Professor Richard Wolff: Opposition to Paying for Capitalism's Crisis | The New School

this is a great crowd I wanted to just do something briefly before we get started which is to take a short little straw poll how many people here heard about this from a Truthout mailing all right good how many people here heard about it from the Facebook invite event excellent then how many people here heard about it on Rick Wolf's website or is a newsletter and how many people here heard about it on WBAI so excellent well then I'll start by I'll start by thanking our media sponsor WBAI for making sure we got a lot of people here today it's lovely to see you all I think that this is one of those unique events where we get to talk about something that's incredibly important and you know I guess you're all WBAI listeners so you listen to it all day but you know we're at a time in the world where the discussion of politics and discussion of economics has become very real in a lot of our lives and you know I don't know about you all but it feels like a little bit of a unbalanced moment or it feels like you can almost feel it feel a tipping point and it's just very tangible these days just a little bit about me my name is Matt Renner I'm the director of communications and development at Truthout org for those of you who aren't familiar Truthout is an online progressive and very independent news website we work to bring a little bit of clarity and some new ideas and perspectives to the internet and to we we have a we've been able to catapult some big stories into the mainstream press which has been one of our proudest accomplishments I'm not sure if you all have heard about it because often CNN or 60 minutes will take our name off of it and steal our reporting but they do it's it's lovely they can't pay for that part of the news anymore but the other reason I'm here I'm here with a group called us uncut and I'm not sure and I'm one of the organizers and mostly just an activist and a guy who pretends to be a banker on the weekends and thank everyone for making me not have to pay any taxes but us uncut is a new organization that there'll be a clipboard coming around from my friend Bernadette here who if you all sign up you'll get our Action Alerts the idea is to make corporations who avoid paying taxes and thus force politicians to cut budgets and cut services on poor people and working people we want to make them a little more uncomfortable right now they do that with almost almost complete impunity and you know the front of the front page of the New York Times ran a story about GE paying no taxes I wanted to read a couple more numbers I'm not gonna bore you with too many of these but and feel free to boo if you hear a name that you don't like or a statistic you don't like let's start with my favorite Bank of America received a 1.9 billion dollar tax refund from the IRS last year all this despite making four point four billion dollars in profits and that's on top of the one trillion dollar bailout that they were received another one is General Electric which you all might have heard about made twenty six billion dollars in profits in the United States and received a four point 1 billion dollar refund from the government and another one you all might have heard of called Goldman Sachs in 2001 was taxed at a rate of 1.1 percent of its income even though it earned a profit of 2.3 billion dollars and received 800 billion dollars from the Federal Reserve and US Treasury Department or guarantees up to 1800 billion dollars so that's to set the stage here because what we're facing now is and it's actually really heartening to see is a global resurgence so that the title of tonight's talk is opposition of paying for capitalism's crisis a global movement and those of us and I'm sure the sentiment is shared in this room who see this plainly as a crisis of capitalism and one that we did not create but we're being asked to pay for it's ludicrous and it's absolutely unacceptable and I for one refuse to be a part of paying for that thank you I want to introduce Rick Wolfe professor Richard Wolff was a professor of economics or as a professor emeritus at the University of Massachusetts where he taught for 35 years from 1973 to 2008 recently he's become a regular contributor to both Truthout and the Guardian where his work has been getting an incredible amount of attention I mean you should see the people the comments on these things it's it's it's as if the entire US media had been lying to us about economics for the last 50 or 60 years shocking I know but this information is vital and rick has become a friend and his information is so valuable and I just want to thank you all for coming tonight and I hope that after this you'll consider getting involved with the u.s. uncut and getting that out there and getting active to be actually in the street in the way of being rolled over by the crimes of capitalism and the politicians that they've paid for to make sure that it comes out of our paycheck instead of theirs thank you a couple things they'll be a question and answer period at the end where we'll have mics and we'll walk around so you can just raise your hand also at the end there'll be refreshments over on the table and to get involved you can sign up with the u.s. uncut that the charr the signup sheet is going around and also you can check out Rick Wolf's website which is our D wolf dot it's calm right our D wolf calm and sign up for the newsletter there and at Truthout thank you all for coming along and showing that you care enough to think about becoming part of of a change this program that I've just started last week on WBAI begins with music from one of the great musicians of the 20th century John Lee Hooker and the song ends up with the line change is going to come and I picked that because it does really seem after so many times when I hoped for it and but didn't quite get it or hope for it and saw it and then saw it fade out and I know that we don't know yet where the current moment is gonna go but it was heartening to see 70,000 people in Wisconsin say something and even though it's a smaller number in Ohio that's doing it now same issue by the way the government in Ohio is about to take away the bargaining rights of public employees in Ohio just as they voted to do in Wisconsin and other states are on their way the response and the fight back is really extraordinary it's taken longer here and while I'm gonna in a minute go through the crisis and where we are in it I do want to talk a little bit for a moment about the reaction in other parts of the world at least so that everyone's clear what can be done I'm gonna pick just a few European countries because they are ahead of us in this sort of thing Greece six general strikes in 2010 one so far this year it's still early they shut the place down and they are making major headway in for putting together an opposition to the imposition of austerity there which is very severe I went to Athens last spring and happened to be there when the public employees got their first wage cut twenty percent less one day in the weekly check that would be then maintained in one act twenty percent the professors because it's a public education system they're they're all public employees and they all came to me the end of my talk and said you know look at this how am I supposed to pay my children's education how am I supposed to do all the rest in France in the summer of last year the French who do these things with a flair literally shut the country down it was extraordinary you could not get in and out of Paris you could not make a phone call the telephone workers stopped the process you the working class in France basically said nothing's gonna happen simultaneous demonstrations in 270 cities across France the same hour of the same day just to like everyone know two and a half million people that's in a country much smaller than ours give you some idea of what happened four general strikes last year in Italy for some reason the American newspapers do not report most of this sort of thing but I'm just telling you what any European newspaper would have reported on and lest you think this was all last year let me give you a couple of other examples ten days ago two and a half percent of the population of Portugal went out on the street that would mean in the United States two and a half percent something like seven eight million people we've never had seven eight million people come out for anything in the United States that would be an unheard of historical break and four days later the government of Portugal collapsed which in case you haven't paid attention because it's not front-page news exactly the goal there is no government in Portugal right now and the interesting thing to underscore what Matt said the interesting thing about Portugal is that all the other political parties broke with tradition the left-wing parties oh I should mention Portugal has left-wing parties Portugal has a Communist Party for example regularly gets between ten and twenty percent of the vote very strong it has a variety of Left parties that it has a variety of right-wing and conservative parties the government was pushing through the third stage of an austerity program cutbacks in services cutbacks and employees but something happened and when they put forward this next phase of it all the other political parties not just the left-wing ones but the right-wing ones said no can't do it and the press went to them assemble you voted for it before what happened well they said we want to do it we understand the reasons but our constituents have told us that if we vote for another step of austerity they'll never vote for us again and we are politicians and we are politicians and much as we would like to keep going and doing what we we can't anymore because we're finished if we do it so the government collapsed and no one knows what's gonna happen in Portugal but that is a that is a sign of something much bigger and much more profound that hasn't happened yet in other European countries it's an extraordinarily important step because it's a unified across the political spectrum that this making people pay for the economic crisis by suffering cuts in services suffering more unemployment that won't wash so let's turn to the United States which is where we are and where we live and go through a little bit of this process too and again I want to start at the end sort of like telling the punchline and then going and building the joke up again we are in a society that has about ten percent unemployment now the unemployment just so you know is when we give that number nine ten percent that you hear in the radio that only refers to the people who are adults looking for work and unable to find it the Bureau of Labor Statistics in Washington actually keeps these statistics every week and every month has a number they prefer and which is a much better number to understand unemployment and that adds together three groups the people who are adults looking for work and unable to find it but it adds to other groups people who are part-time but want a full-time job they're unable to get a full-time job but they want it because these people are figuratively partly at least unemployed relative to what they're capable of and what they want and the third group you might like really better they have a wonderful name by the statisticians marginal workers who are they they're the ones who have looked for so long that they've given up looking now the Bureau of Labor Statistics counts these if you put them all together the unemployment rate in the United States right now is sixteen and a quarter percent one out of six Americans in the workforce is in one of those three groups that means every every family in America has somebody cousin uncle sister niece in that box and if you are suffering that kind of income loss then you become sooner or later whether you mean it or not a bit of a burden on the others making harder for everybody because you turn to your friends and neighbors and your relatives to help you so the unemployment here is terrible terrible I'm not appreciably better for two years there's no recovery in the realm of employment that matters nothing remotely like a return to what we had let me turn to the second sect that is to drive the point home second sector is housing I don't know if you noticed the front page of the New York Times I believe it was today or yesterday going through the kind of sad story of how the modest plan to help people being thrown out of their homes hasn't in fact even