_This Is WAY Worse Than I Thought…_ _ Richard Wolff

The most important economic reality of the last 75 years here in the United States has been the undoing of the reforms carried out by Franklin Roosevelt under the pressure of the socialist, communist, and labor movements of the United States. That's been our number one economic reality. The business community had been horrified by those reforms. Because remember, who paid for social security, unemployment compensation, who had to pay the minimum wage that was established, and who had to fund paying all those people getting government jobs? The answer? The business community. The wealthy people of America and the corporations that make them wealthy, you know, the top 10% that own 80% of the shares. They were taxed heavily, and they had to lend money to the government, whatever money they didn't get lost by taxation. So they were doubly angry. All of this effort by the government to help the mass of people at their expense. So they went to work to undo the New Deal. They stopped government hiring of those millions of people, got rid of that. They nibbled away at unemployment compensation. They nibbled away at social security. From being a basic way people could live, it's now a support. But only poor people actually live only on social security. It's too small. So they've cut back. And forget about the minimum wage. The last time that was raised was in 2009. Even though we've had rising prices every year since, nothing has been raised in the minimum wage. We have behaved as a society savagely towards the poor people who depend on the minimum wage. So we have undone the New Deal of the Great Depression. It turned out that the corporations who had to pay for it, and the rich people who had to pay for it, got together and went to work to undo the reforms. And they have largely succeeded. That's what the Republican Party's number one priority has always been. Change the tax laws, change the inheritance laws, do everything necessary for corporations and the rich to re-establish their absolutely dominant position relative to a mass of people who have economic problems all the time. Yep, we're back to where we were before the Great Depression hit. And all the statistics show it. And there's a lesson for us here. Reformers are the people who want to make a system work better for average people. They do. They're sincere. They mean it. But they don't want to take the step that might guarantee it. Okay, now we come to our situation here and now. The United States succeeded in the aftermath of the Great Depression in ruling out revolution. Revolution was associated with the evil Soviet Empire. The government was very bad. The government was intrusive. The government was dictatorial. All ways to suggest don't go anywhere near where those revolutionaries are. So all that the Republicans and Democrats debate are reforms. Each of them has some reforms they want and some reforms they don't. But the unspoken agreement between them is never to suggest anything that might look, smell, taste, or seem to be revolutionary. The state must be kept out. Some of you have a whole philosophy of that called libertarianism. The state is bad. The state is evil. The state grabs power. The state, the state. Where does that come from? It comes from that split between reform and revolution that came into being around the time of the Great Depression and has been fought ever since, mostly by people who either don't want any change, the so-called conservatives, or many of the reformers who want to keep everything within the realm of reform because they're terribly afraid of the revolution. And we have problems now that are producing the same result. Let's go back to that minimum wage story. It's $7.25, the federal minimum wage. That's outrageous in terms of what it is you can't afford if you work 40 hours a week and get $7.25 paid per hour. It's so gross that reformers in about 30 states have raised the minimum wage in their state, which they can do way above the minimum. Last time I looked, if I'm not mistaken, there are a number of cities and towns and states have a minimum wage around 15 bucks or more. That's more than double the federal. But reformers were able, in those states, to get the wages raised. It's like people who didn't like slavery because it didn't feed slaves properly were successful to sometimes get the slaves to be fed better. And you have that here now too. We don't dare even talk about the reform that they did in the 1930s with the government hiring people who don't get a job in the private sector. That's a way of solving the unemployment problem. We have millions of Americans unemployed right now. The private sector has no work for them. They have no job. Does the government come in and give them a job the way the reformers did in the 1930s? Not at all. Let's them sit out there. Wow. We only discuss reforms and half of them we don't do. But what would revolution be now? Would it be the government coming in? Well, the answer is no. Because what reform and revolution mean, that changes too. Reform, what it means, changes. But so does revolution. One of the things that was learned in the 1930s was precisely that even if you bring the state in, which Roosevelt did, as an employer, as a regulator, as a pension provider, as a minimum wage guarantor, even if you give the state a big role, if that's all you do, then the rich and the powerful remain the employers who gather the profits into their hands. They can, and our history proves that they will, undo the reforms. The lesson of the Great Depression and everything since has been that we shouldn't have gotten caught up in the reform versus revolution, because they shouldn't be seen as either or. They should be seen as reform and revolution. Why? Because the only way to secure reforms is by revolution. It turns out that the way the reformers got slavery to treat the slaves better was by ending slavery. The only way to solve the problems of unemployment and poverty and all the other basic economic issues confronting the United States, which are now building to a crescendo as a desperate government, that's what Mr. Trump's regime represents, a desperate government reaches out and tries unorthodox things, you know, tariffs, firing hundreds of thousands of public employee. These are extreme actions and they reflect the extremity of the dangers and the crises that have accumulated. They are acts of desperation, however cleverly they are choreographed in front of your evening television news, that's what they are. They are attempts to reform. Mr. Trump's tariffs want