Tom Ferguson: Worker’s Wages & Leverage are the Real Targets

Yves here. Political scientist and NC’s favorite curmudgeon Tom Ferguson discusses the 2022, and how the Democrats managed to finesse that the aren’t on workers’ side with gimmicks like Strategic Petroleum Reserve releases.

By Paul Jay. Originally published at

This is an autogenerated version of the transcript. An edited version will be arriving shortly.

Paul Jay

Hi, I’m Paul Jay. Welcome to the Analysis news. So the Dems Democratic Party has retaken the Senate as we are speaking. It’s still not clear whether they’re going to retake the House, although most of the pundits are predicting they won’t by a slim margin. So what happened and why?

We’ll be back in just a few seconds with Thomas Ferguson to discuss the results of the election and some of the economics involved and why so many people got it wrong. So one of the things that was most frustrating for me in watching the lead up to the elections was the way the Democratic Party, of which I am certainly of corporate Democrats everyone knows that watches the Analysis. I am no fan, but yes, as opposed to Trump. Yes, I would hold my nose and vote Democrat if I lived in a state where Republican might actually win. As it turned out, even though I’m not even living in the US. Anymore, I’m still registered to vote in Maryland. But given that the Democrats were going to win everything there is to win in Maryland, I didn’t vote because my nose was sore that day. All that said, I was very frustrated with the way the Democrats couldn’t even defend their economic record, which was rather pitiful, but still better than the Republicans, the basic argument the Republicans were giving.

And here I’m going to show you a little clip from the Stephanopoulos Show on the Sunday just before the election where Chris Christie goes on and on about how the Democrats are going to lose because they couldn’t deal with inflation. And everybody knows inflation came from the stimulus spending that was pushed through by the Democrats.


What drives inflation? It’s not just who’s in Washington, DC. This inflation is being driven by huge demand at a time we had two years of an economic I’ll take Larry Summer’s word for it, okay? Larry Summers, Clinton’s Treasury Secretary, told the Biden administration two years ago, you go ahead with the spending you’re talking about and you are going to create enormous inflation. And it’s exactly what happened. And we can try to blame it on a whole bunch of other things, but when you put $5 trillion that you printed into the economy after all the money that we put in during COVID that’s why you have inflation. And the fact is that it’s got to stop at some point, and the Democrats don’t want to talk about that because they’re constituent. They’re all about paying more. In the end, Sarah’s right that they see that this rounds Republicans.

Paul Jay

Well, there are various studies, and as we get into the interview, I’ll quote one of them that show that, in fact, at the very most, that spending may have caused maybe 3% inflation. That’s at a time, inflation was practically zero. And that inflationary effect, meaning stimulus spending money that went into people’s pockets, well, that money’s long been spent, so it has very little to do with today’s inflation, yet I didn’t see Democrats defending their record. The San Francisco Fed paper I referred to actually said that even if there was 3% inflation caused by these policies, it was better than the alternative, which was deep recession. But I didn’t hear that being said by Democratic candidates. So I’m going to ask Tom why he thinks the Dems couldn’t even defend their own record when they could have actually had something positive to say about it. And but before we get before we get into that, I’m going to ask him, why did so many of these polls get it wrong? Why did so many of the predictions of the results get it wrong? So now joining me is Tom Ferguson. Tom is the director of research at the Institute for New Economic Thinking.

He’s also an emeritus professor at the University of Massachusetts. Thanks for joining me, Tom.

Thomas Ferguson

Boston, please. What’s?

Paul Jay

Not I have to say Boston. Boston. University of Boston, Massachusetts. Sorry. Not Amherst. Okay, here we go. All right. So, Tom, let’s start with this isn’t the first time polling has been wrong, but it was really wrong. Even the internal polls of the Democratic Party, nobody was really expecting the Republicans to do so badly. Or when I say nobody, I guess I should say almost nobody. What do you think?

