Welcome friends to another edition of
Economic Update, a weekly program devoted
to the economic dimensions of our lives,
jobs, debts, incomes, all of it.
I'm your host Richard Wolff, I've been a
professor of economics all my life, and I
bring these updates to you based on what
I've learned. I want to dedicate today's
program to a remarkable phenomena
particularly here in the United States,
but around the world, of people rising up,
fighting back against an economic system
that has outlived its usefulness, and is
now begging literally for the change
that many of us feel is long overdue. Let
me start with the issue of immigration.
it's much in the news these days when we
have a, allow me, trumped-up national
emergency around the wall; and I want to
talk about what the attack on immigrants
and immigration by the Trump and
Republican administrations, what it has
produced and is producing in this
country. I'll start with a story of North
Carolina. The two most populous counties
in North Carolina, Mecklenburg and Wake
counties have decided to refuse to
participate and cooperate with ICE, the
immigration control authority in this
country; and that has led to a back and
forth dispute between the leaders of
those two populous counties and ICE. ICE
has responded by raids in the streets of
those counties. In short, the struggle
against immigration is dividing the
United States in bitter ways and those
are going to have long lasting
consequences; so I want to look at this a
little bit more closely. The basic
support for bringing large numbers of
immigrants into the United States has
always been the same:
employers are interested in cheaper
workers - they always are - and immigrants
work for less money than native workers,
in most cases. Undocumented immigrants
are the best of all for employers
because you can cheat them, as employers
regularly do, and they can't go to the
police because they're undocumented; and
so they become very vulnerable. So when
that happens when we have immigration
and it lowers wages and displaces native
workers we then turn to the native-born
workers they have long-standing
grievances against their employers
they're not paid well enough they're not
taken care of they're not honored
they're not respected and they're bitter
about it and now they have the
immigrants on top of the situation enter
then the right-wing politician enter
then the racist enter then the white
supremacists this is a made-to-order
opportunity what you do is you take the
accumulated grievances of native-born
workers and you focus them not on what
employers are doing to them in this case
by bringing in cheaper workers but you
focus on those cheaper workers on the
refugees running from political military
violence on the immigrants running from
poverty on the people coming to America
for all the reasons that people always
came to America and you hope to make
political hay by turning the native a
worker against the immigrant but let me
explain why this is a fool's errand
employers have three basic ways to make
more profits at the expense of their
employees number one move out of the
United States to places where wages are
much lower American companies have been
doing that big time for 40 years second
if you can't go there or you don't want
to bring
the lower wage workers here that's
immigration and if neither of those are
available there's the really big one
that's exciting
it's called automation get rid of the
job altogether replacing it with a
machine in the 70s 80s and 90s it was
computers then it morphed into robots
and the next big wave about to crash and
American capitalism is artificial
intelligence capitalists will do
whichever one of those works for them
if you stop immigration they'll move to
going out of the country again or
they'll focus on automation that's the
name of the game the problem is not the
immigrant the problem is a system in
which the profits of a few are enhanced
by the taking it out on the mass of the
working people don't be fooled the
immigrant is not the problem
never was it's a system that has all
these alternative ways to stick it to
the mass of workers spending money on a
wall which can't work anyway is a
terribly silly a kind of stupid mistake
about understanding what the system is
it's either committed out of ignorance
or it's committed by people who know
exactly that the problem is the system
and want everyone else not to go there
because of where it leads in terms of
anti-systemic understanding and action
which is precisely what I want to honor
today so let's turn to our next update
which makes this job of honoring people
who fight easier as many of you know
because we've been talking about it for
several months now masses of people in
France
put on yellow vests and go into the
streets particularly on Saturdays to
show the government that they're angry
about their taxes about their pensions
about their wages and they've been very
successful the government has tried
everything
under president macro to stop it to
prevent it total failure of the
government in fact they've had to give
in to some of the demands they got rid
of a tax on fuel they improved the
pension situation and they raised the
minimum wage mazing what they were able
