a special surcharge on incomes over one million dollars a year to help fund schools and transportation.

But, of course, America is a country of contrasts. Though the governor Tate Reeves of Mississippi has announced his plans in the coming year to abolish the state's income tax altogether. Not a graduated income tax, not even a flat income tax, no income tax. And instead people will be paying higher sales taxes every time they buy something at the store. Which, of course, hurts middle and low income people much more than the rich.

Here's a statistic that I wanted to throw at you, too. In U.S legislatures there's a total of 7239 people elected in the state legislatures. A survey recently asked "how many of you come from the working class?" In other words, you have a regular nine-to-five wage paying job. As opposed to how many of you are business owners or executives. Working class: 1.1 percent of elected officials in the 50 States, business owner or executive: 37.3 percent - the owners 36 times more representatives in the state legislatures than the employees they supervise, hire and fire - helps explain why the laws of this country are rigged in a particular way, doesn't it?

And now we come to maybe the biggest issue. I left it for last today because of our time limits. The Federal Reserve is scheduled again to raise interest rates. And, again, most of the debate is about how much they will raise it. Three quarters of a point? Half a point? Possibly more or less than that? And, again, the question therefore is raised: why does the inflation get so bad? Why is it lasting so long? And why are you raising interest rates? Because the inflation already hurts people. We saw earlier in my program how Canada is limiting the wage increases of of 55,000 public employees way below the increase in prices they have to pay for the food and clothing that they buy. So why? Why add to the injustice of an inflation the injustice of an interest rate. Because an interest rate is an inflation. It's an inflation in the cost of money, the price you have to pay if you borrow on your credit card, your student loan, your mortgage, whatever. And, of course, raising the prices is most discriminatory against the middle income and poor people. Well, there is your answer to the question. We have the inflation and we have rising interest rates. Instead of a wage/price freeze - I've spoken with you about that before, - instead of a rationing system that would allow people to buy according to their need, not according to their income... we have alternatives.

But here's a hard reality: inflation is profitable. It's been profitable for the entire 18 months we've had this inflation. And that's a reason why the business community gives a lot of rhetoric about stopping it, but is cashing in the profits and looking for more of them. And that's the reason it's going so slow.

We've come to the end of the first part of today's show. Which, for those of you who may not know, is produced by Democracy at Work, celebrating its 10th year of critical system analyses and visions of a more equitable and democratic world. For example, David Harvey's podcast called Anti-Capitalist Chronicles is available at our website. It looks at capitalism through a Marxist lens. To find out about it go to the website democracyatwork.info. And while you're there sign up for our mailing list, follow us on social media and help us reach our goal of 300,000 subscribers on our YouTube channel. It helps us extend our reach and it is enormously appreciated. And you'll see all the other work that we do. Please stay with us, we'll be right back with today's special guest author Anand Giridharadas.

RW: Welcome back friends to the second half of today's Economic Update. My guest today is Anand Giridharadas. And he is an important fellow that I have looked at and read and followed and wanted to bring for a discussion with all of you. He's the author of the international bestseller Winners Take All, The True American and India Calling, a former foreign correspondent and columnist for the New York Times. He has also written for the New Yorker, the Atlantic and Time. He publishes the newsletter The.Ink and is an on-air political analyst for MSNBC.

So first of all, welcome to our microphones and our cameras. And thank you for sharing some time with us.

AG: Thank you for having me.

RW: Okay, let's jump right in. You have a new book The Persuaders. Can you just, to frame the conversation, give us an idea of what's your basic point there? What is it you want readers of your book to come away with as, kind of, the salient argument you're making?

AG: Well, this book The Persuaders is about the lost or dying art of persuasion in our democracy. You know, democracy is a big word that means a simple thing, which is the people choose the future together through talking, through arguing, through trying to figure out what kind of world they want together. And it is a rare arrangement in history. For most of our history people were ruled by, you know, kings and lords and tyrants who felt it was better to make decisions for the group instead of let the group talk things through and decide for themselves. In the last 300 years we blissfully transitioned to this system called democracy where we choose the future together through haggling about it and arguing about it and voting. And at the heart of the idea of democracy is the idea that you try to change other people's minds and they try to change yours and you change things by changing minds. But in the last few years I got very concerned watching the belief that persuasion is possible kind of disappear from our culture. And you hear it everywhere: "don't bother with those people, they'll never change their mind, they think this because they are that,they did this once therefore they're never movable." The loss of faith in the idea that people can change is the death knell for democracy, I believe. And I wrote a book about a remarkable group of people who are pushing the other way, who are fighting against that tide, who are suggesting that persuasion is still possible, that we still have to have faith in it because it still happens every day and who show how you do it, even in an age of polarization, division and flames.

