On this week’s episode of Economic Update, with the 2024 U.S. Presidential Election only 8 days away, Professor Richard Wolff explores the shared refusal of both major candidates and their parties to face and debate solutions to the grave problems facing US capitalism in 2024: (1) inequality, (2) instability and (3) a declining empire. Instead, we are witnessing both Trump and Harris compete to be the "cheerleader in chief" for capitalism. Missing from the discourse is a genuine opposition party that might dare to offer an alternative non-capitalist vision and solution to the system's deepening problems.
Economic Update
Economic Update: The Missing Economics of the 2024 US Presidential Election
Support from the production of Economic Update comes in part from Democracy at Work. A non-profit 501(c)(3) organization and publisher of books by Richard Wolff, who is a professor of economics emeritus at UMass Amherst and a visiting professor at the New School University, has authored numerous books on the subject of social economics, including Greek thinking Marxism, Understanding Capitalism, and Democracy at Work, a cure for capitalism. Further information is available at democracy@work.info and rdwolf.com. Welcome friends to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives and those of our children. I'm your host, Richard Wolff. I want to quickly remind you that Charlie Fabian is available if you have suggestions and ideas for our programs, you can reach him at charlie.info438@gmail.com. Today's program is different from others. It's not a collection of particular pieces of analysis. It's rather an attempt to respond to what a great many of you have asked. An assessment of the economics of the election, of the Trump versus Harris effort that is now coming to a head and where you have asked me to talk about what the differences are, what their economic programs look like, what we can or should expect. So here's my response to that perfectly reasonable request. Here we go. First of all, there are plenty of reasons to support Mr. Trump over Harris or vice versa. They have important differences on issues you know about, abortion is an obvious choice. The war in Ukraine, a little bit of disagreement there, maybe a little bit hard to tell the language from the reality. Whether or not to extend the tax cuts from 2017, how harsh to be on who might be an immigrant and so on. There are the traditional Republican versus Democrat tendencies the Republicans generally favoring the employers and the Democrats generally the employees with lots of exceptions and lots of crossovers I know. So there are many reasons and if you focus on them, gun control is another and I could go on, you don't need me to do that. It's in the press all the time. But the question is, do they really differ on the basic contours of the United States economy and of the position of the United States in the world economy? Look, these are very important matters. The basic economics of the United States is going to impact you, me, your family, my family right on down the line in every community of this country, crucial, as important or more important than anything else I'm happy to say. So we ought to be able to say here is a clear difference between them on the economy. Now, how would we go about doing that? Well, we might ask them and they certainly offer to do it to give us a straight story about how they see the condition of the US economy today because out of that will come their proposal for what's a problem and what needs the action that they would do if they were elected. That'd be a reasonable way to go about this. Well, how do you evaluate an economy? Do they do that? Let alone give us a program for where to take the economy they evaluate. And the answer is, for both of them, no, they don't. What do I mean? To evaluate an economy is to take a look at the whole thing, which is complicated to do. I'm going to give you a metaphor I often use that works. The metaphor is this that an economy is like the human body. If your body hurts you somewhere, your leg, your arm, your hair, you will eventually, if it doesn't go away, and if you can't self-manage your problem, you will go to a doctor, a specialist who will answer the question, what's wrong, Doc? By doing a whole host of examinations, your temperature, your blood, your urine, inspecting your face, checking your limbs, maybe doing a CAT scan, maybe doing x-rays. There's a battery of tests to begin to give the doctor a comprehensive sense of what your ailments are. If all the doctor did was to take your temperature and then tell you either it's good news or it's bad news, you would be smart to get a different doctor. This doctor isn't doing the proper job. If he tells you your finds 98.6, well, that's very good news, but do you really want to rely on it? Now, why am I telling you this? Because neither Mr. Trump nor Ms. Harris nor their advisors are doing any of this. They're not good doctors. They're not giving you an evaluation. Ms. Harris clearly believes she has to defend the record of the Democrats in office. Mr. Biden is president over the last four years, so she cherry picks tests that make it look like the economy is doing well. Mr. Trump, being the out, does