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Richard Wolff

October 31, 2022

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In this week's show, Prof. Wolff discusses US sanctions against Chinese semiconductor chip makers, OPEC+ cuts oil production by 2 million barrels per day boosting inflation, desperate UK conservatives abandon Brexit scapegoat to cozy up to Europe, and what US might do to solve "labor shortages." In the second half of the show, Wolff is joined by Ana Kasparian, host of “The Young Turks,” to talk about the media and today's US crisis.


Transcript has been edited for clarity

Welcome friends to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives and those of our children. I'm your host Richard Wolff. Today we're going to be talking about struggles between the U.S and China, also struggles between the U.S and Russia and also a little bit about Europe scapegoating immigrants and all that's involved there. So let's jump right in.

Recent weeks have seen the United States heaping on multiple layers of new sanctions against China, and other countries too, but mostly China and mostly around semiconductor chips. This is a crucial industry to running all the devices that we now run electronically with those chips. It's been going on, this kind of harassment of the rest of the world's business by the United States, for some time. So far it has not been matched all that much by other countries, a little, but the United States is clearly a leader in going away from the globalization of recent decades to a new program of not promoting free markets. Quite the opposite, intruding on one market after another, reorganizing it by government intervention. And there is no clear evidence that this works. Here's what I mean: if you hamper the Chinese semiconductor industry they get the message and they are going to now speed up their own development of their own semiconductor chip industry, and I'll come back to that in a moment.

But they're not going to stop there. They understand, because the United States makes it quite clear, that this is all designed to slow down the competition coming to the United States from China, slow down the advance of China as the great challenger of the American empire and of American capitalism. And they're going to now realize that other industries are coming down the pike that may well be treated in the same way by the United States. And so they're going to speed up not just their own semiconductor chip industry but loads of other industries. And when you figure out where and when they will be successful, because you have to assume that, since they've been very successful to this point developing their own industries in competition, we're beginning to have to ask a question that, of course, is not admitted by the government at this point. Is this really about slowing down China? Or have we got here a change in U.S capitalism from the free trade kind of capitalism to the controlled trade kind of capitalism? We've had them both historically, in and out of the United States.

But there's a shift going on, clearly. Big business is cheering on the government intruding on markets. Where not so long ago howls would have gone up at the very thought of the government doing that. And, yes, it was always a little bit phony and a little bit theatrical but maybe there's a shift going on. And all that the semiconductor chip industry in this country has gotten is protection. They are hampering the enemy, that's the story. But the real story is they're hampering the competitor. And it's real convenient to say "no, no, we're not giving a big advantage to one industry - semiconductor chips. That might lead to howling from other American industries that also need protection from China and from many other countries. So instead of admitting what you're doing you tell a story about national defense and security and the scapegoating of the Chinese yet again.

We won't know, but here's something I would urge all of you to think long and hard about: China has shown it's ability to develop virtually every industry. That's not going to stop, they're very good at it. They have lots of friends around the world to trade with and to pick up what they can't get from the U.S. And they'll develop it themselves. They'll probably work with India. And do you really think it's a wise move for the future of the American economy to cut itself off and create this bad blood with the two largest countries on the face of this Earth, India and China? That together have 40 to 45% of the population of this planet?

You know, when they develop industries it's going to be for a much larger market than the United States has. And they're going to realize economies of scale (the ability to make things cheaper because they make so many) and the United States is not going to be able to do that quite so well. Do you really want to be excluded from the biggest, fastest growing market in the world, which is what the Chinese already are? A big price is going to be paid for this change of policy. Too bad it isn't being put on the table honestly and openly so we can all see it, understand it, debate it and begin to make a democratic decision.

The other big news is similar. Very few weeks ago the Saudi Arabian government together with Russia and the other 23 countries that together make up the rest of OPEC+, 23 countries in total - I should be careful here: Saudia Arabia and Russia part of the 23 - they agreed to cut oil production by 2 billion barrels a day. Well, total oil production is about 90 million barrels a day. So this is over two percent. That's more than enough to start a bidding war. Because oil is going to be scarce, if you cut away two/two and a half percent of the total production people are going to get frightened. Who's going to have to take that cut? "And before anyone can take it from me" says country A "I'm going to offer a bit more for it than other people are, to be sure to get my share." And country B says "oh, I'll offer even more than country A so I'm even." And there we go, that's all you need to start the bidding war.

And you know what that means? Oil prices are going up. And you know what that means. Oil is basically crucial to everything in every economy, including the United States. So if the price of oil goes up that inflation we're worried about, that's not going anywhere away anytime soon. Because it's getting more and more supports. If you know, and let me make sure you do, that gas prices are rising in this country way faster than 10% a year and that 40% of the electricity in this country is produced by gas then we're about to have a boom up in the price of electricity, for those who didn't know.