been done in the United States they have nice little circles to show you how big the plans were how little was finally done and how few people were finally helped but the reality is there will be more foreclosures this year than at any time in this crisis it hasn't gotten better it's getting worse million-and-a-half are scheduled to be thrown out of their homes it's an interesting country that in the middle of a crisis with large amounts of housing vacant because there's nobody in it we're now gonna take large more people and throw them out of the houses so they can sit on the grass across the street and look at the house they no longer can live in it's an amazing move but it's very serious last thing about housing if you look at what we call the housing market that's basically a measure of the number of houses on them on the market to be sold the prices they're getting the inventory building up of unsold houses then the thing that you may have heard of the double-dip that's the idea that we're in a crisis we get out of it but they're not oh we dip again a double-dip back there that's already in the housing market the last four months the housing market turned back down so when you hear about recovery the housing market is not being discussed nor is the unemployment much now housing is one of the most important sectors in this country it involves construction it involves the building the manufacture of furniture of all the accoutrements of a house it's a major part of our economy for that to be going down and going down fast over the last three or four months makes the use of the term recovery stop being a question of poor judgment and veer over into what we used to call lying we're not in an economy that is in any kind of good shape and that all is true before we look at the two big factors that are now threatening the American economy which is rising energy prices and rising food prices rising energy prices is a very serious problem everything you're wearing everything you bought for lunch today came to wherever you bought it from by a truck the truck runs on petrol on petroleum products that is going to affect the price of everything our inflation the last month or two have been jumps in the rate of growth of the price of everything in the United States because everything depends on energy what does that mean it means all of us whether we pay for heating oil in our home or gasoline to power our cars and so on we're all gonna have to spend more money on those things which is less money we're gonna be able to spend on everything else and where does that money go into the hands of a dozen national oil companies somewhere in the world and the companies that process all that stuff and so the money is being taken from the mass of people who if they spent it could actually get the economy going and being funneled into the hands of those who are already richer than Croesus and are not gonna spend that money because they never do anyway that's not a good way of managing an economic crisis that's a disaster and since one of the major ways we have food in the United States is by fertilizer and since a major ingredient of fertilizer is petroleum the process of rising food prices is now scheduled to be a plague on us for at least the rest of this year so if you want to stock up on canned peas it's probably a financially wise move to do soon so we're not out of the our economic crisis not by a long shot and we are plagued by a number of issues in our economy that could take a fragile economy already and plunge it in to a disaster zone now some of you think I suppose that the President Obama and the Democratic Party won't let that happen because it will be so dangerous to their election possibilities if we have a terrible economy going into the next year which it certainly will be but as a professional economist all my life let me assure you that because the people who pay economists want something doesn't mean that the economists can produce it President Bush had the best economists around just like Obama does and the worst conceivable thing that could have happened to mr. Bush in the last year of his presidency was to be the president in a collapse the economists couldn't save him from that and part of the election that blew mr. Obama into office was that was a wind that was so angry about what was left over from the bush time that was fueled by that economic crisis and the fear that it struck in everyone's heart what got mr. Obama in was the same anger about the crisis that made him suffer election reverse last year which can do the same to the Republicans next year because there's a fuel of anger the very thing that matt said at the beginning is now tipping the politics of America that anger is going after who's ever looks to be in charge with the fury about a problem that doesn't go away and threatens our future and I'm gonna come back at the end to talk about that let me try briefly and my apologies to those of you that may have heard this before to give you a very quick overview of what this crisis is and why it happened this is not the typical up-and-down of the American economy our system capitalism is fundamentally unstable and give you an idea the last big collapse like this one was in the 1930s that's the really big one though the one that everybody looks to who studies these things and that was a real doozy however since that was over when that ended and it took 11 years 1929 1940 when that was over you might have thought okay well we've put that behind us but between the end of the Great Depression and the beginning of we're in now 2007 there were 11 others eleven downturns those of you were around in New York in the 1970s may remember there was a big one here then New York City kept headlines bankruptcy and so forth so this is a system that throws us out of work and plunges us into economic trouble every few years and no president and no political party and no economic argument has yet figured out how to stop that every president including this one has gone on radio before we had television or television since then and said something about his policies usually he said this I've got these policies in place to get us out of this crisis and then there was a pregnant pause and then he continued and to make sure we do not have these again in the future by that standard every president of the United States has been a liar hasn't been able to deliver on that promise and given that President Obama is doing things that others have done and nothing really new there's not much reason to believe that his promise that it won't happen again is worth believing we're stuck with this but this one is very bad because it comes at the end of a 30-year period in American history which some economists some of us have been talking about for a while but really kind of no one wanted to listen but now just as people are beginning to listen about the concerns about nuclear power given what's happened in Japan we have an economic crisis it makes folks willing to think again about the last 30 years very briefly first over the last 30 years a fundamental change happen in the United States that cannot be over stated or exaggerated real wages what actually you get per hour of work you do if you're an average American worker stopped rising for a hundred and fifty years before the 1970s it had kept going up it's an amazing story it's what made the United States an unusual place to be it was part of the reason why so many people came from all over the place to come here because they had gotten the idea here things got better and they were right and there was no great mystery about it businesses had to pay higher wages and they had to pay wages because there was a labor shortage here we weren't very nice to the people we found here those of us who came here we killed them that meant they weren't there and they wouldn't have worked for us anyway we brought some people here against their will we all know who those folks are but a lot of people came here for looking for higher wages which meant you had to give them higher wages because they wouldn't have come here otherwise and then you would have had no one to work for you but the problem here in America was not just bringing them here you had to keep him in the job once they came here because it turns out having taken the land away from the Native Americans it was free land for everybody and if you didn't treat your worker real nicely here on the East Coast where they tended to come they would run away and start farming which is what most of them knew how to do anyway so to get the worker to come you had to keep wages rising and to keep a worker you had to keep wages rising so for 150 years Americans got this weird idea that they lived in a charmed place God really loved us here and the wage is coal we could have a higher standard of living we could work hard and get better paid in the rest of the world people understand you have to work hard the rest doesn't seem to follow at least not the way it did here so Americans got this idea that it's gonna get better every generation is gonna live better my kids are gonna have opportunity as I didn't have and my grandkids still better what try to with me try just to imagine for a minute what would happen to a culture and a population which for 150 years believes what I just said cuz it's more or less true and then it all stops just stops and that's the truth the real wage in the United States average amount you earn adjusted for the prices of the things you have to buy is exactly the same now as it was in 1978 no change actually a little less but basically to say Americans were shocked awed you might say traumatized if you're into psychology but because we are a people who are very individualistic we reacted as a nation to this sea change by the way a fundamental change that nobody talked about no president went on TV to talk to us what does it mean how do we deal with this how do we get around this overcome that what nothing so Americans dealt with it as individuals that meant we tried as a nation to solve a social change with an individual act never a good move got a social problem you need a social solution what the individual Act ends up being is an attempt to escape doesn't work real well here's how the American people escape them elsewhere I go through all the details but we don't have the time here Americans escaped in two ways first they did more work you know if the wage per hour doesn't go up but you want to give the American dream to your children an education a nice home a nice car a vacation all the rest and you can't get it by rising wages away your parents and grandparents might have well then you do more hours you get more people in the house to do more hours of work and starting in the 1970s that's what we did Americans didn't more and more hours he had a job got a second job if you were a teenager you did something on the weekends and maybe after school and if you were retired you rethought your retirement but the biggest change was the adult American woman who began leaving the house where they had spent a large part of their time and went into paid employment now some people in America had been doing that a long time but I'm talking about a huge sea change in which millions and millions of American women moved into the labor force in of way if I had time I talked to you about all the changes that that meant in our culture you've all lived through them women hold the family life together the emotional center of most American households you make women exhausted by working them an extra shift famous professor of sociology and Berkeley wonderful woman named R Lee ho shell or a book called the second shift where she documents that when the women in America went to work since the 1970s they didn't do work outside the house because they freed up hours from their home or housework they just ended it but you can't physically do that you're exhausted you can't hold then the family together so what happened over the last seven thirty years since the 1970s in the 1970s if you watch the family program on television it was all sugar and sweetness nice daddy nice mommy two children a dog lots of toys everybody quite happy today you look at a program about a family and you're presented with a dysfunctional family the husband is pissed at the wife the wife doesn't want to go near him the children are mouthing off all the time you know the story we're just looking at the results of an economic shift Americans are 5% of the world's population we consume 65% of the psycho drugs antidepressants tranquilizer