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Thursday, May 30, 2024
🚨WEST'S COLOSSAL MISTAKE: US Decline, Rise of BRICS, Tariffs Damage US E...
Bloggers note: Does Democracy Work for us./?
Listen to the first 15 minutes for the Punch line of punch lines.
.
The United States is in a declining position in the world economy it has
0:06
been but now it's being felt you could pretend it wasn't there you could deny
0:12
it there are plenty of people who do that still but it's getting harder and harder as these tariffs and sanctions
0:20
all show that's the most important thing to understand every country in the world
0:26
and I want to underline every is thinking its entire foreign economic
0:33
policy and your political alliances look at the departure of Americans from ner
0:39
in Africa and being replaced by R Russian troops these are all signs you'd
0:45
have to be really blind or desperate not to see all that's going on
0:56
[Music] hello welcome back everyone today I'm
1:02
very excited to welcome Professor Richard wolf who is one of my favorite experts on economics professor wolf
1:09
taught economics at the University of Massachusetts Amherst for nearly 30 years earlier he taught economics at
1:16
Yale University Professor is currently a visiting professor in the graduate program in international Affairs of the
1:23
new school University in New York City and in addition to that Professor wolf is an author and co-founder of the
1:30
organization democracy at work I'm sure many of you are very well familiar with
1:35
it um and they do have a popular YouTube channel where Professor shares frequent
1:41
economic updates interviews and so much more uh please be sure to follow the link in the description below to stay up
1:48
toate on Professor Wolf's latest work Professor welcome thank you so much for joining me thank you for inviting
1:56
me well let's get started with probably one of the uh most burning questions today I have
2:03
several topics that I would love to discuss with you one of the most pressing ones is of course uh the
2:09
national debt we're nearing $35 trillion dollar in national debt the government
2:15
is adding roughly $1 trillion dollar every 100 days which is completely um
2:20
surreal it is out of control and uh the interest cost uh to service that wall of
2:27
debt is now expected to surpass all other government programs which is something that I think people really
2:33
need to understand and that relates to defense spending to Medicare and Social
2:40
Security so the worst part about this is that as trillions of dollars are
2:47
mounting on there's really no value that's actually added that's actually created for the American people so what
2:54
is the plan here if there's one well the basic answer to your
3:00
question which is a good question is that there is no plan that this is a process in which uh
3:08
political uh urgency drives endless expansion of the debt and let me try in
3:16
a very simple but clear way to explain this we have a
3:22
bizarre kind of capitalism in the United States and by bizarre I mean it puts our
3:29
politic itions in a very strange and awkward position on the one hand
3:36
corporations want the government to do lots of expensive things for them they
3:43
want them to maintain a global Military to protect buying and selling around the
3:49
world uh which the United States does as much or more than any other country on Earth and it wants to protect its
3:56
ability to get materials to get them for a good price and having hundreds and
4:02
hundreds of military bases around the world which is very expensive not to
4:08
mention the wars which are even more expensive is part of the cost of
4:13
servicing what corporations want at the same time those
4:21
corporations resent and fight against paying taxes which would be the way the
4:27
government gets the revenue to to then do what the corporations want the government to do all right let's take a
4:35
look then not at the corporations for a moment but at the mass of working people
4:41
they too have things they want and need from the government to do everything
4:47
from Social Security and Medicare to maintaining the roads to helping Finance
4:53
schools education hospitals and all the rest and like the corporations the mass
5:00
of people don't want to spend the taxes to pay for all of that so we have
5:06
corporations and working people both of whom put demands on the government to do
5:13
things which cost the government money and yet at the same time the
5:18
corporations and the massive people don't want to pay taxes last point the
5:24
corporations have enormous wealth to get the government to do what they want and
5:31
the mass of people do not that is nobody has so far organized the mass of people
5:38
to put together the amount of money that might someday enable them to influence
5:44
the government but right now and for most of the history of capitalism the
5:49
division of the income in a society between corporations and the people and
5:54
between rich and the massive people puts the overwhelming bulk of the wealth in
6:00
the hands of Corporations and the rich and now what everybody knows who's
6:05
honest the corporations and the rich have been very successful in removing
6:11
the burden of Taxation off of themselves and onto the mass of people this has
6:19
been going on for the last century and now here comes the point after a certain
6:26
level the mass of people revolt they say we will not pay more taxes they make it
6:33
impossible for politicians to keep doing what they've been doing which is Shifting the burden
6:40
for example in case people are not familiar we used to rely on the income
6:46
tax which is a progressive tax the higher your income the higher the percentage you have to pay then when
6:54
corporations were strong enough they got that changed half of what the government
6:59
raises now is it money off of Social Security withholding from the weekly
7:05
check of an American that's not a progressive tax that does not go up in
7:10
percentage as you get richer in fact if you earn more than
7:16
$160,000 a year which rich people in this country do you don't pay on what's
7:22
