Welcome friends to another edition of
Economic Update a weekly program devoted
to the economic dimensions of our lives
jobs incomes debts those now those in
the future and those besetting our
children as they face the future - 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 economic updates about
what's happening around us. I want to
begin today with a small European
countries sudden transformation. The
country is Armenia a place of 3 million
people that was until relatively
recently a Soviet republic is now an
independent country and it has suffered
after leaving the declining Soviet Union
from corruption from a deepening sense
of inequality that was real and finally
by that marker of inequality when young
people in large numbers leave a country
because they can't see a future for
themselves and so emigrate something
afflicting Greece something afflicting
many of the problematised countries
particularly in the south of Europe so
it was with great hope that the Armenian
people and those of us who watch noticed
that there were spring demonstrations
across the spring of this year that were
finally bitter enough and large enough
to fall force out of power the old
Republican Party and particularly its
president Sargsyan I hope I pronounced
that correctly and into office came the
opposition party led by Nicole Passion
Ian the reason I bring this up is not
only to celebrate
a progressive change of government
particularly one brought out by mass
action of people which is the most
democratic way it's ever done but I want
to raise a fundamental question not just
for Armenia but for all the other
countries that have had or may soon have
Springs like this of their own like the
Tunisian Spring and the Arab Spring and
so on
they make political changes they throw
out the old scoundrels and they bring in
new people devoted to fighting
corruption to ending the inequality to
making it no longer a problem for young
people to build the future at home but
the truth of it is unless you are
willing to change the basic economic
system you cannot achieve those ends a
political revolution without the
economic transformation needed to go
along with it will not succeed not in
effect was the lesson of the decline of
the Soviet Union the end of it political
changes were made no doubt long overdue
but the economic changes that had to go
with it were not of the sort or the
depth needed to support societies that
are not driven towards inequality
corruption and so on you have to face
the reality that these kinds of
transformation offer an opportunity not
just for political but for economic
transformation and the real question is
will these new progressive forces that
come into power after Springs like this
understand the need and have the
political determination to change their
economic systems my next economic update
has to do with bearings here in the
United States
they've been in recent weeks reporting
record profits
banking is doing really well and I want
to tell us all to be thoughtful about
that in the following way
the same banks that are rolling in the
profits have been complaining bitterly
over the last year or two about the
dodd-frank bill that bill passed in the
wake of the crash of 2008 that actually
put some limits on what banks could do
in the hope of for stalling yet another
crisis the banks said it would hurt them
harm them cripple them or the language
you should have listened to it as I
unfortunately had to do and yet here it
comes the dodd-frank bill has nothing to
do with bank profitability they've been
more profitable with it than they had
been before
without it sure enough the tax cut last
December is helping bank profits -
that's right the tax cut and the
dodd-frank bill are signs that the
banking industry is able to get the
political support it wants cut taxes and
no real reform either why because the
people who live off profit run this
society now and they want to run it to
make more of those profits that's what
they do they complain about anything and
everything that stands in their way
even as they make more money it's kind
of a politics of pay to play and the
banks have a lot of money to use and
they're playing the government every
which way they can and it's working out
really well for them third update for
today early on mr. Trump boasted about
what he had done
for the harley-davidson company the big
motorcycle producer he was saving jobs
he was making it America great again by
keeping jobs here
then came the tax cut at the end of last
year providing a big boost in the
profits for you guests at
harley-davidson and what did
harley-davidson decide to do after all
that political theater about saving jobs
they decided that with the extra money
they had by not having to pay taxes they
could close their famous plant in Kansas
City
eight hundred workers would lose their
jobs and that's exactly what's happening
and the company is moving to York
Pennsylvania where wages are
significantly lower than they were in
Kansas City now only that with new
machines there'll be a net loss of about
350 jobs no warning was given to the
workers in Kansas City
despite the 22 year partnership that's
the word they used between the company
and the two unions Steel Workers and
machinists that represent the workers
what did harley-davidson say I'm gonna
read it to you because I want you to
listen to what they said after you know
