Economic Update: Human Rights v. US Water Economics

Welcome, friends, to another edition of
Economic Update: a weekly program devoted to the economic dimensions of our lives,
our jobs, our debts, our incomes, the conditions of our work and what they
look like coming down the road, not just for us, but for our children as well.
I’m your host Richard Wolff. I’ve been a Professor of Economics all my adult life
which I think has prepared me – I hope – for offering some insights as to what’s going on in the economy we all depend on and live in and with. I want to begin today with a particular update before doing the announcements I often start with. And this has to do with, yes, our President Donald Trump. On the 17th and 16th of the month of August he entered into a major fight with some of the
largest corporations here in the United States. Merck in the pharmaceuticals,
Amazon in the delivery operations, and many others. In some cases he attacked particular CEOs, in other cases the company as a whole. And this is interesting and demands a bit of economic analysis. So let me do that. The Republican Party has always been a coalition – as has the Democratic Party – and the Republican Party’s basic coalition had two parts: on the one side, business – particularly big business – was the champion, the funder, and the dominant
influence. Junior partner was what we might call “social conservatives.” A collection of groups that included fundamentalist religious folks, people
who were in favor of all kinds of particular social conventions usually
lumped under the term “conservative.” And the Republican Party to be successful
had to hold this coalition together. It had to be the
party at the same time of business – particularly big business – and of social conservatives. And this was a difficult “coalition” to keep together. When the Republicans were able to do that, they would win. And when they failed to do it
they would lose. When Mr. Trump attacked the large corporate CEOs, he was
straining – to be as polite as I can – that coalition, When he ended the Business
Advisory Councils. Which he really had to do because the business leaders were
quitting, resigning, from being on those councils as a protest, particularly of what the President said in the aftermath of those horrible events in Virginia. But let’s look at one case in particular to understand what’s at stake. Mr. Trump specifically singled out and attacked the Amazon Corporation. And he attacked
that corporation whose leader had been critical of him, for not paying taxes and
for ruining all across the United States small retailers that were competitors,
and many towns that depended on those retailers, eliminating many jobs by their
high-tech approach to the delivery process, and so on. And true to form, the
defenders of Amazon rushed forward to say there should be no criticism, all
that Amazon is doing is bringing progress and higher technology to the
particular areas where they are dominant. Well, let’s take a closer look. The
argument about technological advance is really silly. Sure, technology advances,
but what matters is how you use it. Do you use it to make profit for a small
number of people? That’s what Amazon is doing. Or do you use it to relieve large numbers of people of drudgery of the sort we used to have? The mass of people would like technology
to be used for the second purpose, capitalist enterprises prefer to use it
for the first, and Amazon uses it for the first. There’s not much more to be said
about it. What about taxes? Well the truth of the matter is that Mr. Trump has a point. Amazon doesn’t pay its fair share of
taxes and never did. Let me just give you one statistic, which for me is kind of
overwhelming. Between 2007-2015 the average annual percentage of taxes paid on their profits by the Amazon Corporation was 13%. That’s not just for their federal taxes; it includes also the taxes they paid to the state governments where they are active, and the taxes they pay to the local governments. You know if
you own a big warehouse in a local community, you have to pay property tax
like every other business. And if you’re active in a state that has a corporate
profits tax – which most states do – you have to pay. So you put together the
federal, state, and local, and it worked out to 13%. Folks, that’s a smaller percentage than most Americans pay – individual Americans – when they put together the federal income tax, the state income tax, the local property tax, they pay on their automobile or their home. So Amazon has been getting away
with tax evasion, using the law, using an army of accountants, using an army of
lawyers. When Mr. Trump goes after them, he is right about their tax evasion. Now,
true, he’s never done a thing about it. He’s never joined any movement, let alone
lead one that did anything about this, and he is straining the alliance. The business community wanted things out of Mr. Trump and supported him. They wanted to get out of those high taxes that the Obamacare added to them. Mr. Trump failed. They wanted a big tax reform that would lower the tax burden on them. He hasn’t delivered yet and it’s not
clear if he ever will. What the business community got out of him is little so
far, and it’s not looking good going further. And now with his support
of the conservatives, and even the most right-wing of the conservatives, they’re facing political social turmoil, which they don’t want either. So the coalition of the Republicans is fraying. Meanwhile, Mr. Trump, as he goes and lurches to the
right, and Amazon as they blithely avoid paying taxes, call each other out. It’s kind of a modern version of the falling out among thieves. The next update I want
to talk to you about Americans dying younger. A big story in Bloomberg News back on August 8th that deserves much more attention than it got. Mortality – that’s the average length of our lives before we die, how long we live – has been falling since the 1950s. A sign of economic well-being, a sign of
economic improvement of people’s conditions. But it stopped rising in 2011, and in the last two years…excuse me, stopped falling until 2011, and it’s been rising.
