jobst. video on demand. old girls. and omissions feeds now in the palm of your. book about here with me here is a look at the top stories u.s. embassies are trying to limit the damage after details of thousands of frank and damning diplomatic cables are published many critical of them close allies among the revelations is a suggestion the state department knew georgia was planning an attack in south city of afford to have been in two thousand and eight when the. residents of mumbai

islam's refused to leave their homes to make way for a much needed airport has found something to live there say the government has to make it worth their while to move. and china proposes an emergency meeting of the six nations involved in north korea disarmament talks in a bid to ease tensions on the peninsula this fall is north korea warning of an unpredictable consequences in the south and the u.s. continue their military exercises near the disputed maritime border. as we have eyes here in our next bitter with al and he's crossed all guess discuss whether welfare states are more about socialism for the rich. if you can.

follow me and welcome to cross talk i'm peter lavelle too big to fail expression if you're wealthy governments around the world have bailed out the rich and powerful for them the worst of the recession is probably over but that cannot be said for the middle class and poor it would appear that socialism does exist though only for the rich. and you can. discuss government policies towards the rich i'm joined by doug henwood in new york he is the editor of left business observer also in new york we have andrew chef he's director of communications and marketing at euro pacific capital and author of the illustrated book how an economy grows and how it crashes and in singapore we go to jim rogers he's an author and financial commentator and another member of our cross talk team you know on the hunger all right gentlemen crosstalk rules in

effect that means you can jump in anytime you want and i would seriously encourage you to do that doug can one during the last during the midterm elections of the tea party people saying that obama is building a socialist state ok but on the other side side of the political spectrum a lot of people are saying that there is a welfare state but it is for the rich it is not for it for a very small segment of the population of the united states and it's been being ads been built for over the last forty years and they continue to benefit very much from the state how do you react to that. well there is some truth to it certainly a caricature of obama some sort of foreign born colonial socialist it's ludicrous but he certainly has participated very aggressively and the policy trend of the last couple decades which is to let the rich do ever whatever they want to particularly wall street do whatever it wants to and they want to hit a wall to bail it out we've seen successive bailouts and you know the state bailout mantra have gotten very skilled of the routine i think this one was much bigger than anything they bargained for but you know if you go back to the origins of

deposit insurance and such in the one nine hundred thirty s. it was intended to protect small depositors but that whole system which is intended to prevent a rerun of the one hundred thirty one ten thousand banks failed and drove the country into the much of the world into a decade long depression we were trying to get everything in policy to prevent that from happening again but the emphasis has moved from protecting depositors and actually preserving the system to preserving the wealth of the rich wall street it's just you know it's like good old days for wall street bonuses are almost as big as ever the stock market not doing so great but doing pretty well by market has been doing quite well the federal reserve now moving in to buy a lot of long term bonds and i can understand why they're doing it but it just looks and acts and feels like everything is being done to full power the state is being mobilized to a bailout rich people while the middle and lower income brackets enjoy almost nothing i mean did about two thirds the benefits of economic growth over the past decade went to the top one percent of the income distribution the bottom ninety percent the population about twenty percent the mass of americans have not

participated in anything resembling prosperity for several decades and this is just doesn't seem like any kind of social merge and see what is a social emergency is when wall street gets the wall and the state has to be mobilized to save them but the rest of the population can live with ten percent unemployment by official measures close to twenty probably in real terms and they can just just hang it and now we have a new republican wave and congress we've got some congress people actually trying to remove the. fed federal reserve has. the dual mandate is to preserve full employment and price stability we have some republicans now looking to remove the full employment part of the fed's mandate and just focus on price stability why people worry about inflation at this point is just insane it is kind of ludicrous loading for most people to make it off the mat jim if i go to you in singapore it is the mandate of the modern. industrialized state in the west to protect the wealth of rich people because in the united states over the last few decades it

