Economic Update: Political Divides Deepen

[S12 E25] New

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In this week's show, Prof. Wolff presents updates on US's groceries inflation; US teacher crisis; capitalists profiting from guns and protection from guns, UN report on global suffering from Ukraine war's and sanctions regimes' costs to world's people in terms of fuel, food, and interest rate inflations; and median New York City rent of $4,000/month make city housing increasingly unaffordable to most New Yorkers. In the second half of the show, Wolff is joined by Katie Halper: podcaster, writer, and filmmaker who talks about political decline in the US.

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. I’m your host Richard Wolff. Today I'll be discussing more fallout from guns, the global impact of the war in the Ukraine, rental, inflation, and more. Then in the second half, I'll be talking with podcaster and journalist Katie Halper.

I want to begin with an inflation number that says most important things. First, this is a number I'm about to give you that measures the increase in prices of meals taken at home. In other words, what has happened to the prices of those things we typically buy in the supermarket and take home to eat or in the department store and so forth. But mostly this number measures eating supermarket food at home. Prices rose over the last year 12%. Keep that number in mind. To eat at home is 12% more expensive than a year ago but the measurements the government and others are taking for how much more American families are paying and spending on groceries and food to eat at home only went up 4%. Okay, here’s what we economists do if the prices went up 12% but Americans are only spending on average 4% more…here’s what we know—either people are buying less food than they did last year or they're shifting from expensive food to cheap food…from hamburger to hamburger helper, from real food to processed food—in which the word process substitutes for mixed with the cheapest grains we can get away with. This is a ratcheting down of the standard of living of the American people. That's what's being organized by the businesses that raise the prices and the Republicans and Democrats that let them do it.

My next update has to do with teachers here in the United States and the numbers here are so striking, I wanted to share them with you. During the 1970s, roughly 50 years ago, education programs and education schools were producing 200,000 new teachers per year. Today they are producing 90,000 new teachers per year—less than half. Yes, our population is not growing now, the way it did back in the 70s, but the difference is not anything like that would explain this. What's going on? Here we go…low key, low key pay, low wages. Teachers are paid very poorly in the United States compared with other people who have comparable education. Then there's the pandemic…then there's the unemployment of teachers…then there are the school shootings…then there are the school budget cuts…then there are troubled conditions at home that make for young kids that are needier in terms of the teacher's attention than they used to be—and now, there's political fighting over the curriculum. You put all this together and you're doing what as a society? You're shooting yourself in the foot. You are compromising the education of your own children. You are making it harder for the next generation to find a way to live decently, to work, and contribute in this society. Biden and the Democrats sit by while the Republicans misunderstand what's going on and propose their usual solution for everything which is private schools—as if that would make any difference at all. It’s a tragedy and it should not go unnoticed.

Then I wanted to talk to you briefly about another aspect of the gun situation you might not have thought about. More and more institutions in the United States are responding to gun shootings and the proliferation of guns and carrying of guns by setting up programs to screen for guns, to identify who's got a gun, where they're going with it, and so on. I’m going to give you the names of some of the places that have hired gun protection companies. It's a whole new industry. Here we go—North Carolina’s Charlotte-Mecklenburg school system, the entire University of Wisconsin, Camden Yards sports arena in Baltimore, Toronto’s Pearson International Airport, Port of Tampa cruise ship terminal, Oxford High School in Michigan, and many others. Here are the names of some of the companies that will keep an eye and help protect you against the guns. ZeroEyes is one of them, Liberty Defense is another, [and] Evolv. Now guess what? These companies are going to have an incentive for there to be and [continue to be] guns in our culture because their entire product is protecting people against it. So, the capitalist profit motive leads the gun producers to market guns directly and through the NRA like it’s going out of style and that has provoked a whole new industry to protect others from the guns that some of us are carrying. I mean, it is becoming crazy and profit is driving both and both the gun makers and the protectors against guns need to have the guns around if they're going to keep making the money. Very dangerous…peculiar how capitalism works with guns isn't it?

I now want to report to you about a report issued by the United Nations dated June 8, 2022. It’s called Global Impact of War in Ukraine and it speaks of what it calls quote “the extreme suffering of billions.” That's with a b…billions of people. Here are some of the highlights of that report: 60% of workers in the world have lower real incomes today than they did before the pandemic. In other words, they had less income with which to try to cope with the fallout of the war in Ukraine that I'm going to talk about. Sixty percent of the poorest countries in the world are now in debt distress. That is, they cannot raise the money they must raise to pay off the debts that when they borrowed money to get through the crash of 2020 or to cope with
Covid. Developing countries lack a total of 1.2 trillion dollars per year, to protect their people. 180 million are in a food crisis which means they risk dying from lack of food. [According to] the FAO, that's the food and agriculture organization of the UN, food prices rose long before Russia invaded Ukraine and they are now at their highest level ever. It’s impossible for more and more people to pay for food and fuel, let alone, everything else. Why is this important?