the opposite. He cherry picks a different set of statistics in order to come up with the conclusion the economy is in bad shape and you, Harris, are responsible. This is not news to any of you. We've been there a hundred times before. When Mr. Trump ended his first term, he tried to get his second one by claiming he'd done a great job. He cherry picked then to make it look like he had done a good job. The way he's cherry picking now to make it look like Biden didn't, and the Democrats do the reverse. That's why so many Americans don't listen anymore. Why should they? It's a little bit like advertising. We all know that the advertiser of something that we're thinking of buying is only going to tell us everything good they can think of about this thing. So lopsided that we wonder even if they're true or just made up. The advertiser doesn't think it's his job to give you a balanced view of the pluses and minuses of the strengths and weaknesses. Neither does Mr. Trump. What he tells you about the economy or his people do, nor Harris or her people do. So it's left to people like me, people who are not paid by partisans for either of the two who are giving you such a lopsided advertising like hustle instead of an analysis. You have to get another doctor. Okay, so here for all for me, the key things about the US economy right now. We have an absolutely extraordinary degree of inequality. Let me give you just one idea about this. At the end of World War II, roughly 75 years ago, the United States had a smaller gap between the richest and the poorest than any of the major economies of Europe. We were less unequal than they were. Now, 75 years later, the roles have been exactly reversed. We are the most unequal, more than Britain, France, Italy, Germany, or any of the others. All right, that's a profound change. You may enjoy looking at the antics of Jeff Bezos or Elon Musk or any of the billionaires trying to outdo one another and who gets to be a trillionaire first. But you know they are light ears from you. You have no relationship to them. They can do things that hire a fire. Mr. Musk is funding Mr. Trump in a way that I'm not aware anybody has ever funded a presidential candidate before. A million dollars a day for this, 45 million a month for that. And my guess is Kamala Harris has rough equivalence on her side, although they're not so much in the public eye. But where's the attention to this basic inequality? The answer, there isn't any. Mr. Trump doesn't say anything about it. Kamala Harris says very little. And what she proposes, a slight increase in taxes for people over making over $400,000, giving $25,000 to new families who want to own a home for the first time. These are perfectly nice, positive, but small potatoes against what I just told you. Here's a second major problem of our economy. It's instability. We go from pillar to post. In the last four years, we've had a serious crash, 2020, 2020, 2021. We've had a really serious inflation. Now we're worried about unemployment rising into a recession. We have an unstable economy. The joke I've made periodically on this program, I can repeat. If you lived with a person as unstable as capitalism, you would have moved out long ago. It's a problem to have an economy. It's not enough to have the head of the Federal Reserve pat himself on the back that he's doing something about the inflation. It took a while, but he's, yeah, but the charter of the Federal Reserve that you're the head of, sir, is not to have an inflation, not to be all good or good about bringing it down. You weren't supposed to have it. And we're not supposed to have millions of people unemployed, which we do all the time and right now. Where is the proposal from Mr. Trump? There isn't any. Where's the proposal to deal with this instability from this Harris? There isn't any. They're not dealing with these issues. They're not dealing with the fundamental problems of our economy. They're not offering us a program for how to deal with them because they don't deal with them. Yes, they have this idea. Mr. Trump wants to give a tax break to tip income. Okay, very nice. I'm not going to comment on it because it's like being told you have a cancer and your responses is do I use red or blue band-aids for that? No, no, no. The band-aids are great. I'm glad they're there. You should have some, but they're not adequate to what we're talking about, sir. We're not going in that direction. I'm not going to answer your question. I'm going to tell you you got to face what your problems actually are and then come up with the program and you're not doing it. That is a fundamental problem and it suggests that whichever way this election comes out, neither one of these folks and their teams are going to make the difference that we really need because we have real problems that they are pretending aren't there. We've come to the end of the first half. Stay with me. I'm going to offer you some alternatives that would begin to address these kinds of problems in the way that the candidates are not doing. Welcome back, friends, to the second half of today's economic update. In the first half, I talked about the basic problems of inequality and instability of the U.S. economy. Now I want to