what is that about and by the way the biggest consumer adult American women that might be connected to what has happened to them and to the pressures they're under may have something to do with a 55 percent divorce rate and that doesn't count all the people who don't live together anymore but don't go through the legal process of divorce it traumatized our society the only thing more bizarre than what we did to ourselves as a people by not dealing with this end of rising wages was to see how it became politically useful the Republicans made the best of it they became the champion of Family Values they concocted the notion there were the good old days and we should go back to the good or we should get rid of everything that upsets the family sexy programs on TV abortion lots of things to go back to the family that we have law well they were tapping into something real and they made it work interesting because the corporation's who made out like bandits because they didn't have to raise wages anymore funded the Republicans to celebrate the Family Values let's do that again the people who were killing the family became the big supporters of the celebration of the lost family wonderful if you can do it in this country they did it the second thing the American people did is they discovered that sending the women out to work and transforming the household brought in money because the wife and other people were doing more hours but it didn't help because there were a whole new set of expenses wife had to have a second car wife had to have a hold another set of outfits the family couldn't cook food for hours they had to buy the food prepared and you all know that that costs a lot more than making it yourself when you added it all up the extra was gone so they had to do the one thing that's left for a working class if they want to consume more have a better standard of living live the American dream but they can't get anymore wages and they're exhausted by the way just a little statistic I love to quote according to the OECD a major international organization that collects these data American workers do more hours of paid labor per year than any other working class in any advanced country so if you're feeling tired you should and when you go to Europe and you wonder at the joy of French and Italian people who begin the evening meal with drinks at five o'clock and me and are off to the restaurant and have a couple of olives and another glass of wine and a wonderful meal that ends at 11:00 and then you go home if you can still stand and you go home and you say this is a fantastic culture it's not got all that much to do with culture French and Italian workers do 20% fewer hours a year in labor than Americans they can take a long time for dinner because they have a long time for dinner and the next time you hear a comparison between the standard of living of the American worker what he or she gets and what the Italian gets make a little adjustment which the newspapers in America don't do the money they get which is a little less than here has to be balanced against the fact that for every six days you work they work five and they have something you miss dearly free time leisure time to be with other people you care about and so on anyway we couldn't handle it so Americans did that last thing they borrowed money we became pioneers in a new way we borrowed more money than any working class in the world has ever borrowed before starting in the 1970s we even invented new ways to get the mass of people in today the credit card before the 1970s that was something American Express you remember that businessmen and women and the few of them had as a kind of perk of their upper level executive job the mass of people had no such thing you all have lots of them in 30 years we found a mechanism pioneered to get the mass of people deeply into debt which the American people did for 30 years we kept the illusion of American prosperity because what was going on was that a mountain of debt which made it possible of course by 2007 after 30 years of this we're done we can't we can't work more hours we're not gonna get more wages and we are already carrying more debt than we can handle so predictably everything falls apart in 2007 as millions of people begin to realize they can't do it and they have to stop paying somebody they owe money to either the hot bank that they have the mortgage from or the bank that they have the credit card from or the college that they borrowed to get through 30 years ago the number of people getting debts to go to school was relatively small today it's normal everything is done on debt well you know it doesn't take an advanced degree in economics although I have that but it doesn't take that to understand that if you're taking more and more debt on but your wages are flat you're gonna head hit a stone wall that's why this crisis is serious it's not your typical up-and-down it's coming at the end of 30 years now the other side of the coin very quickly for 30 years remember wages are flat wages are flat by the way because America changes in the 1970s first we have a new technological innovation the computer makes it unnecessary to have all kinds of people working because the machine will do that used to pay the hundred people to keep inventory in a supermarket to measure and watch how many boxes of rice krispies go off the shelf now you know as you check out there's a little code and it'll ticks off in a machine and somebody in Boise Idaho is looking at all.they a MPs across America it knows exactly how many rice krispies have left the shelf in each store across the country thousands of people are gone one person looks at a computer and that was replicated number two the American corporation began in the 1970s to understand that World War two in that peculiar period after were over the defeated countries had come back and were now producing again Germany and Japan leading the and they were good they knew how to recover from the disaster of a lost war they knew the United States was in charge so they knew what they had to do was to produce what the Americans produce better or cheaper or else you had no chance at all so they went to work and did that which is why you drive a Toyota etc etc etc so now the Americans were really gonna do the American corporations they could have decided to try to change our technology they could have done a lot of things they didn't do that they decided to move to where labor was cheaper and so begins this massive exodus still going on moving production out of the United States to another part of the world but if you're doing that then you need fewer workers the computer means you need fewer workers the moving out of the country means you know you need fewer workers and at the same time the women are coming into the labor force less demand for labor more supply of Labor we teach in economics if the demand goes down the supply goes up the price goes nowhere and that's what happened to the American worker so for 30 years we have a flat wage what is the wage again it's what the employer gives you for working that's what a wage is meanwhile what does heat you give the employer because you probably noticed the employer doesn't give you a wage and say thank you very much have a nice day they want something from you labor you got to work for eight hours well we and economics measure how much you produce per hour it's called productivity government keeps records so we know what happened over the last 30 years in labor productivity how much the average worker in America produced for his or her employer it went up every year why our workers are better educated we have more machinery we have better machinery we've made technical breakthroughs etc etc all the usual reasons so now with me let's go it's like television programs for children if what the employer gives the worker is the same for 30 years but what the worker provides for the employer goes up steadily for 30 years what do you call that good news for the employer spectacular better news than anyone ever told these employers they would see when they were going through business school this is a dream what even for 30 years we get more and more out of the worker as a corporation as an employer to sell well we don't have to give the worker anymore at all more and more output per hour flat wage that's why for 30 years we've had a profit boom corporations in the 70s began noticing and I worked with some of them they began noticing they're making money hand over fist they didn't have to raise the wages anymore workers were happy to keep the job with those wages now what did business do and what did the people that business hires to tell Americans what's going on what did they do did they make the analysis I just did no no no no here's what they did here's what they did first big executives of corporations being told by the accountants we're doing spectacular we're making mom Wow the corporation executives knew exactly what to say this is because they said we are genius executives we begin well it's very important America we began to develop the cult of the smart executive member names like Lee Iacocca or Jack Welch of GE fame Lee Iacocca was an automobile executive they say when around said well because of us the same guy who hadn't made anything for 20 years was suddenly a genius we were all supposed to believe that the sudden explosion of productivity was because of a what a sudden explosion of smarts among our executive what kind of crapola was this but when you thought about it for a minute you realized what the real point of it was because if the exploding wealth of the employers had something to do with the genius of the executive then it would make sense to pay them accordingly so in the 1970s we began this wonderful American no other country has done this this American inflation of the top executives income two or three years ago in the middle of this crisis Americans were horrified to discover that in the middle of everything suffering the big executives at Goldman Sachs and General Motors and so forth were taken home hundreds of millions of dollars and Americans have been angry about it ever since look I'm glad that we're angry about I'm glad Americans are angry it did just 30 years late this is a thirty-year process we are now wildly unequal as a society because we put so much money in the hands of the people at the top who walked away with this wonderful historical opportunity of flat wages and rising productivity set in the 1970s the United States was a less unequal Society than most of the other industrial societies the gap between rich and poor was narrower here than in places like France and so forth now we are number one in inequality in 30 years we've jumped over all the others to become the country in which the gap between rich and poor is the widest I've just given you the explanation of why that was okay fast forward what else did they do with their wealth beside pay themselves huge amounts of money they developed a whole new industry if you've got a hundred thousand two hundred thousand executives earning money like there is no tomorrow they need people to manage these enormous fortunes they're busy presiding over the company so we have a new industry the hedge fund it runs around and collects these people and says we'll manage your money for you and they compete with one another to try to do it and if you're if you're a hedge fund you're trying to compete to get this executives 200 million and that executives 80 million and these wild amounts of money you have to offer good returns otherwise they'll go to other lots of hedge funds so the hedge funds collect all this wealth and compete with one another and they have to take ever greater risks in order to get the client so we become more and more risky with this concentrated wealth at the top which is why we had so many speculations that turned out to be no good banks making loans they shouldn't have to people who couldn't possibly pay that because for a while it produced the illusion of good results and the money all rushed there typical of capitalism when it has a profit period it spins out into into accumulation what else happened with that wealth American companies accelerated moving abroad you know what to close a factory in New Jersey and open it in Shanghai is a very risky and difficult and expensive proposition suddenly when the corporation's had all these profits it could afford that and so that that process of leaving the United States accelerated if these strike you is not very attractive outcomes of making some