above $160,000 only the average people pay so look at how successful Corporation s and
7:30
the rich have been in Shifting the taxes but they can't anymore the mass of
7:36
people won't allow it they vote out anybody who raises their taxes okay now
7:42
the politicians are in a jam they are demand the corporations and the people
7:48
demand services but they can't squeeze more taxes out of the masses and the
7:55
corporations and the rich have basically bribed their way out of paying much in the way of taxes so what is the
8:02
government going to do what do the politicians do answer they borrow money
8:09
the way they keep spending on the corporations and on the people is not by
8:17
taxing but by borrowing the money and that's why the borrowing is getting
8:23
bigger and bigger and all the national debt is is the accumulation of annual
8:30
deficits over the years and they're going crazy now because the government
8:38
desperate desperate to hold on to political power is spending money like
8:43
there's no going out of style the most impressive example funding the war in
8:50
Ukraine huge amounts of money simply spent out funding the Israeli activity
8:57
in Gaza which we are also doing in the form of military supplies that are
9:02
effectively given to the Israelis uh at little or no cost so Wars military
9:09
expend everything is being spent without the ability to make the beneficiaries of
9:16
that spending pay for it in taxes because it it's impossible for the
9:21
politicians to survive if they would dare do that if you tax corporations in
9:27
the rich they will fund whoever runs against you in the next election so
9:32
you're gone and for the massive people they are so stressed right now that if
9:38
you tax them an inch more you really will have a popular Revolt it's a sign
9:45
that American capitalism is in a very bad place we are not the great economy
9:52
our political leaders would like us to believe neither Republicans nor Democrats we are in very serious trouble
9:59
and one measure of that is that this political absurdity of our politicians
10:05
having to borrow more and more because they don't have the courage to tax means
10:11
that we are in the situation you described we are loaded up with debt in
10:16
a way that we used to identify with countries that were in trouble economically around the world now we
10:24
don't hear that so much because it applies to us in terms of the ratio of
10:29
the debt to the national uh income and make no mistake the debt matters people
10:35
who are seeing this explosion are trying to calm the American people well it's
10:41
not so important most of the debt is a debt of the government the treasury to
10:46
the Federal Reserve which is another part of the United States government all of that is true but it is not relevant
10:54
it's not relevant because in the end the government has to raise
10:59
the money to pay the interest on this enormous debt and that means more and
11:06
more of the money you and I pay in taxes in the United States is not going to
11:13
give us a useful service it's going to pay off whoever lent money to the
11:19
government and here's the last step the fundamental Injustice of the national debt is often
11:27
overlooked who lends money to the United States government but the minute you
11:33
understand this you will see it's rich people and corporations and to some extent foreign corporations and foreign
11:41
governments the mass of people are not in a position they don't have any extra
11:46
money to lend to the government so they don't the mass of people pay the taxes
11:53
that are used to pay the interest to corporations and the rich who are in a
11:59
position position to lend to the government if you see that here comes the punchline of punchlines you will
12:06
understand that when the politicians borrow money they are doing an enormous
12:13
service to corporations and the rich because they're basically saying to them
12:19
we will not tax you instead you shall take the money that we could have taken
12:26
from you in taxes and instead we will borrow it from you and after a you few
12:33
years we'll give it back to you and during that time we'll pay you interest
12:39
on the money that we've borrowed from you so for corporations this is a
12:44
no-brainer of course it's better to have the government borrow from you than to
12:50
tax you as corporations and the rich so that's why they tolerate it and that's
12:56
why the mass of people even if they don't understand the economics understand they're being
13:02
ripped off and the deficit is a mechanism for ripping off the mass of
13:08
people who pay the cost of it whereas the benefit goes to the corporations and
13:14
the rich who are the only ones to to be able to lend to the government one last
13:20
Point foreign governments are also able to lend money to the United
13:27
States government and most most of the people watching this program probably don't know that the two largest lenders
13:36
to the United States government are Japan and the People's Republic of China
13:42
ranking one and two among foreign lenders China has somewhere around $800
13:50
billion dollar lent to the United States government that is money that the
13:58
Chinese to the United States government which the United States government can
14:04
and does use in part to fight a war in Ukraine where China is helping the
14:12
Russians if that sounds like a strange Arrangement welcome to modern capitalism
14:19
this might strike you as even stranger with 800 billion dollars of US debt the
14:25
United States has to tax all of us which it does to raise the money which it then
14:31
sends to Beijing in interest on all the debt that
14:37
the Chinese own of the United States government which means that part of the
14:43
money China uses to build up its military is the money we American
14:49
taxpayers deliver to them it's the way capitalism has organized the world and
14:56
it's not the least of the Absurd contradictions that this system is
15:02
living with and imposing on all of us Professor you mentioned so many
15:08
important key points you said that effectively taking on more and more debt
15:14
