Global Capitalism: March 2020-March 2021: Covid and the Crash [March 2021]

welcome everyone to another global capitalism live economic update a bi-monthly lecture series presented by democracy at work and designed to talk about the kinds of changes the important events the trends in the larger economy we all live in it's brought to you by democracy at work and it is co-sponsored by the left forum and the judson memorial church before the pandemic we would meet in the judson memorial church and our hope is one day when this pandemic is behind us to resume it is a fundraising event this lecture is for democracy at work we urge those of you watching and particularly those of you that have not donated in the past to consider helping to support these reports to you every other month and doing that is really relatively easy you can make a one-time donation on our website or become a monthly donor on patreon direct links to both of those options can be found on the video description below a special note of gratitude and appreciation to our patreon community because this marked march marks the second anniversary of our presence on the patreon platform the generous support we re receive every month from the patreon community is of enormous importance and support for everything that we do and it is happy opportunity for us to acknowledge that support our new book the sickness is the system when capitalism fails to save us from pandemics or itself is now available as an ebook easy to get just go to our website democracy at work dot info slash books it's a compilation of essays that aims to explain how and why capitalism is the sickness underlying all the symptoms we are living with finally please be sure to like this video by clicking on the red subscribe button below thank you for your support and as always these days stay safe and stay healthy okay as usual i want to begin with three or four short items things that are important that have happened in the last couple of months since last we got together and then turned to the big question for this evening which has to do really with the lessons that we have learned hopefully by now uh about kovid and everything that covid represents the first of the short items for today has to do with the appeal in recent days from the head of the world health organization he has asked the world and i mean the word appeal literally he has asked the world to suspend a kind of special capitalist privilege that businesses have been able to get into the law around the world the privilege is called sometimes a patent sometimes a copyright sometimes a trademark it applies in this case to the vaccines that are now available have been figured out over the last six to 12 months to deal with the kovit 19 pandemic and let's remember in case anyone is not aware that this is the worst public health crisis in at least a century in terms of its impact on the globe the illness the death the dislocation all of it we now have vaccines and there's some reason to believe they are effective but the vaccines the formula the way of producing them has been patented which means under the law that any producer of vaccines around the world who wishes to produce them for his or her population is required by international patent law to obtain the permission from those who hold the patents to be able to produce them and those who hold the patent do so because they can refuse that permission unless money is paid to them that they demand for providing the permission and what the head of the world health organization is appealing for is the following in many countries of the world for example most of those in africa but in many other places too nobody's been vaccinated yet because local producers do not want to pay cannot pay what it costs to get access to those patented formula for the vaccine the vaccine producing companies give their usual large pharma excuse we have to make lots of money from wherever we produce otherwise there's no incentive for us to produce it how interesting saving lives uncount much as a incentive having the government step in and mandate it doesn't seem to be an option so the world health organization fellow in his appeal really is appealing on the basis of this was never invented the patent to make people sick and die rather than share knowledge that could save lives even if patents for other things were maintained and there's a big debate about whether that's reasonable too but even if you left the rest we clearly have a national planetary emergency here and there's something profound in a global capitalist system that is protecting the profits of a small number of companies around the world particularly american at the price of death and illness all over the world even though the facilities which the world health organization leader tells us the facilities to produce the vaccine are sitting there in many cases factories fully equipped doing nothing because they cannot access those patents costing people sickness and death every single day one last horror beyond this that i've already told you the vaccines produced by modern by pfizer by johnson and johnson and the other participants were in many cases subsidized billions of your money your taxpayer money was shoveled to these companies removing the profit risk they might be taking by producing a vaccine by doing the research for a vaccine so they've already been helped their profits have already been juiced but they still want to hold on to that patent think about it if ever there were a case of capitalism versus the needs of this planet's people we are staring it right in the face right now my second short item is about a friend of mine and also about the college the university that he's dealing with and for me to be honest with you all it's the same college that i went to the college in question harvard college the person in question cornell west cornell west in the past was a tenured professor at harvard when he was very poorly treated by larry summers some time ago he left harvard he's also been a tenured professor at princeton university at the union theological seminary and at yale university when he came up for tenure this year or last year at harvard tenure again having received it before somewhere in that university and they all are evading responsibility the president the provost the people at the top who evidently nixed this he can't find out exactly where the bucks stopped they may be getting scared i hope they denied tenure to mr west author of many books internationally renowned scholar professor activist musician an extraordinary treasure in this country not just one of the leading african-american intellectuals which he surely is not merely a superb teacher an inspiring speaker but someone who's tireless in being available in sharing and offering what he has learned in the fields of philosophy theology political science history extraordinary i've had many conversations i know all this personally harvard ought to be ashamed there's really no other word for what it was did they really think