Thomas Ferguson

Well, okay, look, I have to tell you, first of all, we have just done Groundhog Day again, meaning in the sense of the movie, we’re sort of rerunning what we did in 2020 with small changes. And in that sense, I’m less sensuous about the polls, and I would be more sensorious of the pundits. If you like the polls, when you’re at this tight set of races, it takes only a very small margin to just blow you completely off. I mean, it doesn’t mean your polls way off. It means if you’re three or 4% off, you got a lot of racist miss call, but it’s not that bad a deal. On the other hand, what’s striking to me is the way you could see this. I’d be inclined to say ten brain punditry. That was just everywhere, and it’s still everywhere in telling you the meaning of the election that I am pretty sure they can’t actually discern. But most everybody was agreed that the Democrats would get a drubbing, and they got a drubbing, actually. It’s not like things worked out wonderfully for them, but it worked out a lot better than everybody thought it was going to.

I am quite struck by the sort of the basic line, as far as I can tell and I read this, frankly, is coming from the White House, too. It is certainly reflected in things like the New York Times, particularly today, where there is no room for doubt. Just read what might be in the old days, the front page there, they’re all sitting around telling it was a victory for middle of the road candidates in this sort of happy the rosy scenario. It’s middle of the road candidates in the Republican Party and middle of the road candidates in the Democratic Party.

Now, a problem with this is that when you actually compare the major polls edson and the Norcap thing, they actually differ by just enough in some key places that it’s actually hard to tell anything, particularly on the question of exactly how many women were thinking what and how they actually voted. I’m having trouble with that. So I think we have to sort of be cautious there. But it seems to me a lot of people rush to judgement. I mean, look, the first thing I think to be said about the economics of this election is something that, as far as I can tell, no election analyst has said, but which is obvious, which is, hey, opening the Strategic Petroleum Reserve pays.

That is to say, there’s absolutely no question that inflation was heavily on the minds of voters. I’ve seen folks try to dispute that too, using some poll data. But I think that’s nonsensical. It is clear, and I know very well from folks who were around who told me this, is that plenty of people gave Biden the advice if they didn’t get oil prices down, he’d be toast. Well, they got them down. Now, some of that was just the fact that because of the Fed rate rises, the whole of the world now fears a recession. And so, you know, people stopped, the price fell, and then OPEC raised prices in response to keep its revenue up. But still, the point is they open the Strategic Petroleum Reserve. Tell me that that’s not really important here. And before we hear all the stuff about the importance of culture and everything else, stick with that, you know, opening of the Strategic Petroleum Reserve. The other point to notice is that a number of government programs in the farm belt are actually offering to buy crops at well above their existing futures prices in the market. Which means that works out too for farmers.

That’s not universal, but it covers a lot of crops. I mean, this type of stuff is running in the background, if you like, and for sure it’s important there. All right, now let’s first, there is one thing Biden did was to defuse the economic record and make it better by just turning on the pup briefly. Now, we’ll see how they rebuild that thing in the next few months. All right, but then why didn’t they defend it? Well, I think look, first thing to be said is it’s not easy to defend. There’s a lot of slippage on this. But the bottom line was that for most people, their wages just haven’t kept up with inflation. There are a lot of claims made about the lowest paid workers. I think that’s a huge mistake. Not meaning that it didn’t rise, but what they were actually doing was adjusting. If they wanted any low wage workers at all in dangerous occupations that had formerly been safe, they are now dangerous and they have had to pay higher wages for that. I don’t think that was a general tilt, if you like, in favor of labor. And I note that in 21 they actually lost ground in unionization.

Once the Democrats came in, the rate of unionization fell back, not forward. That’s off of BLS release I was just looking at anyway. But the heart of the matter is, you want to understand that no matter what anybody else tells you, or the America is what we might call sunac moment impense, that’s after the new budget, that they will be brought in in a few days by the Prime Minister and the Chancellor, their checker in Britain. Put bluntly, they’re going to do big budget cuts. Now, the bottom line on that is they got to do it to keep their costs down as interest rates rise. But what’s happening to every country on earth now as interest rates rise, the cost on that debt that they’ve all run up rises a lot, not a little. The US is in that boat too. And you could see the Republicans were actually saying it. And interestingly, as a number of folks pointed out, the media wasn’t caring it in those last two weeks about the various Republican proposals for chopping Social Security, keeping lowering the rate, Medicare reimburses for doctors and things like that. Now, this is close to inside baseball, which I actually despise, but it is perfectly obvious that Democrats in the White House are thinking about some of these too.