people very wealthy at the expense of everybody else you've understood which is why we shouldn't have that and why there should have been a debate about this change in our culture rather than we all live through it in a kind of fog of not quite knowing what was going on well then it blows up the massive people can't work anymore can't borrow anymore there haven't got the money to keep this going and the people at the top have Mis speculated with that wealth that accrued in their hands so the system collapses 2007-2008 in the last third of 2008 believe me because I was involved a little bit with it the people in Washington and in New York which are the two cities that matter for this in the United States all due respect I appreciate all the other cities but in this they are not there was a feeling that it was gonna collapse I mean the whole economic system our Credit System seized up nobody would lend money to anybody banks that had been doing business together for 50 years stopped speaking to each other because they didn't trust either of them could pay back any loan you might give them so there was no movement the economy tanked and in those four months particularly there was last four months of 2008 shortly after the collapse of Lehman Brothers if you if you were paying attention at the time suddenly something spectacular happened very rare in American history the entire government Republicans Democrats in Bush is still in power as president at that time everybody agrees right away what has to be done and in a very short time weeks and in some cases these decisions were made in days to spend trillions with a t trillions of dollars to get this credit system going because if you've understood or I've told you everybody depends on credit every corporation every household every store everything is about credit if credit doesn't happen if nobody's willing to take a chance to lend anybody else this economic system cannot continue I mean it just it stops it stops as abruptly as events around that nuclear facility in Japan have to stop because Jay you can't continue life and that was where we were in those four months of 2008 so the government seeing the panic that could come terribly afraid of what to do all the Republican Democrat who cared everybody got together and spent wild amounts of money where does the government get the money no one cared because well they were right in that if you didn't do it then the discussion about how to do it would be academic in the worst sense of the word who cares you had to bail everybody you had to get the system fixed and the only thing they could think of was to go to the banking system the financial system of America and basically say okay you are no longer in charge here we are going to provide every bit of money anybody needs from now on we are going to guarantee the debts of all the major banks which is what they did we are going to give the banks the money that they couldn't borrow from anybody else so they can keep functioning in that time the United States government did something which like the flat wages we could not talk about as a nation because of the Cold War leftover of what can and cannot be said in polite conversation the United States nationalized the financial system of the United States those banks became and many of them still are government supported entities we socialized we did what we think socialism is that's what we did we socialized orphan well I mean that we poured money into every major bank we gave them huge amounts of money your money that's we did we guaranteed their debts which not only commits the money we have now but commits your children and grandchildren to take care of this is it a debt that's open-ended the largest insurance company which had written insurance policies for every financial transaction that that couldn't be made any more called the AIG corporation they announced that they couldn't make good on their insurance policies and so the government took them over and still runs their we've poured 200 billion dollars into that corporation alone it's 80% owned by the United States that is a socialized insurance company the biggest in the world we took over General Motors which we still subsidize on a massive day and so on everybody was agreed there was no significant dissent anywhere anywhere where did the government get this money nobody cared but we should have cared because think a minute there's really only three ways for a government ever to get a money to do anything it either taxes people it's one way to get it but if you think mr. Bush was low on popularity in the waning months of 2008 given everything what was happening imagine the attitude towards the fellow if he had said okay we have to raise the money to bail everybody out so every American family has to cough up another $18,000 which is roughly what it would have been mmm poor mr. Bush if he would have been lucky to make it out alive that's why we can't finance our wars with taxes we don't like them anyway and if we had to pay for them on top of fighting them mm-hmm and the polls would be even more negative but we don't do that we do with credit so the government couldn't tax they didn't see any way it could do that okay that leaves two ways you can print the money governments love to do that because that's quick and that's cheap it's just the paper and of course much so there were temptations in the government and for those of you that pay attention we have been printing money lots of it but we couldn't do all of the need that way because that would make the whole world worried about the dollar and that's very dangerous for us because the world uses the dollar the way it uses no other currency over the last 30 years that the United States has been playing this game of flat wages and rising productivity the government has never had the courage to tax anywhere near enough to pay for what the government does the massive people don't want to pay taxes and the rich don't want to pay taxes and the corporation can't afford to alienate either of those two so it kind of plays the game okay okay um I'll do what you want and you won't have to pay I'll borrow and over the last 30 years we've borrowed and borrowed and borrowed and when the United States government borrows it gets increasingly desperate to find somebody to lend we are the world's biggest debtor the United States nobody's even close so we're the biggest debtor country in the world and you might enjoy just thinking about it you might enjoy knowing in case you hadn't heard who the biggest foreign creditor is cuz the United States when it borrows borrows abroad as well as at home the people Republic of China is the largest lender so let me just to help you see that you're in a new world the number one capitalist country in the world is in debt for one and a half trillion dollars that's what that is - the number one communist country in the world I know those many of you are fond of that American pastime second only to baseball of celebrating how wonderful we are and how terrible the Communists are think about it might be worth a moment's thought what it might mean this situation but it beans also among all the other things that we can't play around with the dollar because the rest of the world will be very angry if what they have in this case the Chinese and the number two countries that we owe money to is Japan that these two countries would be very upset with us if we unilaterally devalue what they hold their wealth in namely in dollars so we couldn't do that so what was left was borrowing borrowing needs a word bear with me we borrow besides borrowing from other countries like China and Japan we also bought that is our government borrows from Americans you all know that because of many a day you've felt a knock on the door where you live and there's an agent from the government saying you know the government needs to borrow could you please lend us something I'm trying humor here that doesn't that doesn't happen to you because you're not rich enough I hate to tell it to you but the government doesn't want to spend time with little people like you and me get 18 dollars and 14 cents not interesting so they borrow big amounts of money who did they borrow from wealthy individuals and large corporations led by banks those are the major people that lend to the government this leads you to a wonderful conclusion over the last 30 years and especially in the last three the government of the United States doesn't tax corporations and rich people that's what I'm gonna finish with in a couple of minutes it doesn't tax them instead it goes to them and it says lend me the money which corporations and rich people can do because they didn't have to pay the taxes the money they didn't give the government in taxes is what they lend to the government and think of it as a rich person this is something you do when you buy that lottery ticket so you know how to do this imagine you're you're rich you could be taxed by the government to cover a problem of the government then they come take your money say you buy an end of story but they don't do that they come instead and they say give me the money I won't tax it from you give it to me as a loan I'll give it all back to you and between now and when I give it back to you I'll pay you interest too if you were a wealthy individual or corporation would you be against the government borrowing yes because Americans are easy in these areas to fool the same politician and banker and corporate president who gets up on the appropriate days to give you a speech about the importance to living within our means a government wouldn't be running deficits a Harvard has in his own portfolio lots of them because they're a very good investment he's taking the money he hasn't paid in taxes and lent it to the government the way you do that is to buy what's called a treasury security an IOU of the government that's how it's done so the people giving you the speeches about what shouldn't happen are the ones making money off the fact that it happens and if that sounds to you as though it might be hypocritical then I've been clear in my presentation that's what it is so now we come to the crisis the government has spent all this money it's borrowed all this money it's broke listen to Governor Walker in Wisconsin we're broke Governor Kasich in Ohio we're broke Governor Cuomo in New York there's no money we have to lay off the 4,000 teachers and we have to cut back on the nutrition program for pregnant women and we have to and we have to and we have to there's no money stop what are you talking about there's oodles of money money is the one thing we've generated for the last 30 years in wild profusion what we haven't done is made sure that the government to perform its normal functions and especially its functions in a crisis to bail the system out can tap that money in a reasonable way so let's turn to the topic that Americans freaked out about the most taxes let's see whether there's money there and whether it's reasonable let's start with the federal government and then we'll go to the state governments and then I'll be done federal government the biggest source of income for the federal government is the income tax everything else is small by comparison there's two kinds of income tax one on corporations and one on individuals the income of a corporation is what we would normally call its profits its net revenues what's left over when you subtract the costs of doing business from the revenues you get from selling whatever the business is in business to produce the United States government taxes that's considered a corporate income and they have to pay an income tax just like you and I have to pay an income tax on our wages and our salaries and or whatever Eldar income that we have let's take a look at that 50 years ago the United States government got ready 50% more of its revenue from corporations income tax than from individuals in other words corporations as a whole in America had to come up with 50% more than was taken from individuals corporations were the major support of the government's budget what is the situation today corporations pay one-quarter of the amount that individuals pay do you understand the shift that's not small that's not little that's not marginal that's massive individual that the burden of the federal government has been taken off business steadily for 50 years and put on you and on behalf of corporate America thank you okay now let's take a look at the second thing the big thing now is in individual income tax because the corporations