this would all go away quietly that cornell west being denied tenure having had it before would simply slink away tell nobody have all the rest of us outraged by this behavior say nothing well not me i went to harvard and i remember when i was there for my four years being struck by how many of my professors weren't very good at what they were doing maybe they were good thinkers maybe they were good scholars i don't know but they weren't good teachers and i used to remark as many of my fellows did that apparently what harvard wanted was stars not people who were particularly good at teaching we began to realize that in many cases you'd be better off as a student with a graduate student assistant because that assistant did more work and was more effective than the famous star professor he or she was assisting harvard excluded marxists because i was learning about marxism and i would ask my professors questions and when i did i noticed something as everyone in the class did often my professors couldn't answer the question they just didn't know because in their education marxism also had been excluded this was at a time when we were told that the world was in a tremendous struggle between capitalism and socialism and that the number one theorist in the world of socialism was marx and the marxian tradition informed socialism and we would always ask the same simple question if we were locked in a great struggle and the world is divided between these two shouldn't we be able to access this material in the classroom with a teacher who knows what it's about well we quickly learned that we had misunderstood the situation because there were teachers who didn't know if you talked with them out of class you learned they knew a good bit they had studied it on their own like we were then beginning to do but they didn't want to talk about it in class it wasn't safe they particularly didn't want to talk about it if they found something useful something insightful in the critique of capitalism which is what marx devoted himself to they were afraid that we could see it in their eyes and so we didn't have many of those teachers and the few that might have been there able to teach were too afraid of what would happen to their careers if they did and you know what they were afraid of the kind of treatment that harvard just meted out to cornell west so it's a long old tradition of academic dishonesty fueled by fear there's nothing else here but fear fear instilled in this institution by the larger society's cold war mentality and yet here we are cold war over 30 years ago and we're still seeing the ideological warfare being pursued so that people with a persuasion that's critical of important issues of the day are excluded are pushed aside are denied tenure shame anyone who claims that the bastions of higher learning are committed to the open exchange of ideas has to think again when these stunning examples of the opposite are thrust upon us the way harvard's treatment of cornell west shows us today i want to turn next briefly to another recent developer elizabeth warren is back in the news not as a candidate for anything this time but in her capacity as a massachusetts senator she has proposed a wealth tax interestingly that's what i want to focus on it has immediately produced howls of opposition as if a wealth tax was new it isn't as if a wealth tax didn't already exist in the united states it does all kinds of nonsense by people who want no way to pay the tax so i want to take just a few minutes to talk to you about elizabeth warren's wealth tax by the way it's not the only wealth tax idea that's out out there but she's a very important person in the united states senate and in this country so hers is getting a good bit of attention here is her plan let's start it effects it will affect it will tax only the richest one tenth of one percent of the american people in other words what i'm about to tell you will not cost a nickel for 99.9 of the american people please keep that in mind okay who will it tax it will only tax people whose total wealth stocks bonds mostly their homes and whatever else of great value they have they will only tax them if they have more than 50 million dollars that's why it's only one-tenth of one percent that are going to be affected how much do the folks have to pay well you don't have to pay anything on your first 50 million that's what it means you only start paying the tax on every dollar of wealth you have above 50 million dollars per person how much do you pay 2 percent two percent okay income tax that we all pay much higher percentages so the tax on wealth that she proposes is a small fraction of what is paid out of income if you have a billion dollars or more you pay three percent on a whatever above billion that you have if you have it okay so 99.9 of the people will not pay this only the richest will pay and they won't pay on the first 50 million that's scot-free no tax now let's talk a little bit about it and about some of the silly things being said against it is this a new thing in america to tax wealth absolutely not let me explain we have three levels of government in the united states federal state and local the local governments in the united states cities towns villages mostly rely on a wealth tax to pay for local public schools the police department the fire department local health department maintaining the roads plowing them etc so there's nothing new about a wealth tax how does it work cities and towns have an office you'll see it in your own downtown it's called the tax assessor's office and the office of the tax assessor in every town and village has a job and that job is to measure the worth the value of the property owned by local citizens subject to the property or wealth tax but what's really interesting about the wealth tax is that it only taxes some kinds of wealth not others let me be precise with you if you live in most american cities and towns if you own a home you pay a wealth tax on that home if you own land you pay a wealth tax on the land if you have an automobile you pay a wealth tax on the value assessed by the assessor of the car or the truck you own sometimes business inventories what's sitting on the shelf in the back of your business is also subject let's be clear you pay a tax on the value of wealth in those forms please keep clear in your mind something the media poorly understand or report a wealth tax is different from an income tax wealth tax is a tax on what you own income tax is a tax on the money coming into you your wage your salary is subject to an income tax if you earn interest on loans you make you pay an income tax on the interest that's an income so let me give you an example that may confuse you but it shouldn't suppose you have a house and what you do with your house which you own is rent out rooms in it or rent the whole house you will then be taxed twice first you will pay a property tax to your local community but on the rents paid to you if that's how you use your house you will be required to pay an income