How would a minimum wage of $15 impact New York's economy? Would this deliver a fatal blow to mom & pop shops that are already struggling to keep pace with corporate America? Are there better ways of minimizing economic inequality?
Hi Professor Wolff, I apologize in advance if you've previously covered this topic, but I have found it immensely interesting for quite some time, and yet I feel like nobody talks about the banking system in its true form. I'd love to get your take on it as your explanatory skills are second to none. The 2014 report released by the Bank of England (link below) outlines how banks no longer use deposits made by customers as a basis to then loan out to others. Instead, when a bank makes a loan, it simply creates the credit out of thin air, and with the newly created credit it also makes a matching debt. The conclusion is therefore that banks are responsible for the total money supply of a given economy - the more people borrow from banks, the greater the money supply. As people pay off their debts, then the money supply shrinks. To my mind, this unrestrained method of money creation is directly responsible for the incredible volatility of the market and the severity of the last financial crisis (economic bubbles and bursts are much easier to fuel and come down with more force when money creation has no limit). There is also the interrelationship between commercial banks and the central bank - the issuing of central bank reserves etc, which I find a little more confusing. Could you please elaborate on this topic in your monthly updates/weekly podcasts, and on any other negative consequences of such a system of money creation? Is the alternative to this unaccountable banking system an interest free, nationalized banking system (like the one in Syria) that works as a general service rather than a profit seeking institution? Without taking much more of your time, I would also like to link this topic of money creation with the financing of government debts (link that may be helpful included below). You've previously mentioned that the wealthy, and the investment institutions of the world are now seeking safer investments in government bonds, instead of investments in productive capital that would (in a perfect world) create jobs and growth for the middle and lower classes. The governments on the other hand, are desperately seeking these loans since they are struggling for revenue that would normally come via taxes and fees. But since capitalism undermines itself by cutting wages, by creating unemployment, and because our politicians are bought and will not tax the wealthy, our governments are forced to borrow to fund services. But by borrowing from the most powerful cliques in our society, the governments now face a strict obligation to compensate their debts - which means austerity around the globe. My question is, why can't governments fund their expenses the same way that private institutions or private persons would - by "creating" credit and an equal debt via the central bank? Would this not give governments breathing space to at least lessen some of the devastating effects of austerity - and not rely directly on wealthy investors/institutions? Thanks! FINANCING GOV DEBTS http://positivemoney.org/how-money-works/advanced/what-about-the-national-debt/ OFFICIAL BANK OF ENGLAND REPORT ON MONEY CREATION http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q102.pdf NEWS REPORT ON BANKING SYSTEM EXPOSE https://www.theguardian.com/commentisfree/2014/mar/18/truth-money-iou-bank-of-england-austerity
i was wondering if you could go more in depth into universal income, shorter work week, and guaranteed jobs. for the guaranteed jobs you could look at china where they had state owned enterprises that aimed to employ every one and they were unproductive, where you had 3 people doing the job of one person. when china opened up and private companies joined, the state owned enterprises found themselves unable to compete.how can full employment be realized in a practical way. as for shorter work weeks, i believe it was you that went over how a few cities in denmark shortened the work week to 30 hours but kept the same pay and still managed to be competitive, if you could go into detail on that it would be extremely helpful. and also the number, science, whatever you wanna call it, how is it achieved. and what are the pros and cons of it
Here is a great article from Bruce Alexander, the psychologist who did the Rat Park experiments: http://www.brucekalexander.com/articles-speeches/283-addiction,-environmental-crisis,-and-global-capitalism Could provide several shows' worth of insight! :)
I am tickled pink that you opened this channel for communication. Before I would just reply to your infrequent status emails and would rarely get a reply. That said, and this may be too big a topic for this forum but perhaps deserve a few words on the radio show as well, could you speak a bit about alternative currencies? Discovering Bitcoin also led to the discovery of a whole history of community currencies in the US and elsewhere. I think perhaps your audience, and myself for certain, would enjoy hearing a bit more about these alternatives to our current monetary system. For example many people know the Fed is bad news but arent aware that other alternatives exist, have existed, and have been successful throughout our history. Also of potential interest is the particulars of how they are eventually forced out of circulation, often times becoming too successful to succeed. A word or two about their killers and the killers motivations wouldnt hurt either. Thank you for this opportunity to communicate with you directly. I am trying not to hog the service but have had a growing list of questions for you for years now. Keep up the great work!
Dear Prof. Wolff and team: Thanks for your great work. You spend a great deal of time discussing WSDE as alternatives for industrial capital. But Marx also talks about finance capital, and if we are to "do better than capitalism" we must clearly also propose alternatives to the current financial system. I wonder if you might be able to suggest some reforms on that front either here on this webpage or on Economic update. I recently read this article by Prof. J. W. Mason on the topic which I found extremely interesting (https://www.jacobinmag.com/2016/11/finance-banks-capitalism-markets-socialism-planning/). I would certainly be very interested to hear your views on these proposed reforms and I would like to hear Prof. Mason as a guest on Economic Update if that be possible. Thanking you again for your excellent work which has taught me so much. Ali
American Chartered Bank was recently purchased and merged into MB Financial bank. I have read that MB screwed the CEO, and the CEO screwed his bankers, who were equity shareholders at American Chartered Bank. I would love to hear more on this topic.