is a burden for future Generations it's it's something that future Generations will have to deal with somehow and it's
15:21
also part of why we're seeing um the middle class in the United States uh
15:28
struggling and um there are forecasts and projections that say that
15:33
effectively it is disappearing and there's going to be a wider a widening
15:38
gap between the um to put it very simply between the the poor and and the rich
15:44
those who have and those who do not have uh means to uh effectively survive and
15:50
and uh function in the society and you mentioned a very very important point
15:55
that I would like to sort of uh a bit expand on you said capitalism as we know
16:01
it is um is is dying it's it's it's it's it's already changed and uh maybe we
16:08
could speak a bit about the uh latest um tariffs and sanctions that the United
16:14
States um uh implemented uh put in place on Chinese Goods so we know that the US
16:21
has a wide range of economic sanctions it's historically U been doing this and
16:26
it has sanctions on Russia of course on Iran on Venezuela China and and other
16:33
countries and so this week this past week new trade tariffs on Chinese uh
16:38
Chinese goods were announced these tariffs are very heavy they range from 25 to 50% and cover a variety of
16:46
products not just semiconductors and um uh precious uh precious metals or raw
16:52
Earth minerals I should say uh what's actually Behind these new tariffs
16:57
because the current Administration is telling us that well we put them in place for your own good we put them in place as a protectionist measure to
17:05
protect our consumers and our producers is that really the case or is there something else behind this
17:13
move um okay let's let's talk about that the first thing is to remember very
17:20
simply that putting tariffs on a vast array of products um is what we call Protection
17:28
you are protecting the industries inside your country by hampering the
17:35
competition they face from abroad now let's take the most egregious example of
17:41
these new tariffs uh that were implemented this last week against China
17:46
by the United States the most extreme example is the electric car and truck
17:52
where the Tariff which was already in place at
17:57
27.5% was raised to 100% let me explain briefly what that
18:04
means imagine an electric car or truck made in China I should tell everyone
18:10
that China is now the world's number one producer of electric cars and trucks
18:16
they have figured out over the last 10 years that people have been competing in
18:23
various parts of the world to produce a profitable electric vehicle
18:29
as the way our society is going to replace the horrible pollution of the
18:36
gas powered automobile with an electric automobile put aside whether that is an
18:42
adequate climate control response it isn't but let's deal just with the
18:47
Tariff question okay the Chinese have done it they've won that competition
18:53
hands down they produce the highest quality at the lowest price so the
18:59
competition has happened lots of companies here in the United States have been working and producing electric
19:06
vehicles and the batteries needed to power them but the Chinese have won that
19:11
they their system which you can think about has been able to mobilize their
19:17
scientific Talent their technology their corporations private and public and
19:23
they've won the competition so if the world were going to buy the best cheapest electric
19:30
vehicle we would all be buying Chinese much of the world is doing that including Europe with the Chinese cars
19:37
and trucks you see them on the road not a problem but no American sees them why
19:43
because the 27 a half% tariff means that whatever the Chinese charge for their
19:50
trucks electric trucks and and cars you have to pay that price to the Chinese if
19:56
you were an American Plus plus 275% going to Uncle Sam as the Tariff
20:04
that prices the Chinese out of the American Market you're going to make
20:11
this even worse because Americans know and have told our government that the
20:17
Chinese continue to improve their technology so that that they're going to
20:23
be even cheaper and even better than the Americans and others competing with them
20:29
are likely to be for years into the future that's how far ahead the Chinese
20:37
have uh achieved okay so we are now raising it to if the car costs
20:44
$22,000 that you're buying from China to pay to the Chinese you'll have to add
20:50
another 20,000 and pay 40,000 here in the United States because you have to
20:56
pay 20 to US government in t on top of the 20 to China this effectively
21:02
protects everybody producing a car here in the United States if it costs and
21:09
just for simple arithmetic if it costs $35,000 in the United States to produce
21:16
a roughly similar truck or car well then you can sell it at 35 you could sell it
21:23
at 36 37 38 because it would always still be cheap deeper to buy that car
21:30
than the 40,000 you'd have to pay for the Chinese that's why it's called
21:35
protection and it is mostly occurring because the losers of a competition
21:43
don't want to pay the price of having lost the
21:48
competition there's no nice way to say this and nobody should be P fooled when
21:54
The Losers of the competition insist that the winner
22:00
cheated yeah that's what they always say it's never their fault it's not they
22:06
didn't develop the technology they didn't develop the the expertise in batteries they didn't no no no no no
22:13
they did everything right the other side is cheating uh Secretary of the Treasury
22:19
yelen went to China and invented an entirely new economics excess capacity
22:26
she said the Chinese produce huge factories of course they do that's how
22:33
they achieve their efficiency it's called economies of scale it's something we teach economic students in the first
22:40
year if you produce a lot of something you can bring down the cost per unit of
22:46
what you produce so you always build in excess capacity competitive Enterprises
22:53
do it all the time it's part of American economic history she's just ing Miss
22:59