tax to the federal government and perhaps also to the state government so you will then pay an income tax and a wealth tax but anyone who tells you that we don't already have a wealth tax does not know what they are talking about or they are lying to you and i'll leave it to you to determine in each case which it is but now here comes the big political punchline when i listed the wealth that local communities tax you may have noticed i left out stocks and bonds you're right i left them out because cities and towns don't tax that kind of wealth now once again if they don't does anybody else tax wealth in the form of stocks and bonds and the answer is no that's what elizabeth warren is proposing now to do so it's not new to have a wealth tax what is new is including the the wealth in the form of stocks and bonds in what gets taxed and if you're wondering which i hope you are why in the world would we have a wealth tax on the kind of wealth the average person maybe can get a home a car a piece of land on which the home sits if that's wealth that's taxed why is the wealth of the wealthiest stocks and bonds not taxed and you know the answer don't you it's because they're the wealthiest they got it set up that way it's a wonderful tax dodge for them that's all it is that's all it ever was think about it ten percent the richest ten percent own eighty percent of stocks and bonds they don't pay a wealth tax if you own a home in an american community worth say a hundred thousand dollars you pay a local property tax on that house on that home if you sell that house and use the hundred thousand dollars you get from selling it to buy a hundred thousand dollars worth of stocks you don't pay your local community anything because you've changed the form of your wealth from house and land which is taxable to stocks and bonds which is not subject to any wealth tax if the stocks and bonds you have generate an income to you dividends capital gains interest you pay an income tax on that that is income tax but on the value of the property nothing so in fact what elizabeth warren is proposing is to bring into the existing wealth tax the wealth of the richest people which they successfully got exempted for centuries in this country she's correcting a grotesque injustice think about it last point that we will have time for talking about elizabeth warren's proposal two percent on all your wealth above 50 million the one-tenth of one percent of you that are affected by this if you have that kind of money in the united states then it's almost 100 certain that you pay people to manage that kind of wealth you don't do that yourself it's a specialized task you give it to professionals you don't mind paying them a hefty fee and it is expensive because the professionals tell you and they have a good track record that they can make money with your money better than you can if you try to do it yourself they have names you've heard of hedge funds capital funds venture capitalists all kinds of folks who collect money from very rich people the one tenth of one percent at the top and they then invested in ways that they know how because they're connected to the big businesses that they fund what do they typically offer to rich people say on average over the last 20 years five percent would be low 10 quite common 15 or 20 often achieved so let's keep in mind if you're a wealthy person with more than 50 million and you give the money to a hedge fund or other manager which most of them do they're going to make for you 5 to 15 easily year in and year out how much is the wealth tax from elizabeth warren 2 which means your wealth will grow each year much more than the 2 tax that she proposes so her tax on wealth is only slowing the growth of wealth of the already richest people in the country if it passes and yet they're still screaming and conniving and maneuvering to stop it and not just the republicans lots of conservative democrats also so that the prospects of her getting this wealth tax proposal through the congress very iffy you live in a society where those rich people at the top know have learned and know how to use their wealth to make sure the rest of us don't get any of it even if all that elizabeth warren is proposing is to on a modest level tax the wealth in the form of stocks and bonds at a lower rate than is paid by people who pay now a wealth tax on their car in their home even then the special privileges that have enabled them to become so wealthy they are determined to maintain the last short item economic sanctions a word about them the united states puts sanctions on other countries economic sanctions people who can't access wealth that they have in an american bank people who can't do business with american corporations sometimes entire embargoes you can't trade with anyone in a particular country sometimes only particular individual recently sanctions were added to russians around vladimir putin some entities some organizations and some individuals in venezuela there's an effective uh sanction on the entire uh petroleum industry which is the life of the venezuelan economy and in the case of cuba we've had an embargo for most of the last uh 70 years wow what is this about the ostensible reason for sanctions and i i'm not making this up because i don't have the imagination to do it the logic of sanctions is those people did something bad you see and the united states government decides usually in the person of the president to punish them there is no trial there is no evidence gathered there is no defense counsel able to make argument none of it trial by jury forget about it a politician decides to punish usually in some economic way someone that they decide didn't behave properly so it's very individual it's very take the law into your own hands because there isn't much law going on here very few other countries do that and they don't do it for a reason if we're going to get along in a world of different countries and we have nearly 200 different countries in the world right now we're going to be in a lot of trouble if every country that doesn't like has a leader that doesn't like what's going on in another country starts interfering in buying and selling and lending and investing that would make for precisely what the league of nations and the united nations were developed to prevent nor do i want bore you with reminding you that there used to be a notion that the government should stay out of the economy you don't stay out if you deny someone access to their bank account you deny someone access to buying and selling you deny someone access to lending and borrowing that's direct government intervention so let me turn to the sanctions here's the the bottom line you might say do sanctions work and my answer as an economist is almost never let me give you some examples sanctions have been applied to the russians on and off many times is it clear that russian behavior has been changed in a dramatic way by that no no where is such evidence never seen it and i've looked maybe a better example is cuba