Biden has a long history of talking out of both sides of his mouth on Social Security, to put it politely. The budget pressure is going to be very intense there. And I think it’s clear that in general, the Democrats did not feel the national Democrats didn’t feel like defending their economic record of helping people because they’re not thinking they can continue to do that. They’ve let way too quickly. They have pulled back on lots of expenditures to even measure the pandemic spread. It’s like today they’re running articles on how thousands of jobs are disappearing in public health that were temporarily funded by the CDC Foundation as part of the government there. And you’ll notice it’s quite striking the way the Biden people biden himself said the pandemic is over, but yesterday they extended the emergency rules on that which will allow them to keep spending. But these folks have been cutting back for quite some time. And Paul, I’m sorry to throw rob meat to you, but I have to tell you, I agree completely with you. These folks were not defending their economic record on the spending side because most of them don’t believe it.

They don’t believe it because they’re corporate Democrats. Now here, I cannot help but absurd, one of those delicious ironies that it’s like this is too good to make up. Although a lot about what you’re about to read about some of this case, the case of the crypto failure there Sam, was it Baker Friedman? This is a big centrist Democrat who, although he pretended to be a left liberal Democrat look where they spent the money. I’m in the process of doing that with my colleague Paul Jorgenson. And no, it’s not money. It’s mostly funded to sort of center and center right Democrats and it’s a lot of money in that sense, one of the big financial props of the center did not hold there within days.

Paul Jay

Let’s just stay on the economic thing for a second, because you and I discussed this a little bit off camera, but it seems to me that they did not want to push back on the argument that government spending was causing inflation, and the only alternative to that is austerity policies. Cut back on government spending and then supposedly higher interest rates are going to do something about inflation. Both of those things are not what’s causing inflation. If I understand it correctly, low interest rates were not significant in this 89% inflation. Government spending wasn’t significant. And the two things they’re doing is going to cut back to government spending and continue raising higher interest rates. There’s another agenda going on here.

Thomas Ferguson

No, I don’t disagree that we are about to see an effort very carefully now because they’re in a much stronger position than they were. My reading is the White House thought they could blame a lot of this on the Republicans. Now they won’t be able to do that. It will be a much more difficult sell than it was all the Republicans, which the Republicans were clearly just raring to step into that role. I have to say in all honesty, that the other reason you would might have some difficulty on pushing that line. So it’s not the controlling thing is given the media worship of Summers and companies, the people, the inflation hawks who were warning, in my view, utterly bogus claims about the role of the stimulus program, it’s a hard if all of your daily papers and all of the talking hats that you’re watching are saying the opposite. It’s tough for a candidate to just walk up to people and say different. In that sense, this is one of these deals where I’d like to blame I’m not saying the system as a whole, it’s more specific than that. The major networks, the New York Times, they just all spend way too much time on Summers.

They don’t look at serious counterarguments. They hardly print them and it’s ridiculous. But it’s also the case if you talk or listen to folks who have access to the White House and I occasionally bump into these people, they will say the influence of the conservative inflation hawks in the Democratic Party is quite strong and they’re actively talking to the upper levels of the biden.

Paul Jay

Winehouse yeah, there was an interesting piece in The Economist and it’s not only been there, but it kind of came out and said it. And this is what I think the agenda is. It says that we up until the Pandemic, we being the elites, have been able to control, quote, unquote, core inflation. But if you read the whole article, it’s clear they mean wages. We were able to control this because we had a reliable, cheap source of labor in China. But two things have happened with the global supply chain. One, the Pandemic has told us, showing us that we can’t rely on this anymore the way we have. And two, the rivalry intentions with China are threatening those supply chains. And now American workers, and I should say add to that Canadian are gaining some leverage. And is that what’s really quote when I said there’s another agenda here is that the real problem they’re trying to deal with is they don’t want the working class in North America to gain leverage here. And so they need to beat people down with higher interest rates and cut back social network spending, which also gives workers more confidence in terms of how they fight.

Thomas Ferguson

Okay, what I’d say is this is you got to treat even the White House as a place where a set of parties fight out stuff. And the arguments inside that, if you like, it’s not the Republican Party, where as far as I can tell, there’s very little disagreement with that strategy. Saved, curiously, on the Trump side, which likes to talk the MAGA Line, which about making America great again for workers, even though they do essentially nothing to make that happen and indeed do many things to make it work. But there is that tension in the Republican Party. That tension is a different kind of that version of tension is in the Democratic Party where there is clearly a wing that is actually friendly to the workforce. The striking thing is that when you look at unionization rates after the Democrats have been in here now almost two years, they haven’t hardly moved at all. And they actually went retrograde last year. There are a lot of strikes. And you hear the familiar line that this is the friendliest president we’ve had in years for labor. What that means is they get to come to the White House or something.