mention something about the international situation and then talk about alternatives that could be, should be, but aren't being discussed and debated in this election. There is a fundamental change in the position of the United States in the world economy. It is momentous. It is having all sorts of consequences and we'll definitely have more of those in the years ahead. Here's the basic way it works. The dominance of the United States, coming out of World War II, 1945, the position it had as the number one economic power in the world, nobody else was close. The number one shaper of the world trade among countries, of the flow of investment money among countries, of the literal currency that the whole world used alongside of gold, which was the U.S. dollar. All of that has changed fundamentally. The dollar is in a much less powerful position today than it has been in the previous 75 years. Likewise, the United States accounts for less of the total production of goods and services, less of world trade, less of world capital flows than it used to. The United States cannot play the role in the world that it did, and that is shaping our world. The United States is currently involved in two major wars whose whole foundation was that we were still as powerful as we once were, but we're not. That's why the war in Ukraine is being lost by the United States. That's why the sanctions against Russia didn't work. The Russians turned to their allies, particularly India and China, in that association known as the BRICS, and discovered their sustenance, trading partners, capital sources, that could allow them to retaliate against the West and the Ukrainian expansion of NATO, etc., and to win that war. The Israelis are engaged in a war that isolates them in the whole world, and the United States supports Israel and supports them with weapons and funds their economic crisis, which will last into an indefinite future. But these are efforts by the United States, acting as though it is still what it once was, but is no more. What do the candidates have to say about the reduced status of the United States? Answer, nothing. They instead pretend that none of this has happened, that China isn't the economic powerhouse in the world, that it is, that it isn't drawing to itself more and more countries that are leaving the orbit of the United States. Everyone in the world sees it. Everyone in the world is adjusting to it. The United States is pretending that this is not going on, and these two candidates in this election are sustaining the pretense. That's why they have nothing to say about it. They talk in abstract terms about self-determination, or countries shouldn't invade others. These abstract principles that have very little to do with what's going on here. This isn't about principles. This is about a change that is altering the way the world works. It's going to affect the prices we pay, the markets we do or do not have. This is crucial, and yet in this election, silence. Then there's the bizarre, and I mean bizarre way we arrange our finances. Here in the United States, we have politicians who face two big audiences, corporations under rich on the one hand, top 10% of our people, and the mass of our population, the other 90% over here. The top 10% say to the politicians, we don't want to be taxed, but we want you to do a lot of things for us. For example, the United States government maintains over 700 military bases around the world. That came out of World War II. That's more of this effort to pretend we can still do in the world what we once could do, but we can't. Wow. And they don't want to be taxed for it. They push the taxes on to the rest of us, but we can't pay taxes anymore, and we're enraged when we're confronted with it. So neither the Republicans nor the Democrats dare tax us. Meanwhile, we want them to do things for us. We need it. Our position in the world is shrinking. We're spending more. Look at the money for Ukraine. Look at the money for Israel. We are spending to sustain the illusions. And where's the money going to come from if nobody wants to be taxed or no one will tolerate it? They have a solution. It is, of course, no solution. It's more fakery. It's called borrowing. So the federal government spends the way we all wanted to, but doesn't tax us. Well, how do you spend if you don't raise enough money in tax? You borrow. Well, who does the government borrow from? Mostly from corporations in the rich. And you know why they lend to the government? Why they even can? Because they didn't get taxed. What the government is doing is saying you don't have to pay tax. You corporations in the rich. They pay, for example, much less today than they did in the 1960s and 70s. Do we need them less? No. Do they have some excuse for this? No, there's no one to pay. So we say, okay, you don't have to pay, lend it to the government instead. The little detail about that is, well, if the government borrows, you and I, the mass of people, will have to pay the taxes in the future to pay them back and to pay the interest every year that they get for lending money to the government. So in the end, we are being taxed more. It's being stretched out on us and our children and their generations. But we're