cuba brought a revolution into the world 1959 two or two years later the united states arranged for an invasion of cubans to overthrow their revolution called the bay of pigs invasion it failed and in the aftermath of that failure the united states decided to impose an embargo cuban goods could no longer be imported into the united states not cuban cigars not the cuban sugar was one of the great producers of sugar in the world etc you couldn't sell to cuba you couldn't buy from cube cuba is 90 miles from the coast of florida selling and trading with the united states was its lifeblood it was an existential threat to the cuban revolution and the cuban government that embargo has been in place for most of the last 60 to 70 years it was supposed to overthrow the cuban socialist government it never did it never did and it's no closer to doing it now than it was 10 20 30 40 50 years ago it is a failed policy no way around it and here's a couple of reasons why these policies fail they outrage people who are you to tell us in this country what it is we're doing and how you have decided it is to be punished what kind of behavior is this no court do you have a complaint about it take it to the international court that's what it's there for if you think something is so terrible bring it up make a point about it have the lawyers come on both sides come on we have ways of dealing with the what are you doing and where is the arrogance of doing this what if other people i'm gonna pick a couple of examples but there's so many i don't know where to start suppose other people thought that what was done to the people of texas a couple of weeks ago when the profit driven electricity companies collapsed because they hadn't prepared for cold weather and people died and people froze and people lost water for long periods of time and are now on their own struggling to cope suppose someone decided that was outrageous should be punished and they sanctioned the governor of texas or something like that that doesn't happen because other countries don't do that because if you do it you know what happens the people in that country get angry the people of cuba have been rallying mostly behind their government which is why it has been able to stay there all these 60 years because the people know that whatever the problems of their government the united states is a problem for them too and so they don't work they solidify the support that foreign governments have from their people it's a very serious failure and it isolates the united states europeans were told recently you can't trade with iran because we're mad at iran what we're not free to go about our business because a government other than our own will punish us without any due process whatsoever remarkable so here's a policy that alienates our allies reinforces and solidifies countries we have problems with and doesn't work wow you know what the question is that i want to end with why is it happening and the answer is it has nothing to do with the other country it's about domestic american politics the leader who wants to win the vote of a particular constituency imposes sanctions because it looks like something that president doesn't care whether it works or not never did that's why the fact that it doesn't made no difference wasn't done to change russia or iran or cuba or venezuela it didn't and who cares it looks to a certain american voter constituency like something and for those votes that politician will do what he has to do and the cost to the united states the cost in the international community the cost of enmity around the world not his problem he's just taken care of his political career we live with the results they don't for them it pays and for nobody else i want now to turn to the lessons of the covid crisis we've had this pandemic for a year here in the united states at least from march of 2020 to march of 2021 there have been winners and there have been losers and there are lessons and i want to go over them with you okay i'm going to start with the losers because they're the majority the vast majority i'm not going to talk about those who got sick or who died the numbers are huge and you all know them i want to focus here in the united states that's what i know best but much of what i'm about to say applies in many other parts of the world as well so first here in the united states we have 20 million people roughly collecting unemployment compensation that's a staggering number these are people who have been unemployed some or all of the last year they've used up whatever savings they have they are living pinched frightened lives because not only are they unemployed they have no knowledge no certainty no support in answering the question will a job be there for me when this pandemic is over will my employer have survived tens of thousands of employers are gone and are not coming back they have told us so then there are the millions of americans who have decided not to look for work anymore they're not counted among the unemployed they have to use the technical language left the labor force they're not working anymore they're eating they're consuming but they're not producing which means those that are left and producing are not able to consume what they produce because that has to be transferred to those who are consuming but not producing which is why we keep track of the size of our labor force and its relationship to the size of our population labor force participation rate is the number that measures what proportion of our adults are working and that number has been negatively impacted by the pandemic and that's on top of all of those unemployed people because we only count you as unemployed if you are a member of the labor force without work if you leave the labor force stop looking we don't count you as either employed or unemployed then there are the wages that have been impacted people at the low wage level have been much more unemployed than people at higher wages in general those at higher wages were able to use their position in the labor force to keep working to convert their work situation from in-person to distance internet all of that the lower your wage the less likely you had that flexibility or even had the resources to try to achieve that flexibility so it has come down on millions of people whose wages have disappeared or fallen either because the wage per hour was cut or the number of hours were cut or the number of days per week or month that they had a job the suffering at the bottom of our economic ladder was and is staggering we've also seen a kind of harshness at a time when some tried to suggest that a pandemic is a time for a community to come together since we're all threatened by the disease we're all threatened by the consequences of getting sick that we will somehow work out a way to help one another or to use the phrase that a number of leaders glibly threw around were quote all in this together but of course in a capitalist system that never happens and it didn't happen now either what what about meaning