Welcome friends to another edition of
Economic Update a weekly program devoted
to the economic dimensions of our lives
jobs debts incomes those we face those
coming down the road and those
confronting our children and the next
generation
I'm your host Richard Wolff I've been a
professor of economics all my adult life
with the hope that I can bring to bear
what I've learned to make more sense out
of the surrounding economic events than
the most major media seem able to do so
let's jump right in one of the most
important documents of the last few
weeks was a paper a pamphlet actually
issued by Oxfam international Oxfam is
the most widely used and respected
institution based in Great Britain that
studies global inequality has been doing
it for years
in January of 2018 they issued a
document entitled reward work not wealth
basically it makes the case for exactly
what it's title says but in so doing it
talks about the latest research it has
either done or commissioned on global
inequality including the attitudes of
people toward global inequality so I
want to bring you some of what they
found because it is crucial to
understanding how the capitalist system
that governs the world today both in the
so called advanced part of the world and
in the so called
less developed part if you want to make
an assessment of the capitalist system
take a look at its results it's a
logical way to proceed so here are some
of them last year that's 2017
so the biggest increase in the number of
billionaires in history
one more billionaire was added to the
list every two days there are now and
this may come as a surprise to you 2043
billionaires in the world nine out of
ten of them are men these billionaires
these 2043 individuals in a population
on this planet of seven billion
individuals mm that's point
0:01 percent of the population their
wealth last year increased by a total of
seven hundred and sixty-two billion
dollars that is the value of their
stocks and bonds and land holdings went
up by seven hundred and sixty-two
billion dollars by every known
calculation of the number of people
around the world living in extreme
poverty that amount of money is more
than you need to eradicate extreme
poverty on this planet let me drive this
point home to you the richest 2043
people on the earth became richer over
the last year by an amount of money
larger than what would have been
necessary to bring hundreds of millions
of people out of extreme poverty usually
calculated as people living on less than
one dollar and ninety cents per day for
food clothing shelter and everything
else what kind of a society would be
organized in such a way as to make the
2043
richest people on the planet seven
hundred
sixty-two billion dollars richer when
that's more than the money needed to
eradicate extreme poverty for their
fellow citizens for their fellow human
beings this is a system that can't solve
that problem that makes the problem
worse
year after year meanwhile some
statistics I've given you in the past
continued to be true and reaffirmed by
Oxfam's research the richest 1% on this
planet own more wealth than the other
99% combined the richest 1% this
happened into 2016
when over half that is the richest 1% on
more than half the other 99% fight over
the remaining half what Oxfam also did
last year know what I also want to
report to you is they interviewed they
surveyed 70,000 people in 10 countries
population of those countries represent
1/4 of the world's population so they
did this survey in countries that
together account for a quarter of the
people on this planet over
three-quarters of the people they
surveyed either agree or strongly agree
that the gap between rich and poor in
their country is too large the numbers
ranged from 58% in the Netherlands
believe that to 92 percent in Nigeria
believe that two-thirds of the
respondents in the 10 countries think
that the gap between rich and poor needs
to be addressed urgently or very
urgently so what if we got o wildly an
equal distribution of wealth and income
in the world and a vast majority of the
people who are against it and
nonetheless it gets worse but better
with each passing year
what the majority thinks is unable in
this culture and in this economy to be
translated into corrective action
overwhelming majorities want something
which doesn't happen the opposite
happens which means that those at the
top know not only have the wealth in
their hands but have bought the
political system to make sure it isn't
responsive to what the majority of
people would want this means that the
consequences of capitalism are not only
gross inequality but also the political
corruption that prevents that problem
from being addressed even though the
majority of people want it to be in a
peculiar way much of the rest of today's
economic updates will operate a little
bit to illustrate what the summary that
Oxfam has produced allowed me to just
tell you about so let's begin let me
introduce to you the owner of a store
you may have encountered if not
personally well through the internet the
store in question is called Victoria's
Secret it is a famous store that sells
lingerie and all kinds of underwear and
so forth the owner is a billionaire one
of the 2043 I just told you about his
name is Leslie Wexner, WEXNER, he
is 78 years of age and he is worth
apparently
seven billion dollars that is he owns
seven billion dollars worth of oh I'm
gonna tell you about some of the things
he owns but I presume most of it is
stocks and bonds because that's what
most of the wealthy hold most of their
wealth in those forms but mr. Wexler
lives well
perhaps most famous is a huge mansion in
Britain mansions in Britain have their
own name this one is called Fox coat
fo x Co te cost him apparently 30
million dollars it is referred to in the
press as a gentleman's shooting estate
in October helicopters came in and
apparently the shooting was done from
the helicopter what kind of sport you
might want to call this I leave to your
judgment and your imagination
mr. Wexner also owns a 47 million dollar
mansion outside of Columbus Ohio
likewise one of the largest yachts ever
built in the world he owns it in 1997 he
got some more publicity when he paid
sixteen point five million dollars for a
1954 Ferrari automobile but he's in
litigation fighting with the former
owner or the auction house that sold it
to him and so forth why am I telling you
this because I want you to understand
that the people who are billionaires are
only billionaires because the rest of us
enable them to be billionaires the
people who go in and spend large amounts
of money on the products of Victoria
Secret when you buy that highly priced
piece of clothing you're feeding the
billionaire mr. Wexner you're paying for
that yacht and that mansion every time
you shop there and I don't mean to pick
on Victoria's Secret although I do get a
bit of a kick out of it because I could
do the same thing with all the other
billionaires all of whom are in that
position because you and I pay the money
that flows into their pockets you might
think
that if we pay the money we would have
some say about how that money is used
but not in a capitalist system they can
use it and Mr. Wexner has done it in the
way I've just summarized my next
economic update takes me once again to
the issue of immigration I don't mean to
harp on it but it is something that
keeps being in the news why because mr.