to achieve but the government still
wants to shut him down
and so a big milestone was achieved on
February 5th, when the largest Federation
of labor unions in France, which had kept
its distance from this mass uprising of
the people, decided to call a general
strike around many similar issues for
working people, and invited the yellow
vests to join them, which they did. That's
the death knell of mr. Macron's
government; may take a while, but he's
done. The merger of a mass popular
movement with the largest labor union
movement - and labor unions are strong in
France, not like in the United States -
that is a force that no president has
been able to long resist; and mr. Macron,
who's less than most of the rest of them
will not either and efforts to dissuade
people from seeing the handwriting on
the wall are not working in France
massive action of people in the street
has made all the difference there too. My
next update is a shout out, if you like. I
want to honor a photographer by the name
of Nan Goldin. Perhaps many of you know
of her work. She has a group called PAIN,
P. A. I. N. It stands for prescription
addiction prevention now; and they've
been doing something remarkable. They've
had ly-ins, sit-ins, demonstrations at New
York's Guggenheim Museum and the Museum
of Modern Art, at the Smithsonian
Institute in Washington DC, and at
Harvard's Art Museum in Cambridge
Massachusetts. And what is their issue?They
are protesting the fact that in all
those institutions, they have honored the
Sackler family, S A C K L E R. That's
the family that owns and dominates
Perdue pharmaceuticals the producer of
oxycontin one of the deadliest overdosed
using drugs in this country that has
killed many tens of thousands of
Americans over the years oxycontin
Sackler they've made a lot of money and
that's why they went into this business
to make money that's what happens when
you allow your health system to be
involved with profit to capitalistic
aliy run your health system you give an
incentive to make money off of drugs
that can be and are used for suicide in
effect by tens of thousands of our
fellow citizens and Nan Goldin and the
people of pain don't want those folks
honored who make money off of death they
don't want to see that and they're
protesting as is their right and as is
the service they're doing to all of us
but the message here is not to be
particularly angry at this one example
there are unfortunately many other
examples the key thing to understand is
that it's the profit that drove that
company to produce that good to market
it and spend a lot of money marketing it
to physicians its profit that drove
pharmacies around the country to honor
the prescriptions for oxycontin even
though they knew perfectly well that
there was a market in reselling them by
the people to whom they wrote the
prescriptions a profit driven system to
produce the drugs to disseminate the
drugs to prescribe the drugs that's
what's the law that has to be changed to
allow that profit making and health
don't go well together and the
never have I want to conclude by talking
about another stand up step up a fight
back that deserves attention this time
it's the New York City Council in New
York City it's currently considering a
bill that would require employers in
fast-food restaurants and in New York
City alone they have 60,000 employees
we're talking a lot of people here the
bill would require the employer's to
show cause before they can fire anyone
in other words currently that employer
can fire any worker at any time for any
reason that they don't have to account
to either the person they fire or anyone
else for what they do and this bill
would say you can't do that
if you can't show a reasonable basis for
firing a person you can't fire them why
am i interested in this well I want to
shout out that people are fighting back
workers are fighting back and they're
getting people in in office to work with
them to put a bill like that forward and
to struggle for it but there's a deeper
issue here we really have two competing
freedoms Americans like a lot to talk
about freedom one is the freedom of the
employer to fire at will they want that
freedom on the other side is the freedom
of the employee to know that if he or
she is doing their job as that job was
laid out to them when they were hired
they can't be fired by an employer who
for whatever reason decides to do so the
freedom of having a secure job if you're
performing the freedom of your family to
rely on the income the freedom of your
neighborhood to rely on your ability to
sustain a neighborhood with the income
from your job those freedoms are up
against the freedom of the employer to
fire you at will so we have competing
freedoms
in capitalism in general we know which
freedom rules
that's why fast-food employers can now
fire at will but the majority are
employees not employers and it's not
even close the number of employers is
very small the number of employees large
whose freedom should rule is the problem
and capitalism is the system that makes
that problem
acute we've come to the end of the first
half of economic update I want to remind
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welcome back friends to the second half