by all of this well a struggle begins the struggle is who's gonna lose the most as the situation deteriorated after march of 2020 people who rented their home couldn't pay the rent anymore landlords who weren't getting their rents turned around and told the banks they owed money to they couldn't pay for the loans they couldn't service their loans because their tenants weren't paying rent it didn't just happen with individuals and families renting a place to live it happened with stores and restaurants that were renting a place for their business commercial real estate went into the toilet right alongside residential real estate banks weren't getting repaid by commercial landlords malls in the united states already in deep trouble collapsed on a massive scale with thousands and thousands of malls across the united states sitting empty losing money going bankrupt left and right communities all across the united states weren't getting the taxes they need unemployed people don't pay income tax they'll earn much income businesses that have closed or reduced pay little or no taxes here's then the absurdity of american capitalism when you have high unemployment and high breakdown of jobs which is what we've had this year people need more government support and help to compensate for the collapsed economy but because we pay less in taxes when we have unemployment the government is uniquely less capable of providing the extra services that the economic downturn requires this is upside down crazy way of organizing you need the government to step up with resources not to pull back it's been so desperate that despite the fact that the taxes have been cut back governments have had to step in because the private sector can't handle the situation yet again and for those of you that think there's something reasonable about either libertarian or less a fair or let the private economy fix itself you've been through a year where the private economy didn't fix anything it wasn't prepared for the pandemic it hadn't produced in stockpile the tests the ventilators the masks none of it the government hadn't stepped in to compensate for the private sector which is what we needed but it didn't do that because it's trapped and captured by a private sector that fears having the government solve problems because it'll raise in the minds of all of us the notion why are we letting the private sector do what it fails over and over again to do the private electric company in california didn't take care of the forests and so they had the worst fires in a century the private electric companies in texas didn't prepare for the cold weather so they had a catastrophe of no water no heat in a cold spell in texas the levels of failure here are catastrophic private capitalism a la united states is a disease disease-ridden collection of symptoms that i could go on but i don't want to let's talk for a moment about who the winners were over the last year and there were some let's be fair let's be clear if you were a lucky company the pandemic made money for you and it just about luck nobody created the pandemic nobody set out to do it despite mr trump's effort to raise such an idea but if you're a company that delivers things if you're a package delivery company let me pick one let's see oh yeah amazon you made a lot of money because nobody can go to a store and nobody can go to a restaurant everything is ordered and delivered and amazon was just lucked out and its shares went up and its chairman and mr jeffrey bezos saw his 130 billion dollars he's one of a few hundred billionaires in america go up to near 200 billion dollars wow lucky fellow and he kept all that money for himself he benefited from illness sickness and death in a pandemic did he propose to share that wealth to say for example i have 130 billion dollars which makes me the third or fourth or maybe even the second richest person in in the country and among the 10 richest in the world so i don't need to go to 200 billion so i can take the extra 70 billion that i've gotten out of this sickness and death plague and help my fellow citizens did he do that no he didn't and none of the other billionaires that i'm aware of and certainly not most of them did anything they just collected the extra money we may all be in this together but they didn't hear about that memo did they the billionaires got richer to the tune of almost 1 trillion dollars while 20 million people are on unemployment insurance using up their savings leaning on their family and friends for the loans to keep them going saying goodbye to the american dream if they still had hopes of acquiring it of achieving it wow you know how the billionaires do that they move their money they have advisors who say oh uh don't leave your money over there because the pandemic's gonna hurt that industry move your money sell those shares and use the money to buy those other shares though amazon's gonna do well everybody's gonna be on the internet all day long what else are they gonna have to do so get buy apple buy you get the picture if you have liquid wealth like that you can move it around that's what stock markets are for so the people rich enough to be on the stock market are rich enough to hire the advisors who will make sure that they keep their wealth or actually go one better grow it which is what the 600 billionaires in america did so while the massive people were worried about getting sick were worried about their job were worried about their hours were worried about the debts they had accumulated other people were laughing all the way to the bank the rich got richer and everybody else either got poor or got sick or both what kind of a society what kind of a system responds to a viral pandemic in such a way and even worse what kind of a system that responds in that way has a population that allows it as a population the majority of people are coming out on the short end of this stick who are in the loser category why are they permitting it i want to remind you all in world wars 1 and 2 when something like this happened when a war we were all in together was making some people rich while other people died on the battlefield or did without the congress of the united states passed what were called excess profits taxes a special tax that said if you're making money out of the war that's costing the lives of young men and women you're going to have to give a large portion of that to uncle sam to help the larger society making profit off a war that other people are giving their lives for is outrageous and we're not going to allow it but we don't live in the america then we live in an america now where the concentration of wealth at the top is so total that those fee people can buy enough of the senate and enough of the house of representatives to make sure not only that there's no excess profits tax this time around oh it's fun to say the fight against covet is like a war yeah but not in that way no no we're not gonna tax people making money off this war no no we're not but again the greed is such the