In this exclusive Monthly Update series, leading economist and professor Richard D. Wolff tackles the pressing global economic events in February 2012 and their consequences. Well-known for his work on economic methodology and class analysis, each month Professor Wolff examines current events and of-the-moment trends that are shaping the global economy, and aims to develop the audiences understanding of and ability to articulate the key economic developments of our time."
Richard D. Wolff
Richard D. Wolff is Professor of Economics Emeritus, University of Massachusetts, Amherst. He is currently a Visiting Professor in the Graduate Program in International Affairs of the New School University in New York. Wolff has also taught economics at Yale University, City University of New York, University of Paris I (Sorbonne), and The Brecht Forum in New York City. In 2010, Wolff published Capitalism Hits the Fan: The Global Economic Meltdown and What to Do About It, also released as a DVD. He will release three new books in 2012: Occupy the Economy: Challenging Capitalism, with David Barsamian (San Francisco: City Lights Books), Contending Economic Theories: Neoclassical, Keynesian, and Marxian, with Stephen Resnick (Cambridge, MA, and London: MIT University Press), and Democracy at Work (Chicago: Haymarket Books).
Wolff hosts the weekly hour-long radio program Economic Update on WBAI, 99.5 FM, New York City (Pacifica Radio). He writes regularly for The Guardian, Truthout.org, and the MRZine. He has been interviewed on RT-TV, Amy Goodman’s Democracy Now!, Al Jazeera English, Thom Hartman, National Public Radio, Alternative Radio, and many other radio and TV programs in the United States and abroad. The New York Times Magazine named him “America’s most prominent Marxist economist.” His work can be accessed at rdwolff.com. Wolff lives in Manhattan with his wife and frequent collaborator, Dr. Harriet Fraad, a practicing psychotherapist (see podcasts at www.rdwolff.com on psychology and economics).
Economics professor Richard Wolff breaks down Greece's latest round of European Union bailout loans. He deems the Greek crisis to be a "flash point" for global economics, and warns that the United States may follow a similar path.
Economics professor Richard Wolff attributes the global economic crisis to the failure of the capitalist system. He argues that the root cause of the problem is over-borrowing, and that capitalism runs on an unsustainable cycle.
Total indebtedness of a government, especially as evidenced by securities issued to investors. The national debt grows whenever the government operates a budget deficitthat is, when government spending exceeds government revenues in a year. To finance its debt, the government can issue securities such as bonds or treasury bills. The level of national debt varies from country to country, from less than 10% of the gross domestic product (GDP) to more than double it. Public borrowing is thought to have an inflationary effect on the economy and thus is often used during recessions to stimulate consumption, investment, and employment. See alsodeficit financing; John Maynard Keynes.
Debt culture doesn't.
Germany's internal market is competant, wages are very high.
Currency stability of the Euro will help the ruinous economies of the EZ back onto their feet by giving them something to stand on, once they can pick themselves up.
This video doesn't impress.
Unfortunately there are many people who fail to realize the fact that, just as employees are dependent on industry owners for their wages, so too are the wealthy owners dependent on their workers for the labor they use to enrich themselves with. IOW it's social cooperation that results in decent wages for those employed AND products worth enough the owner can sell them at a profit.
I cringe whenever I hear someone refer to billionaires as "job creators" that we should be thankful even exist in the same universe as us lowly "job takers". Argghh!
Westerners, and Americans in particular, need to acknowledge the fact that they have been subjected to a half-century of cold-war propaganda that has left them with distorted sensibilities regrading what and how exactly both capitalism and socialism really work. As it is now, Americans remain the last developed nation to shun socialized health care for their children. The reason is surely that they were indoctrinated to believe socialized 'anything' is either a communist plot looking to steal our "precious bodily fluids" (as the film Dr. Strangelove so perfectly captured the false patriotism of those afflicted), or that doing so would amount to America's capitulation to an "evil empire", an act they frequently infer would be tantamount to spitting on the graves of the cold-warriors who have died fighting against the corrupting influence of socialism on "free markets" they now also equate with democracy.
Of course these notions border on hysterical self-deceptions. But that's to be expected when a democratic government finds itself needing to somehow tell voters that henceforth they are now expected to pay through their own taxes the trillions it will take for aerospace-arms industry CEOs to create for the Joint Chiefs the most expensive military machine that any nation will ever see - including even those that are run by military dictatorships (but whose generals apparently have more respect for their own citizens than ours do).