of economic update in this second half I
want to deal with two larger subjects as
we often do in the second half of
economic update the first one has to do
with changes in our neighbor to the
south Mexico and the second one has to
do with the estate tax here in the
United States and what is happening to
it and I want to draw some lessons about
both of these issues you know Mexico has
gotten a bad rap recently from our
president and the people around him
insults attacks demeaning of an entire
society accusations and of course the
ultimate indignity
of an immense wall as if that was going
to do something in the process Americans
have been treated to a description and
an approach to our neighbors to the
South that is scandalous unjust and
ignorant and I want to build on one part
of that story on the other side of the
border just on the other side of the
border Mexico has erected special
industrial zones
they're called maquiladora zones and
they're places where enterprises can set
up under favorable conditions and many
of them produce for the US market which
is just across the nearby border and
workers have come there from all over
Mexico for the jobs that have been
created and the United States has
benefited a great deal by having
relatively low workers very close to the
United States so there aren't
transportation costs may not have been
very good for American workers whose
jobs were moved across a border and
given to people for much less but that's
how capitalism works isn't it in any
case what has happened recently is a
testimony to the Mexican working class a
wave have of strikes has swept across
the maquiladora industries more
successful and more powerful than any
before and indeed having started or at
least achieved a certain power in the
famous city of Madame Oros they are now
threatening these strikes are to move
across Mexico it comes as a time when a
new more progressive government under
Obrador is interested in shaking up the
cozy relationship between employers and
a good number of the labor unions in
Mexico a system that produced low wages
in that society and minimize the
challenges to them so the strikers some
of which working within
with their unions some of them working
over and against their unions have been
extraordinarily successful in Matamoros
the strikers so far were able to get
games in this case $1700 bonus an
enormous amount of money there
roughly a quarter of many workers
incomes annual incomes they also were
able to get an increase of about $2 a
day in salary and I say this in order to
drive home that this is a big gain
because average workers that were
striking get about $12 per day as their
wages in that part of Mexico the
movement is called the 2032 movement
because it refers to the 20 percent pay
increase the strikers are demanding and
the 32,000 peso bonus they have demanded
and already in many cases received this
is a profound successful labor movement
in Mexico one that Americans who need a
profound powerful successful labor
movement - should envy should admire and
should recognize so - is what's going on
in Mexico more broadly another reason to
dismiss the casual almost racist
denunciations coming down from mr. Trump
and those around him since taking office
last December lopez obrador
has reached agreement to increase
Mexico's minimum wage raising it 16
percent nationwide and along the border
in the maquiladora area doubling it to
$9 a day
this is after 30 years when wages did
not keep up with prices in effect they
fell so there's much about our southern
neighbor that Americans have - it
meir to respect conditions for workers
to strike there are harder than in the
United States and yet they've done so
they've organized and they have
prevailed well what about the accusation
that Mexico delivers drugs into the
United States
well let's deal with that attacking
Mexico for delivering drugs is a little
bit like attacking the pharmacist for
filling prescriptions
he's just the middleman if you're really
interested in doing something about the
drug epidemic in this country you'd need
to deal with the conditions in the
United States that lead people to need
to do that you'd also have to deal with
the profit-making incentive to producers
of drugs in the United States and around
the world who funnel them through Mexico
but who are responsible for producing
them the United States has been engaged
in the drug war for 40 years and like so
many of the wars we fought the United
States has lost the drugs are available
now as much as they ever were maybe more
so and a wall is just the latest in the
unsuccessful inadequate failure to deal
with the roots of the problem which are
the profit driven production on one side
and the broken lives inadequate jobs and
low income here in the United States
that fosters and reinforces the market
for drugs when will people learn and
then there's the wall and let me add to
the wall the trial in New York City of
El Chapo a leading drug purveyor in
Mexico
these are spectacles the wall is a
spectacle to try to get mr. Trump
reelected to pander to his base to give
people the illusion just like every
other installment in the war on drugs
that this one will
now be successful oh and all the others
weren't and the trial of El Chapo you're