Well, for the following reason, the Russian invasion of Ukraine is part of the story, no question. The sanctions imposed by the United States and the rest of Western Europe and so on against the Russians then the counter-sanctions imposed by the Russians have at least as much responsibility for food and fuel price increases, as the war itself. But, now here's the reality—a much larger number of people are being hurt in fundamental ways by this war and the sanctions imposed as a consequence of the war…way bigger stakes than were at the beginning of the war. We know that the people on the ground in the Ukraine have suffered terribly, as people in the middle of a war always do, but we now see the rest of the world becoming collateral damage in a massive way. By the way, particularly for those of us in the United States and Western Europe, let me make clear how most of the rest of the world sees this war. This is a fight among Europeans and they don't seem to care that the resulting rise in prices of food and fuel is killing large numbers of non-Europeans. They [non-Europeans] don’t care about the outcome in Europe if it costs them this amount of mass suffering. The people involved, Ukrainian leadership, Russian leadership, US, and Western European…they better think about this…or else the costs of long-term political-economic hostility from the majority of the people in the world will be an enormous price to pay for this fight in Eastern Ukraine.

The last economic update I have time for today has to do with yet another aspect of the inflation. Median rents here in New York City, where this program is produced, crossed a milestone in May of 2022. Median rental hit $4,000 per month. By median I mean 50% of apartments pay more than that, 50% pay less, that's what median means. Let me give you an idea of a side effect of this explosion in rentals. Way higher. It’s, by the way, from a year ago it’s a 25.2% rent increase of the median rent in New York City over the last year. In May of 2021, there were 19,000 apartments listed for rent. In May of this year, 2022, 5700 apartments for rent—that’s a collapse. Three-quarters of the apartments for rent are gone and haven’t been replaced by anything. Realtors use a number which I want to share with you now. It's called the 40 times rule. Here’s how it works—you take the median rental per month and you multiply it by 40. So, in this case, $4,000 per month, multiply it by 40 because that tells you how much the household has to earn in income per year to afford a $4000-a-month apartment. It's a measure of apartment affordability. 40 times $4,000 is $160,000 a year, which is what you need to afford a median rent apartment in New York City. You know what the median income in New York City is? $80,000 [a year]—half. You are making city apartments unaffordable and the social consequences of that are going to play out in dramatic ways in the months and years ahead.

We’ve come to the end of the first part of today's show. For those of you who may not know, Economic Update is produced by Democracy at Work, that is celebrating 10 years of producing content focused on critical system analysis so we might, one day, be able to actually live in a more democratic and thereby, more equitable world. For instance, my latest book called The Sickness is the System: When Capitalism Fails to Save Us from Pandemics or Itself, is available. You can find it, along with other content we produce, on our website democracyat work.info where you can also follow us on social media, sign up on our mailing list, and support our work. Stay with us, we'll be right back with today's special guest Katie Halper.

Welcome back, friends, to the second half of today's economic update. I am very pleased, I'm honored to have you with us today and to welcome to the microphones and cameras, Katie Halper. She's a writer, a podcast host, a videographer, and more. She hosts the Katie Halper Show and co-hosts Useful Idiots with Matt Taibbi. She has published in New York Magazin, The Guardian, Rolling Stone, FAIR, Comedy Central, The Nation magazine, and more. She’s appeared on MSNBC and Fox News and co-produced films with Tim Robbins and Estela Bravo as well as working with Naomi Klein and Avi Lewis on their well-known film, The Take. She will be releasing her own award-winning film, Commie Camp, a documentary about Camp Kinderland, this summer.

So, first of all, Katie, welcome.

KH: Thanks so much for having me.

RDW: My pleasure. All right I want to pick your brain. I want to find out and I want our audience to hear how someone who works literally every day with the news…with watching what’s going on how it feels to you, how it makes sense. What do you think is going on—so let me begin by saying what I'm sure you know—that in the United States many people feel that we are now going into or have already been in a kind of crisis that could even end or make implode the system we live in and that some civil war might be building up. Certainly, people have said it. What’s your feeling as you look at your country, our country here? What is your sense of where we are?

KH: Well I think that a civil war is possible. I don't know how likely it is…but I feel like even with the status quo, we have a form of like, cold civil war where we have people who should be united…divided, being pitted against each other…people who share economic interests. I think there is a lot of instability and there's a lot of fear, justifiable fear, and anxiety. I also think that in terms of war, I think that there's a real risk of actual war. I mean… I think you and I talked about this on my show, but I'm kind of worried about the state of the anti-war left. I think we've seen a real weakening of the anti-war left and a real almost naivete among the anti-war left around the Russia Ukraine conflict—around Russia’s invasion of Ukraine. That is worrisome because I think that people are being duped by propaganda. Even people who weren't duped by propaganda when it came to Iraq or even Afghanistan—I think that they're being duped now. So that's worrisome.