Yellen is on people not understanding these Basics and so finding this to be
23:05
some sort of argum as if the Chinese Have Cheated no they didn't they outdid
23:11
you competition always has winners and losers and I know that here in America
23:18
I'm born and raised here we cannot imagine the United States losing ever
23:25
anything but we do we lost the war in Vietnam we lost the war in Afghanistan
23:31
we're in the process of losing it in Ukraine but Americans need to believe
23:36
that we're always winning the tariffs are a sign that American dominance which
23:44
we got used to after World War II from the second half of the 20th century was
23:50
the dominance of the United States and with the collapse of the Soviet Union in
23:57
1989 it left the United States in what uh political scientists like to call a
24:03
unipolar moment but that's over now the United States isn't what it was and the
24:11
Chinese and their allies have become a powerful new competitor and the United
24:18
States is having a hard time adjusting which I can understand it's like the
24:24
British took them a century to realize that the British Empire wasn't there anymore and some of them still haven't
24:32
understood it the United States is at an earlier stage the sanctions you see the
24:38
tariffs you see that's a switch to protectionism by a society that has no
24:46
confidence in its own company's ability to compete we used to that's when the US
24:53
was the champion of free trade around the world that's because we could win in
24:59
those situations we were the most technologically Dynamic we were the
25:05
fastest growing but we're not anymore and we haven't been for a generation now
25:11
and it's beginning to impact us day by day and nobody should be fooled by
25:17
leaders who continue to sanction and to tariff as if we were free to do that
25:24
without consequences here's the most important bottom line for Americans if you raise the
25:32
price of the Tariff if you raise the cost of imported goods whether they are
25:38
solar panels or semiconductor chips or electric vehicles or any of the other
25:44
items if you put a tariff on them it means everything coming in from abroad
25:50
costs much more which allows the American competitors to charge more than
25:55
they could have ever gotten away with if they had had to compete and if everybody does that you know what that contributes
26:03
to inflation we're supposed to be a nation worried about inflation tariffs
26:10
are inflationary and they always have been and so the irony here is you're flailing
26:18
around this is mostly political posturing Mr Biden is worried about
26:24
voters in Michigan which is where a lot of automobile that burn gas are produced so he's going
26:32
to say I'm protecting your job look the inflation is pricing people out of the
26:39
supermarket out of the department store across America that means fewer jobs in
26:45
supermarkets and fewer jobs in department stores and those lost jobs
26:51
are more in number than the ones you're protecting in the Auto industry so they
26:56
the honest statement here is this is mostly political posturing whose net
27:03
effect on the economy is not going to be very significant one way or the
27:10
other absolutely I couldn't agree with you more I um uploaded a quick video the
27:15
other day on on this particular topic just very high level video and one of the questions that I received from a
27:22
viewer was well why are you saying that tariffs are bad tariffs will allow
27:28
producers to produce more but you you just summed up the effect that these
27:33
tariffs will have on consumers and businesses so so well and I think what you just said answers that question just
27:40
um very very um directly let me let thank you but let me amplify it a bit
27:47
more the price of electric vehicles here in the United States will either be the
27:52
$40 to use my example that we have to give to China 20 to China for the car 20
27:58
to Uncle Sam for the Tariff or we will have these artificially protected high
28:04
prices for electric vehicles produced here but now keep in mind in the rest of
28:10
the world our competitors can buy the cars they need
28:16
the trucks they need at $20 they buy it from China the best and the cheapest so
28:23
what goes into producing goods and services in Europe or in as Asia or
28:28
Africa or Latin America are cheap cars and trucks which will allow them to not
28:35
raise their prices of final goods the way Americans will have to because we're
28:40
having to pay $40 for the same Chinese truck instead of 20 or an inflated price
28:47
for our protected do American Producers which means our prices will not be
28:54
competitive with those of of people producing in the part of the world where they can buy the cheap Chinese truck
29:02
that's going to hurt our exports we are losing our export market
29:08
and that hurts employment in the United States so it is simply not correct to
29:15
say it's protecting jobs here it's protecting some jobs here in the Auto
29:21
industry at the price of other jobs affected by the consequences of
29:27
protecting the auto that's the honest answer and if a clever student raises
29:33
his or her hand and says well which is larger the protected Auto jobs or all
29:38
the other jobs the answer is nobody knows because that work depends on
29:45
what's going to happen in the future it depends on all the other things but the simplistic notion the tarff was good for
29:53
jobs that's not true and that is either said out of ignorance or more likely
29:59
among the politicians it's good for a headline it pleases the people there and
30:05
we hope nobody does the little bit of extra thinking that you and I are doing
30:11
in this conversation absolutely and what's really interesting is that a couple of
30:16
days ago um the United States reportedly threatened to sanction any country that
30:22
signs trade deals with Iran so are we effectively you know we we we've got
30:29
China we've got Russia now IR well Iran has been s sanctioned but now they're
30:34
they're saying well we'll sanction anyone who even dares to do any business with Iran so are we now effectively
30:40