RW: Okay, let me push you a little bit. Why have we come to this? In other words, what's your sense - and I know you've been thinking and writing about these issues for some time now - why are we here? What happened to the discourse, the discussion, the efforts at persuasion - left and right and so forth? Why have we come to a point where a book like this, in your mind, needed to be written?

RW: Well, I think a lot has been written about growing political polarization and tribalism in American life. And this is, by the way, happening around the world. I think what I became interested in is a follow-on from that. Which is the culture that develops around a polarizing society. And the culture that develops, that I observe developing, is not just the culture of people being far apart from each other or in their kind of respective trenches but really a culture of a mutual kind of contempt, a feeling that people are fundamentally, irrevocably different from you, that they will never change their ways. And this is, of course, abetted by some really serious phenomena in our culture that we should talk about. I mean the rise of social media has kind of encouraged the hunt for, you know, apostates more than the conversion of non-believers. It's more interesting and fashionable to kind of dunk on people on social media than to pull them in. You know, I think we have billionaire-owned divide-and-conquer hate-for-profit media like Fox News and Rupert Murdochs, you know, of the world who have inflamed our discourse for money and out of greed. And who have pushed us into this kind of culture further of, you know, enmity and and disgust for each other.

And I think the intervention that I wanted to make is that, you know, frankly right now it's not a Republican and Democrat, left and right thing. There's a pro-democracy, pro-freedom side in this country. And there is an anti-democracy, anti-freedom side in this country at this point. And I became very concerned that the pro-democracy, pro-freedom side wasn't winning. You know, in part because it had lost faith in this notion that it could persuade and was trying to, you know, just mobilize the faithful, drive up turnout.

And I think there's two problems with this notion. First of all, it's empirically false. You know, it's empirically false. A whole lot of people who felt one way about gay rights and gay marriage 20 years ago feel very, very differently about it today. That's one of the most bedrock, visceral issues in a society, right? I talked to so many young - not young, like middle-aged - gay people. Now, when they were young [they] could not have imagined the kind of shift in attitudes. A lot of people were persuaded, were persuaded about marriage. A lot of people were persuaded about the just dignity of people, regardless of their orientation. That happened in your or my lifetime. It's happened on the status of women in many of our lifetimes. It's happened on attitudes to trans people in many communities already. It's happened on race and demographics. It's happened on our attitude to our history.

We forget that we change people's minds all the time, that people change our minds all the time. And this kind of fatalistic pose that it's not worth the effort is often more of a commentary on the despair and depression and incapacity of the person making that claim than it is an empirical claim grounded in evidence. And I, again, spent time with a lot of people or activists, politicians, organizers and others who not only believe that persuasion is still possible but show how.

RW: You know, in my own life I've had on-and-off interactions with Bernie Sanders. And he figures among the people that you are talking about in terms of persuasion. And he is certainly a person - I've known him for many years - who tries very hard to persuade, and always has. And has been, given that he accepts the name socialist as applied to him, remarkably successful in an environment which was not friendly to that concept, to say the least. But I ask you, you know, in all humility, what happened to all those efforts that he made? It didn't work, that is it didn't get the results he had hoped for. He's trying, he's good at it. He's a person many of us admire for his stick-to-itness and his commitment to persuasion. But there do seem to be structural obstacles to, if not the side you represent and the side that I'm on too, and the other side, which feels it is fighting for democracy. It uses the word also and it engages in persuasion also. And it has done well enough, that the very feelings you just described exist. What are some of the structural problems with a successful effort to persuade?

AG: Well, the reason I wrote about Bernie's remarkable campaigns is that I think the question is complicated. Because on the one hand it is absolutely true that he was up against tremendous structural barriers because he was running on a program to restructure the United States in a direction, you know, to the benefit of people and away from the benefit of corporations. And there is obviously very powerful enemies to that. And, you know, my previous book Winners Take All was about how the very wealthy have erected those structural barriers and how they defend them. So that's kind of no stranger to me. But I think the case of Bernie and persuasion is a complicated and interesting case. And I write about it in the book. You know, including spending time with him for the book but also spending time with some of his advisors after he lost really processing and reflecting on what went wrong, or where he fell short. I mean, again, these were remarkable runs, right? Given who he is and what he's standing for, right? But there's also no consolation prizes in politics, right?