have gotten out of it when you heard Matt earlier say GE pay 2% Goldman Sachs or they get they get refunds that's what you're you're tacking into your hearing ya hear the particular examples of this enormous mega trend now let's look at the individual income tax same story I tell you this only because my experience as a teacher of economics is that nobody knows this in 1960s and 70s and there may even be some people here who paid income tax back then so you'll remember in 1960s and 71-year as an example 1970 I'll just pick it in 1970 the top income tax bracket in the United States was 70% here's what that meant if you were a single individual in 1970 in America every dollar you earned over $100,000 a year rich people obviously every dollar over a hundred thousand you ready you had to give Uncle Sam 70 cents you got to keep 30 if you think that's high in the previous 15 years before 1970 the rate was most of those years ninety-one percent ready every dollar over a hundred thousand that you earned as a rich income earner you had to give the government 91 cents and you kept nine why because we had just been through a catastrophic Depression and then World War two and in those situation the argument in America was we all have to pull together and those who have the most have to contribute the most and I want to remind you this 91 percent before 1970 and 70 percent in the 1970s was endorsed by Republican presidents and Democratic presidents Republican congresses and then nobody said boo politically it was a universally supported rule in the United States I'm not talking about Russia or China or Cuba or any place we took it from the rich people that's what we did what is the rate the top rate on the income tax in the United States today thirty five percent okay that's an income tax drop you ready for the richest from ninety one percent in the 60s to thirty five percent now that is a tax cut you have never seen anything like that nothing like that happened for the vast mass of the American people not even close so what do we have over fifty years we have a massive shift of the burden of Taxation at the federal level from corporations to individuals and from the richest to all of you soldier funds who got all that money dumped on us as a kind of economic tsunami bailed out by the government with our money now we are going to be told we have to take fewer government services watch our neighbors and friends who work for the government as teachers and social workers and firefighters and police officers they all to lose their youth you've got to be kidding in fact as an outsider looking at this it strikes me that if I were an advisor the Republican Party I tell them be very careful here you are pushing too far you're going to get a backlash that you're gonna be real sorry as people's conditions keep deteriorating which all of these programs make for sure where's that anger from all of that gonna go over the last weekend in the Wall Street Journal this last week The Wall Street Journal has a weekend edition covers Saturday and Sunday so would have been 26 27 or something like that of March there's a wonderful story on the inside that the Republican Party in Ohio is beginning to have second thoughts because their polls show voters are angry at them angry at them because they see this now they're beginning to get a sense that in a time of unemployment laying off public employees would make the unemployment worse and during a time of unemployment and people without homes we need more government service and help but you're reducing it that's yeah mm-hmm that doesn't sound so good and what's supposed to happen wonderful good things but they're not happening to me they're very dangerous for them not that I worry on their behalf all that much but it is a sign that something and then the wall street journal' wanted to make a story wanted us all to see that those Republicans are getting worried and that's I suspect because the Wall Street Journal is getting worried and I think that that's a sign two of the very same things that we're all saying of course the money is there we don't have a problem of taxation United States we have a problem of who is taxed and who isn't we are at the end of a 30-year period where the gap between rich and poor has become unbelievable in the hands of the rich is concentrated an enormous resource that could and used to be made available to solve problems in this country we have a national economic crisis what better reason what better historical precedent then now to go to where the wealth is so that it can help get us through we're not doing that and it is it is not happening on a scale that is so overwhelming that the really interesting question which all my friends from Europe keep emailing me about is why isn't something happening in your country what's the matter with you you know what are you America what's wrong with you one example because it offends me so deeply there's a debate been going on for weeks many of you have maybe watched it or gotten bored by it it's Republican officials in Washington talking about they have to cut the budget by 66 million dollars for the House Republicans are now control the house of representing the house is in favor of 66 billion dollar cut MIT Democrats know the Democrats controlling the Senate the Senate only wants 3366 vs. 33 friends the deficit this year the gap between what the government is spending three and a half trillion and what it raises in taxes about two that's a one point five trillion dollar gap that's what's being borrowed from wealthy people here and from the People's Republic of China putting this country further and further in debt if you're dealing with a deficit of 1.5 trillion and your two major parties are debating 66 verses 33 that's like having a fight with the person trying to mug you in which the issue is how many of the pennies in your shoe he will get that's irrelevant what the Democrats and Republicans are doing they're counting on you all to think that 33 billion sounds like a lot in 66 billion that sounds like a lot and we're fighting and we're arguing what is important is both parties are perfectly happy to run a 1.5 trillion dollar deficit they both agree on that there's no dispute whatsoever no debate about it no discussion of who's gonna get all of the interest payment on that money you're all gonna pay for that to pay the interest of the people who have it you don't own those bonds you just pay interest but the rich you don't get taxed they buy the bonds that's what they do with that money that they don't pay in taxes by the way all my rich friends and I do some consulting with corporations and so on they all explain that to me this American economy is too shaky they say I'm not gonna invest in the United States economy and that's not a good investment I'm gonna park my money in Treasury securities I'm gonna take the money I don't pay in taxes and lend it to the government that's what they're doing and that's not a productive use of this that's gonna build our economy that's for the government to use to keep things from collapsing further so what you watching in Washington is a game a theater of the absurd in which the two contenders aren't contending at all last point and this is if I leave you with this you may get depressed but then again everything I've told you tonight might might lead you there but I don't you'll see for 30 years American corporations move production out of the country in the last five or ten years something new has happened and that is really serious for us going forward American corporations continue to move production abroad but the new thing is that's where they see their future markets growing that's new it means that American corporations have not only decided to produce out of the country but that the growth the future where they should spend their money marketing where they should spend their money for advertising where they should plan on their growth is outside the United States - what does that leave the United States it leaves us with a set of corporations for whom the rest of us are decreasing ly relevant and important they're more interested in making sure that laws get passed in Europe or Asia or Africa or Latin America then those laws get paid if the roads deteriorate here it's less urgent than that making sure they're good roads elsewhere so their trucks can travel their interest in this society is shrinking and the American holiday of a hundred and fifty years of rising wages our Empire economic as well as political has never in my lifetime seen as shaky and the future as grim as it does now the people in charge are making the money they'll make the money abroad as well as they make it here American icons like Pepsi Cola already make more than half their profits outside the United States they are an American corporation but they know what they depend on and they depend more on the rest of the world than they do on this society and their politics and their ideology and their planning come from that they're doing what they do they're making a lot of money in China and everywhere else and they're paying the dividends to the people rich enough to participate in the corporation but it's leaving the mass of the American people more and more out of the loop and that has more to say about the future of this country than anything else only the people here can stop that if there isn't the change if Matt renders comment of a tipping point in the change that's not true I hope it is but if it isn't then we're not gonna see a major change we're gonna see more going down this road that has now been in effect for 30 years and hasn't even been derailed by a fantastic crisis that the whole world shook for a long time around but I don't want to leave you with the thought that people aren't doing something that's what we get back whether it's the story about Portugal I told you or the thing in in Wisconsin but the story I'm gonna end with is about something that happened a while back but that Americans don't know and it's about Americans who made a difference one state in the United States out of fifty made a decision early on in the crisis early in 2009 not to do what California is doing its neighboring state not to do what Cuomo is doing here not to do what Curren kasitch and the others are doing it's a state of Oregon for those of you don't know in 2009 here's what happened the legislature began considering a bill and the bill went like this we in Oregon are not gonna do what our sister state California to the South Washington to the north what they're doing we are not gonna cut public services we're not gonna lay off any public workers they face the same problem every state did with a crisis of unemployment with a crisis of home foreclosures the revenues coming to States collapse unemployed people don't pay income tax because they don't have an income and people who are in a crisis cut back on expenditures because they're scared and so they pay less sales tax and that's what states depend on so every state is in trouble every Strait is having less money they could of course go to the corporations and the rich but they don't but Oregon is the exception and I tell the story because it certainly must be true that if this could happen in Oregon then it sure could happen lots of other places it's summertime 2009 the legislature has a bill which says we're not gonna cut services we're not gonna lay off all people how are we gonna deal with the cutback of our revenues we're gonna tax corporations and we're gonna tax the rich I kid you not and they do that and they want to tax everybody who earns over 250 any family that earns over $250,000 a year has to pay a big increase and any family that earns over five hundred thousand dollars a year has to pay a whopping big increase it passes the first house of the legislature people are amazed it passes the second house of the legislature people are more amazed the bill is sent to the governor who signs it in other states that's the end of the story but not in the West in the West they take seriously these ideas you know that we give lip service to democracy and all that so in Oregon like in other states here's the law if a group of people and doesn't have to be very large goes around and collect signatures they can force any bill that has passed the legislature and been signed by the governor to be put up for a vote other people as a whole and the people decide in other words if the people vote against that bill there will overwhelms the governor in the legislature the bill is void and they can't I think they can't