seems to be exactly that to protect their wealth because they've certainly gotten very very rich over the last decade. well it's sort of been in the last two or three years that they've they've been bailing out wall street which is totally outrageous i cannot believe that taxpayers are letting them get away with it i can't believe that anybody would let them get away with it it's happening in the u.k. as well as not just happening in in america i'm afraid it's happening a lot of places but it to. a point i would have to point out that a lot of the money which mr which the government has been spending in the last two or three years has been going to the middle class i mean forty percent of it went to preserve the jobs of bureaucrats at the state levels around the country now you may be in favor of bureaucrats or you may not but that's it's hard to say that bureaucrats are but the rich in wall street that you just call so called of the many people many people that many people of many people have been receiving this money none of whom should receive it if you ask me but unfortunately we have a government now which likes to pay up by votes from anybody by votes and by

patronage from anybody can you think about that andrew i mean you know it's the last election kind of show that i mean you don't have to have any kind of disclosure right now though the koch brothers they spend some people say over one hundred million dollars because supporting their candidates to protect their interests ok again to get the state to pass legislation to protect their wealth that's what some people would say and you would go ahead while their interests their interests or their interests are keeping the country country safe for business. or some private interest but i think there's plenty of money being spent on the other side i think it's interesting to think that the rich the rich don't pay anything for the society of course we do have a progressive tax system the rich pay far more in taxes that than the middle class many many the vast majority of citizens in the united states don't pay any income taxes at all so there is a massive transfer of wealth and it's interesting you call that a giveaway for the rich is allowing them to keep more of their money but yes in the last few years there have been bailouts and in wall street it's benefited wall

street i agree with jim it's a tragedy but but those bailouts were made not to save the rich but but this. really to say to keep interest rates low to keep the financial financial edifice from collapsing which would raise interest rates and we have a society dictate to low interest rates not just for the rich people but but but poor people middle class people in this country survive on low interest rates and rather than letting interest rates rise and people having to live off of savings which they don't have that the government stepped in and bailed out wall street tragic landrieu to keep interest rates low jim get a jump in go ahead and do wait wait a minute andrew wait a minute and you're taking interest rates to zero is destroying the class of people in america who save and invest for the future hundreds of i mean tens of millions of americans didn't get into financial trouble didn't buy six houses with no money down and no one had no job and the people who did the right thing who saved their money didn't get in trouble now are being wiped out by the federal reserve and the

central government because they've got interest rates at zero all of these people who thought they could live off their interest or their savings are now being totally wiped out when ever a country why great saving a great it's vanished. i'm not saying i think they did the right thing. i think they mean we had if we had little it's got to the right people at c.b.s. and those people should have to work for their let it go ahead we're hoping you're just playing with interest rates are supposed to feel someone savings low interest rates are supposed to encourage investment they're not low interest rates are supposed to encourage investment by corporations corporations have a trillion dollars in the balance sheet right now that they're not investing because the economy is so weak. and something has to be done about that and investors do not want to invest because the economy's weak and they're scared of losing money and that's that's the fundamental problem the prospects for there are future economy are terrible and that's why they're not hiring the investor can only terrible as long as the government continues to be is can clip coupons is delusional and you want to jump on the reason i mean. well the only reason the commie remains terrible is because because most of that most of the capital is

flowing towards the public sector i mean if they have the government will allow first of all our real echo. a contraction take place and we can get down and we can wring out some of this bad debt we live by intelligence or employment you want twenty percent unemployment is what we need twenty percent unemployment. but mr goodwin really the heart of the mistakes in america in the past twenty years we've got some. finish i'm going to jam going. in europe at no. it was a laboratory go study in europe right now ireland is undergoing a vigorous austerity program it's doing exactly what i think you would like to do see budget cutting and also greece is doing the same deep budget cutting all right what are we getting for that high unemployment the irish of the player it is fifteen percent and rising the economy is collapsing it's contract by twenty five percent of the last week of years had we had a undergoing a big austerity program it's leading to implosion too i think it doesn't this austerity scheme does not work we want to hear to create want to hear that are you

