Welcome, friends, to another edition of Economic Update: a weekly program devoted
to the economic dimensions of our lives, our jobs, our debts, our incomes, the
conditions of our work and what they look like coming down the road, not just
for us, but for our children as well. I'm your host Richard Wolff. I've been a
Professor of Economics all my adult life which I think has prepared me - I hope - for
offering some insights as to what's going on in the economy we all depend on and live in and with.
I want to begin today with a particular update before doing the announcements I often start with.
And this has to do with, yes, our President Donald Trump. On the 17th and 16th of the month of August he
entered into a major fight with some of the largest corporations here in the United States.
Merck in the pharmaceuticals, Amazon in the delivery operations, and
many others. In some cases he attacked particular CEOs, in other cases the company as a whole.
And this is interesting and demands a bit of economic analysis.
So let me do that.
The Republican Party has always been a coalition - as has the Democratic Party - and the
Republican Party's basic coalition had two parts: on the one side, business - particularly big business - was
the champion, the funder, and the dominant influence.
Junior partner was what we might call "social conservatives." A collection of groups that included
fundamentalist religious folks, people who were in favor of all kinds of
particular social conventions usually lumped under the term "conservative."
And the Republican Party to be successful had to hold this
coalition together. It had to be the party at the same time of business
- particularly big business - and of social conservatives. And this was a difficult "coalition" to keep together.
When the Republicans were able to do that, they would win.
And when they failed to do it they would lose. When Mr. Trump attacked
the large corporate CEOs, he was straining - to be as polite as I can - that coalition,
When he ended the Business Advisory Councils. Which he really had to
do because the business leaders were quitting, resigning, from being on those
councils as a protest, particularly of what the President said in the aftermath of those horrible events in Virginia.
But let's look at one case in particular to understand what's at stake.
Mr. Trump specifically singled out and attacked
the Amazon Corporation. And he attacked that corporation whose leader had been
critical of him, for not paying taxes and for ruining all across the United States
small retailers that were competitors, and many towns that depended on those
retailers, eliminating many jobs by their high-tech approach to the delivery
process, and so on. And true to form, the defenders of Amazon rushed forward to
say there should be no criticism, all that Amazon is doing is bringing
progress and higher technology to the particular areas where they are dominant.
Well, let's take a closer look. The argument about technological advance is really silly.
Sure, technology advances, but what matters is how you use it.
Do you use it to make profit for a small number of people? That's what Amazon is doing.
Or do you use it to relieve large numbers of people of drudgery of the sort we used to have?
The mass of people would like technology to be used for the second purpose,
capitalist enterprises prefer to use it for the first, and Amazon uses it for the first.
There's not much more to be said about it. What about taxes?
Well the truth of the matter is that Mr. Trump has a point.
Amazon doesn't pay its fair share of taxes and never did. Let me just give you
one statistic, which for me is kind of overwhelming.
Between 2007-2015 the average annual percentage of taxes paid on their profits by the Amazon Corporation was 13%.
That's not just for their federal taxes; it includes also
the taxes they paid to the state governments where they are active, and the taxes they
pay to the local governments. You know if you own a big warehouse in a local
community, you have to pay property tax like every other business. And if you're
active in a state that has a corporate profits tax - which most states do - you
have to pay. So you put together the federal, state, and local, and it worked out to 13%.
Folks, that's a smaller percentage than most Americans pay - individual Americans - when they put together
the federal income tax, the state income tax, the local property tax, they pay on their automobile or their home.
So Amazon has been getting away with tax evasion, using the law, using an
army of accountants, using an army of lawyers. When Mr. Trump goes after them,
he is right about their tax evasion. Now, true, he's never done a thing about it.
He's never joined any movement, let alone lead one that did anything about this,
and he is straining the alliance. The business community wanted things out of Mr. Trump and supported him.
They wanted to get out of those high taxes that the Obamacare added to them. Mr. Trump failed.
They wanted a big tax reform that would lower the tax burden on them.
He hasn't delivered yet and it's not clear if he ever will. What the business
community got out of him is little so far, and it's not looking good going further.
And now with his support of the conservatives, and even the most
right-wing of the conservatives, they're facing political social turmoil, which they don't want either.
So the coalition of the Republicans is fraying.
Meanwhile, Mr. Trump, as he goes and lurches to the right, and Amazon as they blithely avoid
paying taxes, call each other out. It's kind of a modern version of the falling out among thieves.
The next update I want to talk to you about Americans dying younger.