going after the bricks block individually not as a whole but country by country yes the bricks for everybody
30:49
who doesn't know China and its allies the world economy is now split in a way
30:55
it hasn't been for 75 years years
31:01
sorry the world is now split in a way it hasn't been for 75 years for most of the
31:07
last 75 years the dominant economic Block in the world was the United States
31:14
and its allies these days this is called the G7 the United States Canada Japan
31:21
Britain France Germany and Italy those seven countries were the dominant
31:26
reality of the the world economy that is no longer true there is
31:33
now a second block of countries namely China and its allies they are called The
31:40
Bricks because the first five that got together Brazil Russia India uh China
31:46
and South Africa and and a half dozen more that have joined since to give you
31:52
an idea uh as of 2023 last year the
31:57
total GDP the total output per year of goods and services in the G7 was around
32:05
29% of the total output of the world if you look at the bricks their output all
32:13
of it was about 33% in other words as a block the bricks
32:18
are already a bigger economic unit than the G7 that is a
32:26
momentous change and it's a gap getting bigger with each passing year they were
32:32
roughly equal in 2020 they're already significantly far apart in 2023 it's
32:38
going very fast the United States is in a declining position in the world
32:45
economy it has been but now it's being felt you could pretend it wasn't there
32:51
you could deny it there are plenty of people who do that still but it's getting harder and harder as these
32:59
tariffs and sanctions all show that's the most important thing to understand
33:06
every country in the world and I want to underline every is rethinking its entire
33:12
foreign economic policy to take account of the fact that there are now two power
33:18
blocks if you need to improve your exports or your Imports or get a loan or
33:24
get investment you don't just go to London or par or New York you can now go to New Delhi or you can go to Beijing or
33:32
you could it's a whole new world and your political alliances look at the
33:38
departure of Americans from ner and Africa and being replaced by Russian
33:44
troops these are all signs you'd have to be really blind or desperate not to see
33:50
all that's going on look at the miscalculation in in Ukraine my God the
33:56
West thought it was fighting a war with an isolated Russia wrong Russia could
34:02
turn and did turn to China and India and Brazil and got enormous amounts of help
34:09
meaning that the West misunderstood which is why the West has had to escalate the fight and is still losing
34:16
as a result I mean this you're making colossal mistakes because you don't want to face how the world economy has
34:24
changed and what that uh what that really means last point there are many
34:31
studies many books articles about sanctions like the one you mentioned if
34:39
anybody trades with Iran well then then okay this is lovely you know what this
34:45
means very little countries that were trading with Iran will now make an
34:51
arrangement they will make an understanding with some Third Country we're going to ship what we used to ship
34:57
to Iran to you you have a relationship with Iran that is different from ours you are too
35:04
important for the United States to bother with so we'll work through you it's a little extra cash to pay for the
35:11
extra expenses a little more recordkeeping but sanctions are evaded
35:18
that is the history of sanctions the more you put them down the more the people you put them on figure out ways
35:25
around it it's a little bit like tax law in the United States every year Congress
35:31
rewrites the taxes and every year people who used to be in Congress are now
35:37
private accountants and they advise their rich clients how to get around the latest and then the government adjusts
35:44
the law and the people who evade the law adjust the evasions and this silliness
35:50
is good for headlines but doesn't change the basic situation Russia did not stop
35:57
doing in in Ukraine what it's doing because you hit them with the mother of all sanctions Iran didn't change its
36:05
government last month over the over the last month the Secretary of the Treasury
36:10
uh Yellen and Secretary of State blinkin went to China urging them to change
36:16
their system the Chinese must look at them and say over the last 25 years we
36:23
have grown our economy two to three times faster than yours year in and year
36:30
out that's why you're here visiting us we are the greatest escape from poverty
36:36
the world has ever seen over a billion people escaping poverty in a generation
36:43
it's unheard of nobody in their right mind would come
36:49
here urging us to change a system that has worked this well you can't what are
36:55
you doing it's ridiculous and you know most of the world looks at at it that
37:00
way only here in the United States does it seem reasonable for the United States
37:07
to go to China after 25 years of doing less well giving them advice on making
37:15
their system look more like ours wow absolutely and those trips by uh
37:23
treasury secretary Yellen and uh Anthony blinkin um state Secretary they were
37:29
nothing short of embarrassing it just it just when you when you look at it and you're you're just kind of thinking how
37:34
could this be it's unimaginable to think that uh you know like China or or any
37:40
other country comes to the United States and tries to tell us oh you need to stop
37:45
producing you need to stop doing this or that because it's it's not in our favor
37:51
but that is precisely what they did and it certainly didn't really go over very well and I think the um
37:58
this past week with uh Vladimir Putin's visit to China and so many new trade
38:03
agreements and um the way he was um received and kind of the overall
38:09
coverage of that visit it proved that that China probably didn't really uh take uh blinkin or Yellen visit
38:16
seriously anyway and this past week may have been a response to those uh forms
38:22