RDW What about the idea that the culture wars, so-called, fighting around religion or abortion or guns and all of that is some sort of substitute…some sort of dry run maybe for a more basic civil war around economic and more philosophic issues. Is there anything to this notion of culture war as either preliminary form, if you like, of a more basic civil war?

KH: Well, I think the primary function of the culture wars is to serve as a distraction from, kind of, socio-economic shared interests. I think it lets the Republicans screw people over while pretending that they're fighting for their best interest. They can kind of distract people with these culture war issues and I want to be clear, I don't think something like abortion is unimportant, I just think that it’s something that Republicans run on, Democrats run on—in different ways, obviously, I mean Republicans run on it, trying to and sometimes successfully limiting a woman's rights to bodily autonomy and right to choose, reproductive freedom. They are very successful at eroding this right and obviously, we see this more. It's even scarier than ever with the Supreme Court. Then, you have Democrats who run on it but they haven't really done anything to codify Roe v. Wade but they get to fundraise off of it. I think that's really the function of the culture wars. It serves as a distraction and that way both Republicans and Democrats…there’s…I don't want to totally equate them but certainly, they're both beholden to donors and they both have overlapping…they share overlapping donors. What they're able to do is show these shiny objects you know, what would be the equivalent of a shiny object which are these culture war issues they get to hide behind those and continue to screw people over economically.

RDW: Well I notice, which I appreciate in your work, an interest in history and using history to make comparisons…to draw lessons. So, let me ask you to follow up on what you just said. What happened in your view to the Democratic Party?

KH: Yeah, that's something I think a lot about and I think it's really up for debate. In terms of the history of the Democratic Party selling people out—I’m a big fan of Thomas Frank in general, but especially of his [book], Listen, Liberal: Or, Whatever Happened to the Party of the People? I think that the Democrats were always more hawkish than people like to admit. They also were less…Roosevelt was unique I think in his—and you'd know about this much more than I would, as an economist—but Roosevelt was unique in how he championed the rights of working people. His social democratic approach to politics, which we haven’t really seen, we saw some of that with JFK and LBJ but I think that with Bill Clinton especially, we saw a kind of recasting. A more overt almost embrace of moderate politics…centrist politics. That and then, of course, there’s the Cold War, right?…which made Democrats run away from the left and afraid of their own shadows. That's a whole other issue but I think that one thing going back to Thomas Frank that is interesting is this idea that Democrats, it’s not that they're cowardly and inept. They actually don't want a lot of the things that they claim that they want—the things that they claim to champion. I grew up always thinking they were just kind of spineless but it's not spinelessness. It's actually political theater.

I think we have Clintonianism and then we also have a very dangerous weaponization of identity politics where identity politics are kind of hijacked and used to distract from economic exploitation. It’s the opposite of what it was invented to be when it was created (that term) by the Combahee River Collective. The women who did that were radical. The people who now have taken that term or that movement have totally hijacked it and so what we see is, for instance, Hillary Clinton, who famously said, “Will breaking up the banks end racism? No, and that was a straw man issue because no one was saying that breaking up the banks would end racism. She was clearly trying to undermine Bernie Sanders’ focus on economic justice and the irony is, of course, as you know better than I do, the housing crisis and the banking crisis were very racialized and the people who suffered the most were people of color. That is a great example of the cynical weaponization of identity politics to not only undermine economic justice but to also undermine economic justice that has very racialized components to it and that would have helped. Of course, breaking up the banks wouldn’t end racism but it just shows how little these people like Hillary Clinton actually care…they don’t. It's not only that they reject economic justice and don't see the connection between economic justice and racial justice or gender issues but they actually embrace policies which disproportionately hurt people of color while running as these champions of racial justice…while running as a feminist…same thing with not supporting Fight for $15, the minimum wage…raising the minimum wage to $15 which Bernie Sanders, of course, supported. Hillary Clinton didn’t. As people may know, the majority of minimum wage earners are women and people of color, so, again, it's just this example of progressive in name but not in policy. So we see that is, I think, one of the most dangerous things about today's Democratic Party is how they use these very important issues. Not only do they sell people out economically, but they're also contributing to this vast racial inequality.

RDW: So then, what is going to represent the people on the left who might once have seen the Democratic Party as, in some way, an expression of their needs wants, desires and interests. Are we forever condemned to have two conservative parties just with different names?