That is we are dying at an earlier age. This is extremely important for at least
two reasons I want to bring to your attention. First, it is a stunning
statistic undermining the notion that we are enjoying an economic recovery in the
United States. We aren’t. And one of the stunning demonstrations of that fact is we are dying at a lower average age than we used to. The improvement in longevity
is over. It’s now deteriorating, and that is a very powerful comment on the
conditions of people’s lives. Especially because they experts tell us that the economic conditions of people’s lives, the stresses associated with them, the
physical and mental exertions associated with them, are major causes of how long
we live. So it’s a critical sign that there’s a problem with the economic
situation. We have not recovered, in fact it’s going the other way. And here’s the
second economic fact: corporations as Bloomberg points out, are making billions
by this, And you know why? Very simple. They have obligations to pay pensions.
The sooner the worker dies after completing his or her work life, the less
they have to pay out, it’s even making the social security systems crisis less
than it was before because the government doesn’t have to pay out after
you die. So this bad news for the mass of people is in a perverse way good news
for the very corporations whose work conditions are part of the reason why
people are dying earlier. Before I turn to the next updates, I want to remind you by making a short announcement of some important considerations. If you would
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simply write to: [email protected] and they will work out with
you the details of such a visit. Now back to our updates. Once again I find myself talking to you about the Monsanto Corporation. It’s on this program all too
often, and in each case – virtually each case – it’s because it is doing something
that demonstrates what it means when you have an economic system that puts profit
before all else. Or to use the other way of saying it: makes profit the bottom
line, he thing that is most to be focused on. This time, Monsanto has
produced a remarkable herbicide – if I understand exactly what it is – the name
of it is Dicamba. This herbicide – it gets rid of weeds,
at least that’s the idea – is produced by Monsanto. But there’s an interesting
story of a new version produced by them and marketed by them, that was covered by
Reuters the international news agency very short time ago, and I want to bring
it to your attention. Why? Well it turns out that when Dicamba was used, particularly on beans peaches and vegetable gardens, they died. That is, not the weeds, but the bean plants and the peach trees and the vegetable plants. That’s not what the herbicide is supposed to do. And it devastated the farms, the livelihoods, and the natural environment that we all depend on in millions of acres, apparently. Startling pictures swirled around the
internet, so Reuters looked into it and what they found is something I want to
tell you about. What they found is that Monsanto had departed from the usual
procedure. The usual procedure when you have a new chemical like this and you
want to market it, is that your scientists test whether it’s safe. But of
course not *only* your scientists. Typically the company that makes such a
thing gives samples to university laboratories and two other independent
testers, so they can all make the relevant tests and only market the product if all the tests indicate that it’s safe to be used on food products. One of the things that every test should incorporate – should test for – is called “volatility,” and I had to look up what that meant,
so let me share it with you. Volatility is a measure of whether an herbicide, if used in one part of a field is likely to blow over and affect the plants in
another part of the field. Volatility is a measure of where the
herbicide can go beyond where you apply it. And now we get the interesting
conclusion of the story. Monsanto did give the University of
Arkansas, the University of Missouri, and the University of Illinois samples. But
for the first time that anyone in these universities had ever seen, as the
Reuters story makes clear, they gave them them with a strict rule, that had to be
signed and agreed to: no test for volatility. Test for everything else
about the safety, but not the volatility. Wow. And guess what the problem was? When
the herbicide was finally produced, and sold, and used by unwitting farmers? Turns
out the product had a problem with: volatility. It blew from those areas
where it was initially applied to nearby areas, particularly with beans, peaches
and vegetable gardens. When confronted by Reuters with this story, this story of a bizarre unusual procedure that made it profitable for Monsanto to sell
something which had in the end devastating effects, I would like to tell
you what Mr. Scott Partridge, Monsanto’s Vice President of Global Strategy, here’s
what he had to say: “We tested it, and it seemed safe.” Whoo. But here’s the better
quotation: “To get meaningful data takes a long, long time,” Mr. Partridge said. “This product needed to get into the hands of growers.” End of quotation. Well, that’s not very subtle is it? They were in a rush to make money and
that’s what they did. They rushed the product, and they made a lot of money, but
in the process they put their profitability, what they could market to
growers ahead of what was safe for the human race, and we are suffering as a
result. And this happened so often that I just occasionally take your and my time
to give you an example. The important lesson here is to see that there’s a system in this society that fosters, promotes, incentivizes this kind of
behavior. That’s the problem. I really am not picking on Monsanto, although they do provide so many examples, but I could pick others as
I occasionally do. But again, the important point is what kind of a system
functions in this way? Let me turn next to another update that caught my eye, and again it has multiple lessons for us.