even allow to bring it up again for a year so in other words the people overrule the governor and the legislature okay so you could imagine after the governor signed it the Republicans and the business community went nuts predictably and they gathered the signatures very quickly they were able to do that and they and that required then a date to be set I believe the date was the 10th of January 2010 on that day after months of campaigning by the two sides 1.2 million people citizens of Oregon went to the polls you know why I'm telling you the story they voted decisively in favor of the law so Oregon is not doing what the rest of the United States is doing and if you don't know that story then that's and listen to you in how the media in this country work you don't know even though nothing could be more relevant for all of you that are considering for example what the government of the state of New York is now doing nothing could be more relevant and the question why aren't we doing or at least debating doing what Oregon did Oregon is in case you didn't know part of the US of A and so it might be reasonable to take it as a model or at least as an image of what we could do even if there weren't in Oregon we should be discussing it but we actually have a place when Americans get mobilized and clear that it's kind of gone too far and they want to make a basic change they have shown themselves able to do that it's scary we have a long tradition of time when thinking like this and talking like this got you labeled with words I won't repeat because you all know them anyway but what may surprise a lot of you is that those times are over for better or for worse and the best example is me because I go all around the country talking like this and instead of people looking at me funny and worrying that they're in the same room they keep inviting me and I'm having a wonderful time thank you very much for your attention and now as Matt explained if you haven't have comments questions expressions of outrage there are mics and so if you do it that way at the mic or you'll bring the mic around and everybody can hear the questions or the comments or the professor will affect me my we've met before I have I have a couple of I have a couple of questions or comments first is that I don't know if you know this but as at the time that productivity and wages uncoupled so did the lowering of the ranks of unionized workers and in fact today the level of people in private sector unions is lower than it was before the Wagner Act in 1935 it is lower and it and and I believe that part of the the success in this creating the structural inequality has been an attack on labor unions and the attack on labor and it should be mentioned I you know I'm sure you agree but I also have been following this group called the Robin Hood Tax Group I don't know if you know them but they're talking about it if you if you go to their their website robin hood tax org there's like a little video of a of a baker being asked why don't you why don't you go and pay a financial transactions tax and they say oh how much would that be and it goes down and he's basically like oh less than 1% and how many would that make it would yeah like hundreds of billions of Bounce anyway I I think that what I can't believe that nobody has raised this issue of a financial transactions tax because I frankly think that it's the rich that got us into this and that's where if there's going to be revenue it should be from there so I'd like your view on that okay the numbers for those of you that are interested in the private sector of United States according to the United States Department of Labor 6.9% of workers are in a union so 93.1% of the workers in the private sector of the united states are not members of and are not bargained for by any trade union so it's really crucial for you to understand that arguments about the danger or the cost or the burden of trade unions is silly it's just a joke the only amazing thing is the ability of the American people to take it seriously when the newspaper says it even in the public sector which is much more organized it's still below 1/3 so the vast majority of public employees are likewise onion eyes Union in the United States are unspeakably small poor and weak the idea that they represent a counter force to corporations requires that you know nothing about what I just said since it's an impossible argument to sustain given this situation so yeah absolutely trade unions have been on a 50-year slide here's a even before the the last 30 years it basically goes back to their high point in the mid 50's if you look at the numbers and it's been going down ever since it's a very sad story to say the least the importance of this if I could just take a moment we had in the 1930s three significant kinds of organizations speaking up for working people by far the most important was the trade union movement we had a wave of unionization in the depths of the depression I want to remind you all the Congress of Industrial Organizations the CIO part of the afl-cio the CIO swept across American industry the 1930s organizing millions of workers into trade unions it startled everybody it created an organizational framework all those workers giving a little bit for their union dues produced the money and back bone in the mass of people that's why this crisis is different from the 1930s in 1933 a President Roosevelt who had been elected as a balanced budget advocate a conservative Democrat coming from one of the richest and most established families in the United States the Roosevelt's abruptly turns around goes on the radio and he says if the by the way the unemployment in 1933 when he does this is 25% two-and-a-half times what it is now so he goes on the radio and he says if the private sector in America either cannot or will not hire millions and millions of Americans who want to work then there's no alternative but for me and the federal government to do that between 1934 and 1941 the federal government created and filled 11 million jobs now why do I tell you this we're in a crisis now not as bad but very very bad with millions of people out of work or suffering part-time work or being you know this waited for an even looking anymore not only do we not have a federal jobs program nobody proposes it no one debates in the president never mentioned it's as if it didn't happen in our country why is that because we don't have any organizations that will force mr. Obama to do what those organizations force mr. Roosevelt to do in the 1930s and there were three organizations I told you trade unions were the biggest but dare we say it because it's our history so was the socialist and so was the Communist Party if you know anything about the history at that time particularly if you come from the New York area where those organizations were strong I want to remind you we had as a result of the power of these organizations we had two interesting things here in New York that you may not know about one we had proportional representation we had elections in which you got in you got a seat on the City Council in the according to the number of people who voted for you if 5% of the people voted for you 5% of the City Councilman we had what Europe has now we had it and because we had it an african-american communist was elected to the City Council of New York way back then Benjamin Davis if you never heard that go read up on it it's in all the history books the in people of New York elected a black communist to the City Council and you think Americans can't do something unusual that was that counts as on you that would count as unusual now wouldn't it and imagine it imagine it back then when Jim Crow and all that stuff was still part of our culture so you had organizations socialist communist but above all of the trade union all of the the communists and socialists have virtually disappeared and the trade unions are in a 50-year slide of course we don't have the kind of pressure on our president to do what even a fellow like Roosevelt was willing to do let alone to go further so yeah that story of the trade unions and how they got caught up in that is absolutely crucial I want to start by thanking you for singing my song and doing it in such an erudite way but I'm really interested in what you think of the way of the unemployment situation the jobs there is a regardless of the financial situation definitely an enormous loss of jobs due to the computerization of of work and I'm asking where though they talk about new technologies creating jobs but those two are highly computerized where do you think high degree of employment we'll come from that will return America to a high employment economy before I answer there is something I should say I don't want to be understood as as arguing that we ought to have this or that law this or that regulation this or that change in the government I could come up with them like I just did in terms of the government employing people but frankly I don't think those are sufficient something much more fundamental has to happen in the 1930s we did all those things we put people to work in case you don't know and because it's partially an answer to your question one of the most creative things we ever did as a nation happened then we decided that if we're gonna give all these jobs to people let's do something that really transforms United States and one of the things they did then was a program called the WPA the government went and it said to everybody who has any artistic skill can you sing can you draw can you act can you sculpt do you lead or write poetry didn't matter come and we'll give you a job and here's what we'll do we'll we'll put you into troops an acting troupe a poetry through creative writing troupe whatever it was and we will pay you to do your art work but to do it in a way where we'll move you all around the United States particularly the cities and towns where they don't have an orchestra or poetry so that the children and the adults can get culture brought to them by the fan respect that was the greatest distribution of culture to the American people we had ever had before and that we have ever had since we trans we were a creative people we transformed an unemployment program into something that not only gave people a job but transformed everybody else's life that was what could happen if you had trade unions socialists and communists working with a government that responded what would we do to get this again all that was undone all of that was undone just like the rules governing what banks could and couldn't do that were passed in the 30s were undone later if we don't change the basic structure of this society that's the message then even when we have a crisis we won't get the right response and even if we get the right response it won't be secure it'll be undone by the same unequal organization in which masses of people produce what the profits are for a very small number as long as you keep that situation that way you can't be surprised if those with the wealth who keep collecting it make sure that they stay in that position by shaping the culture and shaping the politics what could we do now here's some examples there's a lot of people who understand that we are despoiling our planet there's talk of things like a Green Revolution but let's be very practical we ought to have a decent public transportation system across the United States whether it's buses or trams or trolleys or street railways that that's an enormous project we'll take huge numbers of people but it will make us not the if you pardon my technical language about getting independent of foreign dependence on oil if you don't want to be dependent on oil or worse still nuclear energy the way to do it is not to fool around with which way you grab stuff out of the earth it's to stop using these crazy amounts of energy that we don't need public transportation as 8,000 studies will show you takes much less energy to move a person a mile in a public transportation system than if we all have these individual SUVs gobbling it all up same thing if we design our housing different and living in units and groups we don't need the heating is infinitely cheaper than if we otherwise do there's a hundred examples like that where there's jobs number one number two it is a scandal in this society what we don't do in the way of quality daycare provided by the government to free up the adults who are already working more than they can and can hardly manage this situation that's jobs for millions of people because it's a personal service