are going to be followed by mr hand when i go in there not jam go ahead go ahead and singapore and i mean we're in the midst and we're in the in the united states in the past twenty or thirty years as you were pointing out we've had some unbelievable dislocations we have we have done things which no country in the world should do we have run up debts which we can never pay off no matter how hard we try what the politicians are and you say we don't have to have a recovery from that i mean when you have a long hangover you've got to recover when you have a long illness you have to re whenever you make mistakes mr hand would somebody has got to pay for those mistakes and it should be the ridge should we shouldn't of my own up to the range of. the go ahead go ahead watch the debt levels united stuff public that the government out of the states it's not excessively crazy i mean it's entirely manageable like the debt g.d.p. ratio the united states i'm not outlandish by international not entirely minutes we don't have a problem for at least twenty years according to official productive projections from the c b o so there's this sense of emergency that we have to cut cut cut in

order to get out of the debt problem is delusional and it's going to cause immense already we're going to rebuild it and despair. go ahead jim what do you think our debt is in the united states the household what do you think the debt is than the united states that you see as you are trying to match sixty percent is the highest anywhere that i have sat on a stand alone if you throw in the fannie and freddie and what should be on the federal government one sheet because fannie and freddie are for our federal entity at this point we have higher debt levels in greece. and now almost do you know what i'm talking i mean and then what. dow do you want to generate is there and we had a lot of just international debt i really don't know why don't you want to jump in there go ahead yeah now the real problem is debt in the states is the household debt at the government debt is entirely manageable it's not a problem we could tax the other the other folks on this on this program you know there are a very recent or a very what matters i mean the more you can tax regulate your taxes nobody's pay

fifty percent no one is paying fifty percent at the end so you thought he was like secretary fifty one as i look at it. yes i was going to say your safety percentage always pay for it ok let me tell you how much i'm paying i'm paying i'm paying thirty eight percent to thirty three percent of the fair share and i think nine percent of the city of new york i pay ten percent of the state of new york i pay six percent or six and a half percent it's all security and then having to talk about my sales taxes or my property taxes mr mayor we have to present a set of the people in america mr hand with p.p. fifty percent of the people in the united states don't pay any tax at all any tax at all it's left to the other fifty percent but let me go back yes question because i know that's not true john if you were to claim what you say you claim to america doesn't have any we are the largest international debtor in the history of the world and nobody in history has ever owed as much as we do on the international economic and i don't mean charlie's let me try this gentlemen please let me jump in here i'm really glad everyone's taking crosstalk rules to heart here but after

a short break we'll continue our discussion on the rich stay with our team. story. it was created to serve public interests to inform and to entertain. these days there's nothing easier than opening a new media outlet but there is nothing harder than revoking its license in case of collapse. when just. say. in trouble. you could involve a community where you have one large corporation controlling the building newspaper

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welcome back charles time people are about to mind you were talking about the so-called socialism for the rich. but before it let's see what russians think about taxing the wealthy governments all over the world claim they've done to the limits tried everything but the results are still the same the rich are getting richer while the poor struggle to preserve what they had as a result many are considering raising taxes for the rich the russian public opinion research center asked citizens if this support raising the tax burden of the wealthy fifty seven percent of those polled would have a high earners pay more do you while twenty eight percent opposed to raising the tax burden what was not clear however is how much poll respondents themselves heard back to. ok doug and i to go back to you

a lot of people say that taxing the rich hurts job creation there's a direct correlation between the two so george w. bush cut taxes for the top two percent of american earners and during his presidency the country lost eight million jobs so what's going on here because i think a lot of people say middle the middle class needs a tax break does the top two percent of the population need a tax break go ahead. no the top two percent of the population has been raking it in and been taxed very lightly for it's the bush tax cuts that happened early the decade preceded the weakest expansion in modern american history the weakest g.d.p. growth the weakest growth in employment of any of the eleven pushed forward to expansions so we have to go back to the ninety's the first thing that bill clinton did in office was to raise taxes on the top one percent of the population and proceeded quite a long boom which vigorous job creation but also across the board income gains for the first time since the early one nine hundred seventy s.