A big story in Bloomberg News back on August 8th that deserves much more attention than it got.
Mortality - that's the average length of our lives before we die, how long we live - has been falling since the 1950s.
A sign of economic well-being, a sign of economic improvement of people's conditions.
But it stopped rising in 2011, and in the last two years...excuse me, stopped falling until 2011,
and it's been rising. That is we are dying at an earlier age.
This is extremely important for at least two reasons I want to bring to your attention.
First, it is a stunning statistic undermining the notion that we
are enjoying an economic recovery in the United States. We aren't.
And one of the stunning demonstrations of that fact is we are dying at a lower average age than we used to.
The improvement in longevity is over. It's now deteriorating, and that
is a very powerful comment on the conditions of people's lives.
Especially because they experts tell us that the economic conditions of people's lives,
the stresses associated with them, the physical and mental exertions associated
with them, are major causes of how long we live. So it's a critical sign that
there's a problem with the economic situation. We have not recovered, in fact
it's going the other way. And here's the second economic fact: corporations as
Bloomberg points out, are making billions by this, And you know why? Very simple.
They have obligations to pay pensions. The sooner the worker dies after
completing his or her work life, the less they have to pay out, it's even making
the social security systems crisis less than it was before because the
government doesn't have to pay out after you die. So this bad news for the mass of
people is in a perverse way good news for the very corporations whose work
conditions are part of the reason why people are dying earlier.
Before I turn to the next updates, I want to remind you by making a short announcement of some
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Now back to our updates.
Once again I find myself talking to you about the Monsanto Corporation.
It's on this program all too often and in each case virtually each
case it's because it is doing something that demonstrates what it means when you
have an economic system that puts profit before all else or to use the other way
of saying it makes profit the bottom line the thing that is most to be
focused on this time Monsanto has produced a remarkable herbicide if I
understand exactly what it is the name of it is die Campbell di CA M B oh this
herbicide it gets rid of weeds at least that's the idea is produced by
Monsanto but there's an interesting story of a new version produced by them
and marketed by them that was covered by Reuters the international news agency
very short time ago and I want to bring it to your attention why well it turns
out that when Diane Campbell was used and particularly on beans peaches and
vegetable gardens they died that is not the weeds but the bean plants and the
beech trees and the vegetable plants that's not what the herbicide is
supposed to do and it devastated the farms the livelihoods and the natural
environment that we all depend on in Lourdes in millions of acres apparently
startling pictures swirled around the internet so Reuters looked into it and
what they found is something I want to tell you about what they found is that
Monsanto had departed from the usual procedure the usual procedure when you
have a new chemical like this and you want to market it is that your
scientists test whether it's safe but of course not only your scientists
typically the company that makes such a thing gives samples to university
laboratories and two other independent testers so they can all make the
relevant tests and only market the product if all the tests indicate that
it's safe to be used on food products one of the things that every test should
incorporate should test for is called volatility and I had to look up what
that meant so let me share it with you volatility
is a measure of whether an herbicide if used in one part of a field is likely to
blow over and affect the plants in another part of the fee
volatility is a measure of where the herbicide can go beyond where you apply
it and now we get the interesting conclusion of the story
Monsanto did give the University of Arkansas the University of Missouri and
the University of Illinois samples but for the first time that anyone in these
universities had ever seen as the Reuters story makes clear they gave them
them with a strict rule that had to be signed and agreed to no test for
volatility test for everything else about the safety but not the volatility
Wow and guess what the problem was when the herbicide was finally produced and
sold and used by unwitting farmers turns out the product had a problem with
volatility it blew from those areas where it was initially applied to nearby
areas particularly with beans peaches and vegetable gardens when confronted by
Reuters with this story this story of a bizarre unusual procedure that made it
profitable for Monsanto to sell something which had in the end
devastating effects I would like to tell you what mr. Scott Partridge Monsanto's
vice president of Global Strategy here's what he had to say we tested it and it
seemed safe whoo but here's the better quotation to get meaningful data takes a
long long time mr. partridge said quote this product needed to get into the
hands of growers end of quotation well that's not very subtle is it they were
in a rush to make money and that's what they did they rushed the
product and they made a lot of money but in the process they put their
profitability what they could market to growers ahead of what was safe for the
human race and we are suffering as a result and this happened so often that I
just occasionally take your and my time to give you an example the important
lesson here is to see that there's a system in this society that fosters
promotes incentivizes this kind of behavior that's the problem
I really am not picking on month Monsanto although they do provide so
many examples but I could pick others as I occasionally do but again the