And on the National Labor Relations Board that is restructured, I think, in a way that is friendly to labor. But the NLRB and elections are increasingly irrelevant to what’s happening to the bulk of the workforce, which never reaches the stage of even getting to mount a union election. You do see a raft of unsanctioned strikes from small strikes of all kinds. But you notice what the White House did. It kicked off the question of the railway contract settlement until after the election. This is going to be very interesting. I just saw where the Secretary of labor recommend was saying that well, he told Biden to say there can’t be a strike. They need to tell the employers there to like sick leaves and some controlled over time, especially on weekends for people is an important issue and not just sort of sit out there trying to quote mediate that it’s obvious. Anybody who studies American railways or transportation general can see just how crazily one side of these situations have been, particularly as they try to run very, very long trains with one or two people. I think you Canadians know something about that especially.

Paul Jay

I worked on the railroad for five years. I worked as a Carmen mechanic on the railroad for five years, and that was beginning when I was there. We were starting to wage it was a big fight or whether you could have whether you needed a railroad worker in the van, in the caboose at the end of the train and they started getting rid of them and they started having more accidents.

Thomas Ferguson

Yeah, well, the workers have been in the caboose for a generation or more now, that’s clear. So yeah, all right, I think we’re on the same wavelength here. But yes, I think we have this serious problem even in the Democratic White House, and I can’t wait to see how they negotiate this there. I mean, just watch the railway strike business since I think at least four of those unions have already turned down the contract and probably some more will be coming along. But more generally, look, this problem of wages hasn’t been solved. In fact, there’s no doubt that in general, wages have lagged well behind inflation and that’s not going to change as a result of this election. You could say probably you’ll just continue with the policies you’ve got. I do not myself think that that can go on forever. Inflation does begin to start, institutional changes happening because the results are so disastrous if you just stay put there. And I don’t know where we go into the future here. I think it’s going to be very interesting. Now, on the general question of inflation in the world, I would just comment this way.

I don’t disagree with the Economist article, which I haven’t read, the one you just that you can see that the US reliance, us. Firms reliance on China is declining. I mean, the usual estimate is about half of the Chinese trade surplus with the United States is American firms selling back into here. It is clear to me that the combination of Taiwan hightech subsidies in China and especially the COVID rules there for lockdowns, which included the foreign firms I mean, you know, you get some CEO flies into there to see how his firms doing, and he’s going to spend ten days at a hotel that he didn’t bargain for. Well, that pulled him off. And I think that has very clearly altered the top runs of American business attitude towards china, there are still guys cheering on, let’s invest, but it’s a lot lower than it was. And the other side of it is the restructuring of Europe. You also see that basically strategic trade issues and decoupling are becoming much more important now. Those are going to create they are already creating supply shocks of all types, and that’s not going to stop. It’s going to continue.


Paul Jay

Even if they move production to India, say, one, it’s going to take some time to get anywhere near what it was in China. And two, that wasn’t the biggest issue. The biggest issue is during the pandemic, they couldn’t get stuff here. The ports were so clogged up. And we’re in the era of pandemics now. This ain’t going away. Every month there’s a new one coming by.

Thomas Ferguson

Yeah, that was one of the significant failures of the Biden administration. They should have generalized vaccine quickly. They should have told Pfizer and modern, okay, look, you’re going to have given the amount of federal support for the background of these viruses, not necessarily to those companies at the time they had it, but the whole development of those viruses, of the vaccines. The whole development of the vaccine was certainly in the background. Large programs of federal support from DARPA, from the NIH and other places there. They should have said, OK, after you’ve made a couple billion, now give everybody access to the vaccine. They haven’t done that. And most everybody else’s vaccines while there are around and they haven’t been disseminated on a wide scale. And some of them, I don’t think the Chinese or the Russian vaccines work that well.

Paul Jay

Yeah, they’re maybe 60% at best, where the American ones are up around 90%. If that’s all to be believed.