going to imprison a leader there are
10,000 more waiting right behind him you
haven't dealt with the cause of the
problem you haven't dealt with the
production of the drugs you haven't
dealt with a demand for the drugs this
is a pathetic failure designed to
distract people from the reality which
is a system that by profit Foster's the
production of these kinds of items and
by failure to give people decent jobs
decent lives adequate incomes creates
the demand for the drugs and if you have
a system that creates the supply on one
side and the demand on the other walls
are not going to solve the problem of
bringing the supply to where the demand
that yields the profits is waiting you
can twist and turn you can have one
distraction one spectacular item after
another mr. Trump's wall is the latest
in a hopeless line of failures to deal
with a serious problem that has hurt so
many Americans for so many years that it
is yet again another politicians little
political football tells us more than
about that sad politician that tells us
about a system that the not only doesn't
work but keeps distracting us from that
fact then there's the inheritance tax I
want to talk to you about that and I
want to do that in an important way the
whole idea of a tax on estates or
inheritance and those words are
synonymous here the whole idea was the
notion which some people used to think
was American in some particular way the
notion of equal opportunity that somehow
each fresh new innocent baby born into
this world
would have an equal opportunity to
develop his or her skills attitudes
capabilities you name it to do the best
they could in their life and that it
isn't fair that one baby starts with a
silver spoon in its mouth and the other
one with nothing to eat whether without
a spoon and that therefore we say to
people if you do well in life and you
accumulate some wealth good for you but
most of it is going to be taxed so that
your children have an equal opportunity
with the children of folks who have
nothing to leave to their kids because
of the salaries they didn't get the
wages they didn't earn and the capital
gains they never saw that's the idea and
for a long time in the United States we
at least gave lip service that is we had
an estate tax we said beyond an amount
and it wasn't very large sizable but not
crazy we would tax estates now it's true
we didn't attacks tax on as
energetically as we might have but we
did let me remind you that for much of
the post-war period after World War two
estate taxes in this country were
between 60 and 80 percent so we took a
big amount we let the first few hundred
thousand go and after that we had we
taxed it but all of that changed
recently and nowhere more excitedly than
under mr. Trump and the Republicans when
they got elected here was the exemption
the first five and a half million
dollars that was already achieved by
Republicans and Democrats before mr.
Trump they raised the exemption all the
way up to the first five and a half
million you could leave to anyone you
wanted to and there was no estate tax
but in the tax reform of December 2017
that mr. minuchin the second
the Treasury and mr. Trump said would
not be good for rich people but only
good for the middle class a straight-out
lie there really is no other word to use
one of the things that tax reform did
was raise the exemption from five and a
half million to eleven point one eight
million per person so that a couple in
the United States a wealthy couple say
mr. and mrs. Gates or mr. and mrs.
bezels or any of them could leave you
ready twenty two point three six million
dollars to their descendants and pay not
a nickel of estate tax and how much on
the amount above that since they're
billionaires forty percent not sixty to
eighty forty percent
Wow that's a gift to the richest people
in this country an immense gift worth
millions or even billions in the case of
the richest of all it was a gift to the
richest those who need at least got the
biggest gain out of that tax reform
minuchin and Trump said the opposite but
the truth is what I just told you so we
don't have it
estate tax that really bites and we have
an exemption that means a child of
wealthy people can walk away with that
many with twenty two bill billion
dollars free and clear you know what
this does it cements into our culture
the gap between rich and poor it makes
it inheritable we are doing to the
richest of America
what monarchies used to do for the King
who left it all to his son the prince
who left it all to his son the prince
forever
we're making it impossible because the
wealth is handled in these wealthy
families who keep it through the
generations
which means the rest of you and me don't
get it there is no equal opportunity
less than there was in the past and it
wasn't great in the
either this is a country which is more
and more falling into warring minorities
with the wealth and power and the rest
of us sitting there waiting for what for
something like the yellow vests in
France to emerge and say we've had
enough we've come to the end of economic
update for today I want to thank you for
joining us I want to ask you to partner
with us spread the word and I look
forward to speaking with you again next
week