of of of trying to force uh force them to change their trade policy to change
38:29
their uh policies in general do you feel that this past week was a message that they sent or was was this sort of a a
38:36
new step towards multipolarity and uh economic development for uh countries
38:43
that have been developing but now found this new block where they can uh sort of
38:48
um play off of each other and and help each other grow the bricks block I think
38:53
my answer is it's both I mean I I am as you are I find it embarrassing that these
39:00
leaders from the United States are so toned deaf that they cannot imagine how
39:06
what they are doing looks to people in the rest of the world I mean American
39:12
foreign policy on many levels ever since at least Henry
39:17
Kissinger back in the 1970s so half a century ago has been devoted to
39:24
preventing a an alliance between Russia and China so you'd have to say that
39:32
everything of the last 50 years is a colossal failure because Russia and
39:37
China are closer together now than arguably they've ever been you know back in the
39:45
1960s uh Russia and China came to military blows against one another on
39:50
the border between their two countries even though both were were you know organized under a communist party the
39:58
Russian the Soviet one and and the Chinese one so here they are now Russia
40:03
quite different rejected its revolution China is still with its Communist party
40:09
and now they are even though they're different in this important way they're closer together than ever that's really
40:16
a product of American policy it's not only that American policy failed to keep
40:22
them separate but American policy gets a good bit of the credit for bringing them
40:29
together especially with this war in Ukraine which if they had understood
40:35
what they were doing which they clearly didn't they would have understood this is a possible side effect which makes
40:42
the whole project an idiocy to undertake not even to speak of the
40:49
terrible Damage Done to the people and country of Ukraine etc etc uh so you're
40:56
seeing in my view all the signs of a decaying Empire of a decaying capitalism
41:04
you know capitalism always has moved let's be economic historians together
41:10
just for a moment you know here I live in the United States our the history of
41:16
our country we once had capitalism Dynamic and growing in the area called
41:21
New England Maine Rhode Island Massachusetts Connecticut and so on then
41:27
eventually it moved into what we call the midatlantic states New York
41:33
Pennsylvania and so on then it moved to the Midwest Ohio Indiana Illinois then it
41:41
moved to the South and the Far West California uh and so on and it left
41:47
behind empty factories depressed economic units in recent decades it's left the
41:55
United States all together General Motors produces more cars in China than
42:00
it does in the United States ditto for Ford and so on well guess what
42:08
friends capitalism looking for profits goes where the profits are the highest
42:16
and over the last 30 years what China has done no great secret it has said to
42:22
the world's capitalists come here we want you we
42:27
welcome you we offer you an educated disciplined labor force much cheaper
42:33
than what you pay your workers in Western Europe or North America or
42:39
Japan and because we are growing we offer you the fastest growing market and
42:46
because we have a huge population it's the world's biggest and fastest growing
42:52
Market well I've been a professor at Business Schools and I can assure you teach the students who are the future
43:00
Business Leaders that if you want your business to succeed you go where the
43:05
wages are low and the market is growing that's what you do and so capitalists
43:11
have left the United States western Europe and Japan and moved into China
43:17
India Brazil and if you don't like that if it
43:22
depresses you about what that means that all of America is now experiencing the
43:29
decline that New England and Mid-Atlantic experienced half a century
43:35
ago then the problem for you is capitalism not this or that detail it's
43:41
a system that goes to where the profits are and the profits are not here unless
43:48
you create them artificially tariffs give you artificial profit opportunities by being
43:55
able to jack up the price but that that's called an inflation has
44:01
other very negative consequences the poor capitalists are stuck what they do
44:07
to solve a problem makes another problem worse that's another sign of
44:15
Decline and this may be a naive question but you mentioned economic decline you
44:20
mentioned you know dying Empire essentially and um so this may be an NA
44:26
question I just want to preface it with that but why do you feel the US foreign
44:31
policy has been so unwilling to adapt to this changing landscape International in
44:39
terms of um centers of power and in terms of economic changes that uh move
44:47
profits to countries that are just like China that have a lower cost um of Labor
44:53
and that are emerging in terms of uh their Market well the United States at this point is
44:59
stuck on its own on its own history it can't adjust you know it has developed a
45:06
society which told itself and its people that profit the profit motive is the
45:13
Royal Road to prosperity and success let companies pursue the profit and well
45:20
over the last 30 years companies did that they pursued the profit and they went to China or they went to India or
45:26
they went to Brazil which they're still doing and so Americans were stuck what were they going to say we don't believe
45:34
in the prophet motive the results of the Prophet are not good for us they would
45:39
have to rethink the entire proc capitalist ideology that private pursuit
45:46
of profit leads to the best outcome for everybody look that's what's taught in
45:51
the universities where I've been a professor all my life that's what was taught to me and went to all the elite
45:58
universities here that was the ideology and the problem is that
46:04
misunderstands that capitalism is in fact a profit-driven system and it will
46:10