So I think with Bernie it was in many ways a test of a certain kind of persuasive method. One was his stick-to-itiveness, as you said, his moral clarity, his, you know, almost prophetic quality of just saying the same thing over and over again, you know, pointing to a future that people either come to or don't, not compromising to win people over. And I think that was a huge part of his appeal. And he got from, you know, a few percentage points of the American public up to 20-25%. Which is remarkable of your democratic socialist in a crowded primary. Because people really admired that and people really, you know, felt drawn to that.

The interesting question for his campaign, particularly the second time, was where's the next 10% come from? Where's the next 10% after that come from? How do you go from 25 to 35, 35 to 45? Those are going to be the people who don't like democratic socialism, like the next 10 percent of the people who kind of don't like it. Now the next 10 after that is gonna be people who actually hate it. And you need to win them too, right? As advisors we're really thinking about this problem. Like, if you're going to be the Commander-in-Chief of the United States you're gonna have to win a ton of people who don't like socialism but they want to go where you're going. How do you do that, right? And I think this is where Bernie faced a really difficult decision. That had to do with his willingness to adapt some of his methods of persuasion, right?

Aristotle talks about, you know, logos - a kind of logical appeal - versus a more pathos - emotional appeal, - right? And Bernie was someone who really stuck to: I want to stick to the facts, I want to stick to the policies, I want to keep things as they are. And Bernie really resisted feeling, sentiment, emotion, you know? And I think in some deep way Bernie resisted the idea of voters as they are. And I think in that sense, although he's not a, you know, tried and true Democrat, he's in many ways emblematic of the Democratic Party. That in some ways is a high-minded party, that in some ways believes with Aristotle in that logos notion that you can kind of speak to the brain directly and people will come, people will follow.

I think in some ways Democrats, in general, are like that: Build Back Better, 72 point plans, Elizabeth Warren. I mean they're really speaking on this kind of faith that people are smart, people are engaged, people will read bullet points. And, while I admire their view of human nature because it's almost soul-stirring, I think it's dead wrong and inaccurate. And I think, you know, Bernie, for example, is someone who's almost unwilling to tell people the really searing personal stories in his life that motivated some of his stances; his mother's struggle and untimely death when he was a late teenager from a bad health care system that didn't treat her right. It's hard to think of a politician who wouldn't put that front and center if Medicare-for-all was your signature domestic issue. Bernie just didn't talk about it. His father's family is murdered in the Holocaust and he was running against an actual Nazi in Donald Trump. And he wouldn't... you know, a couple times he mentioned it, right? But someone else who had family, you know, murdered in the Holocaust might play up a kind of moral passion for having personal reasons to fight this kind of thing.

And so there's different versions of this persuasion dilemma. But I kind of believe that Democrats need to be willing to play on all cylinders, not just be cerebral but play to emotion, play into the reptile brain, have a better understanding of psychology. And I think what a lot of the Bernie folks I talked to and kind of after action what they... well, many of them agreed in different ways was that if this movement is going to win it's got to be like a four engine movement, it can't just run on policy and logos and the brain.

RW: Okay, let me ask you a final question, because we're running out of time. Do you think that the material that you covered in your first book - the corporate sector - is there a possibility that the corporate sector creates an environment in which the Democrats feel they have no way to go other than to focus on those kinds of issues? And that you would argue, despite that, the emotional issues have to be brought into the fore?

AG: Well, I would argue that it's precisely because there's so much corporate power and control in America that there's no rest for the weary, that Democrats have a huge structural disadvantage, they have constitutional structural disadvantages in the Electoral College and gerrymandering and the Senate and many other things that inherently allow Republicans to govern with a minority. And so that's not fair and I would like to change that. But we're not going to change that without winning some elections big time. And a lot of what I wrote about in this book is what you have to do to defeat the structural barriers I wrote about in the previous book.

And I think, you know, having an astute understanding of voters, of their psychology, of emotions, of fear and anxiety isn't beneath those who want to save America from fascism. It's what they need to do.

RW: Very similar arguments were made about the Germans and their experience with fascism and what the left did and didn't do there as well. Well, we've come to the end of our time. I want to thank you. And to all of you I hope you found this as interesting as I did. And I look forward, as always, to speaking with you again next week.