still being squeezed to pay. This year, we will pay as a government almost as much in interest to the rich as we spend on military. What happens to the rest of us? More and more we pay taxes, less and less we get. Our schools are in trouble. Our infrastructure we know is in trouble. Come on. This is not working out well. And there are alternatives. You don't have to borrow if you tax corporations in the rich. Just go back to what it was in the 60s and 70s, not even asking for more. Do that. And it would transform our economy. That would be a real idea. That would be a proposal. Here's another one. A new new deal. Everybody who's an American citizen gets a job by right. You don't have one now. You go to this government office. The unemployment office will become the employment office. Everybody gets a job. You either get a job in private industry. That'd be our first choice or the government itself. We'll put you to work the way we did in the 1930s to millions of workers. We can do that again. We can make beautiful parks and we can take care of our elderly and we can provide daycare, rational, important contributions to our society that will put all of those people to work. And so there'll be no one worrying about immigrants anymore because they won't be taking your job. You've got a job and no immigrant can ever take it from you. It was a mythology anyway, but we can put it all to rest. We can have a rule which says you don't have to fight new technology. If there's a new technology in your industry and it makes your job no longer needed, don't you worry. We're committed to having you have an income and finding you another job. That will be a responsibility of the society right alongside the responsibility to give your child an education from kindergarten through the 12th grade, etc. And giving you a park where you can have a picnic and making sure your water and air are clean. You know we will make a decent society. We'll put people to work. We can deal with the basic problems. There won't be an up and down. You know how we'll control prices by controlling prices. Not by waiting for the Federal Reserve, which waits too late until the inflation is underway and then raises interest rates which hurts us in order to stop having the inflation of price stop. You know we'll do we'll do what Richard Nixon the conservative president did in 1971. We will have wage price freezes, freeze the wages and prices so they can't go up so we don't hurt one another that way. And we saw whatever the technical problems are to get the economy going again without an inflation. We fix it. That way we can do these things, solve many of our basic problems if we admit them. I'm here to tell you the same message that alcohol anonymous tells the people who come to it. The first step on recovery is to admit that you have something to recover from. You have to admit what your problem is. We have to do that too. The kind of candidates we generate in the two political parties seem to imagine that all they're there to do is to be cheerleaders. Capitalism is good. American capitalism is even better. Okay, I understand. For 60 to 70 years there was enough truth in that to let a lot of people get away with making that their pitch. That time is gone. It is not coming back. Like every other empire the American empire was born, grew, evolved, developed, peaked, and then faded away. We're in the fading away stage. We need leaders who understand that and who work out with us as people a way to accomplish that without war, without desperate efforts to hold on to an empire that is over. There's still a chance that the rest of the world, and here I'm thinking particularly of China and India and Brazil and all the let's work out an adjustment of the world as they come up into a place of enjoyment and standard of living that we've already had. There has to be an accommodation. It will happen one way or another. It could happen in a good way, in a successful way. If we face the problem, if we admit that capitalism is a system that like the American empire has had its day, we can do better. We don't have to have a tiny group of people making the decision in every enterprise. We can work co-operatively and we better because that is the future. That is the way we will move into a better universe than the one we've left behind. That's the best thing about humans. They're always trying to do better. It's one of the great things about us as a species. And here's a moment where we have to do it. We cannot continue to live in a world of make-believe. It's becoming way too dangerous. Thank you for your attention. I hope this has been of interest in terms of the election. And as always, I look forward to speaking with you again, next week. Support from the production of Economic Update comes in part from Democracy at Work, a non-profit 501(c)(3) organization and publisher of Books by Richard Wolff. Who is a professor of economics emeritus at UMass Amherst and a visiting professor at the New School University has authored numerous books on the subject of social economics, including rethinking Marxism, understanding capitalism, and democracy at work, a cure for capitalism. Further information is available at democracy@work.info and rdwolf.com.