to reform the entire global trading system. With Mr. Musk, he wants to reform the entire federal workforce. What it does, how it does it, who does it, these are dramatic reforms. But what you'll never hear from the Republicans is one word about changing the capitalist system. And by that I mean, very simply, the arrangement in which in every factory store or office, a very small group of people, the board of directors, if it's a corporation, the owner, the operator of the business, the partnership, if that's what it is, they make all the decisions. What to produce, how to produce, where to produce, and what to do with the profits. And of course, should surprise no one, they take care of themselves first. They're rich, you're not. They're powerful, you're not. They hire and fire, you don't. That's the difference. And the Republicans wouldn't say a word. But because of what happened after the Great Depression, the Democrats won't say a word about that either. During the last presidential election, neither Mr. Trump, nor Mr. Biden, nor Ms. Harris had one word to say about the employer-employee relationship and the imbalance of power and wealth inside every business that that shows us. You want there not to be an abuse of the mass of working people, then you're gonna have to face it. They're gonna have to be in charge. If you don't want masters to abuse slaves, you've got to end slavery. If you don't want employers to abuse employees, you've got to end that relationship. We're in terrible trouble. For years now, we cannot function without borrowing as a nation. Huge amounts of money, now measured each year in the trillions of dollars. Two, three trillion dollars spending more than we take in in taxes. Among other things, for these very expensive wars. But there's a deeper reason. American corporations and the rich want the government to do things for them. All kinds of things. But they don't want to pay taxes. And the mass of Americans, the working people, they want the government to do all kinds of things for them. And they don't want to pay taxes either. But the difference between the two is that the corporations and the rich have something that the government needs. Money. They provide the bulk of the money that funds the political parties, the candidates, the governments, all of it. So they get their way. They get lots of services and they don't pay much in taxes. They've paid less and less over the last century in a straight line down. The mass of people can't mobilize themselves yet in this country, so they still pay quite a bit. But you can't keep taxing them because they won't vote for you. The basic problem of our government is that the rich people don't want to be taxed for all the things that the government needs money to do for them. And the mass of people don't want to be taxed for all the things they want the government to do. And so what happens is the corporations, the politicians, excuse me, are stuck. They can't provide the services we need without taxing us, they thought. But we don't want to be taxed and hold them accountable. So they've come up with a solution. How do you spend money for the mass of people and for the corporations and the rich without taxing them? The answer? You borrow it. And that's why we do that. And that's why the national debt of the United States is today $35 trillion, and our annual output of goods and services is about $25 trillion. So we're not even close. And that's a sign of trouble when you are borrowing more than your total output in a year. It's kind of measure, being around for many years and used to signal distress. And distress is what we got, a government that can't keep doing this. The signs are crystal clear. There are three major rating agencies in the world, Standard & Poor, Fitch, and Moody's. Moody's, over the last few weeks, joined the other two in demoting the credit of the United States. We're not AAA. We're not the best. We are a risky borrower, in the words of the world. Many other countries are not. We are. The United States is the biggest debtor country in the world. And lenders are looking at the Americans and worrying, will a day come when they can't pay back, or they won't? When their own people will rise up and say, you can't pay interest to rich people and foreign governments and corporations if the money that you're using isn't available for basic medical care, basic education, basic road maintenance. Uh-uh. And at that point, the lender of the people who lend to the U.S. may not see their money repaid. And they're getting nervous. So they're pulling their money out. That's why the dollar has diminished in value by almost 10 percent since Mr. Trump was inaugurated. The signs are everywhere. The United States isn't the AAA-rated borrower that it once was. Uh-uh. And now you can begin to see a certain desperation creeping in to what's happening. That's very important that you understand that. Mr. Trump and his team are desperate. And they're doing desperate things because they don't know how to solve this problem. There's no magic way to make the empire return. There's no magic way to deal with these economic problems that derive from a declining empire and the economic difficulties that that means for us. The American empire, built up after World War I particularly, and solidified into global dominance after World War II, has peaked and is now declining. That is a huge problem. Because as we grew from a small, unimportant colony of Great Britain in North America, and became the colossus that the United States was, particularly in the second half of the 20th century, we began as a nation to take it all for granted. That's that business about American exceptionalism. Not only were we the dominant economic, political, ideological power in the world, not only did we establish a kind of informal, but nonetheless tightly controlled global empire, in which the U.S. dollar became the global currency, in which the U.S. military overwhelmed everybody else's. And all of that was true. We did make a mistake. And the mistake was not understanding that every other empire in the history of the human race that arose also fell away and died. No empire lasts forever. None ever did. And that meant that the United States would, in all likelihood, have to also eventually decline. Well, eventually arrived, and we are declining. I'll come back to that in a moment. What I want to stress, though, is that most of our politicians have responded to the decline of our empire and to the difficulties of American capitalism that result by pretending none of that is happening. It's what psychologists call