concentration of wealth at the top is such that there won't even be the steps taken to help those at the bottom modestly you must have noticed but if you haven't let me stress that have twice already the 15 an hour minimum wage proposal has been defeated in the congress already the proposal has been watered down so it's 15 an hour but only by 2025 you wouldn't want to help people too soon would you it's even worse in the sense that we have seen a kind of harshness a kind of not only refusal to do anything with the wealth achieved at the price of pandemic but even the desire to help those at the bottom has been constricted twice the effort to raise the minimum wage to 15 an hour has been defeated in the congress the proposal that is now still half alive wouldn't raise the rate to 15 an hour until the year 2025 by which time of course prices will have risen so the real value of 15 then will be considerably less than what it is now and the last time that the minimum wage was raised was in the year 2009 that's when it achieved the current level of 7.25 cents an hour one of the lowest minimum wage rates in the industrialized world or indeed in the world as a whole is extraordinary over those last 11 odd years prices rose in this country every year sometimes only one one and a half percent sometimes two or three or four percent and every time the prices rose the minimum wage stayed the same so that what it could actually afford a person shrank you'd think after 11 years of a declining real minimum wage there wouldn't be this hesitation but there is so desperate are those at the top they don't want anyone to touch anything they don't want anyone to have any more money that might somehow directly or indirectly reduce the wealth they have already accumulated and they work very hard to get the majority of people to somehow push against what it is that we all somewhere know ought to have been done i want to pick up on this idea in yet another way there could have there should have been an alternative approach that we can now see would have made an enormous difference from the beginning there could have been and there should have been a recognition that we are now in a situation like and only like the great depression of the 1930s in those years starting in october of 1929 and running until 1941 the united states capitalist system had collapsed the unemployment rate when it reached a peak in 1933 was 25 that means every family had either a mother or father a cousin an uncle an aunt unemployed and because there was no unemployment compensation they leaned on one another at a time when nobody had much of anything or they went to a church bread line or a soup kitchen that was the crisis we have that kind of crisis now the unemployment not quite as high but then again worse in this in the way than the 1930s there was no public health crisis on top of a crashed capitalism we have both a crashed capitalism third crash in the 21st century by the way and a public health disaster at the same time in the same country okay that level of unprecedented double crisis could have and should have led to the following idea and i bring it up only to underscore the meaning of the fact that that idea was never brought up here we go in the 1930s what happened in reaction to the collapse of capitalism then was a massive and this is crucial redistribution of wealth the wealth of those at the top shrank and that cutting back of their wealth was the resource was the way masses of people were helped the ways that they were helped i've enumerated them with you before once again the social security system we've never had that in america before if you reach the age of 65 the government will give you a pension check every month for as long as you live number two if you lose your job through no fault of your own and at that time there were tens of millions in that category the government will give you a check every week for a year or two to help you through this crisis number three the first time a minimum wage was passed in this country in the depths of the depression just like social security just like unemployment and the fourth a federal jobs program 15 million give or take were hired by the federal government they were no longer unemployed because they had a job with the government they were no longer without income because the government paid them a decent income so they could keep their home and keep their rental payments or mortgage payments or whatever they had now it was extraordinarily expensive for a social security program for all of the older people and not only did it give the older people a decent retirement but it meant they didn't have to be the kind of burden they would have had to been on their own kids who were having the trouble of the depression too so it was helping everybody dramatically so was the unemployment compensation so was the minimum wage and so were the 15 million government jobs but the government of course didn't have the money to do these things why because tens of millions of people were unemployed they didn't have any money to pay taxes with they didn't have jobs that they required them to pay taxes on didn't have any income stores were shut factories were cut back or closed nobody was paying taxes bluntly put so where did the government get the value to provide massive support and the answer is they redistributed wealth they used taxes they used loaned money they used a variety of mechanism what's not important is the mechanisms what is important is that if you look at the distribution of wealth in america in 1929 it reverses what it had been doing in the entire period since the civil war in this country where the inequality had gotten worse and worse and worse but after the great crash of 1929 it reversed inequality got less and less the great crash prompted the use of the wealth of the richest to help everybody else it didn't take enough away from the richest their position as the richest they came out of the great depression the richest in america just like they went in but they had had to take a sizable portion of their wealth to help everybody else and you know what that did it produced in the united states a kind of solidarity a kind of community and one of the expressions of that solidarity and community was the feeling that the president at that time franklin roosevelt was a kind of special gift to america he had presided over this remarkable genuine sharing that helped the mass of people not everybody people of color were not treated properly to which should surprise no one given this country's history but nonetheless a massive change and people understood it they understood it and so they celebrated their leader they returned franklin roosevelt the president who had taxed and moved the wealth of the rich so that he could help the massive people he didn't overthrow capitalism and it wasn't what he was interested in he was one himself he came from that part of the community he protected the wealthy too but he demanded and got a redistribution of wealth from the top to the