- Richard Wolffemeritus professor of economics at University of Massachusetts, Amherst, and visiting professor at The New School. He is the founder of Democracy at Work and hosts a weekly national television and radio program called Economic Update. He’s the author of several books, including, most recently, Capitalism’s Crisis Deepens: Essays on the Global Economic Meltdown.
This weekend, House Speaker Paul Ryan touted a story of a woman whose paycheck increased by $1.50 cents a week as a major benefit to middle-class workers. On Saturday, Ryan tweeted a link to an Associated Press report, writing, “A secretary at a public high school in Lancaster, Pennsylvania, said she was pleasantly surprised her pay went up $1.50 a week … she said [that] will more than cover her Costco membership for the year.” After a deluge of ridicule and outrage, Ryan deleted the tweet hours later. For more, we speak with Richard Wolff, emeritus professor of economics at University of Massachusetts, Amherst, and visiting professor at The New School. He’s the author of several books, including, most recently, “Capitalism’s Crisis Deepens: Essays on the Global Economic Meltdown.”
JUAN GONZÁLEZ: $1.50 a week. Is that a pay hike worth celebrating? Well, at least it is according to House Speaker Paul Ryan. On Saturday, Ryan tweeted a link to an Associated Press report, writing, quote, “A secretary at a public high school in Lancaster, Pennsylvania, said she was pleasantly surprised her pay went up $1.50 a week … she said [that] will more than cover her Costco membership for the year,” unquote. After a deluge of ridicule and outrage, Ryan deleted the tweet hours later.
AMY GOODMAN: In contrast to the reported $1.50 pay increase, which comes to $78 a year, House Speaker Ryan received a staggering half a million dollars in campaign contributions from Charles Koch only days after Ryan pushed through the tax overhaul. The legislation has been massively benefiting corporations and the richest Americans, including President Trump and his own family, and the Koch brothers, who may save as much as $1.4 billion on income taxes every year.
Well, to talk more about the Trump administration’s economic agenda, we’re joined by Richard Wolff, professor emeritus of economics at the University of Massachusetts, Amherst, visiting professor at New School University. He’s the founder of Democracy at Work, hosts a weekly national television and radio program called Economic Update, author of a number of books, including Capitalism’s Crisis Deepens: Essays on the Global Economic Meltdown.
So, you have the House speaker tweeting about this incredible victory, as he considered it, this woman raising—getting $1.50 raise a week, $78 a year. But he is mocked and ridiculed so much, he has to delete the tweet. Your response to this, Richard Wolff?
RICHARD WOLFF: I take great comfort from the fact that there was this kind of response. The classic move, both of the Republican Party in general and of Mr. Trump, is to give tiny tax benefits to the mass of people in order to distract them from the grotesque inequality of the benefits going to the corporations and the richest people. Exxon Corporation gloated over the weekend that they’re going to save $6 billion from this tax cut. So, we can see that what this is doing is worsening—not improving, worsening—the inequality of the United States in a dramatic way. And for me, as an economic historian, after 30 years, which is the truth of the last 30 years, of a growing gap between rich and poor, that everybody recognizes, to pass a tax cut that worsens it rather than softens it, is kind of staggering. It’s really not about economics anymore. It’s about an out-of-control economy in which the few are simply grabbing it all before it disappears.
JUAN GONZÁLEZ: Richard, I’m wondering: What do you think the impact might be even of a small increase, because for people who have been used to not having increases in their take-home pay, even a small increase, to what degree that may lull many Americans into thinking, “Well, look, maybe Trump and the Republicans aren’t so bad”?
RICHARD WOLFF: That’s what they hope. They hope that if you get a little bit, you’ll be so grateful and so happy that you won’t pay attention. But here’s where it’ll come back and bite you, because with this kind of a tax cut, massive reduction in the money that the federal government gets from all these corporations and rich, we know already, because Mr. Ryan, among others, has told us, they’re going to be cutting government programs, using the excuse that they don’t have the money. So, the $1.50 that young lady will save, she will then lose more than that in the cutback in government programs upon which she and her family and her community will depend. This is a bad scene for the mass of the American people.
AMY GOODMAN: It’s very interesting. We just had the segment on nuclear weapons and President Trump’s $1.2 trillion plan to increase the nuclear weapons of the United States. That, we can afford.
RICHARD WOLFF: Right.
AMY GOODMAN: Talk about where the money goes and what you see as the alternatives.
RICHARD WOLFF: Well, I think, fundamentally, the money is going where Mr. Trump and the Republican Party want it to go. He is building his political support. He’s not a popular president. We all know that, despite his tweets. So he has to build. So he gives the military. That’s one way to build his support. He gives the big banks and the big corporations a cut. That’s another way to build support. He makes symbolic gestures for the rest of the population, in hopes of drawing them in. This is a program that is mindless about the economic realities of our society, about the suffering, about the promises he also made in his campaign. It is built on the notion he is going to build his support and the Republican Party, and the rest of the society will just live with where the chips may fall.