job you don't want an adult to be responsible for more than a relatively small number of children to give them the attention and the affection that they need come on a humane collection of five of you in his room could design a decent program that would give millions of people a job number three we have an aging population the number of us that are becoming as you can see at an advanced age what's gonna happen to those people we are sticking huge numbers of them in unmentionable nursing homes where the last years of their lives are made into our horror we periodically have an expose as if we needed it but we damn well know if we're honest that we're getting older and older we're taking away people's Social Security that's what we're doing making them even more desperate as they get older this ought to be turned around in a in a humane way that's again millions and millions of jobs I don't think it's a problem we live in a society now that has a conservative estimate 25 million people not working - the amount that they want the government keeps a statistic called a capacity utilization what proportion of our tools equipment and factories is being used and what is sitting idle it's currently at around 70 to 75 percent what that means is one quarter of our productive capacity tools equipment machines is sitting there gathering rust and dust we've got millions of people we got all the equipment materials raw materials for them to work with and we desperately need the output to make our society better but we live in a capitalist system that cannot put these things together if there was ever an argument that we ought to be open to asking questions about this system because it isn't delivering the goods capitalism used to be defended by people who said it delivers the goods okay if you rise by that argument and you have to fall by it too capitalism is delivering beds lots of them to lots of people for long periods of time cold war is over maybe we can again grow up and ask the question any sane society does is the economic system we got the best we can do and if it isn't then say thank you for what capitalism achieved and it achieved plenty but move on and ask about other ways of organizing a society we don't do that we will have ourselves in a sense to blame so I think there are lots of ways to put all those people to work with where the technology would help us not be an obstacle you should sort of get a mic yeah good hi dr. wolf I'd like to ask you a question about the Fed quantified you quantified easing program of the Fed and stimulus now you spoke about you know the terrible high housing crisis that's reburied right but there's also the horrible u s-- car scam that's that's that's really a replication of the banking crisis the same kind of toxic mortgage loans are being you know late on people and that bubble is about to burst I think and then there's a third problem and that is the horrible scam of student loans where millions of students in this country have been turned into debt pins with no possibility of bankruptcy thanks by the way partly to that dimbo Biden who pushed for all these are changes in the bankruptcy laws so it's obvious that what we need I mean we need a radical social transformation sorry it's so obvious but what we need at least for now is another stimulus and a real stimulus even more than the moderate amount of monies that were poured into the economy in 2009 I'm asking you whether or not Bernanke and our Reaganite supply apparently supply-side President have the moral courage or even the insight to recognize that these things are needed given what's coming from best I can tell and I know some of these people because the the world of economics is not that large and the world of economics of folks who went to the right schools I don't often I explain this but I will explain it now because it really it's part of the story there's two kinds of economists in the United States there are those in the large number who went to the usual schools that teach that and then there is what we basically call the old boy network and the old boy network are those economists who went to a list of I don't know 20 schools you all know their names it it exists in all disciplines but it certainly exists in economics so I went to all those schools and so I know all these people they're not happy about that I didn't turn out right as far as they're concerned but I do know them and they know me and it creates awkward moments from time to time I think burn and I say therefore I can answer your question Bernanke understands what's going on he is frustrated if you want to under not understand what Bernanke's frustrations are then just read mr. Krugman this is all the same thing what Krugman says it Bernanke cannot why because the political muscle at this point of the highly concentrated wealth is such that they don't believe they need to slow down this juggernaut how can I put this to you it's I can't tell you how many times I've been in the meeting of a corporate board of directors where half of the corporate boards of directors usually about 15 to 20 people so half of them in in the room are saying look we have cut wages we have cut benefits these workers don't do anything well cut some more what's the problem there's a lot of noise but their unions are weak they're worried about their job they go for it then there are other members of the board who are just as loyal to the company as the first group who say don't keep pushing cuz one day you'll push too far and then the whole game will be gone don't be an idiot stop we've done real well we don't have to go than that this is normally a debate what has happened in the last 30 years is that the conservative ones the the first group they keep proving that they're right they keep pushing and they get away with it and push some more to get away with it so they solve the problems of a corporation which are many by sticking it to their employees in one way or another and they think they can do it at this point they think they could have a crisis they could get the government to save them and they could make the massive people pay for that's what they think and they they're the majority and they're not gonna stop they can't get over the idea they expected many of them that when this crisis hit they would have to give up things because they were culpable they are ecstatic they don't have to give up anything they can make furthering they can turn the crisis from being a flaw of capitalism that they're gonna have to pay for into a flow of unions that they can stick it to they can't get all they I've been with them it's like being in a bar and you had one too many suddenly everything is very very funny you know every joke however old and tired is just it breaks you up for these people they're in a moment they are they just taken with it and they don't want they want nobody to tax them they want them people to accept cutbacks instead of taxing them they're sitting on more wealth than they've ever seen before they're not paying any taxes they have 86,000 ways even to get out of the low rates that they face nobody is saying boo about it everybody's discussing who do we cut should we take all of the remaining money away from the National Public Radio bucks to Planned Parenthood they don't care about by the way the majority of these people support Planned Parenthood these are not right-wing people they're not that's a mistake they hate the Tea Party I can't tell I can't repeat in this audience the words about the Tea Party that I hear you know on Wall Street they think those people are look they're afraid of them those are crazy people for them I am strange they're crazy that's really the answer they can't they can't stop this they're afraid of how far this is gonna go but they're on the ride you know that's how empires end you do it too much we are now a country for those of you that haven't noticed which I'm sure is nobody we are now entering the fourth war against Muslim country Pakistan Afghanistan Iraq and now Libya you got to be crazy what you're doing here yeah but you're aren't you know you're on a roll of a certain sort the way it works it seems you got to do this too and then then you suddenly discover oh I can't do this but it's you know you painted yourself into a corner I think they are not going to touch any of these things they've got they convinced they can now whether it let the bubble in securitize student loans or securitized auto loans let the bubble burst which is very well made a lot of people are saying that it's coming they're just convinced they will get another bailout of the better than because that's what people Americans do it they they watch the government they endorse the government and the government said okay you not have to pay for this oh I do let me get angry at the public employee that is an amazing trip to find yourself in the middle of a global crisis that the public employees in the state of Wisconsin probably has relatively little to do with and to go after them as the great problem it's an extraordinary achievement of our political system to return and I think that folks like Bernanke they understand this and they're nervous very nervous about it but they're stuck in the political world of Washington and Washington is a political world sustained by the wealth put yourself in this situation you know which is an enjoyable moment imagine you were one of these wealthy corporate leaders and you understood because your accountant explained to you that you were now worth 300 million dollars and you were part of a charmed circle and there were a lot of you in America like this and they all go they all live in Greenwich just like you do etc etc etc you would not require much tutoring to understand this is dangerous you're sitting with all this in a society where the massive people don't have anything like that and no prospect of getting it you better be careful and one of the first things you better do is shape the culture of this society so that you're not positioned as the bad guy and control the politics so that the people who still have the right of a mass voting don't vote in people who they would then want to take away from you what you this is not you know rocket science here so you move into the political sphere when I told you before that Americans in the last 30 years faced with flat wages turned in on themselves turned away from politics they did there's that wonderful book I always recommend for those of you that are book readers a Harvard professor in sociology and then Bob Putnam wrote a book with a title you'll never forget because it's funny called Bowling Alone was a best-seller for a while but the point about Bowling Alone was he studied Americans who stopped participating in civic affairs who stopped going out with friends who stopped being in a bowling league so that when they went bowling they on bowled alone because they weren't with anybody that withdrawal of the American working class as it did all this work and took on all this debt and got stressed out and emotionally upset by all the transformations we've been talking about when people turned away from political life of participation when all those urban political machines kind of faded out in came the money the very money they were creating at the top moved in because it needed now to control the political situation because it's hard to keep a system like this look at the impasse ination of the United States with Egypt and the wealth of Mubarak against the poverty of the masses my wife's a psychotherapist the first thing she said is Americans are all projecting they can't talk about it at home so they're fascinated when it's somewhere really far away it was her way of realizing with this extraordinary intense engagement with a country whose name you can't spell you know what is that because it's it's it's a morality play it's like a drama that you see yourself reflected it gen where are you just one more short question you mentioned the problem with Oregon and knew no one knows about what happened there the corporate press doesn't want to advertise that I would wonder if you could tell us something about how people can find out all the social benefits that are in Europe in those advanced Western countries that you spoke about they never talk about the things that those people have and I was wondering how you can help us to find out what they have in Norway in France and Italy and all those social benefits of those people out right as well as the defined pension seemed to be going the way of the dodo bird and they're