every part every demographic group every income level saw strong real income gains for the probably part of the ninety's we haven't seen anything like that in the last thirty thirty five years and it's i don't know i just think it's tearing those two policy approaches touching the rich is a good thing and you're going to have your shop i don't know what you consider to be i don't know what you consider to be light i don't think consider fifty percent to be like but you know it's interesting that there are more factors that come up that go into economic growth and taxes that are going to make a direct causality between the tax rates and economic growth is overly simplistic there are many many other factors but you know one of what i think the only sector that really grew most of the new in common with last twenty years went to the financial sector and that's where all the new income was and certainly the people on wall street have made obscene amounts of money but the reason why they were able to do that was because the government has been making money so cheap that the money business is so great because the government subsidizes it if the government didn't subsidize this money business using by lowering interest rates far too low and

backstopping investment houses there wouldn't be that much money there so i think it's a government policy and i don't think do it they've got to benefit the rich they do it to keep the credit flowing they do it to keep america addicted to credit and that's what's made so much money for wall street and i think that should go away but i want to know about you jim and singapore i missed or disagree with that it's interesting that you want to go back to mr han was going to head towards. before that he would not be ok jim said before that people mr edward said before that people who save their money shouldn't be allowed to earn interest on it i must say there are tens of millions of americans who are retirees my mother being one of those ninety one years old who would love to get some income from her savings and mr henry says she's despicable for earning money on her saving our us pitiful savings so that she can. get you know national gathering i don't know dagger ring i don't want to hand would say why should not he just don't. believe anybody

was just plain is calm and he'd like to explain it if he said it go ahead. of oil as there is no god given right to earn a large income on savings i mean. low interest rates are absolutely essential to get this economy off by that. razor but it's now we're going to end up like ireland . and i basically measure it with the morally right stuff really matter going to where it is and where they produce they have a right to their money in that sense and you know mr what all the people who asked me if i like your trophy and i guess i don't have any bearing jim go ahead go ahead you're saying that all the people you're saying that all the people live through saved and the retirees should have nothing to show for it at all just go to their grave poor with no income and nothing who is going to pay for their funeral by the way and i mean like i said before you have low interest rates are going to. the idea that low interest rates are going to save us is totally false the japanese have been trying for twenty years and are still trying to recover the problem is we

america and japan keep trying to trying to bail out all the fat cats and the incompetence all the incompetent people who made mistakes in the past twenty years of being propped up we're not letting them go bankrupt how can we possibly have a just system what you're going to say which is real or have a depression to clear off the. what you're frankly saying we need to raise interest rates so that the minority a population that has a large amount of savings can rake it in while the rest of the public is either debtors most of the debtors you have to so you want to play sorry sort of if you are talking about you want a one hundred thirty s. you're looking for a deflationary depression you are most people would say you are there you want to just don't where everyone who you want to system where everyone who save money gets wiped out and everyone who owes money gets bailed out and that might that works i was i'd like for a living get a good deal ok you mean when it didn't work if you want to buy about saving and you want to write you off say twenty years you'll never get growth because

a savings account comes from saving japan a stagnant i mean it has little habits what you want is they don't have the two percent of north korea growth doesn't come from same as it comes from investment you know if it was well you would think that's an improvement in the state of your auto here. comes from senator kerry because mr him what he learned that he was doing over there for corporations. in the last year has been to his work and with the legislators from corporations who reinvest their profits do you ever read the flow of funds are confident it will stuff i know what i'm talking about investing in real investment and real employment comes from the for the profits of business which are generated internally they do not turn outside very much for the savings. there is a lot simpler that you have to admit and we're going to see how much you but you got to clean this is not a guys it's going to gym in singapore go ahead. even socialist economists say that savings leads to investment where do you think investment comes on you think it comes from the tooth fairy you think it falls out of the sky you have to have