bottom in the middle and the gratitude of the american people meant that franklin roosevelt was re-elected president three times no president in american history had ever experienced that he was the most popular president in the history of the united states because he presided over a redistribution of wealth as the way to address the fairest way to address a problem that the whole society was struggling with the great depression followed immediately by world war ii well we have something comparable one of those horrible rare events another crash of capitalism unfortunately that's not rare we get that every four to seven years but a pandemic at the same time that's a lot the pandemic made the crash worse and the crash contributed to the pandemic but not mr trump and not mr biden have ever indicated any understanding or any intention to do what mr roosevelt did they may want to be president and look how desperate mr trump was but they are not about to follow in the steps of the most successful president in american history because they know who butters their bread they know who calls the tune they know who in the end they serve and so we do not have it our inequality didn't go down it got worse it's not that they didn't do what roosevelt did they did allowed to have happen the opposite of what mr roosevelt did to wind this up some people are hoping and you see it in the financial press these days that we are about to end the pandemic that somehow mask wearing and the vaccines despite the behavior of politicians who are continually pandering to business interests by opposing the lockdowns that have worked so well in other countries led in this country by texas and mississippi behaving in ways that the rest of the world cannot believe as they watch it there are people who look at all of this horror and say well we'll be out of the woods soon we're going to have a boom when it's over it's going to be like 1945 the end of world war ii which was followed by a bit of a boom in the united states and so i want to conclude with a couple of observations one of them about this boom mentality i don't think a boom is coming and it's not it's not that i can predict the future i cannot nobody can but the conditions for 1945 are simply not here and so there's very little reason to expect now what happened then then the united states people had been deprived of the ability to spend money for over 15 years basically from 1929 through 1945. the depression had denied them the ability to paint their house buy another car live send their kids to carla any of it there was no jobs there was no income for none of it and no sooner was the depression kind of over 4041 but then the war made it impossible to get those things too because the resources of the united states had been deflected for war production guns and bullets and uniforms and ships and tanks and all of that so in 1945 you had what's called pent up demand that had accumulated for a long long time we have nothing like that the demand here has been pent up for a year not 15 and that's not even close here's the second reason the level of debts that americans have accumulated much higher now than it was in 1945. therefore the money americans can earn now is going to have to go to service their debt especially if interest rates continue their recent rise that's going to be very expensive it's not going to leave all that much to be used to buy goods and services so that pent-up demand which hasn't been penned up more than a year is going to be deflected into repaying huge levels of debt mortgage debt ready automobile payment debt credit card debt student loan debt the four huge debt burdens carried by the american people way beyond what existed in 1945. i'm not done yet then there is the fact that in 1945 the united st in the world all the other countries that might have been competitors had been destroyed in the war germany japan britain france russia china decimated by long wars that took their young people that destroyed their factories their transportation networks all the the united states had no war on its territory other than the first act in pearl harbor it fought elsewhere not here so when the war ended the united states was in an absolutely unique position in the world it isn't in that position now even if the american people did have a significant pent-up demand and i don't think it will be there but even if it were a large part of it is going to go out of the country buying goods and services produced elsewhere generating jobs elsewhere providing income to those doing those jobs elsewhere and nowhere more than in the people's republic of china which is now a major provider of american goods and services and a major powerful competitor globally we didn't have anything comparable to that back in 1945 so you put all these things together and the talk about a boom when this pandemic is behind us is just that lots of talk by people who are claiming some historical parallel that is not there my last comment today before we close has to do with an interpretation of the events on january 6th a remarkable day that is still echoing and reverberating across both the united states and the larger world the extreme right wing in the united states attacked the capital where the congress meets uh killed a few people destroyed lots of property made a big noise threatened a lot of people including a lot of sitting representatives and so on and there's been a search for them hundreds have been arrested since then they are going to be charged and tried etc and i want to make a comment about all of that so that none of you especially now i'm speaking to you outside the united states miss the significance of that event i could package it together with the conservative political action conference that happened a week or two ago in late february but whether i do or not the same comments apply american capitalism is in decline the symptoms are everywhere the upsurge of the metoo movement making the gender relationship that has existed here for so long no longer tolerable the black lives matter movement saying much the same about the horrible ongoing racial inequality and discrimination that this country suffers and reproduces the fires in california i mentioned earlier the collapse of the electricity system in texas that i mentioned earlier the fundamental fact of kovit that the united states has four percent of the world's people and 20 of the world's deaths from covid a very rich country a highly developed medical system performed so badly it tells you that it's not doctors we lack or nurses or factories that can make the masks the ventilators none of it is the system that's the sickness it's the system that disables us from being able to use our wealth to use our medical profession to deal with the problems we have as a society we put profit first profit is the bottom line and it's costing us everything but as this system goes down as u.s capitalism declines and again let me stress as i have before the decline is the product of capitalism itself no outside force