replacing it with the 401 K and 403 P right and I'd like you to speak about that and the possibility of having defined pensions that would go with you from job to job is that possible thank you all those things exist in those European country let me mention just a few and the way to learn about it is to make use of technology always cuts both ways the Internet is a wonderful place it's very quick do your little google game and find out what what the social benefits of the social welfare system is in France or Italy or Germany or Sweden it's not hard to do but let me give you just a taste the law in France the minute you go to work after you finish your high school or college you have a paid job your employer is required by law to give you five weeks of paid vacation that's the law let me guess let me just repeat that let me just repeat that law in France is you must get five weeks paid vacation try to think try to think most Americans will not get five weeks paid vacation ever but if they're lucky maybe in the last 18 months the employer in addition to giving you a cheap watch will give you such a vacation but probably not let me give you another example public health every one of the European countries has a national public health program they produce health outcomes that are better than those United States longer life expectancy lower infant mortality and all the rest and they spend much much less money per person on their health care with better outcomes anyone looking at these systems would be able to say goodness gracious is something approximating what all these other countries do I mean it's possible if you listen to the AMA and other groups in the United States to conclude that our system is much much better than theirs and that would require you then Duke and conclude as well that everybody over there is a raving [ __ ] because they all seem to want and to maintain even with conservative governments their national health service nobody dares messing Sarkozy who by the way is it's a name for you not to remember since he is gone the people of France and in their attitude towards it he's in worse shape than mr. Bush in his worst moments was and that's saying a lot and right behind him heading into the toilet is mrs. Merkel in the Germany next door and those are the two key country and both of them are being defeated by the rain against austerity that's what's driving them out and so a very different situation from here so the public health service there is extraordinary I know France best cuz my family's partly French if when you are born you have a child the government will send a person to work with you for the first four or five years you don't have to have them but it's a government service they will help you they will teach you all about caring for the baby and everything else but they will give you time and help everything when I I taught in France for a while as a visiting professor the University of Paris and my colleagues who brought me there as a visiting professor had at that time a young child a little girl Sean Devine which is a very popular French name and she was about seven and he was an economics professor like I at the University there and they could bring her as early as seven o'clock in the morning and pick her up as late as 7:00 in the evening or any period within that that they wanted she had her own outfit that the school provides a daycare center provided in school after-school programs for her and so forth and she paid the family paid $21.50 a week and they had it six days a week and that's in the middle of Paris and that's across the city so it's a level of public services that is completely different you also ought to understand for some of you don't get this that in France there are no private university said all of the university system is public and when you ask them gee how come you don't have private universities like we do in America and they look at you as if you're nuts and they explain and they explain if you have private as well as public then you have a two-track system it's unequal and we know that would be undemocratic with wider that would be undemocratic of course everybody should be equal in school and so there are no private schools bingo also to go to a public school to go to the University of Paris cost you the lofty sum 200 dollars a year then 200 now to be fair but they don't have the kind of vast university system that we do so a much smaller percentage of college-age people in France go to the University so it's not their program is free basically for students but it doesn't take in anywhere near the size that we do but then again what we call university they wouldn't consider that they do it well it's true if you know what their system is they do in France for exams called the bacalao via it to do that is to do the equivalent of what we do here in the first couple years of college so you you have to adjust it but it's a much more many more social benefits than you have here across the board it's just a different society and in Germany let me give you some examples in German I can see from your faces you're interested this gentleman asked a very important question in Germany a factory cannot leave a community a factory cannot leave a community in order for a factory to shut down and move to another place it has to get a vote of approval from the trade union and a vote of approval from the City Council in the community where it exists if it leaves without doing that its property is seized by the governments a criminal act can't do it another example if you have more than two thousand if you have more than two thousand if you have more than two thousand employees in Germany half the Board of Directors have to be workers from the plant now these are not these don't they're still capitalist societies and they have a lot of problems but you sense right away the power of mass organizations trade unions socialist parties and communist parties and nowadays also green parties which are strong in these countries and a new thing parties that are called anti-capitalist france has two of them germany's most amazing new political party is a party the left D linka in German that's what the left means they got 12% of the vote in the last national election one out of eight Germans voted for them and here's their slogan Germany can do better than capitalism so to give the the the basic answer use the internet you can learn all about you know all these countries have information about themselves away you can learn about all of this and how they work it's a remarkable story there of even within capitalism the conditions of life of working people will be very different if they have organizations fighting for them then if they don't and their ability to hold on when I was a professor in France I remember once an effort was made by a Conservative government was in the middle 1990s to reduce oh I forgot to mention this to reduce the subsidy for children in France if you have a second third fourth fifth child you get money for each extra child you get a direct cash everybody gets it it's just to help you with large families you all got that good good it's been the law for 50 years in France maybe longer and there was an effort by the Conservative government to slightly slightly reduce the support for it's called family norm blurs large families in French and there was a demonstration I came out of the hotel where I was being put up while I was a professor and there was a demonstration and I'm the kind of person I've never seen a demonstration I didn't want to be part of so I went immediately into the demonstration and I have spoken French since I've been in the child so the first thing that struck me as an American was that where I entered the prayer thing was a group of Catholic nuns France is a Catholic country and they were carrying big banners about how parish st. whatever it was was against the government doing this and they were busily chattering and shaitan handing cookies to the line behind them which was the Communist Party officials of that district and they were all friends and they were in this demonstration together two days later the government withdrew the bill you can't what are you gonna do every French family has got somebody who's a socialist or a communist in it you can't do what American that what we have in this country you can't demonize because that he won't come Eunice that's aunt Louise the one who comes to the picnic and hands leaflets between the sandwiches you know that's what she'd you you can't you can't do it you can't do it you should remember by the way that the politics in France in Europe are very strange the government pushing austerity in Greece is a government of the Socialist Party the order goes Papandreou of the long socialist families grandfather was the prime minister of Greece his father was the Prime Minister agree these are socialists doing the austerity and being pushed back in the government that fell in Portugal that I told you about before that fell last week the the name of the Prime Minister you'll love this is josé sócrates like the Greek josé sócrates was Prime Minister of the Socialist Party which was thrown out of office by an alliance of the Communists and the Conservatives so that's another sign that the conventional world that we've all been living in for a long time is coming to an end the thing on pensions last point I know we've run out of time we used to have pensions where the whole point of the pension was to say if you'd give a lifetime of work to whoever you work for private or public then there's a kind of a commitment we're gonna take a bunch of money out of your check every week but we're gonna put it aside and we the employer are gonna guarantee that between the money which is your money that we've taken and how we've invested it you have a guarantee you will be taken care of in a decent way in old age and you will not be a burden on your children that was the whole point and it came out of the 1930s the big fight there were no pensions before that Social Security came out of the Great Depression notice a Great Depression gave people a real good benefit in this depression we're taking things away from people ok the difference what's happening now is that the business community doesn't want that because they don't want to be stuck with the obligation in case their investments didn't turn out real good with your money they don't want to have to pay you off in the way that you had been promised so what they do now is they say we'll take your money but what you get depends on how well the investment in the stock market goes that means your future life as a retired person becomes a crapshoot you're now a gambler with your own future you'd you'll do nicely if the stock market goes up and you'll be in deep doo-doo if it doesn't that's not a commitment to people that comes out of honoring their lifetime of work that's making them gamble about their own future and the irony here is that younger people don't think that's their issue but it is your issue because if your parents are not able to take care of themselves when they're all either you're gonna be a monster and dump them in a nursing home well that's an option a lot of people take that option or you're gonna have to take your own difficult situation and help them and that it was it was to avoid the tension and the pain inside families to create an intention and that is being taken away because over the last three years it's not much discussed there's been a massive change away from defined benefit you get a certain defined benefit to define the contribution what's defined as how much you put in but it's an open question how much you get out and that again is an assault on on the working class of the country so think about this uncut movement it's one of many movements that's happening around the United States where people really are interested in these questions changing their minds beginning to think about getting active things are gonna change in the United States and we need you to be part of that thank you again very much

Channel: The New School

Views: 614,631

Rating: 4.0426145 out of 5

Keywords: The New School, New School University, NYC, Colleges in New York City, Capitalism, Financial Crisis, Economy, Economic Analysis, budget cuts, Poverty, Poor, Working Class, Inequality, Richard D. Wolff, International Affairs, Globalization, government, rights, finance, debate, economy, lecture, warfare, brand, International Affairs Major

Id: -6DLT9MHO4M

Length: 119min 45sec (7185 seconds)

Published: Sat Apr 02 2011