JESSICA DESVARIEUX: Welcome to the Real News Network. I'm Jessica Desvarieux in Baltimore.
The Department of Labor released its jobs report for September, and it's way behind
expectations. The U.S. economy created about 140,000 jobs when economists expected a bit
more than 200,000 new jobs. The share of the population in the workforce, which includes
people who have jobs or who are looking for one fell to about 62 percent, the lowest level
since 1977. Now joining us to give us the story behind the numbers is our guest Richard
Wolff. Rick is a Professor of Economics Emeritus at the University of Massachusetts Amherst,
and he's currently a visiting professor at the New School University in New York.
Thanks for joining us, Rick.
RICHARD WOLFF: My pleasure, Jessica. Thank you for inviting me.
DESVARIEUX: So Rick, this is the second month that we've seen job numbers be behind expectations.
Why did we see job numbers go down and what does China have to do with all of this?
WOLFF: Well, we're seeing the numbers go down because the inevitable effect of severe economic
troubles in Europe coupled with a slowdown of economic growth in China, it was only a
matter of time before these two tsunamis hit the American economy. We've been celebrating
that we're not as bad off as them, but it's a little bit childish. The crisis started
here and hit them later. And now that they're in trouble it's reverberating back on us.
And therefore, our numbers across the board are looking grimmer and grimmer in terms of
the economic prospects for our people. And you're quite right that the labor force participation
is the real important number here, together with real wages. And both of those are in
very bad shape.
DESVARIEUX: All right. And is this bad news for everyone, these job numbers? Are there
sections of the economy still doing quite well? And are people pretty much feeling the
pain, or are people feeling the pain throughout the global economy?
WOLFF: I think people are feeling the pain throughout the global economy because this
is a global effect. Europe and China and the United States are in many ways the three poles
of the world economy. Everybody else caught up in the relations among them. So everybody's
hurting. But in a capitalist economic system of the sort we have, when there is hurt those
at the top are the ones best positioned, and have the resources to push the pain away from
themselves and push it on to those just below them. And so it, if you like, trickles down.
And the folks at the bottom, the temporary workers, the part-timers, the unskilled, those
in the least capacity to protect themselves are the ones upon whom the ax eventually falls.
And they don't have anybody else to pass it down to. So everybody's hurting, but those
who should hurt the least hurt the most, and those who should hurt the most hurt the least.
It's the way our system works.
DESVARIEUX: Yeah, Rick. And a lot of people are also looking at how these job numbers
are going to affect what the federal reserve does in terms of interest rates. That affects
everything from how much you pay for a mortgage or a car. Do you see these numbers making
a clear case for the Fed not to end its near-zero interest rate policy at its scheduled meeting
later this month?
WOLFF: I think so. I think that the very thing that prevented them from raising interest
rates last month when they were scheduled and had said likely they would do so was their
concern, that of Janet Yellen and all the others, that the American economy, especially
looking at what's going on in the world, is in way too scary a poor shape to give it the
hurt, if you like, of a higher interest rate. Which as you point out makes it more expensive
to buy a car, to take out a mortgage for your home, to pay for your child's education, which
is now a matter of borrowing money in this country. And so it is highly likely that these
kinds of numbers are going to make them very worried that if they take the American economy
off the life support of low interest rates and endless increases in the money supply,
that there will be a downturn that will be severe again, and they don't want to take
that chance and they don't want that responsibility.
DESVARIEUX: All right, Rick. Let's turn the corner and talk about solutions. Give us some
clear policies or initiatives that you think would actually stimulate the economy.
WOLFF: Well, we've kind of run out of the usual ones when it comes to monetary policy.
Normally increasing the money supply and lowering interest rates is a way to get people to spend
more money. We've been doing that pretty much nonstop since 2008, and yet here we are with
these awful numbers. There's not much more you can do in that area. Well, what else is
there. The government could stimulate more by running bigger deficits. That's not going
to happen, because the Republicans and the conservative Democrats have basically bought
into the idea that the federal government ought to have a balanced budget no matter
what the economic damage is of having the government not be the spender of last resort,
which we now need because no one else is able to buy anything that would keep this economy
going.
So my fear is we have so long believed that we could make little adjustments, monetary
policy here, tax increase or government spending there, that we are unable as a nation to look
at the bigger picture. To be honest enough to say, the little policy adjustments that
we've been talking about no longer cut the mustard. They no longer are adequate to the
level of problem we have, so that the honest and realistic thing is to say, look, we need
much more fundamental change. And no matter how uncomfortable that makes people who are
committed to the status quo, if you don't do that you are fiddling around with policies
that are no longer adequate to the level of economic problem we have.
DESVARIEUX: All right. Rick Wolff, joining us from Massachusetts. Thank you so much for
being with us.
WOLFF: My pleasure, and thank you for inviting me.
DESVARIEUX: And thank you for joining us on the Real News Network.