important point is what kind of a system functions in this way
let me turn next to another update that caught my eye and
again it has multiple lessons for us this one comes for those of you who'd
like to pursue the details from the New York Times dated August 16th 2017 the
report in The Times says the following that 100,000 children in New York City
were homeless at some time during the 2015-2016 period that we are headed for
and pull already this year this coming school year be in a situation where one
in seven public school children in New York City is homeless part of the year
why am I talking to you about this well first it's a stunning statistic 100,000
children are suffering homelessness children enrolled in school this is one
of the riches cities in the world New York City in one
of the richest countries in the world the United States what in the world is
going on if a hundred thousand children in one city are suffering homelessness
part of the year beyond that I want to talk to you about what this means
since perhaps you haven't thought that through and when I read this story I
began to try to think it through and there were things in the story that
helped it first thing in the story that caught my mind graduation rates turns
out the school has been keeping records one is the percentage of students who
graduate high school who were homeless at part of the time versus those who did
not have that problem the answers are stunning right homeless
students graduated at a rate of 55% barely over half graduated students who
had steady housing graduated at the rate of 74% a completely different number my
goodness here's another statistic in the elementary school the first school that
a child attends homeless students missed on average 88 days of school all right I
don't want to over dramatize this but if you meet miss 88 days of school on
average and remember an average means a large number of students missed even
more than that but eighty eight's enough the average just like 60 would be enough
and forty would be enough in what sense in the sense that you're gonna fall
behind you're not gonna be able to keep up you will have missed this lesson or
that lesson in arithmetic or reading or writing and then you will have the added
burden of coming to school not able to do what the other students sitting
around you are able to do and feeling bad
and maybe hiding it either from your parents for your friends or maybe even
from yourself and if you fall behind early on that tends to get worse over
time alienating you from the other kids and
from the whole educational process because it is embarrassing because it is
undermining your self-esteem as a human being we are doing an unspeakable
injustice to millions of our fellow citizens children by blocking their
ability to access a decent education and a decent life based on a decent
education but I want to take it another step there are those amongst us whose
response to the awful problem of poverty in this society is to blame the poor to
blame the victim but what this story shows is how terribly wrong that is how
large numbers of the poor are people who at a time when they have no
responsibility for it at all were denied the opportunity for an education from
the beginning I'm talking tinder garden first in second grade who were deprived
through no fault of their own from the access to an education throwing them
back in terms of their levels of achievement making their relationships
to the rest of their schoolmates and to the school experience as a whole one
full of embarrassment difficulty shame failure to blame them as adults for
their poverty without recognizing how much of that poverty is accounted for by
a failure of their system we are not a poor country we have huge amounts of
housing that sits empty we have the capacity to build housing
that is as good as any in the world what excuse could there be and then to point
to the poverty that we have allowed to evolve and to blame the poor once you
understand what the condition of our schools is that really takes a bad
problem and makes it worse homeless people have 10 times more problems than
everybody else because they're homeless this does not require rocket science
children as I've just shown you suffer especially in something as vital as
their education from the fact of homelessness we know from the statistics
of homelessness that more and more of the homeless are families parents and
their children we know where this ends up what kind of a society is unable to
make the decision that those who have extraordinary wealth should be
encouraged and if they fail to heed the encouragement should be required whether
it's by tax functions or by changing the wages people are paid so we don't have
to take it from somebody to give it to somebody else because we pay good wages
and give decent jobs to people from the beginning whatever it takes
we can solve the problem of homelessness and in that act do a major thing for
social justice for innocent children and to eliminate poverty in the long run
which flows from that homelessness and its impact on the children of this
nation it seems to me extraordinary to read such a statistic and do not have it
create the uproar that it deserves in terms of both the problem it presents
but the solution it Christel clearly lays out for how to solve the problem
we've come to the end of the first half of today's economic update I would like
to urge you again the follow us on patreon.com and to make sure you make
use of our websites our DeWulf with two FS comm and democracy at work dot info
that's all one word democracy at work dot I an F Oh
we will have a short interlude and then we will come right back with the second
half of this program which will involve a very interesting interview about the
water issues that the devil the United States in every part of our country in
terms of adequate water in terms of safety in terms of drink ability water
as you well know is one of the most basic requirements of human life and
nothing is more urgent than the human right to have access to clean safe water
please stay with us we will be right back
you
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