And you know what this all shows, besides that our inflation is probably going to get worse before it gets better? It shows that the power of the United States isn't what it once was. Those 23 countries didn't take very long to say to the United States "you know a few weeks ago your President Biden went to Saudi Arabia asking them to produce more oil." Not only did they not do that (there was a symbolic increase, very small) but they've really taken a big step by cutting it right in his face. The United States empire isn't what it was. And, let's be clear, that declining power is also now accumulating enemies; people who feel aggrieved by and are beginning to hit back at the United States: Saudi Arabia, Russia, the BRICS countries (that's Brazil, China, India, South Africa, Iran, North Korea, Cuba, I could go on.) Do you really want to have a foreign policy that makes enemies out of all of them? Are you going to fight wars everywhere all at once? Really? Many of these countries have nuclear weapons. It should be obvious that some enormous chances are being taken here. And it's in the name of the American people by the leaders of the United States. And the level of discourse and honest debate about it? Nowhere near in proportion to the size of the risks being taken.

My last update for today: I want to take note of a shift in Britain. Now, many things are shifting in Britain. It's a society under extraordinary stress, divisiveness, tension, bitterness. Sounds a little bit like the United States. Well, one big diversion is coming to an end: Brexit. Back in 2016 the British people got all excited that the cause of their economic suffering, which was certainly real, was not the inequality of the British economy, it was not the decline of the British Empire, it was not the conservative policies of the government. No. You know what it was? It was Europe. You know, the rest of that part of the world on the other side of the British English Channel. It was the British fault, they were doing bad policies, they were crowding on Britain, they were sending immigrants into Britain - yep, you know the story - taking British jobs. So they had a big referendum election and they voted to leave Europe. It made no sense, no economic sense and not much political sense. And there were enough people both inside and outside Britain to say that. But, no, the suffering was so intense that anybody who seemed to maybe have an answer got people's attention. And the Conservatives knew they had to blame somebody else because otherwise the blame would have come right on them. And what do we see here five/six years after Brexit? The British economy is in way worse shape. The promised benefits of Brexit: zero.

You know, it has a stunning similarity to the United States today. For the last year and a half, and continuing, we hear all about labor shortage. And you know what? That labor shortage could be solved if we changed our attitude toward immigrants. Because you know most of the jobs going begging are low paid jobs. And you know what immigrants have to take when they come here? Yeah, low-paid jobs. The British are becoming nice to the Europeans. Brexit is being shoved under the rug. Americans may be in for a similar twist-around, as we suddenly discover sympathy and empathy for immigrants, maybe those thrown on an airplane and flown thousands of miles away for the political gain of a Republican Governor, who knows? The winds change, but the same people are playing the same game of manipulation.

We've come to the end of the first part of today's show. And before we get to the second half I want to remind everyone that Economic Update is produced by Democracy at Work, a small donor-funded non-profit media organization that is celebrating its 10th anniversary of producing critical system analyses through a variety of media, including live virtual events like my upcoming conversation with David Harvey on November 18th. Go to our website democracyatwork.info to learn more about that event and all of the other work we produce. And while you're there, be sure to follow us on Facebook, Instagram and especially our YouTube channel, as we are getting close to the goal of having three hundred thousand subscribers before year's end. And hitting that goal will help us reach more people than ever. Please stay with us, we'll be right back with today's special guest, the host of The Young Turks Ana Kasparian.

RW: Welcome back friends to the second half of today's Economic Update. I am very pleased and proud to bring to our cameras and our microphones Ana Kasparian, whom I'm pretty sure many of you have already encountered one way or another. She is the multiple award-winning host and producer of the online news show The Young Turks, whose astronomical rise has made it the world's largest online news show, with over 6 billion views. Beyond broadcasting Ana Kasparian is also a columnist for Raw Story and a journalism lecturer at California State University at Northridge. Her work has been published in the New York Times, Time Magazine and many other publications. So first of all Ana, thank you very, very much for joining us.

AK: Thank you for having me.

RW: Okay, I've watched you, I've seen you, I've heard you. I want your opinion on a number of topics that I know are in the minds of my audience. And they would love to get your take on these things. So let me begin with maybe the biggest overall one. For the last 30 years and counting, income and wealth in the United States has been redistributed through tax laws, through pricing mechanisms, through inflation and a whole bunch of other mechanisms from the bottom and the middle to those at the top, that's a long-running phenomenon. The last three years have put a cap on that process. That made it worse. We've had a crash - second worst in American history. In 2020 we had the pandemic, we've had an inflation, or rather (the present tense) we are having an inflation and we are also having rising interest rates as the method thought to deal with the inflation. This is a collection of economic blows to the working class, the vast majority of us that are employees. And my question is: given all of that, given the tradition that the Democratic Party was somehow the spokesperson, if you like, of the vast working majority, can the Democratic party survive, having been unable to protect the working class from what I just went through? Let alone advance its situation?