I have made an observation that i would like to be reviewed by Richard. In one comedy show, from Croatia, called "Our little clinic", there was a scene: Guy says: "I have a problem. I need three maids but only for one I have enough money." Other guy responds: "Make a competition for three maids. Reward the best one by paying it salary. Other get nothing. You get work of free maids by the price of one." Competition is main component of capitalism. The competition is dependent on reward witch means that there higher performing workers should be paid more then lower performing workers. There are two ways archive that: First: by increasing the paycheck of higher performing workers. Second: by lowering the paycheck of lower performing workers. If they look for decreasing cost of production they would be tempted to choose the second one. In that case the main character of competition is just an excuse by employer to lower the paychecks of his employees, and also an mask for doing so. Do you want competition in economics? Do you want higher quality work to be rewarded? In that kind of system the difference between higher and lower performers might be difference whether you can earn enough to survive. In other words workers are not working as much for earning money then for hope that they might earn money. There is an psychological experiment: use food to train an dove to pick an button. That is classical conditioning. Then lower the rate by witch reward, food, is given to the dove for picking the button. The dove starts picking button even more than it use to. Why would lowering the reward for doing something increase the need to that same thing? Could it be anxiety? I don`t know but that psychological effect reminds me on capitalism. Why is that?
And the prospect of the US Government taking the $1,000 note out of circulation? https://cointelegraph.com/news/copycat-currency-venezuela-follows-india-into-national-demonetization Copycat Currency: Venezuela Follows India into National Demonetization 2016 has become an all-out war against cash. Last month, India almost instantly demonetized their most used paper currency notes, the 500 and 1000 Rs. This has caused massive problems throughout the country, resulting in the deaths of people as they wait in line to exchange money, and a soaring market for Bitcoin. Now, embattled Venezuelan President Nicolas Maduro announced on Sunday that the 100-bolivar bill will be decommissioned. Haven’t we heard this before? In India, Prime Minister Narendra Damodardas Modi announced on Nov. 8 that the government would remove India’s most used currency notes to fight “black money,” or money that is undeclared and untaxed in the underground economy. On Sunday, President Maduro seems to have taken a page out of Modi’s book, referring to “mafias” smuggling the currency ..... Bitcoin trading volume all-time high Demand for Bitcoin has risen dramatically in Venezuela, as it has in India, with the amount of Bitcoin purchased on LocalBitcoins.com growing 1000 percent within the last six months, according to Coin Dance. With the bolivar losing so much value, it may be hard for Bitcoin to be purchased effectively in the region, as its price continues to move in the opposite direction. Venezuela is on a growing list of nations with national currency devaluations. The list includes China, which has seen six national devaluations in the last twelve months, Zimbabwe, Brazil, Argentina, Spain, Italy, Great Britain and Ukraine. Every weakening of a nation currency, or a cash ban by a national banking system, seems to strengthen the global demand and value for Bitcoin.
Dear Professor Wolff, I have enjoyed your radio broadcasts immensely, especially the ones concerning worker co-ops and, as an adjunct professor myself, the perils facing our system of higher education. Combining these two issues, I wonder if any significant work has been done on the possibility of applying the democratic, cooperative model of industry to the enterprise of college and university education. Would a college that is run entirely by educators who are not managed and ultimately exploited by overpaid administrators, shareholders, trustees, etc. be viable? Thanks, Justin Harmon
Charlie Rose recently interviewed Ted Koppel about his book "Lights Out" which is a expose on the dangers posed by cyberterrorists to the power grid and on a government that has done nothing to safeguard that system. I did some follow up reading which revealed the fact that it is the industry itself that is refusing to confront the danger because of the costs of doing so; moreover, I learned that although power distribution is overwhelmingly controlled by public companies, only 10% of power generation is under public control. Capitalists simply will not spend any money that does not contribute to their bottom line, even if the failure to safeguard power production exposes society to unimaginable calamity: without power, there is no water, no system of human waste disposal and consequently an increased likelihood of a public health crisis. I imagine that this failure is grounds enough to nationalize the entire energy system.
Dr. Wolff, I think we are in terrible trouble unless Trump sees a large, cohesive opposition group rise up soon and help to elect a Veto-Proof Congress. The Democratic Party seems like a clueless, corrupt bunch. A relative of mine lives in affluent Newport Beach, California and last week a large, spontaneous meeting took place in my relative's home, with people expressing outrage and a desire to do something concrete about the threat we face. What about a national umbrella group composed of and representing people who meet like this and who are focused on a small number of gun versus butter issues that affect huge numbers of people, like Social Security, defense spending, and progressive taxation? Such a group could coordinate nationally over the Internet and by phone, and its membership figures could show politicians that large numbers of people are of like mind. Call it "The House Party."
I have a great song you can play during breaks or a break, that can be downloaded from ITunes. Title is: "Capitalism Gone Mad", sung by The Mighty Sparrow. It's a very catchy tune in a Calypso style, from the album "Quintessential". The Mighty Sparrow is perhaps the most famous and prolific singer from Trinidad and is very well known in the U.S. as well.