Welcome friends to another edition of
Economic Update, a weekly program devoted
to the economic dimensions of our lives,
jobs, debts, incomes, those coming down the
road for us, for our kids.
I'm your host Richard Wolff. I've been a
Professor of Economics all my adult life
and my hope is that it has prepared me
to offer these analyses and
interpretations of the economic events
surrounding us. I want to begin today
with Disneyland and Disney World and and
those places that mean something to
folks who've gone there with their kids
they refer to themselves with a modesty
that I can only mention in passing as
quote the happiest place on earth and
when you read that please keep in mind
there are a lot of people who also tell
us that we are in an economic recovery
and the two of them those two statements
are about the same when it comes to what
they don't tell you so let me give you
the example of Disney on March 23rd
hundreds of workers marched to the
headquarters of Disney particularly to
Disney Springs the shopping complex that
is on Disney property demanding an end
to Disney poverty that's one of the
signs they held up we work we sweat put
a raise on our check was another sign
they carried the unions representing
38,000 Disney World employees were
asking that the $10 minimum wage that
Disney pays be raised to $15 let me
remind everyone that those are wages
which if you depend on them make you a
person in poverty in the United States
Disney didn't want to do it didn't want
to raise wages for their folks in
California either so there have been
actions by workers there when they
couldn't reach an agreement
in December Disney recently announced a
new tactic they had promised all workers
$1,000 bonus because of the enormous tax
cut that the Trump administration
enacted back in December and now Disney
announced to the workers that if they
didn't accept what Disney offered they
wouldn't be given the bonuses that the
company got by paying lower taxes what
the Disney offer in place of the demand
of workers to have the 10 dollar minimum
wage raised to fifteen fifty cents not
five dollars they would give them an
additional 50 Cent's each year for a
number of years no thank you said the
workers who voted overwhelmingly not to
accept that offer so beneath the veneer
of the happiest place on earth are an
awful lot of people many thousands of
them who work there who aren't happy at
all
it's little like the rest of us keep
hearing about recovery in the economy
and wonder who is talking exactly about
what my next update is about a straw in
the wind an economic straw to places in
great importance New York City and
Toronto Canada reported this last week
extraordinary drops in the value of
homes compared to what they were a year
ago let me give you the numbers because
they are arresting home prices in
Manhattan dropped 25 percent from a year
earlier in the first quarter of 2018 and
this was true a call across all
categories of housing from the most
expensive to the most modest what is
going on and before I analyze it let me
tell you that the numbers in Toronto are
similarly a star
she sales of homes in and around
Canada's biggest city fell 46 percent in
March from the same month a year ago the
average price of a home fell 17% from a
year ago these are extraordinary drops
in real estate values in two North
American cities what's going on
well it's at least three factors and I
want to bring them to your attention one
interest rates are going up and that
means the size of a mortgage for a
confor a house or a home is going up the
monthly payment and that is bad news for
the real estate business number two
there's been an excess of building over
the last ten to twenty years the reason
for that the extraordinarily low
interest rates that allow builders and
developers to borrow money very cheaply
and then to build particularly for the
rich because that's where the money and
the wealth had been concentrated so the
market for high-end coops condos
detached homes has been exploding so the
supply has been created ahead of the
demand we don't plan things in our
capitalist economy so we allow the
market to determine things and the
market stimulates the builders way ahead
of what it can absorb in the way of
buyers and here's the last one that
affects New York more than Toronto
foreigners are becoming more and more
hesitant about investing in real estate
in New York or for that matter across
the United States the attitude of the
Trump administration the hostility to
foreigners of all kinds whether it be
expressed in anti-immigrant language or
anti Chinese language in terms of trade
or the notion of going to war against
Muslim countries that is coming out from
pollute
leaders people around the world are
saying to themselves this is a country
that's going out of control not smart to
keep money invested in a country like
that who knows what they will do so
maybe we should better have an apartment
in Paris or London or Rome or Tokyo or
places where we do not feel anything
like these threats the third update
today has to do with water and once
again it's with the Nestle company which
is making an awful lot of money by
taking water from underground putting it
in a plastic bottle and selling it to us
to make a buck this time the story is in
Michigan and here's what happened a
commission in Michigan allowed Nestle
that was taking 250 gallons per minute
out of the ground in the state of
Michigan particularly at the white pine
springs in the Great Lakes basin and
boost that up to 400 gallons a minute
which works out in case you're
interested to five hundred and seventy
six gallons per day from that one source
and so they had a public hearing the
Commission did what do people in the
affected areas Michigan basically what
do they think about this are they in
favor of letting Nestle take more water
out of the ground what struck me more
than anything else well the results
comments were solicited from the people
ready and about eighty-one thousand
comments that's a lot of comments were
gotten from the people of Michigan and
here's how they broke down eighty
thousand nine hundred and forty five
were against it seventy five were for it
I'm gonna repeat that because you don't
think you heard me right eighty thousand
nine hundred and forty five people were
against letting Nestle do that to the
water under the ground
in Michigan 75 comments were in favor
the Commission voted to give Nestle the
right to do it what were the concerns of
the 80,000 people who were against it
here they were in listed in the order of
importance people were concerned about
corporate greed versus people and the
environment
number two water should not be for
profit and number three it's worrisome
to have water become a privately owned
thing because we all depend on it for
our lives
look this is business folks first you do
everything in your power to let the
public services be pinched for money so
they can't maintain good quality public
water the way most Americans have had it
through the history of this country as
the quality of the water coming out of
the tap deteriorates upjumped the
private capitalists offering you cleaner
better water in their bottle in their
plastic bottle you just have to pay for
it in a way that you never had to before
and it's much more expensive to get your
water that way than to get it out of the
tap so they make money by actually
helping the deterioration of the public
free water supply and as for the
Commission saying it had to give this to
the Nestle Company because it's the law
let me all remind you big business
spends a fortune maintaining the
lobbyists who write the laws to sell you
that the law allows you to do it is just
to say you're going to allow the
companies to write the laws that
surprise surprise bring them the profit
and it's the water the water that we all
depend on the next item has to do with a
fight going on between President Trump
on the
one hand and the Amazon corporation on
the other it's quite clear that the
reason for this fight has very little to
do with economics it has to do with the
fact that the head of Amazon Jeff Bezos
purchased the Washington Post a little
while ago and that the Washington Post
prints articles that are critical of mr.