AK: Well, I believe the situation is so dire in the United States at the moment that my concern at this point goes beyond whether or not the Democratic Party can survive; the Democratic Party now being completely captured by corporate interests through campaign finance of elections and also through the fact that they're literally investing in individual stocks on their own. Meaning they're very much in favor of this wealth redistribution from the bottom to the top. That leaves this huge void for workers in this country who are angry, who are living lives of economic instability, who are grappling with insane poverty in many cases and want to understand what's happening in the country. And what makes the situation even worse is we have consolidation of our media, corporate capture of our media. And rather than getting the full story, rather than helping the public to understand what's really transpiring in this country and why this inequality exists in the first place what they do is they dive into endless culture war issues that further divide the country and essentially fuels some of the hatred that we're seeing among the electorate right now toward one another.

And so I'm genuinely concerned about this country devolving further into fascism. I think that we're seeing signs of that as we speak, with prominent public figures openly declaring war on Jewish individuals. And, yes, I'm talking about Kanye West. And, you know, five years ago statements like this would have seemed hyperbolic to me. But I do think that since there isn't really anything being done to make Americans whole, to ensure that we actually tackle inequality effectively. These narratives in media, these narratives that are being spouted by the right-wing in this country will absolutely, you know, fuel fascism in America and potentially across the world. I'm genuinely concerned about that.

RW: All right, you mentioned the media and I'd like to ask - because you're in it, you know it really well - how do you account? Or let me put it differently: isn't the media the reason why over and over again now we see polls showing the mass of the American people feeling one way and the Republicans and Democrats voting in the Congress, with a few exceptions, in general voting the opposite? And no one seems to notice that. I mean occasionally, maybe, but this is a pattern. What's going on?

AK: Well, what I think is happening right now is the issues that matter most to the majority of Americans, and they typically end up being economic issues, for good reason, are mostly ignored. Or, more importantly, there's, in my opinion, a concerted effort to distract away from those issues. And the fact is that you have really two parties in name only when it comes to the substantive bread and butter issues. In reality we have two pro-corporatist parties. And the way that they differentiate themselves with the help of the media is through culture-war narratives. And that distraction, of course, ends up fueling the hatred that members of the electorate have for one another. But, again, rather than focusing on the similarities that working Americans have with one another including support for unionized labor, including support for doing something about wealth inequality, their focus has been on, honestly, a lot of manufactured issues. So while I believe in the importance of, let's say, protecting underserved communities (the transgender community being one of them) I think that there's an intentional effort to make it seem as though something like transgender athletes in school sports is the most important issue. And that takes up so much of the bandwidth in our corporate media and also in the rhetoric that we see in Congress.

But the fact of the matter is what's really impacting the most Americans in this country right now, it's the way our economic system is set up, the fact that wages have remained stagnant since the 1970s when you take into account inflation wages have actually gone down considerably since the 1970s. And we have this unelected body of individuals called the Federal Reserve making decisions quite openly, candidly about crushing workers further by increasing interest rates to respond to inflation. And no one in the media, by the way, addresses the fact that part of the inflation that we're seeing in this country is fueled by the Federal Reserve just pumping out money and giving money to corporations with low interest rates, of course, or no interest rates in some cases. And also through a policy known as quantitative easing, which is incredibly destructive to our economy, especially when you consider what it's done to our housing market. So these are maybe complex issues, but they're issues that I would venture to say the public is intentionally not informed on. And instead all of the focus has been on everything that makes us different, everything that we disagree on. You know, again, the cultural issues, the religious issues, all of that. And that's further dividing the country without addressing what the majority of the electorate actually happens to agree on.

RW: Right, I was struck and I think you must have been too listening to the Fed Chairman Powell using repeatedly the word pain - p-a-i-n - that the policies we have to now go through will cause pain. And each time he said it he carefully avoided making it clear pain for whom and who would not feel the pain. I mean it was an extraordinary exercise in the make-believe that the media, whether they're conscious of it or not, are engaged in promoting. Oh well, that leads me to another question still about the media. How important are things like The Young Turks, what we do on this program? There is an alternative media that has been called forth in a way by everything you just said. Do you see hope there? Is that a sign you think is worthy of attention?

AK: I do think independent media is critical in countering the narratives that individuals come across in corporate media. But I am also concerned about how incredibly difficult it is for independent media to grow, to remain sustainable, to remain, I guess, untouched by corporate greed and corporate interests. Because the fact of the matter is we're all operating under a system in which we need to make a living to survive. The companies like TYT, for instance, needs to have a steady revenue flow in order to survive. And that's incredibly difficult to do under a capitalistic model where media, again, has to operate under profit.