Thomas Ferguson

Yeah. So the result is that you’ve got a worldwide problem. The latest round of vaccines, the take up is not that high even in the US. But it’s, of course, zero in countries with no access to it. And so you’ve just let this thing sit out there and it will keep mutate. I completely agree. It’s like this is now the biggest gambling operation in the world. It dwarves from a cow in Las Vegas and everything else. It’s like, you bet the whole planet on this policy. This is stupid. I would add the Gates Foundation has not helped here. Bill Gates has famously opposed this vaccine. Everybody says, what’s he doing there? My take is that what you’re actually looking at here is an effort to make American intellectual property essentially nonnegotiable. That is to say that the fundamental story here is the US government and its major companies think that the intellectual property issue is so important, they’re not willing to compromise on it. That’s a big mistake on issues like this. They should just give the stuff away.

Paul Jay

It’s not like, just to be clear, because the coin just dropped for me, what you’re saying you’ve been given away on a worldwide basis because as long as most of the world’s not vaccinated the thing keeps mutating. It’s impossible. It doesn’t come back to the United States to North America which means over and over again you have completely broken global supply chains which was the whole basis of globalization which means you have to keep moving more and more production back to North America which again is going to give workers here more leverage. So you better beat the shit out of them now.

Thomas Ferguson

Well I was surprised when I was looking at some numbers on growth in manufacturing in the United States the other day out of the St. Louis Fed. There’s rather a lot of there’s more than I would have thought. But I’m not expecting to see lots of onsuring except in the case of our Renshoring, as I think except in the case of goods with a defense component and sort of basic things you need say like I suspect that you will see, I trust we will see some continuous effort to keep masks and things like that available.

Paul Jay

But I saw an article a lot of the production that goes on in China not all but a significant part meaning FOXCOM as the best example is actually owned by Taiwan, it’s Taiwanese corporation. And I saw that Taiwan’s planning more investment in the United States including trying to develop some semiconductor business there.

Thomas Ferguson

And we are subsidizing our semiconductor folks especially intel to try to do more here in the high tech stuff with a defense or vital part aspect. You’ll see a good deal of that but I think you’re going to find more and more people moving to places like Vietnam. What you’re going to do is this will sort of be a kind of well it calls to mind the old empires of the late 19th century where the French, the British and eventually the Americans late joining sort of creative spheres of influence there. Although the American position in China was famously everyone should have a right to get in meaning the Americans should get in too. But I’m not looking for a lot of that but you’re right and this is going to be continuously generating trouble and it does not help that the Biden administration and the CDC have just not they haven’t got any monitoring system in place in real time to find out what variants are out. I mean they find out now by looking at hospital stuff that’s two weeks old in the sense of what the vaccine is out there by the time you get sick enough to go to the hospital.

Paul Jay

Just before we finish. If you’re watching mainstream media there’s at least been discussions about high energy prices and what that means for inflation. There’s at least been discussion about supply chain. But the thing that’s getting very little attention, something you mentioned just a bit to me off camera again is how high margins profit is simply higher than usual these days and that doesn’t get talked about very much now.

Thomas Ferguson

The Bind administration has been very late on antitrust. They’re making some moves now, but they’ve been slow and it’s probably well, we’ll see. I wish them the best on that. There are people in charge, there are serious about that, but it’s not nearly broad enough to do anything. I think in terms of it’s not going to constrain most companies. They were slow on that. They haven’t done anything on commodities regulations, this crypto thing, but it just happened. That was money mostly going to Democrats. It just blocked it. Bill Clinton and others were all walking around saying how we really had to have a light touch on regulation. No, we didn’t. A lot of people are out of vast sums of cash. It is said that relatively more blacks than whites were actually invested in cryptocurrency. I don’t know if that’s true, but it’s like I don’t mean that most blacks I’m not saying that all, just that the proportion compared is a little higher there. I think for younger folks of all types. Everybody found it kind of irresistible. I was doing my best to persuade members of the family not to do that. Look, FLEM flam here is just stock markets lend themselves to that, and particularly at low rates of interest, and that bubbles are the basic heart of low interest rate policies and bad regulation.