somebody saving so that can lead to investment i mean even the even crewman knows that i mean what is this doug i mean let's let you believe me and invest it let's not get into that. i seen most of the real investment in buildings and machinery the kind of things that make an economy grow and be productive come from corporate profits corporate profits that is corporations fund almost all their investment internally over the long term about ninety percent of corporate investment comes from corporate profits it has nothing to do with all these cute little stories about old ladies living on their retirement savings that's just not the way it works and i know the flow of funds accounts i know the flow of money in the economy i know what i'm talking about this is just absolute fact i mean you can they can rant and rave and repeat received ideology all they want to but that's just not the way these calvinist homilies but that's not the way things really work ok and you want to be there not only gradually been very patient go ahead i mean i

mean well i was going to talk about you were while ago talking about savings and i was going to mention that the north koreans you know who manage to work outside of the system and entrepreneurs and selling vegetables and and the illegal markets there and they they save their whole lives to get a little bit of money together and one day the government decides that they want to print some more money and devalue their currency so they can they can spend new money into their system and they completely destroyed the life savings of of everybody who had been working there although i do it so you could use your very interesting you bring up that point because they if you're making an analogy the united states is like north korea in the way it's going so you're saying you're saying you're sitting here you're talking with us thank you for at least said anything to bring this program i've let you guys go ok i mean again it's about management of the economy here and currency flows as doug has pointed out go ahead enter. oh i'm sorry i. don't know him to compare it compares to north korea and the united states and it's i was just talking about you know doug

was talking about you know he brought up the you know the sanctity of savings and why should people have a right to their savings or right to interest and i was saying like look would take until it was obvious it's an extreme example but look what happens in a place like north korea where all of a sudden their savings get wiped out overnight because of government policy and they want to spend new money into the economy i mean how could you possibly justify that obviously you can't but that's that's the that policy to it taken to an extent it's extreme. now in terms of his point about korea is probably desperation. now i'm not i'm not i mean you brought up who has a right to their savings so i'm saying look we'll take that to extreme and see what happened in north korea and that's that and what we're doing out here but in a much in a much slower slower fashion i mean i used to be when franklin saved to set a penny saved was a penny earned i mean he wasn't he wasn't a moron he wasn't a fool people think that now it kind of sounds stupid but back then i mean the natural the natural order of prices in an economy should be to go down if you have a stable money supply and increase in productivity which is what you have and in

a growing economy prices will come down over time like they did in the united states between seventeen seventeen eighty nine and one thousand and thirteen prices came steadily down we had sustained deflation in this country coupled with robust economic growth so you don't need inflation to have economic growth you also inflation people who have been in a big urban labor radical socialist movement because we also know we also the environment is incredibly punishing to everybody who isn't a creditor but you know what we have we had incredible growth in this country not just for the upper class but the middle class we invented the middle class we invented. the knees in this room for the. in the wall and then in the in the nineteenth century things were when from when from systems level to you know we were the wealthiest country in the world by nine hundred ten one hundred fifteen. and that was that was based on the market we did in the night in the eight in the nineteenth century we were doing the one thousand century what china is doing today people john i want to go to jim rogers because we're almost running out of time what about what's the future of the middle class in the united states jimmy got one

minute go ahead. it's being wiped out by the government by by low interest rates and by gigantic debt which nobody can finance the farmers are going to give up on a soon and then what do we do doug what do you think what's the future of the middle class is not very good unless you actually start investing and get the money out of the hands of financiers and into actual productive investment ok and elsewhere go standridge which future the middle class well who is going to decide where that productive money goes to if the government decides what the industries need to fund they're not going to work because the government has no sense of what what is productive and what isn't productive you've got to leave those decisions ahead of the of of of it's working pretty well china it's working very well and the top private sector there are there are communist in name only there communist in their political class but but their economy is run by entrepreneurs and business people ok on the notion of what more can in america ok well let me will do a program on that in the future what's more capitalistic china or the united states many thanks to my guest today on york and in singapore and thanks to our viewers

for watching us here are to see you next time and remember prost on. the. story.