We used to have something called the fairness doctrine which was a far better system for journalism which ensured that audiences, regardless of what radio show or television show they're watching, would be exposed to different perspectives rather than an echo chamber. And so we don't have that anymore. Reagan did away with that in the 1980s. And after that the emergence of figures like Rush Limbaugh occurred. And now everyone's kind of in their own corners, listening to, you know, information or broadcasts that just reinforce their preconceived notions. And that's a huge problem. I think TYT, if I may be a little self-critical, could do a better job in communicating to individuals who don't already agree with us in an effort to persuade them.

I think there's a lot of frustration in the country. I feel a lot of frustration. And sometimes the instinct is to be insulting to those on the other side. But we got to remember, again, that the majority of Americans do, in fact, agree on the bread and butter issues. We just have to make sure that we make those issues front and center. And we have to make sure that we communicate with individuals who might disagree with us on maybe some cultural issues in a way to help them see what's really going on in a higher level, what members of Congress are really up to, why it is that they continuously distract us with non-issues and culture-war narratives. Now, that's not to say that we don't have a problem with racism, discrimination and all of that in this country, we absolutely do. But what partially fuels that is the economic frustration and anxiety people are facing. They want a scapegoat. And what you have is a Republican party that continuously gives them scapegoats. And they happen to be the least powerful people in the country: immigrants, Muslim individuals, members of the LGBTQ community. I think independent media needs to be super focused on getting that message out. And maybe that'll make a difference.

But what gives me the most hope, and, I'm sorry, I know I'm rambling a little bit, is what we're seeing at the workplace. What we're seeing with places like Amazon unionizing, this new momentum for, you know, a workers movement, if you will, for organizing the workplace. That's really the only thing at the moment that's giving me some hope. Because it's making me realize that despite the corporate media narratives workers are privy to what's going on to some extent. And they want a seat at the table. They want power. And I hope that this continues to evolve to the point where we start seeing more worker cooperatives, for instance. Because the only way we as ordinary Americans have any say in anything is if we band together, work together and demand more. And we're starting to see a little more of that.

RW: Yeah, I'm amazed too. I mean because my field is economics and I've worked with unions, something has happened. I don't know what it is, I have not yet had someone teach me. But all the effort to shut down working people, to make them accept everything has fallen now on deaf ears for a whole generation. And it is an amazing process to watch it build over and against all the obstacles.

Well, I wish we had more time. We don't, but I want to thank you again for coming on and being forthright and clear about what you feel with the intensity that you bring to everything you do. So thank you very, very much Ana. And to my audience Young Turks is an important project, Ana is an important part of that project. And I want to bring folks like her on the program. In part to build more and more relationships among the independent media that are trying to do exactly what she so eloquently articulated. And I want to thank you all for joining me and, as always, to say I look forward to speaking with you again next week.

Transcript by Brendan Tait

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About our guest: Ana Kasparian is the host and producer of the online news show “The Young Turks,” (TYT) a show covering politics, pop culture and lifestyle. Her bold and intelligent style has played a vital part in the astronomical rise of TYT, the largest online news show in the world. TYT now has more than 6 billion views. Kasparian's success in building a new media powerhouse placed her on the Forbes 30 Under 30 list in 2016. She has won several recognitions due to her journalistic work, including a Webby for Best Web Personality and Host, and a Streamy Award for Best News and Culture Show.

While flourishing in her broadcasting career, Kasparian is also a columnist for Raw Story, and a journalism lecturer. After realizing that she has an intense passion for education, she began teaching broadcast journalism at California State University Northridge in the Fall of 2013, where she received both her undergraduate degree in journalism, and her graduate degree in political science. 

Kasparian's work has been published in the New York Times, Time Magazine and a host of established publications. 

Links: 

• http://www.anakasparian.com
• https://tyt.com/
• Twitter: @AnaKasparian
• Instagram: @anakasparianofficial

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• Sanctions on China and Russia: https://www.reuters.com/technology/chip-industry-rethinks-taiwan-risk-after-pelosi-visit-options-limited-2022-10-07/
• OPEC+ agree to cut oil production: https://www.reuters.com/world/opec-oil-output-cut-shows-widening-rift-between-biden-saudi-royals-2022-10-07/
  • https://oilprice.com/Energy/Oil-Prices/The-Radical-Plans-To-Counter-High-Oil-Prices.html
• UK conservatives shift policy: https://www.wsj.com/articles/after-criticizing-the-eu-for-years-britains-conservatives-extend-an-olive-branch-11665055648?mod=world_major_1_pos7