Trump and the Republicans think they
have a politically viable way to impress
people so now let's do the numbers to
see whether there's any truth in it the
population of the United States is 325
million people roughly so if we want to
talk about the economic well-being of
the American people we're talking about
the economic well-being the job holders
who are roughly half of that population
how many undocumented immigrants are
there and those are the only ones that
are being talked about when there's all
this talk about stopping immigration or
reversing immigration or expelling
undocumented immigrants best guess of
the United States government eleven
point eight million so let's be clear
that right we're talking when we talk
about immigration undocumented
immigration about eleven that's rounded
off twelve million people in a
population of 325 million people here's
a hot flash for all of you nothing about
that eleven point eight million no
matter what happens to them or what is
done to them is gonna fundamentally
alter the economic situation of the
American people lots of attention to
expelling these 700,000 or closing off
the border to these million you're not
talking about things that are gonna
change the problems of the American
people the economic problems the whole
focus on immigration
is fake is phony it's a way to distract
Americans from the economic problems
they do have serious ones that affect
tens of millions of families in this
country there are not going to be
affected one way or the other in any
significant degree by anything that is
done to the immigrants so even if you
are the kind of American who
conveniently forgets that the whole
country is a country of immigrants
precisely because you wiped out the
people who were here when the immigrants
first came and even if you're the kind
of American who doesn't care about what
it means to expel people at the bottom
of the economic ladder who over a
suffered from poverty and lack of
education and poor housing and all the
rest and you want them to be the butt of
your action to fix an economy fixing it
on the backs of those most already
impoverished by it if you don't have any
moral problems with that no ethical
problems with that here's the real
argument the reasoning an economist
would give you it's not the issue
friends jobs are the issue Automation is
the issue unequal distribution of wages
and profits is the issue
our whole capitalist system is the issue
immigrants aren't the issue it's as if
you told me that the house was on fire
and I told you take a little nail file
and try to work on a corner of the wood
at the base of the house you'd scream at
me and say that that's not gonna solve
the problem of a house on fire we need a
lot of water we need other faiths but
filing the corner of a piece of wood
you're crazy
my response is an economists to the
discussion of immigration to seeing mr.
Trump and the Republican leaders in the
Democratic leaders arguing and fighting
over there is to see a system whose job
it is to distract the mass of people
suffering from it from the system itself
nobody's questioning
sister we're fighting over immigrants it
is a terrible misunderstanding of what's
going on that makes all of that possible
before I go on to other up the updates
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charge ever 24/7 continuing on our story
after the tax cut bill was passed in
December of last year a great deal of
noise was spent saying how this was in
the words of our president a middle
class tax cut and so forth I wanted to
do some research to basically answer the
question is the tax cut that was passed
by mr. Trump and the Republicans
something that will really transform
America's people fix the middle class
rebuild the middle class save the middle
class transform its economic situation
so let me tell you the research I did in
their results I found first I made use
of research done by the Tax Policy
Center a non partisan very good very
well-qualified research outfit and they
sat down and did a study of how each
level of household in America would be
affected by the tax cut let me give you
just a small flavor of what they said if
you earn less than twenty five thousand
dollars a year so you are among the
poorer folks in America the tax cut will
save you get ready because it's really
gonna change your life if you were in
less than twenty five thousand that tax
cut will save you sixty dollars that's
right you heard me sixty dollars if you
were in between twenty five thousand and
forty nine thousand dollars a year it
will save you three hundred and sixty
dollars if you earn between forty nine
and eighty six thousand dollars a year
it will save you
nine hundred and thirty dollars that's
most Americans right there so most
Americans are gonna save between sixty
and nine hundred dollars I understand
$900 a significant amount of money for a
lot of people it's not gonna transform
your life it's what you save in the
entire year not per week not per month
that's what you save across 2018 by
virtue of that fact now if you are a
millionaire if you earn over a lot I'll
use this number because you might find
it interesting if you earn over three
point four million dollars a year here's
how much you will save by the tax cut in
2018 ready here we go one hundred and
ninety three thousand three hundred and
eighty dollars let me do that again if
you weren't over three point four
million dollars you
we'll save nearly $200,000 on your time
that's a lot of money in order to save a
lot of money you already have to have a