That’s just the long and the short of it. It’s now mostly the short of it anyway. I think we should come back to one point, though, on this, which is the weirdness of all this. I would accept the fact that the Trump folks running in the states, if they were running fresh, usually did not do well in Secretaries of State office and things like that. Election deniers, though, in the House, because they were incumbent, did very well. And the insanity of the whole business is that, yeah, on the whole, I don’t think it was so great for Trump. I doubt that even Trump will try to claim that. But you look inside the Republican Party and it’s fairly striking. You have a serious challenge to Mitch McConnell, who was certainly the main bull walk in that party against Trump in the Senate. And you’ve got even kevin McCarthy is under severe from people who think he wasn’t friendly enough to Trump, even though we all know between this enormous gap between what he actually thought and what he did. He’s talked like a Trump person for a long time now. And you may see this amazing this development is really worth watching how in fact, inside the Republican Party, the Trump folks may in fact come out somewhat stronger in the congressional delegations than anybody would have guessed on election night.

Paul Jay

There’s one other factor which I think certainly mainstream media has not even touched, but I think it’s significant, which is there has been over the past eight years, 910 years, progressive. Organizations I know better the situation in Pennsylvania who have been bypassing the media monopolies and just knocking on doors. And they’ve been knocking on doors now in Pennsylvania now close to a decade. And there’s three organizations that have been doing it, and there’s similar or some of the same organizations across the country. And to some extent it’s really going under the radar. And I think we saw some of that effect, at least in Pennsylvania and maybe in Michigan where they recaptured the state legislature. Knocking on doors may be the new technology of the future, which is sort of funny.

Thomas Ferguson

Yeah, I’m having a hard time reading what’s going on in those. I am quite struck, for example, by the difference in the outcomes in Pennsylvania and New York. And I’ve heard all kinds of noise made about this, but it is a fact that Federman, but also the candidate for governor there, Shapiro shapiro both ran well to the left of most of the congressional delegation in New York. Not all of them, obviously you got AOC and people like that too. But that was a pretty strange the other thing that I think people need to think about here is look at the outcome. Compare Ohio and Michigan where Ryan was said to be, well, a strong hope for a Senate. He didn’t even win his own county, which I think is Mahoney down there near Youngstown and things like that. But if you look voter turnout, these are all Senate race states. So we’re comparing apples with apples, not states that didn’t have Senate faces or something. Compare the Senate races in Pennsylvania, the turnout or in Ohio, it’s quite different. It’s also in Michigan. The Michigan turnout is eight or nine percentage points higher than the turnout in Ohio.

And the turnout variations here are quite marked. And what is up that may be.

Paul Jay

Well, I got to look dig more into this, but I have a hunch that it’s these organizations that are not part of the Democratic Party. They’re progressive. They came into being to support progressive local candidates and not always successful early on, but I know they exist in Michigan. I know they exist in Pennsylvania. They’re funded and operating without almost no support from the Democratic Party itself at all. And maybe they didn’t exist in New York State where maybe it was just assumed Dems would do well.

Thomas Ferguson

I know that they did to some extent in some place because I talked to some one of them made a very interesting point to me. Might be appropriate to close on this one. At the time, the person there had actually gone down to Georgia in the runoff in 2020. Really, I guess that was 2021, just the turn of the new year that boosted the Democrats into the 50 50 tie there. And he said at the time they were all campaigning. They were telling people, look, if you’ll vote for Biden, you’ll get a rise in the minimum wage. Now, of course, the White House never got around to that. Now, it’s fine to say that, yeah, they had a 50 50 situation, which was really 48 52, with two senators maybe reluctant. My sense was they didn’t try very hard and they could have done a much better job of that early on. And Biden has plenty of authority to do that inside federal government contracts, and he didn’t do it. So this is a problem. And now the minimum wage, the meaning of that is changing with inflation, but it’s going to make the problem even more urgent in the next few years.

Paul Jay

Sorry, go ahead.

Thomas Ferguson

My reading of this is unemployment is going to go back up, and also there are vast numbers of people out of the labor market that could be brought in with intelligent policies, especially on public health.

Paul Jay

Hang on, isn’t that the point of high interest rates is to create more unemployment?

Thomas Ferguson

Well, we have Jerome Powell’s authority for that. Right. He was pretty clear about it. Yeah. I mean, it’s just the worst form of rashmake.