Trump and he's not happy with that but I
want to talk about what mr. Trump said
cuz that's where the economics comes in
he attacked Amazon for somehow being
responsible for the u.s. post office
losing money and said that they had to
make Amazon pay more in order that the
post office not be a losing proposition
that we taxpayers have to somehow
compensate for by giving taxpayer money
to offset the deficit run by the post
office the level of economic error in
this analysis is so profound I want to
tell you what's going on the post office
does two kinds of business in the United
States the most important thing it does
is bring this country together that's
why it was set up the old Pony Express
the whole history of the post office we
are a very large country dispersed over
an enormous amount of territory many of
us live in remote rural areas the post
office creates this country unifies us
allows everyone to interact with anybody
else in this country automatically in an
efficient way
it is a social service as important to
our society as harbors rivers land
defense or anything else
we support socially so the whole idea
that it should be making a profit is
bizarre it's like saying to the army you
should make a profit nobody does that
because they are a social service or at
least we want to believe that and so we
don't demand that they make a profit why
do we do it of the post office yet the
reality is the particular kinds of
business the post office does
are in fact profitable the most
profitable thing the post office does is
deliver packages that's by the way where
the deal with Amazon comes in Amazon
uses the post office to do what's called
delivery for the last mile Amazon
organizes the distribution and then the
post office delivers much of what Amazon
delivers to many people around the
country they make money or that's
profitable what isn't so profitable for
the post office are letters and that's
because it's difficult and we have been
switching from letters to email and that
has hurt the business of the post office
but even with the losing proposition of
letters offset by the profitable
activity of packaging the post office is
on hole self-sustaining it doesn't need
support that is it didn't need it until
a few years ago when Congress passed a
particular law and I want to tell you
about that because it's a wonderful
example of capitalism in action Congress
passed a law that requires the post
office every year to set aside billions
of dollars for the future medical
insurance for current and possible
future employees and to count that as a
cost just like it pays for gas to run
those trucks that deliver the mail just
like it pays for the heating of the post
office and all the rest no other
government agency is required to do that
no private corporation is required to do
that in this country the post office was
required and that added suddenly the
cost of setting aside this money that's
why the post office is losing money
because it has to incur a cost no other
enterprise public or private is required
to do now why you might ask would the
Congress do that because under existing
law the post office has to raise rates
to cover its costs if you impose on them
there's new
cost of the future possible medical
expenses of employees they have to raise
their rates and when the post office
raises its rates that means money in the
bank for the competitors of the post
office above all the united Parcel
Service and FedEx they can compete with
the post office because they don't have
to set aside billions for the possible
future expenses of their retirees and
workers they don't have the cost that
the Congress imposed
what a lovely favor done to the private
competitors of the post office at our
expense of the people who have to cover
the losses of the post office but Amazon
isn't the problem and even the
politicians aren't it's the pressure
from business to use the government as a
way to make more money before I turn to
the remaining updates I want to remind
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we can do in an hour if you would like
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the name of this
program and there you will be able to
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because you are providing crucial
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we do on this program I also want to
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available on Apple podcasts and Google
Play last but not least I am proud that
I play a small role in a new film that
is airing shortly for the first time
being previewed in both New York and Los
Angeles it's called American socialist
the life and times of Eugene Victor Debs
it opens in New York City on April 27 at
the cinema village and it opens in Los
Angeles at Laemmle Monica on May 4th
I think it's you'll find it a remarkable
film about one of the most important men
in American history particularly the
history of people building a labor
movement of enormous importance
throughout the 20th century our next
update is about Larry Summers
he was once a Secretary of Treasury and
now works with Michael Bloomberg and
he's busily working on the problem of
obesity which is an epidemic both in the
United States but in other countries as
well and he comments on a report in the
british medical journal Lancet about how
happy he is to see taxes on unhealthy
goods soda alcohol and tobacco
particularly UK has been raising those
taxes he refers to it as the best way to
curb obesity and other diseases with all
due respect I disagree it's not the best
way it's actually one of the worst ways
why because if you raise the price which
is what a tax does on soda or alcohol or
anything like that you are applying what
we call a regressive tax you are putting
X cents more on the price of a can of
soda for
ample well X sense moron a can of soda
means a lot to a poor person means
nothing at all to a rich person it makes