the reality of what they did quote this
is a decision we did not take lightly
the Kansas City plant has been
assembling harley-davidson motorcycles
since 1997 and our employees will leave
a great legacy of quality price and
manufacturing leadership we are grateful
to them and the Kansas City community
for their many years of support and
their service to our dealers and our
riders Wow
thank you we're dumping you have a nice
day with no warning no preparation and
no funds
to help any of the 800 families left
jobless by their profit-driven decision
oh and by the way did they say anything
about the theater they had undertaken
with mr. Trump to help him politically
not a word
meanwhile Harley Davidson also announced
its opening a plant in Thailand and it
already has to one in India and one in
Brazil making America great again
knowlet's highest priority it also took
its extra tax savings and increased the
dividend to its shareholders and it
bought that 15 million of its shares in
the market at a cost of 700 million
dollars put into the hands of
shareholders who sold their shares back
and about all this mr. Trump has so far
nothing to say the theater is over the
photos were taken who cares what the
reality is well you can be sure
Kansas City is learning that it better
care next my attention was caught as I'm
sure many of yours was also by the news
from Vancouver Washington and Oregon a
young boy 15 years old in Vancouver
Washington tossed a firecracker into a
forest and the end result was a forest
fire that burned 48,000 acres terrible
thing no question about it
thoughtless careless a terrible mistake
by a 15 year old boy the Oregon judge
presiding over his trial sentenced him I
remember he was 15 when he did this -
five years probation
14 hundred hours of community service
and get this a 36 million dollar fine
and said something like punishment
befits the consequences of the boys
action all I can ask you to do is to
remember that Jamie Dimon the head of
Morgan Stanley and Lloyd Blank find the
head of Goldman Sachs did things in
their capacity that harmed way more
people and way more of this country than
anything the fifteen-year-old boy could
be accused of doing and they got no
probation no hours of community service
and no fine whatsoever crime befitting
what punishment befitting what crimes
justice in the United States if you want
to call it that at this point in the
program I would like to particularly
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Play returning to our updates the next
one has to do with the Federal Reserve
in the United States our central bank
they do a special kind of research that
we find very valuable called the survey
of household economics and decision
making and they recently released this
survey for the year 2017 and they list
there some information very valuable for
economists but two particular items I
want to bring to your attention because
they are wonderful snapshots into the
reality of the American economy right
now here's the first one an emergency
expense of four hundred dollars would
cause what kind of problems for American
families a medical emergency something
breaks in the house whatever four
hundred dollar cost forty percent of
Americans
cannot cover an emergency $400 expense
without either borrowing from others or
selling possessions
in other words 40% just under half of
American families do not have four
hundred dollars in money readily
available in the event of an emergency
costing $400 that friends is an
inadequate economic situation you should
not be in that situation forced either
to borrow from other people or sell your
possessions to handle a $400 emergency
if as the Federal Reserve smartly
decided if we raise it to $1,000 an
emergency that cost a thousand and
believe me be easier to make a list of
emergencies that cost a thousand than to
make a list of emergencies that cost 400
well then it would easily be over half
the American people cannot meet an
emergency demand for $1,000 without
either selling possessions are borrowing
from other people the majority of
Americans are in tough economic shape
that's the truth the other statistic
that just jumped out at me from the
Federal Reserve was that 20 percent of
Americans knew some other person who was
addicted either to opioids or other
painkillers
one in five Americans knew somebody
think about it next let's go to Hamburg
Germany something interesting happened
there that's also worth your time my
attention in Hamburg Germany the
decision was made by the local
authorities to close several major
highways - older diesel cars
and trucks number of cars and trucks
involved over 200,000 were basically
told you can't use these highways
anymore that's the equivalent old
something that you have spent a lot of
money on is effectively unusable on
major arteries in and around the city
where you live and/or work this was done
after the European Commission declared
that Germany among other countries was
violating the pollution limits pollution
emission from vehicle limits that were
harming the health of the people which
is the job of the European Commission to
protect the health it turns out that
Hamburg is one of 80 cities where
nitrogen dioxide levels exceed European
safety threshold levels now why the old
diesel cars and why is pollution too
high the answer has a lot to do with
what used to be called the VW scandal
but is now a scandal involving virtually