For me, this is a problem of a system. This is beyond this problem, that problem, this reform, that law. You have a system that is out of control. We have so much wealth in the hands of so few, that they’re in a position to make everything else serve them. That’s a classic sign of a decay in a society. And for me, the fundamental shifts that have to happen are the only way you’re going to get out of this long series of horrible kinds of decisions, such as saying, “We can’t take care of the secretary’s economic needs beyond $1.50 a week,” and then, you know, doubling our defense expenditures.
JUAN GONZÁLEZ: And I’m wondering what in this bill, that was—tax bill, that was recently passed, most astounded you, because, clearly, there was the cut in the corporate tax and the pass-through companies and the inheritance tax. I mean, what was it that most astounded you about the ability of the Republicans and President Trump to get this through?
RICHARD WOLFF: All the ones you mentioned, but here’s the one that really got me. For years, large corporations have evaded their share of taxes by using a loophole that their lobbyists got into the law years ago, which says, if you keep your wealth outside the country, your profits, you don’t have to pay the tax here in the United States, you only have to pay when you come back. Year after year, billions were unavailable to Washington to serve our needs as a people, because they did that. And instead of saying, “You know, you’ve abused the American economy by this not payment,” instead, that bill, that was passed in December, gives them a preferential lower rate than they otherwise would have had to pay.
JUAN GONZÁLEZ: Gives them amnesty.
RICHARD WOLFF: That’s right. Basically gives them—instead of punishing them for the damage they did, it rewards them by saying, “Having waited and not paid, now bring it back, and you’ll pay less than you ever would have before.” That is such an upside-down notion of justice and economics logic in taxation, you know.
And here’s a last point that I do as an economist. If you give government money to poor and middle-income people, they go out and they spend it, and it makes the economy hum. If you give the bulk of government support to the richest, those are the people who don’t spend it all, because they’re already living high on the hog. They save it. They hold it back. They use it for all kinds of things that aren’t the kinds of things that make the economy hum. In economic logic, it’s much better to give to the middle and the bottom than it is to give even more to the top, after 30 years of having done that already.
JUAN GONZÁLEZ: And what’s your response to these corporations that have suddenly now started to voluntarily give their workers a small increase in their base pay?
RICHARD WOLFF: Well, I brought with me, because I didn’t want to make any mistake, the name of the firm, Willis Towers Watson. It’s a human resources firm. It’s the only scientific effort to understand what the companies are doing with their tax cut. They interviewed—they picked, at random, 333 companies with no less than a thousand workers each. And here’s the results they got. They asked them, “Are you giving the workers a benefit from your tax cut? If you’re not, are you planning to over the next year? If you’re not doing that, are you considering it?” Here are the results. Three percent have given. Four percent are planning to give. Thirteen percent are considering it. Eighty percent of American corporations aren’t—haven’t done it, aren’t planning on it and are not even considering it. It’s a hype. It’s a hustle. It’s an attempt to fool people by picking a few examples.
And there’s one more I love. Walmart is giving money. But it turns out the amount that you get depends on how long you’ve worked at Walmart. Walmart has a tremendous turnover, because they don’t pay much, therefore most people haven’t been there very long. They won’t get very much. It’s a game, in which, unfortunately, these companies are complicit with Mr. Trump in the hype that this is not what it actually is.
JUAN GONZÁLEZ: And, unfortunately, the media are complicit in reporting on it.
RICHARD WOLFF: Yes, and they go with it.
AMY GOODMAN: So, back to that deleted tweet of Paul Ryan, the House speaker, who said this woman was pleasantly surprised when her pay went up $1.50 a week. She said that will more than cover her Costco membership for a year. The former Obama staffer, Jon Favreau, tweeted, “As a thank you for passing a $1 trillion corporate tax cut, Paul Ryan received $500,000 in campaign contributions from the Koch brothers, which would probably cover the cost of buying a Costco.” OK, so that’s the Obama staffer. But how different is what Trump and his allies are doing than what the Obama administration was doing? And what do you think needs to be done?
RICHARD WOLFF: Well, it’s much worse. I want to be fair. What Trump and the GOP are doing is much worse than what the Obama. But you’re quite right in your question. It’s a difference in degree. It is not a difference in kind. Mr. Obama came in with great hopes, as everyone knows, that there would be changes and there would be a redirection. There wasn’t. I mean, to be real brutally honest, there really wasn’t. But in the light of what Mr. Trump does, it all kind of looks better. We have a history in America that with each president, the previous one looks a bit better than he did before.