This one comes – for those of you who’d like to pursue the details – from the New
York Times dated August 16th, 2017. The report in the Times says the following:
that 100,000 children in New York City were homeless at some time during the
2015-2016 period. That we are headed for and pull already this year, this coming school year, be in a situation where 1 in 7 public school children in New
York City is homeless part of the year. Why am I talking to you about this? Well,
first it’s a stunning statistic. 100,000 children are suffering homelessness.
Children enrolled in school. This is one of the riches
cities in the world, New York City, in one of the richest countries in the world,
the United States. What in the world is going on if 100,000 children in one city are suffering homelessness part of the year? Beyond that, I want to
talk to you about what this means, since perhaps you haven’t thought that
through, and when I read this story I began to try to think it through, and
there were things in the story that helped it. First thing in the story that
caught my mind: graduation rates. Turns out the school has been keeping records. One is the percentage of students who graduate high school who were homeless at part of the time, versus those who did not have that problem. The answers are stunning. Homeless students graduated at a rate of 55%.
Barely over half graduated. Students who had steady housing graduated at the rate
of 74%, a completely different number. My goodness. Here’s another statistic. In the elementary school, the first school that a child attends, homeless students missed
on average 88 days of school. All right, I don’t want to over dramatize this, but if you meet miss 88 days of school on average – and remember an average means a large number of students missed even more than that – but 88’s enough
the average. Just like 60 would be enough and 40 would be enough, in what sense?
In the sense that you’re gonna fall behind. You’re not gonna be able to keep
up. You will have missed this lesson, or that lesson in arithmetic, or reading, or
writing…and then you will have the added burden of coming to school not able to
do what the other students sitting around you are able to do, and feeling
bad, and maybe hiding it either from your
parents or your friends, or maybe even from yourself. And if you fall behind
early on, that tends to get worse over time, alienating you from the other kids and from the whole educational process.
Because it is embarrassing,. Because it is undermining your self-esteem as a human
being. We are doing an unspeakable injustice to millions of our fellow
citizens – children – by blocking their ability to access a decent education, and
a decent life based on a decent education. But I want to take it another
step. There are those amongst us whose response to the awful problem of poverty
in this society is to blame the poor, to blame the victim. But what this story shows is how terribly wrong that is. How large numbers of the poor are people who – at a time when they have no responsibility for it at all – were denied
the opportunity for an education from the beginning. I’m talking kindergarten,
first and second grade. Who were deprived, through no fault of their own, from the
access to an education. Throwing them back in terms of their levels of
achievement,. Making their relationships to the rest of their schoolmates, and to
the school experience as a whole, one full of embarrassment, difficulty, shame,
failure. To blame them as adults for their poverty without recognizing how much of that poverty is accounted for by a failure of the system. We are not a
poor country. We have huge amounts of housing that sits empty. We have the
capacity to build housing that is as good as any in the world. What
excuse could there be? And then to point to the poverty that we have allowed to
evolve, and to blame the poor? Once you understand what the condition of our schools is, that really takes a bad problem and makes it worse. Homeless
people have 10 times more problems than everybody else, because they’re homeless.
This does not require rocket science. Children, as I’ve just shown you, suffer
especially in something as vital as their education from the fact of
homelessness. We know from the statistics of homelessness that more and more of
the homeless are families: parents and their children. We know where this ends
up. What kind of a society is unable to make the decision that those who have
extraordinary wealth should be encouraged – and if they fail to heed the
encouragement, should be required, whether it’s by tax functions, or by changing the
wages people are paid so we don’t have to take it from somebody to give it to
somebody else, because we pay good wages and give decent jobs to people from the
beginning – whatever it takes, we can solve the problem of homelessness
and in that act, do a major thing for social justice, for innocent children and
to eliminate poverty in the long run which flows from that homelessness and
its impact on the children of this nation. It seems to me extraordinary to
read such a statistic and to not have it create the uproar that it deserves in
terms of both the problem it presents, but the solution it crystal clearly
lays out for how to solve the problem. We’ve come to the end of the first half
of today’s Economic Update. I would like to urge you again to follow us on and to make sure you make use of our websites: and That’s all one word: We will have a short interlude and then
we will come right back with the second half of this program, which will involve
a very interesting interview about the water issues that the bedevil the United
States in every part of our country in terms of adequate water, in terms of
safety, in terms of drinkability. Water, as you well know, is one of the most
basic requirements of human life and nothing is more urgent than the human
right to have access to clean safe water. Please stay with us, we will be right


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