all automobile makers they faked
emissions tests or rather to be more
accurate they installed devices into
their diesel vehicles that allowed them
to report lower pollution emissions
during the testing than they actually
emitted on the road thereby exceeding
the safety limits no that's a nice way
to put it
let me put it more bluntly they damage
the health of their own people in huge
numbers so badly that the European
Commission has to come down on them and
forbid them they let these cars run on
the roads this is a direct result of
this scandal and the horror that the
Europeans understandably fee
at the betrayal that they were subjected
to by the profit-driven decisions of car
companies to make more money no matter
what it did to the air and the the
health of the people of Europe it's a
stunning maybe a little too late maybe a
little too little but it's something and
it's an admission that's worthy of some
attention my next update has to do with
a poll a poll of 250 emergency
physicians that were surveyed and asked
if they had experienced a shortage or
absence of critical medicine in their
emergency departments in hospitals and
clinics in the past month here's what
drew my attention more than one-third of
the physicians polled said patient
outcomes had been negatively affected as
a result of these shortages nearly 90
percent said they had to take time away
from patients to deal with these
shortages and 97% said they had to
substitute other medications from those
they would have preferred for their
patients I want to remind everyone
listening and watching Americans pay
more for their health care than any
other people on this planet we have the
most expensive hospitals doctors
insurance policies drugs medical
equipment in the world but the quality
of the care we get as shown in the fact
that our longevity is mediocre I need to
go to the hospital is not at all at the
bottom as it should be we pay more and
now it turns out we can't even get
reliable supplies of the drugs we need
drugs are produced as a private
capitalist commodity in this
they're produced and marketed to make
money for the companies that do it
that's the primary thing and so if they
need to create shortages maybe to make
you use this medicine rather than that
one because maybe this one is more
profitable than that one well that's
what we allow private companies to do so
I have to report to you
serious medical shortages while we pay
the highest prices in the world for this
sort of medical care I want to close out
the first half of our program today by
what might be called good news although
it depends a little on your perspective
I I admit the fifth edition of a
remarkable book it's called the wealth
ex billionaire census that's right it's
a annual report that takes a look at all
the billionaires and how they're doing
this is not very difficult to do there
aren't very many of them a couple of
thousand more or less so I want to tell
you how they did in the last full year
2017 because I'm sure you'll be happy
for them here we go the wealth of the
billionaires on this planet rose during
2017 by 24% let let me do that again and
let me be stark with you for a moment I
want you to ask yourself how did the
wealth grow that you have that the
people you know have that the people you
know about have did it do that well last
year did your wealth grow by 24% see if
you're a billionaire hit don't need it
to grow like that if you're not you do
but in capital
lism it works the other way the ones who
need it don't get it and the ones who
don't need it do and if you allow that
system to continue you will allow it to
produce these kinds of results which
people like me will have the bad taste
to report to you
the billionaire population also
rebounded in 2017 up by 15% here we go
2,750 for individuals that's right two
hundred and two thousand seven hundred
and fifty four individuals the largest
number on record are now billionaires
Wow
any other interesting results yeah
couple first it used to be that most
billionaires were located geographically
in North America but with 2017 that
changed where are most billionaires now
located answer Asia I'm an American I
was brought up to think that this was
the land of wealth and power and
dominance and you name it all the
superlatives wrapped into one how
undignified that in the era the first
full year of Donald Trump's presidency
he's presiding over a shift of the locus
of billionaires from a declining part of
the world economy to the Rising Sun of
another part billionaires of course it's
a dubious distinction if you think about
it because billionaires in Asia are even
further from the economic condition
of the mass of their people than
billionaires elsewhere in the world so
it's clear that inside of Asia like
inside of Europe like inside of the
United States the inequality keeps
growing out of control for me to say to
you that the billionaires of the world
saw their wealth go up by twenty four
percent when no one else did means that
the inequality the distance between the
rich and the rest of us keeps getting
worse and worse this is a capitalist
system like a train running down the
track seeing the stone wall but
apparently powerless to stop what's
coming I want to thank you for your
attention we've come to the end of the
first half of economic update please
stay with us after a short break we will
be right back
you