So, for me, the basic issue is what you say: What has to be done? And for me, here’s how it looks. The decisions we see are the decisions made by the people who run the businesses of America—the corporations, the boards of directors, the major shareholders—who really do control this economy and have for a long time. If we’re not happy with the outcome, which I assume we’re not—we have been discussing that—then we have to go to that problem. We have to be willing to change the system. And for me, what I work on is to change the way corporations are run.
Democracy Now!—I love the slogan, I love your name—I want it in the workplace. I want democracy there for the first time. We don’t have democracy at the workplace. We have a tiny group of people at the top: the major shareholders, the boards of directors they select. They make all the decisions—what to produce, how to produce, where to produce and what to do with the profits everybody helps to produce in an enterprise. Why do we allow such an undemocratic system? The decisions at the top, everybody who works there has to live with, and yet there’s no accountability. The mass of people who work in each enterprise can’t control, don’t elect, have no role. They live with it, but they have no participation. That’s the opposite of democracy. I don’t think—if we put the people in charge of our businesses, if we make the economy run by the people in each enterprise, I think, for the first time, we’d have an economy that serves people rather than asking all of us to serve an economy run by a tiny minority.
JUAN GONZÁLEZ: I wanted to ask you about the Trump administration’s regulatory direction, because, clearly, after the financial crisis, there was an attempt, during the Obama administration, to provide more brakes and controls on the worst excesses of the financial industries. But now we’re seeing payday lenders, we’re seeing the old student loan companies that were constantly peddling debt to America’s young people, all having a resurgence. The impact of the regulatory changes that are occurring?
RICHARD WOLFF: Probably more profound than anything we’ve been discussing right now. Under the surface, because there’s so much of it going on, even the media can’t quite keep up—underneath the visible is a change in the personnel, in which, one after the other, lobbyists from every industrial group are being brought in to be regulators of what they used to work for. I mean, it really is the foxes guarding the chicken coop on a mass basis.
And I think what you’re going to see, slowly, is a radical alteration, in which the government looks the other way as each industry group gets to do what they’ve tried to do for decades and been held back from, more or less. Now it’s open season. And we will have—and I suspect you will have to cover—more and more stories. And the most recent one is the one in which the fast-food industry lobbyist has become the person hired to determine American dietary rules. It’s extraordinary what you’re seeing and how that will play out in the little moments of our lives.
AMY GOODMAN: Talk about that, Jerome Powell taking charge “as the economy stutters,” says The New York Times.
RICHARD WOLFF: Yes. Well, you know, the Federal Reserve—we pretend in America that we’re a private enterprise economy, but we all depend on the Federal Reserve, which is basically a governmental, or largely governmental, agency that has unspeakably enormous power. How much money there is in the economy, what the interest rates are, are shaped by the Federal Reserve. Janet Yellen, a classmate of mine, by the way, when I was in graduate school in economics, has left, and replaced by Mr. Powell, who is closer to the Republicans and closer to the president than before. My guess is you’re going to see a Federal Reserve accommodating, like everybody else, this deregulatory, shift-wealth-to-the-top kind of mindset. So, unfortunately, where Ms. Yellen might have been a bit of a break, this is full speed ahead in a direction I think is disastrous for this country.
AMY GOODMAN: Well, last question, and that is: How has Trump sold it to the American people, with the help of the media, even if they are an opposition media sometimes? What is the note he has struck, that he has so succeeded in what you see as duping people?
RICHARD WOLFF: I think it goes back to your point about Obama. In fact, promises were made to the American people, in the Obama administration, to bring hope, to bring change, and there wasn’t much of any. And I think it turned a large number of people off, and they were discontented and turning away from politics. And there’s a kind of anger and rage against what’s happening, and Mr. Trump has tapped into that. And he keeps playing on it: “I’m the naughty boy. I’m the different one. I’m going to do what others fear to do.” It’s theater. There’s no reality to it. He’s actually gone in the opposite direction. But this endless tweeting and the endless crisis-mongering with his promises is a kind of distraction meant to keep people away from understanding that what they hoped for with Obama and were disappointing in is going to be an even bigger disappointment with this one.
AMY GOODMAN: We want to thank you so much for being with us, Richard Wolff, professor of economics at University of Massachusetts, Amherst, visiting professor at The New School, founder of Democracy at Work, hosts a national television and radio program called Economic Update.
This is Democracy Now! When we come back, yep, Super Bowl happened last night, huge upset in the sports world, with the Philadelphia Eagles winning for the first time. If you were watching, did you notice that someone was taken off the field with a concussion? Or maybe that’s why you weren’t watching last night. We’ll talk about what happened on the field and off. Seventeen people were arrested in racial justice protests outside. Stay with us.