Paul Jay

Yeah. I just think if you want to understand both Democratic corporate Democratic Party and Republican Party economics, it seems to me it comes down to a very simple proposition. Both, all of them depend on corporate money. Not just campaign money, but the whole way the system works in terms of where you’re going to work when you’re out of office and so on. And if you run a business, it doesn’t matter if it’s a small, medium or big business, you wake up in the morning with three things on your mind how do I increase my market share? How do I produce with less workers? How do I produce with cheaper workers? And then you can worry about everything else. And the whole elite is concerned about the fact that they may have to pay more money for workers, and that’s what the policies are aimed at. Am I wrong about that?

Thomas Ferguson

No, I’m of course, shocked. Shocked that you could possibly think this, especially the fact that yeah, really. Now, my reading is fundamentally that the stuff you’re reading in the New York Times now is quite constant with what the White House thinks. And they think that the combination of abortion and democracy is enough to break enough votes off to beat the Republicans in this Groundhog Day situation. And so they are already reaching out to mount their corporate campaigns for the next general election. And there’s already talk of bringing in a senior business Democrat. The White House is full of senior business Democrats, and that’s just all there is to it.

Paul Jay

And if, as many people, economists and business pundits and so on, are predicting, if these high interest rate policies are pushing us into a deep recession and that’s where we are in 2024, good luck with cultural issues.

Thomas Ferguson

No, this is a longer discussion, but yes, that is a serious problem. I think the Fed will relent a bit, but not quickly.

Paul Jay

All right, we can talk about that next time we talk. And also when you’ve got some more data, because you’re a data cruncher. Thanks very much for joining me, Tom.

Thomas Ferguson

Alright, thank you.

Paul Jay

And thank you for joining us on theanalysisnews please don’t forget there’s a donate button at the top of the website. Subscribe to our email list. If you’re on YouTube, make sure you subscribe. Even though we’re pretty sure YouTube is not communicating with our subscribers. Even people that have clicked on that little bell so they get notified. We’re getting lots of emails that people are not getting notified. But at any rate, come over to the website. That’s the most reliable way to watch the analysis. And thanks for joining us.

Print Friendly, PDF & Email


  1. Alice X


    …the whole elite is concerned about the fact that they may have to pay more money for workers…


    These two together make my day, thank you!

    1. Kurtismayfield

      Everytime worker compensation started to creep up during the last 30 years, the Fed has squashed it. And they have admitted it every time.

  2. Carolinian

    While we’re grateful for a transcript, this one–obviously done by a computer or perhaps the Biden administration–is pretty hard to read. Interesting about the draining of the SPR in order to obtain what was really a feeble result for the Dems. To my mind Biden was pulling out all the stops to keep Hunter and likely himself from House investigators.

    And yet it didn’t work and so now he will be stroking those House Republicans to the maximum degree while still calling them terrorists. It doesn’t have to make any sense if you are Joe or Nancy. They know the press has their back.

    Although gosh knows the Republicans are strokable. Perhaps Monica can return and save us once again.

    1. upstater

      Beside drawing down the SPR before the election, NY State eliminated most taxes on gasoline. Our 4% county sales tax returns in full at the end of the month. The State excise and sales taxes (~50 cents/gallon) return on January 1. I don’t know if other states reduced taxes to this extent…

      The price differential between gasoline ($3.80) and diesel (close to $6) is approximately $2 and bound to expand further.

      Yes, the machine translation was pretty rough this time.

  3. spud

    i almost spit out my morning coffee when it was said that why didn’t the democrats defend their economic record, and they were better than trumps!

    what planet is this guy from?

    can he name one universal concrete material benefit that bill clinton, barack obama, and now joe biden gave us?

    in fact, those three took a first world nation, and turned it into a third world banana republic with falling life expectancy, racked with pandemics like opiods that bill clinton created with his deregulation, and ignored, and massive poverty from his polices that were pure economic nonsense, that enriched a few, to the detriment of the world.

    the inflation we are experiencing today, is a direct result of bill clinton and barack obamas out rageous polices completly aimed at milton friedmans free markets.

    how ever bad trump was, his economics gave us almost fours years where wages exceeded inflation.

    he got rid of the TPP and the investor dispute fascism, somewhat gave mexicans back their sovereignty, now they have real unions and rising wages.

    he gave us operation warp speed, and managed to get back some manufacturing of PE.

    was more than willing to keep writing checks to keep the deplorable afloat during the pandemic.

    not one new war. finally got us out of afganhistan.

    alfred e. nueman could have done a better job than the democrats, and trump was better than alfred.