no effort to distinguish capacity to pay
it's an disproportionate burden on those
who have little money if you want to
deal with obesity why are you doing it
that way here's an alternative way make
regular taxes progressive taxes income
taxes that are structured to take more
from those who have more who can afford
it more and then use that money to do
what public education on the costs of
sugary drinks and what they do to your
health passing laws that prevent large
quantities of these things to be sold
preventing schoolchildren from having
access as youngsters to these sorts of
come on there are lots of ways of doing
this that could be funded in a much more
ethical moral and fair way to slap a tax
on the objects is to whack hardest the
people who can least afford it shame on
mr. Somers for calling that the best way
to deal with it our next economic update
quickly has to do with the VW scandal
this is a scandal that simply will not
go away
the latest aspect of the scandal struck
me when I learned this last week that VW
has recalled in the United States almost
all of the five hundred thousand
vehicles in which they installed
cheating software mechanisms that gave a
flawed reading about the pollution that
comes out of those cars I learned to my
amazement that 300,000 cars are sitting
recalled by VW in parking lots across
the United States thirty-seven
facilities including a Detroit football
arena a paper mill in Minnesota and a
desert vehicle Cemetery in Victorville
California it turns out it's less costly
to VW
to take these cars and park them where
they will rust to death then to do
something with these 300 thousand
vehicles fix them for God's sake make
them available in all kinds of ways
without the damage to the environment so
they can help human needs don't park
them it's such a comment on why
producing for profit is a disastrously
inefficient way to function it's
extraordinary
I wanted to end today's program with a
comment about the me2 movement sexual
harassment particularly of women I'm not
going to talk to you about the
immorality of it I'm not gonna talk to
you about the remarkable upsurge of
rebellion by women particularly in some
men against sexual harassment on the job
but I want to talk because it's a
program on economic update I want to
talk to you about the economics of it to
add in a way to what I hope is your
sense that this is a movement whose time
has come and is long overdue let's begin
millions of women leave their jobs
because of sexual harassment they can't
stand it for a variety of reasons they
may be unable to stop it they may be
fearful so they leave their employment
and they go somewhere else often being
told by a superior that if you don't
like to work here go get another job and
they do but let's be clear on what the
economic costs are of this kind of
subordination and oppression
particularly of women when you leave and
go to another job you lose skills
appropriate to that job you leave you've
learned how to work there you've learned
how to work with those people you can do
your job because you've learned how to
work you go to a new job you have to
start learning all over again that's not
efficient folks number
to the salary will typically be lower
when you have to leave particularly in a
hurry because you have to get out of an
unsustainable sexually oppressive job
situation so you but also the family
members your children who depend on your
income are hurt no fault of their own
they just heard the costs to this
country's economy beyond all the
personal and humane costs are staggering
allowing this kind of thing to go
unchallenged and unopposed then there
are the millions of women who do protest
who are not willing to walk away and
search for another job but they discover
that when they protest their careers are
damaged their ability to contribute
there were those stories of the
actresses who after refusing to go along
with Harvey Weinstein discovered that
their careers were suddenly in trouble
other directors in Hollywood having
heard from mr. Weinstein or folks around
him that these were difficult actresses
to work with kept their distance
damaging their careers damaging our the
public's ability to see skilled
actresses perform etc etc those women
lost those careers lost we as a society
lost what those women could have and
should have contributed because of
sexual harassment on the job and then
there are what are probably the largest
number the women who don't leave for
another job and are not particularly
destroyed in terms of their career they
stay they work under these conditions
but as any psychologist will tell you if
your job in addition to all the other
regular stresses and strains of any job
have on top of it the fact that you must
fear must worry about must maneuver
around sexual harassment only worsens
the health cost
it's mental and physical and all the
other negative aspects of a job how many
people have suffered nervous breakdowns
how many families have been torn apart
by the pressure the strain the
difficulty the me2 movement is not only
about having women achieve the dignity
the respect they have always deserved
it's about saying that a capitalist
economic system that puts some people in
enormous positions of power at the top
of a hierarchy and that makes men the
overwhelming majority the higher you go
in virtually every industry that is a
recipe for exactly what has happened and
that makes this capitalist system
fundamentally inefficient right from the
get-go the struggle for women's equality
is a struggle against the system that
worked this way and that undercut the
quality of life we all could have
enjoyed had we dealt with this much much
earlier we've come to the end of the
first half of economic update I want to
thank you for staying with us invite you
again to be a good partner and ask you
to stay with us for a remarkable
interview coming up we'll be right back
you