lot of money that's how this system
always works nothing new has happened in
this tax cut for the vast majority of
Americans what you save in taxes will
not fundamentally change your situation
at all this wasn't a tax cut for you but
it was a tax cut for the really rich
they will now have an extra two hundred
thousand dollars not you it was not a
tax cut for you there was a tax cut of
your expense because you have to
remember that when they cut all those
taxes that don't have to be paid
particularly not by rich people the next
step is to say the government not
getting all that money from people will
not be able to fund a whole lot of
programs for school kids for road
maintenance for college education we're
gonna have a season of cutting because
there isn't enough money because they
cut taxes above all on the rich so
you're gonna not get the benefit of the
tax cut but you are likely going to pay
the cost of the tax cut which is in a
reduction in the quality and the
quantity of public services in the
United States which middle and
lower-income people rely on more than
the folks at the top you want a tax cut
for the middle class then give it to the
middle class we don't do that in America
we say we do it but we don't do it in
case you're wondering we have actually a
case study that proves all this back in
2012 a person like Trump a man named Sam
Brownback became the governor of Kansas
and he did in Kansas what mr. Trump has
now done he cut taxes on the rich and he
cut taxes on corporations promising it
would really explode
the economy of Kansas it didn't do
anything of the sort
Kansas went downward its unemployment
got worse than the rest of the America
in a way it hadn't before there was no
explosion of jobs none of it so bad is
it that in the last session of the
Kansas Legislature they put back in the
very taxes that they had cut out under
mr. Brownback and he was dispatched off
as an ambassador to someplace abroad I
can't remember the name of the country
he's gone gone from Kansas gone from the
United States a disaster because it
didn't work in Kansas it's of course
logical that the same kind of
politicians will now do it in the
country as a whole next update many of
you have no doubt watched with horror
the public trial of a doctor who worked
on Olympic athletes in the United States
particularly young women who was also
for a long time a professor of medical
sciences at Michigan State University he
has been sentenced to spend the rest of
his life in jail he has had to listen to
150 or maybe more young women testify as
to what he did to them over 20 or 30
years of being the official doctor for
the USA Gymnastics that organizes our
Olympic competitors and likewise his
activities at Michigan State in recent
weeks the president of Michigan State
University other officials there and
likewise the entire board of USA
Gymnastics quit and they quit because of
a rising chorus of anger and bitterness
not just from the women who suffered the
sexual abuse this
sexual assaults over all those years not
even from the just from their families
their friends their communities but from
the general public and I want to say to
you a word about that because there's an
economic lesson in all of this here's
the lesson if you organize a teaching
institution a university such as
Michigan State a good big State
University if you organize it as a
school it behaves in one way if you
organize it as a business it behaves in
a different way a business depends on
customers it is afraid to reveal any of
its shortcomings to its customers lest
they go someplace else
it's afraid to admit to its shareholders
or those who control it than it did bad
things for fear they will invest
somewhere else businesses tend to hide
the illegal the immoral that they do
because it's in their interest to do
that the behavior of the people who run
Michigan State University is the
behavior of people in a business it
turns out that the police department of
Michigan State University received
something on the order of 100 complaints
from young athletes at the University
about this same dr. nasir some of them
were pursued some of them were nothing
ever happened the administration failed
to take the most minimal protections how
in the world did you not have a major
investigation after a hundred complaints
what is the what is the possibility that
you didn't know that's not serious that
you didn't care I'm not willing to
assume that about these people I don't
think there
monsters but they are caught up in a
system that rewards them for keeping it
quiet for hushing it up for not letting
anyone know and when you do that you
don't expose the problem and you don't
solve the problem you subordinate the
solving of the problem to the keeping up
of your income your money your profits
long ago we made major universities into
businesses that sell sports that sell
events that sell all kinds of things
they even sell positions in their
schools that's not healthy and one of
the prices you pay when you mix business
with education is you get business type
results hiding dis simulating making
money even at the expense of the most
basic kinds of human care for one
another
michigan state stands exposed but these
problems are you not unique to Michigan
State they affect the entire universe of
higher education and other institutions
being businesslike has always been a
very mixed bag we've come to the end of
economic updates first half-hour please
stay with us I think you'll find this
second half hour today as interesting if
not more