Transcript by Brendan Tait

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About our guest: ANAND GIRIDHARADAS is the author of the international best-seller Winners Take All, The True American, and India Calling. A former foreign correspondent and columnist for The New York Times for more than a decade, he has also written for The New Yorker, The Atlantic, and Time, and is the publisher of the newsletter The.Ink. He is an on-air political analyst for MSNBC. He has received the Radcliffe Fellowship, the Porchlight Business Book of the Year Award, Harvard University’s Outstanding Lifetime Achievement Award for Humanism in Culture, and the New York Public Library’s Helen Bernstein Book Award for Excellence in Journalism. He lives in Brooklyn, New York.

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Showing 5 comments

  • Kelena Kelena
    commented 2022-12-14 03:54:22 -0500
  • Maria Carnemolla-Mania
    commented 2022-12-01 12:03:02 -0500
    Dear Ricardo,

    Prof. Wolff will correct the numbers of homeless and unemployed in a future program based on your email. Thank you for your feedback and for engaging with us.

    Sincerely,

    The [email protected] Team
  • Ricardo Villreal
    commented 2022-11-30 23:20:30 -0500
    Mr. Wolff is forgetting that in America there are at least 10 million homeless people who are not registered and unknown in the unemployment rolls. So there are at least 15 million workers unemployed living from handouts. Millions of Seniors are not counted as unemployed because they are “retired” and can’t of their age they are not hired even though they still can work. Work has become a luxury in America and all you have is starvation wages working at Walmart and McDonald where workers are abused and misused to say the least. In these company there is no sick leave, no wage raises, no health protection and if a worker gets Covid he or she has only 5 days to come back to work or get fired even if the worker is still infected with Covid. Workers at Walmart have to abide by an infamous point system. When workers get sick and if they don’t show up for work he or she get a point regardless if they have a legitimate excuse. If they get 5 points this is ground for their dismissal. My disappointment in all of this is why workers at Walmart have not unionized and have to put up with all of that mistreatment. An answer to this is ignorance by workers who have no idea that the union is their best protection. It is sad that union leaders have become so bureaucratic and aristocratic that they don’t care about other workers in the service sector in particular. Craft unionism has been guilty of this and has lived up to the expectations of the ruling capitalist class in its divide and conquer strategy to divide up the working class into thousands of unions each one separate from the other with no solidarity between them. I remember the grocery food chain store when thousands of workers in San Diego in the early 1990s (Vons, Ralph, Food for Least, Safeway, etc.) went on strike. To may amazement Teamster union truckers were bringing in food supplies to the store not respecting the strike. After 6 weeks of strike the workers lost the strike and capitalist food store owners fired most of the striking workers and thus imposed their own harsh rules.
    There was no solidarity between unions in America and this is their biggest weakness and this how the capitalist class and its government wants it.
  • Edward Dodson
    commented 2022-11-30 12:14:26 -0500
    Certainly, rising interest rates makes it more difficult for many households to afford to borrow to make purchases, particularly of a residential property. First-time buyers are affected most because of the difficulty of accumulating savings given the high apartment rents they are paying. Thanks to our dysfunctional, credit-fueled and speculation-driven land markets, land prices climbed higher and higher after 2010 as mortgage interest rates were lowered by the Federal Reserve to below the official rate of inflation. Owners of land (whether vacant or improved with a building) increased asking prices to the level the market could absorb, meaning that buyers were able to be approved for higher and higher levels of mortgage debt.

    Solving the problem requires taming our land markets. And, economic theory tells us very clearly that the only way to tame our land markets is by the imposition of an annual tax on land holdings equal to the potential annual rental value thereof. And, as housing is a depreciating asset, most housing units (at least those not considered to be mansions) should be exempt from the annual property tax.

    Edward J. Dodson, Director
    School of Cooperative Individualism
    www.cooperative-individualism.org
  • Ken Swanston
    commented 2022-11-29 02:53:09 -0500
    The overwhelming influence of corporations and industrial groups and the 1%ers for lobbying and contributions to PACs and Super PACs (Citizens United) is leverage that will NOT be easily given up…EVER!…in America.
    To overcome that, now inherent, advantage will take a consistent and concerted effort by grass roots individuals across the WHOLE country and I don’t see that happening.
    The corporations know they can, and do, control legislatures and issues at the municipal, state and national level by simply controlling the choices available at the ballot box…on both sides of the isle. Coupled with overwhelming control of media and social exchange apps they have the ability to not only filter issues, but shape the attitudes towards those selected issues to their benefit and further secure the advantages they hold over the common man/woman in America.
    As I’ve said before, America has the best government…BIG MONEY CAN BUY!
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