is going on here no one need look for it capitalism is a system in which capital looks for the most profitable outlet the most profitable investment the way to compete with others by being able to produce something at a lower price capitalists in america figured out since the 1970s that they can make more profit either by moving production to where the wages are much lower or by replacing high-cost workers with cheaper machines automation or by bringing in immigrants willing to work for less than native born people or varying combinations of all three and the end result of doing that is why we have so many products coming into the united states from example people's republic of china where they are produced by subsidiaries of american companies or joint ventures by american and chinese companies as much or more than by chinese companies themselves capitalism is what developed these problems for the united states the american workers who once had a good job but have been replaced by a job that was exported or a machine or an immigrant they have to make sense of what happened to them no one is helping them no future is being worked out with them they are being thrust aside or in the language of the right wing they are being cancelled or replaced or thrown away and they are upset about it and those that are most upset about it agonized about it become raw material for right wing politicians who have a nice easy scapegoat to vent your anger on immigrants women people of color foreigners of every kind the chinese the mexicans the canadians the euro everyone is cheating us taking advantage of us preying upon us threatening uh look at it it's like a bad film and those are the people who attacked the capital because it's a very small step to demonize the democrats as the ones who've allowed the mexicans and the canadians and the iranians and the chinese whatever the fantasies of trump q anon and everything in between but on the left it's also happening the workers in alabama trying for the first time to organize an amazon warehouse the workers across the country who are showing all kinds of new militancy new demands making even president biden remember what the law says about what an employer can or cannot do to discourage his workers from joining a union you know what these are all about these are signs that the middle of politics is disappearing the center left which is the democratic party the center right which is the republican party the establishments of those two parties are losing their position losing their control on the right you can see it already in the capture of the republican party or most of it by trump by the people who attacked the capital on january 6th and the rest of the republicans the old establishment doesn't know what to do doesn't know whether it can hang on doesn't know whether it'll stay inside the republican party or give that away and then what and you see it likewise on the left the power the energy the innovative demand for change that's coming from the left wing of the democratic party from the forces of bernie sanders alexandria ocasio-cortez corey bush and others emerging a good number of whom do not shy away from the word socialist which is a kind of watershed identification in american politics they have not prevailed on the democratic side the way the trump right wing has prevailed on the republican side nor should that surprise anyone the republican party has welcomed the right wing for a long time it knew it needed them it wanted to control them it wanted to keep them as a junior partner which you can't do anymore but it always welcomed them the democratic party did not the cold war meant that the democratic party felt it had to cleanse itself from anything that could possibly link it to socialism marxism communism or anything like it so their hostility to their own left wing has kept it repressed most of the last 75 years so of course it's more difficult it'll take longer for the left but make no mistake the polarization continues the january 6th excuse me the january 6th event is a signpost of that polarization the number of republican politicians who had to support it who have supported it since who have supported the most extreme articulations tells you they have to or their political careers are over we have not had that in the united states for a long time that polarization continues on the left and the right and it will change american politics just as much as the economic disintegration of the post-war period created this very split in politics this is a society that is falling apart and i don't say that with pleasure and i don't say that with drama i say it as an analytic observation of all these events crashing in around us we are going to be changing as a society in the years to come in ways and at paces we're mostly not prepared for and given the role of the united states in the world the least we can do is talk about it put it out there and ask ourselves which i'm doing with you now what are the implications of the reality that the very survival of u.s capitalism is coming on to today's historical agenda the center is not holding and it's not only the political center when social media giants twitter facebook any of them begin to say we we can't let the extremes left all right speak we cannot open on we can't they are also trying to hold on to the middle which is no surprise because it has been the rule of the middle that brought us to this crisis so their instinctual reaction if i may quote mr biden about his own presidency their instinctual reaction is we just want to get back to normal where normal means before trump before the center collapsed and so sadly i have to tell them as my closing comment if you are making the catastrophic mistake of going back to normal you're going back to the very system and processes that brought this collapse that brought trump to power that brought the difficulties for the middle what you should have done is recognize what roosevelt did if you really want to hold on to capitalism then the capitalists are going to have to pay the kind of price roosevelt got out of them a dramatic redistribution of wealth and power downward and the irony is if you don't do that which the left forced you to do in the 30s now that the left has not been able to recover yet if you don't do it yourself you condemn yourself to your own historical extinction this is richard wolff on behalf of democracy at work i want to thank you all for your participation and once again if you can support what we do talks like this it will be enormously appreciated by all of us and allow all this to continue and i hope to speak with you again two months from now

Channel: Democracy At Work

Views: 112,399

Rating: 4.9058142 out of 5

Keywords: Richard Wolff, democracy, work, labor, economy, economics, inequality, justice, capitalism, capital, socialism, wealth, income, wages, poverty, yt:cc=on, Cornel West, US Capitol, politics, GOP, Democrats, Biden, Trump

Id: GE6s9HK_F6o

Length: 88min 55sec (5335 seconds)

Published: Wed Mar 10 2021