And I'm sure ours realised very early in their discussions on how to get an entire population to willingly subsidize this super-military, that they would have to steep them relentlessly in simplistic slogans, bumper-stickers and other forms of war-time propaganda, yet not let on that this is what they were doing despite the presence of a "hot war" to justify that level of propaganda on one's own citizenry.
And Lo... So it came to pass. That the USA took up the Great Sword of Righteousness crafted by the Angels themselves, so that Good will triumph over the Evil Empire; one where atheistic Satanists desire the corruption of God's gift to mankind - Capitalism!
That, rather than something a little closer to the simple truth. That since socialist countries won't allow the extreme concentrations of wealth the ruling elite then and now stil depend on for power, because to allow it must ultimately undermine their entire economy due a lack of liquidity; and because socialists usually nationalize the industries and natural resources their economy is built on, which thereby restricts the ability of those same international financiers and bankers from gaining enough access to them to stage a takeover and eventual control of the economy, the newly dependent political class, then ultimately the entire country.
Why would they do it?
Because the new industrial tycoons soon fancied themselves the rightful heirs of that same status and power that had long been enjoyed only by royalty and he titled aristocrats who made up their court, but who had just recently lost almost all of that power after dragging Europe into the Great War thereby revealing how truly selfish, corrupt and wasteful that system had become.
So instead of using an excuse like a royal bloodline to justify their control of society, they paid off judges, financed political campaigns, and peppered the working class with tales of their own glorious deeds and selfless acts. All tactics well beyond the average person's financial ability to also do in ways that would also aid them in a quest to capture financial control of the factories or other resources their economy now runs on, but that they, the vast majority of the population, now retain little control of.
What the bloody hell?! Material Wealth, value, is created by a certain class in capitalism that is forced to sell its labor as a commodity, the proletariat. The obvious solution is for this class to not be told what to do by certain autocrats as you are suggesting, but by economic co-operation of the people who produce the material wealth. "From each according to his ability to each according to his needs"
Okay, not good. Now, how do you make this work? We can't cut people's income by almost 25% without possible riots. So, we need to RETHINK this whole thing. As an accountant, I say first, where are you spending money? School system? Okay, how can we educate the kids (perhaps even better for less) cutting those cost? Computer classes (for those that can). Where next? Food, okay (now I garden & enjoy it) if we had (in my neighborhood) a collective garden I'd work an hour or 2 a day (5 a week, no problem). What you need to do is take the people you put in charge of each section (education, food distribution, office supplies)you need to send them all a note, telling them they have 1 week to come up with a "plan" that will cut cost & not diminish quality in those areas, then you all meet. IF you put people in charge with no brain to come up with ANYTHING, hey, you need to rehire for that position. Every company I have ever gone into was trashed as far as spending was concerned, I was able to cut cost, improve productivity and I'm not an Albert. Those people in charge advise them in your note to take advantage of the brains around them (and be sure to give them credit) ask those brains for ideas. Give them a budget see what you can come up with. I'd even venture you publish it and ask the public to come up with ideas. Break it down so you are not overwhelmed by suggestions. Break it by categories. Step by step, piece by piece. Don't panic, just do. Last, if any of the people working on this don't know what an income statement or a balance sheet looks like.... we best replace those (or teach them in 30 mins. flat how to read one). It isn't brain surgery.
Interesting stuff, especially the comment that the ever increasing austerity measures on the people of Greece are an experiment to see how far people can be pushed and their reactions.
There are some new theories of economics starting to make waves, Modern Monetary Theory, Modern Monetary Realism, and Monetary Reform campioning ending fractional reserve banking. I wonder if Richard Wolff would care to comment in a general way as to his opinion as to wether each has economic turthfullness in practice.
MMT and MMR almost seem as ruse de guerre, much as I now view Glass Stiegal as a ruse to perpetuate the financial elite's control over financing capitalism during the Great Depression. As a lay student I would like to hear Mr. Wolff's comments on these various theories. One thing I noticed is that none of them deal with financial speculating and the creation of "bubbles."
Watch Global Capitalism: The Evolving Economic Crisis and Its Consequences