therefore go where the profits dictate if you're the place to which profit
46:17
dictates investment you're having a good time you're having the second half of the 20th century in the United States
46:25
but if you're living in a country which isn't the profit attractor because that's somewhere else China India then
46:33
you're going to be on the bad side of the profit motive that's what's forcing itself into the consciousness of the
46:41
United States they're now seeing that free trade and profit driven is what
46:48
lost the jobs you referred to it earlier correctly about the disappearing middle
46:53
class they're beginning to understand that's why we have the support for Mr
46:59
Trump he at least sounds different doesn't do anything different but he at
47:05
least sounds like he's going to do something different whereas Mr Biden
47:10
sounds like the same old same old continue with and that puts Mr Biden in a very dangerous position because he is
47:19
not responding in the minds of millions of Americans to the felt economic crisis
47:27
this is a generation of Americans who don't believe that their children are going to have a higher standard of
47:33
living than they do when I was growing up in the United States that was assumed to be somehow the magic benefit of being
47:42
an American each generation would live you will live better than your parents
47:47
they lived better than your grandparents etc etc it was just built into to what
47:53
came to be called American exceptionalism that it what it was nothing exceptional at all it was that
48:00
profits were better here for all kinds of reasons and capital came here and
48:06
when profits became better somewhere else Capital left and it and the
48:12
politicians don't know what to do you know their ideology was free
48:20
market that didn't work out they're now switching to economic nationalism
48:26
protecting everywhere sanctioning funding this company funding that
48:31
company billions have been given for example to Elon Musk the production of
48:37
electric vehicles in this country by Tesla is a government funded project Americans don't want to face
48:44
that but if they hadn't done that then he would have done everything elsewhere or he wouldn't have done it at all the
48:50
government is crucial not just when we collapse like in 2008 and n and the
48:55
government had to Comm and bail out the banks or in 2020 21 when the government
49:01
had to save us from the covid pandemic the government is continuously now being
49:06
brought in because this capitalism cannot compete and that takes us right
49:13
back to the beginning of our conversation we can't compete with the electric vehicles either and so we're
49:19
protecting without facing that this is going to worsen the inflation that we're
49:25
supposed to be fighting these kinds of absurdities these are
49:31
signs it's like a doctor reading a patient your body there are signs that a
49:36
medical trained person can see that you've got some serious issues to deal
49:42
with it's not just that you have a rash here or a pain over there there's something more fundamental going on and
49:50
hopefully they can figure it out and treat it we're in that situation except we have a country whose politician have
49:57
to end every speech by saying we are in the greatest economy in the great it's
50:03
no longer true the wages aren't the highest here the standard of living isn't the high it's all not true but we
50:09
have a cheerleading political environment that hasn't yet been broken
50:15
although I must tell you the number of people that I encounter as an American
50:22
who are questioning capitalism I've never seen that in my entire life what I am seeing around me
50:30
now and the willingness of young people particularly young people to challenge
50:35
and question what the government is doing well you can see it on the campuses around Israel and Gaza but
50:43
that's the tip of the iceberg they're questioning everything and that's because they're not being offered the
50:49
jobs they were taught to expect they are not being offered the economic future
50:54
they were taught to expect and they are asking the questions that intelligent
50:59
human beings have always asked when things don't work the way they're
51:04
supposed to and you mentioned that even younger people are starting to sort of think well things aren't really going as
51:11
we're told on you know in in the mainstream media so people are starting to realize that these changes that we're
51:17
facing they're not going to um it's not something that will impact us 50 years
51:24
from now this is something that's already impacting us our society our purchasing power so uh maybe um my last
51:31
question for you uh for this video what is what would be fair to say um would be
51:38
um the economic developments or the situation five or 10 years from now just
51:43
based on these processes that uh you just described here's what I think is going
51:49
on and of course you know the future is always a guess your guess my guess and I
51:55
don't claim any more than that but here's my guess I see particularly again
52:01
the younger Generations asking questions about the economic system much Bolder
52:08
much deeper than I have ever seen before and and certainly that was true of my
52:13
generation when I was a university student and so I've asked myself where
52:19
is this going and the answer I've come up with is the following these young
52:25
people are not going to be persuaded that voting for a Democrat versus a
52:31
Republican or for that matter vice versa that's not the solution they they
52:38
understand the problems are deeper and that these people are fundamentally puppets of the way the
52:45
system is laid out you know a couple of days ago the Washington Post carried an
52:51
article which I found remarkable uh someone had given them the transcript of a WhatsApp conversation
53:00
and it was a conversation among very rich corporate people
53:05
discussing how much money they were going to give and what kind of support they were going to give to the mayor of
53:12
New York Adams to have the police in New York intervene at Colombia at NYU to