denial. We just had a presidential race, three candidates, Trump, Biden, Harris. None of them talked about our empire, let alone facing its decline, let alone talking about how to deal with the problems we have as an economy because our empire is fading. They pretended none of that was going. Well, maybe let me be fair. The MAGA slogan is a kind of indirect way of admitting it. If you have to make America great again, it's a kind of admission that is not so great now. But it was, and we're gonna go back. What an interesting admission. The Trump people, in that way, show us they get it in some way. They can't quite say it. They wouldn't dare admit it in public, but they know, as do most of you if you think about it, which we don't do in this country because it's a kind of taboo topic. Well, what is Mr. Trump's plan to deal with what I've just said? Here we go. First, he wants to stop the forever wars. He said that on the campaign trail umpteen times, and he has spent the first several months of his administration trying to deal with the war in Ukraine, to deal with the war in the Middle East, and to generally talk about what? Well, not fighting wars. And the reason is our empire has lost most of the wars it's fought in the last 30 years. We lost the war in Vietnam. That country is run by the Indochinese or Vietnamese Communist Party. That was the enemy of the United States. They won, we lost. In Afghanistan, the enemy of the United States was the Taliban. They run that country now. They won, we lost. In Iraq, we were supposed to, I don't know what, but the people who were there when we got there are the people running that society now. Saddam Hussein is gone, but all the rest of it remains. They persevered, they persisted, we lost. And in the Ukraine, we're in process of losing. This is not a sign that the empire is able to function very well to defend itself. Number two, those are very, very expensive wars. Every one of them. It costs a fortune. And when the United States fights a war, it never dares to tax its people to pay for it. If you think the opposition to the wars in Vietnam, or Afghanistan, or Iraq, or now Ukraine is strong, and it is, and it was, it would have been much stronger if every American family had been informed, we're going to tax you five, ten, fifteen thousand dollars each to pay for the enormous cost of these wars. The United States government can't afford it. That's what happens when empires decline. Mr. Trump doesn't want to fight these wars, and he doesn't want to pay for it. As I'm speaking to you, Mr. Trump and his administration is making the decision of whether, and I'm now quoting the president, we will walk away from the Ukraine war, leave it to the Europeans. The whole Ukraine war is a war on the cheap. No American troops over there, or very few. It's a war fought without mobilizing the American armies, which is what costs a fortune, making the Europeans pay half or more of it, which saves us a fortune. It's war on the cheap, which is what you would expect from an economy that's in trouble. Mr. Trump is putting a burden on all of us in the rising prices we will be paying, already are, and putting a burden on every other country. And guess what? In every other country, the local politicians there are now able to say, yeah, we have problems here in Asia, Africa, Latin America, but they all come from Mr. Trump. Are they blaming Trump for problems that are partly their own? Absolutely. But Mr. Trump has given them the invitation, given them the excuse. We are being isolated as a country, because in desperation, we are trying to solve the problems of a declining empire and a declining U.S. capitalism at the expense of our working class and the rest of the world. That's what this crazy push is to get rid of all our immigrants, illegal, undocumented, or not. What is that about? This country became strong precisely because it could absorb the immigrants, generation after generation, find them initially bad housing, bad schooling, absolutely, but giving them a chance if they work. And they did, and they brought up the country with them. Deporting means we no longer can absorb what we used to not only absorb, but welcome. That's not a sign of strength. That's not a sign of America, number one. It's the opposite. It's a sign of desperation and no longer being capable of doing what we once did. You can't stop this. Economic development grows, and it grows unevenly, and it grows often in places that are new faster than in places that are old. It's, in fact, the kind of pattern. That's why Europe is now a technologically to the United States on the one hand and China on the other. What the British couldn't do to the Americans, the Americans cannot do to the Chinese. And a war is not a way to figure that out. Not when both sides have enormous stockpiles of nuclear weapons. The United States, and on the other side, China allied with Russia, is not working. And trying to do it in these ways is desperate. And the Chinese are not bending. They don't need to. They understand that history is on their side. We can't yet figure out what to do because we can't face what I just said, not as a nation. We're still denying it. Mr. Trump's big beautiful tax bill that passed the House of Representatives at the end of May guarantees that our deficits will go on in huge trillion dollar sizes for the next several years. We can't do that. Doing that got us to everything I have summarized today. But look, he can't do it. It doesn't work. Too much resistance to the tariffs. Too many retaliation tariffs that are going to hurt us. The United States is becoming isolated in the world. Recent polling shows that around the world the U.S. used to be much more favorably viewed than China, but that's been reversed. Especially since Mr. Trump won the election and took power. There's not a question of saying China's good and America's bad any more than such a silly idea was true in reverse. It's facing honestly where we are. If we don't do that we're going to make mistakes. Ukraine misunderstood that Russia could and would turn to China and solve the problems it faced in fighting that war. The United States hadn't planned on it, the Europeans hadn't expected it. They made a mistake. But it becomes, if you think about it, a result of denying the decline of the empire and the decline of American capitalism. Not understanding that desperate measures, which is what Mr. Trump's plan is about, will not likely work and will be in any case extremely costly. That's the reality of the economic problems and programs of the United States government as I speak to you.