    1. JBird4049

      What, me worry? Not they. Truly, the Democrats (and the Republicans) are content to be the (perceived) Party of the Lesser Evil; Trump goal was the support of the general voting population, while the Evil Parties’ goal is the support of the Class of the Moneybags, which explains their refusal to help the peasants and the need to lie about this whenever they are near an open mic.

  4. Mikel

    If a country is concerned with the long term effects of Covid on their population – catching it over and over again – the non-sterilizing shots from Moderna and Pfizer (still in test phases with “boosters”) are not effective.
    The shots are NOT ending the pandemic.
    Paul and Jay are still drinking that “90% effective” kool-aid. Wake up!

    1. JBird4049

      They still acknowledged and agreed on the current policies will lead to more mutations and that it is a fantastic gambling operation. It really does not matter just how effective or not the vaccines with the coverage being so spotty, it will encourage the creation of new variants.

  5. Questa Nota

    Recall that ominous graph showing the returns to labor and capital over the decades. The divergence became noticeable in the early 1970s and only got worse from there. Labor got abandoned progressively while capital got subsidized even more. That was where the money was, and if labor got squeezed, they weren’t that mobile anyway so screw them. That was the message from politicians of all stripes, notwithstanding their fine rhetoric and hand wringing.
    The late 1990s sellout to Wall Street was only one of their overt betrayals. Anything to stay in power.

    1. anon in so cal

      Did Schumer just make the idiotic statement that 11 million undocumented must be given citizenship because the US population is not growing and we need workers? Hardly kept a straight face. Schumer really means we have to keep a lid on wages. Illegal immigration introduces labor/wage arbitrage.

      Bill Clinton pushed for China’s entry into the WTO–decimated US manufacturing jobs.

      Obama started / escalated QE in 2009—a hidden tax on the middle class, the “wealth effect,” which increases economic inequality,

      1. Jehr

        It just dawned on me why our Prime Minister is trying to increase immigration by 500,000 a year. Wow, the elite sure pull the big ones on us when we don’t pay strict attention.

      2. spud

        all correct. here is the history.

        “we’ve backed ourselves into the same trap that caught Britain in 1914: lethally overcommitted to an unaffordable global empire, hopelessly dependent on a global economy that’s cracking at the seams, and unable to realize that the world has changed. The next few decades will be a rough road for us.”

        “a stunning ignorance of history, since this is hardly the first time that an era of economic globalization(free trade) has shattered under the pressure of geopolitics. Several thoughtful writers have already noted the parallels between the present crisis and the collapse of Victorian economic globalization a century ago.”

        bill clinton: “China will open its markets to American products from wheat to cars to consulting services, and our companies will be far more able to sell goods without moving factories or investments there.”

        bill clinton: free trade with China as “a hundred-to-nothing deal for America when it comes to the economic consequences.”

        bill clintons Secretary of State Madeleine Albright said, “Economically, America gives nothing in this deal. All we agree to do is maintain the same open markets and policies toward the Chinese products that have already expanded choices and lowered prices for U.S. consumers.”

        Gene Sperling, Director of the National Economic Council under President Clinton (and again in the Obama/Biden Administration), said China’s market opening to the U.S. was a bonanza. “The agreement we negotiated with China is a one-way deal.”

        The U.S. had no face masks, ventilators and limited hospital gowns in the middle of the worst pandemic since the Spanish Flu. They are mostly made in China.

        The Trump Administration basically told the WTO to go pound sand.

        here is ferguson in 2020

        Economics Not Culture Wars Drove Most Trump Voters – Thomas Ferguson
        November 25, 2020

        “in particular, a lot of people like tariffs, though it was hard to
        see. When you start looking at people’s responses to questions, if you
        ask them, do you like free trade? “Yeah, we like free trade. That
        sounds pretty good.” Then when you probe a little further, well, what
        they really mean by that is some notion of fair trade, which gets a
        little woolly, but it’s not anything goes. And a lot of folks like
        plain, old tariffs.”

      1. Alice X

        You can always watch the video, I did.

        Ferguson’s audio is not so clear which messes up the computer transcription.

Comments are closed.