53:22
squash the uh protesters around the Gaza uh activity okay uh there it is the
53:31
young people know this they didn't know those details those are new but they it confirms what people have begun to
53:39
understand that if you live in a system that produces great wealth at one end
53:44
and mass of people having a kind of hard time getting through uh you're going to literally
53:52
create in those people the use of the money that has has been concentrated in
53:57
their hands to do whatever they want so if for example these people are very
54:04
supportive of Israel in this case that's was the case they want to shut down these protests that support the
54:11
Palestinians and and Gaza and all that so they offer money and they are listen
54:16
to the mayor answers the phone these are important donors they talk about donating more to him so he can be
54:24
reelected the money is doing what it's doing it's showing the young people and
54:29
they've learned it that we have the best government money can buy but that's not the government they want and they're now
54:36
smart enough to understand the problem really isn't in the government the
54:41
government is acting out what an unequal Society will make it do and that has
54:49
always been true you know and therefore you got to deal with that well how do
54:54
you deal with the horrible inequality that allows a few people to shape what a
55:00
a mayor of the biggest city in the country does over the telephone against
55:06
young people who are peacefully protesting in the University where they are students well the young people are
55:14
asking basic questions so now I'll tell you why that's the answer to your
55:19
question they understand that the origin of the inequality is in inside the
55:27
Enterprise it's inside the factory the office the store and it comes out of the
55:34
way those are organized because in all of them factories offices and stores a tiny
55:41
group of people the owner of the business uh the board of directors if it's a corporation they have all the
55:49
power they make the decision what is going to be produced what technology is
55:55
going to be used us where the production will occur and then the big one how to
56:02
utilize what to do with the revenue you get from running the business all of
56:08
that's decide a board of uh board of directors in an American corporation is usually between 10 and 20 people they
56:16
may hire 10,000 but it's 10 and 20 individuals who sit around they usually
56:22
meet four times a year and they make those decisions and guess what they give the money the
56:29
revenue the debt The Profit whatever you want to call it they give it to the shareholders who the ones who elect them
56:36
to be on the board or to the top Executives which often includes
56:41
themselves in other words the people at the top take the Lion's Share of the net
56:47
revenue of the Enterprise which should surprise nobody they're the people who run it they're in a position to do it
56:55
and they do it Boeing aircraft who has had one safety
57:00
disaster after another for the last several years just raised raised the annual pay of their
57:09
departing CEO a Mr Calhoun from the 22
57:14
million he got last year 20 in 2022 to
57:19
33 million for 2023 he preserved Ed over the worst
57:28
safety record any modern air airline has ever achieved okay there's no connection
57:35
between what he did and what he's paid and the board of directors voted him
57:42
that money was not just him it that's how the they take care of
57:47
themselves so here's where we're going I think five or 10 years from now
57:53
this generation will have put on the agenda a radical change in the
58:01
organization of the Enterprise the factory the office and the store it's
58:07
going to be called I suspect the democratization of the
58:12
Enterprise all Enterprises are going to be run one person one vote as a
58:19
democratic community no individual is going to get hundreds of millions no
58:25
bill Bill Gates no Elon Musk none of that you can give a reward to people who
58:31
make a good invention you can honor the one who improves the technology and give
58:36
him money too sure but basically we are not going to function to produce this
58:43
kind of inequality and that's going to save us from rich people who buy the
58:48
government when none of us are going to be in a position to do that I think that's the kind of fundamental change
58:56
we're talking about so it'll be on a scale of deciding for example no longer
59:01
to organize our factories offices and stores with Masters and slaves as in
59:07
slavery or with Lords and surfs as in feudalism or with employers and
59:13
employees which was capitalism it's a new Democratic organization which will seem
59:21
to the that generation a much better much more grounded solution to the
59:27
problems that are accumulating than doing peace meal or imagining that the
59:33
leaders of our corporations today or the politicians they buy are going to help
59:38
us out of the situation they have created and from which they benefit I
59:44
couldn't agree with you more I think you brought up so many interesting points that uh I would love to uh hear hear
59:51
your thoughts on um hopefully in the next videos Professor thank thank you so
59:56
much for such an interesting conversation I really enjoyed it and I know that our viewers did as well we're
1:00:02
definitely living in very interesting times and it seems that every single day
1:00:08
every week if not every day every week there's something that let's just say surprises us right something that
1:00:14
happens and we we never thought it could happen or it would happen that exact way so I would like to remind our viewers
1:00:21
that uh Dr wal's YouTube channel and his website democracy atw work will be
1:00:26
linked in the video description below please give him a follow he has wonderful wonderful content as I'm sure
1:00:32
many of you already know and uh Professor I hope you come back thank you so much for your time today thank you
1:00:38
for inviting me and I'd love to continue the conversation in the future
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