KH: Yeah, I don't know the answer to that. I obviously was someone, you can probably tell, who was a huge Bernie Sanders supporter and he was marginalized and denigrated. I think that, I go back and forth, honestly, on what I think about the Democratic Party. I mean, we live in a duopoly, obviously so and we live in a duopoly where there aren't that many progressives and even with the Squad we saw they all voted for the 40 billion dollars for a proxy war in Ukraine, flooding Ukraine with weapons basically. I think though that we can't totally write off electoralism because you know that is the system that exists. If people want to try to grow third parties that's certainly admirable…third, fourth, and fifth parties but I do also think, especially on a local level, you have DSA candidates…so candidates endorsed by the Democratic Socialists of America, ranging from AOC to Christian Gonzalez, who's running now in Queens and Jabari Brisport, Julia Salazar. These people undoubtedly make concrete differences in people's material conditions so while I understand people's frustration with not only the Democrats but with the Squad, I still think that what we have to be doing is building a social movement that makes it impossible for the Squad not to do the right thing because no one's going to do the right thing on their own. It’s probably apocryphal, but it's still very useful, that FDR quote where he told A. Philip Randolph, “These sound great, all these things you're saying about civil rights… the civil rights movement. Now go ahead and make me do it.” So the left does to some extent, I mean…not to some extent…to a large extent, we have to go out and make these politicians do the right thing. We have to force their hand. They need us to force their hand because they can't even…even if they like certain things, they have to show that there's popular will demanding it.

RDW: You know I was struck, in response to my own question, that on June 12th—Sunday, June 12th—there was an election in France which surprised an awful lot of people because several political parties on the far left got together, unified, and ran a political campaign, and basically got the same votes as the sitting president, Mr. Macron. He's in a very, very bad and weakening position by the hour but it is not because of the right. It’s because of the left—that this situation is coming to a head. I think it portends all kinds of things that are going to happen in this country too.

All right, in the little bit of time we have left, how do you account for the growth of the right-wing? Why are right-wing politicians’ policies…Why are we watching this spectacle of the January 6th committee? What happened to make the right wing as strong as it appears to be?

KH: Well, they say that Republicans fear their base and Democrats sustain their base and I think that's true. I think that's a big part of it. I think that, also, something we can't lose sight of is how funded the right wing is…the Tea Party was funded by ALEC. These are basically astroturf movements… they pretend to be organic grassroots movements which doesn't mean that there aren't regular people who just join them, but they're funded and coordinated by extremely wealthy institutions—the Koch brothers, for instance. There's also a lot of discipline on the right wing and there really isn't any equivalent of the Tea Party on the left. The left equivalent of a Tea Party would be an actually unapologetically fearless populist movement and actually populist as opposed to the right-wing populism which is not populism… it’s pseudo-populism. They [the Republicans] are well-funded. They're a well-oiled machine. They have a lot of message discipline and they fear their base. I think those are some of the reasons why and they're unapologetic. I think that's probably the biggest thing. People get a sense when people are hedging and when they're being hypocritical and the Republicans are hypocrites but they're open hypocrites. Democrats pretend not to be hypocrites and that's in some ways more hypocritical than the other one.

RDW: Good point. All right, I wish we had more time, Katie, but we have run out of time. Thank you very much for sharing this with us…gives us a lot to chew on, and to my audience, as usual, I look forward to speaking with you again next week.

Transcript by Barbara Bartlett

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About our guest: Katie Halper is a writer, podcast host and video correspondent. She hosts her creatively named podcast and WBAI radio show “The Katie Halper Show,” and co-hosts the Rolling Stone podcast Useful Idiots with Matt Taibbi. Her writing has appeared in New York Magazine, The Guardian,  Rolling Stone, FAIR, Comedy Central, The Nation Magazine and more. She’s appeared on MSNBC and Fox News. Katie co-produced Tim Robbins’s film Embedded, (Venice Film Festival, Sundance Channel); Estela Bravo’s Free to Fly (Havana Film Festival, LA Latino Film Festival); was outreach director for The Take, Naomi Klein/Avi Lewis documentary about Argentine workers (Toronto & Venice Film Festivals, Film Forum); co-directed New Yorkers Remember the Spanish Civil War, a video for Museum of the City of NY exhibit, and wrote/directed viral satiric videos including Jews/ Women/ Gays for McCain.

Katie will be releasing her award-winning film, COMMIE CAMP, a documentary about Camp Kinderland, the summer camp the right loves to hate.

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Showing 1 comment

  • Edward Dodson
    commented 2022-06-29 14:40:31 -0400
    What would bring apartment and housing rents down to affordable levels: restructuring of the property tax into an annual tax on the potential annual rental value of the location (i.e., the land) only. We want more housings, so taxing it is counter-productive. More land cannot (very easily) be created. A high annual tax as proposed will provide a real financial incentive for owners to bring the land they hold to its highest, best use, or sell to someone who will. Land prices will come down because there is no net imputed income stream to be capitalized into a selling price for the land.
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