paul. robeson shift it was hundreds but they precocious planets. everywhere this is. the russian capital twenty four hours a day top stories now to south america in the details a published online over its relations with its closest problems experts say it shows a degradation of washington's foreign policy. two senior iranian nuclear scientists have targeted in bomb attacks tehran blames israel and the u.s. saying it's an attempt to hamper the country's nuclear program. keeping tensions high career on those pyongyang with a regional joint naval exercises with the u.s. and a week after a deadly artillery exchange in the region. brings up to date for the moment. and half an hour from now in the meantime he's crossed all guests discuss whether

welfare states are more about socialism for the rich stay with us for that. for the full story we've got. the biggest issues get a human voice face to face with the news makers. bringing you the latest in science and technology from. the future of coverage. 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. can. you 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 in the united states and it's been being a it's 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 to colonial socialist is ludicrous but he certainly has participated very aggressively and the policy trend of the last couple of 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 nine hundred thirty s. when ten thousand banks failed and drove the country into and the much of the world

into a decade long depression we're trying to do 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 is 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 the full power of the state is being mobilized to a bail out 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 emergency what is a social emergency is when wall street hits 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. as a dual mandate that 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 are worried about inflation at this point is just insane it is kind of ludicrous loading for most people him and kick 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 it's not just happening in in america i'm afraid it's happening in lots of places but 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 it's hard to say that bureaucrats are but the rich in wall street that you just call so what i call that 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 advice votes and by patronage from anybody you can do anything about that andrew i mean you know it's the last election in may kind of show that i mean you don't have to have any kind of disclosure right now that the koch brothers they spend some people say over one hundred million dollars because of 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. and 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 they've been bailouts and we're 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 to. 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 tragical andrew to keep interest rates low jim get 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 say you can invest for the future hundreds and 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 in a country why great savings rate and spanish. i'm not saying i think they did the

right thing either. i think i mean we had if we had a little it's got to be there was a big surge in those people should have to work for their let it go ahead we're hoping you're just going to this is great you're supposed to encourage someone savings low interest rates you're 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 the earth future economy are terrible and that's why they're not hiring the investor can only terrible as long as the government continues to use kid clip coupons is delusional and you want to jump on the reason i mean. well the only reason economy 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 eco. the contraction take place and we can get down and we can bring out some of this bad debt we live by one thousand or one that you want twenty percent

unemployment is what we need twenty percent unemployment. but mr number can you 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 letter to his biggest already in europe but 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 this and deep budget cutting or what are we getting for that high unemployment the irish other player rate 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's doesn't this austerity scheme does not work we have a twenty year doc to create want to hear that are going to be followed by mr hand what 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 richie we shouldn't have my own . that 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 but the debt g.d.p. ratio united states i'm not outlandish by international not entirely made and 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 when the real debt 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 and as you say if you actually manage sixty percent the highest anyways i have sat on a stand alone if you throw in the fannie and freddie which should be on the federal government and should because fannie and freddie are for our federal entity at this point we'd have higher debt levels in greece. and now almost to the top to a minute and then i would. doubt you want to jump in 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. yes now the real problem is that no stations the household debt default the government debt is entirely manageable it's not a problem we could tax the other but the other folks on this on this program you know there are a fairly recent or three when there is a real person or your tax rate you're usually actually nobody say fifty percent no one is paying fifty percent at the end so you thought he was like ok i'm sorry fifteen we're going to take a look at it yes i'm going to see 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 fetcher including 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 or so security and then i have even talk about my sales taxes or my property taxes mr used to have always have fifty percent of the people in america mr hayward p.p. fifty percent of the people in the united states don't pay any tax at all any tax and zero it's left to the other fifty percent but let me go back yes question example that's not true at all is not true john if you were to claim don't use it you claim that america doesn't have any we are the largest international debtor in the history of the world nobody in history has ever known as much as we do on the international economy and i don't entirely does not reach out this gentlemen to lease 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 r.t. . if you still. want.

good some. excellent professional. the dukes travel possessing a struct. ordinary car. the doctor who helped many people in his country. the political criminal responsible for thousands of deaths. was it an attempt to repent. or just escape a fair trial. the other line twelve run a one car journey on our city.

to be soo much brighter. from things to pressure inside. the startup team don't come. cheap. welcome back to france time people 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 have 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 have 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 that. ok doug i'd like 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 that middle the middle class needs a tax break there's a 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 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 going to i don't know i just think it's very close to 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 light but you know it's interesting that there are more factors that go into

economic growth and taxes there and 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 to think the only sector that really grew most of the new income of the 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 do it they get to benefit the rich they do it to keep the credit flowing they 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 in singapore i mr disagree with that it's interesting that you want to go back to mr han was going to head was. before that people should not be ok jim just ahead was said before that people who mr edwards

had before the people who save their money shouldn't be allowed to earn interest on it i must say that 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 henwood says she's despicable for earning money on her saving our i was pitiful savings so that she can. you know national gathering i don't know jack a ring i don't have to hand would say why should not he just don't do anything jim did not believe anybody was alex plane 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 made where the morally right stuff really matter going to be where it is and where they produce they have

a right to their money in that sense. and you mr what all the people who i say i like your church it does not have any bearing jim go ahead go ahead you're saying that all the people you're saying that all the people live you saved and the retirees should have nothing to show for it 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 a society where 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 we're going to say we just read or have a depression to clear off the you know what you're factually say is we need to raise interest rates so that the minority of the 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're talking about a one hundred thirty s. you're looking for a deflationary depression you are most people would say you are you want to see them 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 going to like or if we're looking for a living get a good deal. ok you know i mean and when it didn't work if you want to fight about saving and you want to write you off as a one to years. you'll never get growth because savings are coming from savings you've had a stagnant i mean it has little at risk what you want is vulnerable to the sort of north korea growth doesn't come from same as it comes from investment know what i guess i'm going to say later on here. because i'm saying anyway because mr him what he learned that he was doing it for corporations. in the last year has been this was the let's just leave them some corporations who reinvest their profits do you ever read the flow of funds because there's no he will stuff i know what i'm

talking about. investments to 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 of. simplicity and who aren't missed and when i sat in my view by the kind of 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 what does that lead you to 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 just 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 in the north koreans you know who managed 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 about the sanctity of your lease 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. know no need 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 right to their savings or right interest and i was saying like look we'll take it too it was obviously 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 six train. 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 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 nine hundred 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 also inflation if you live in a bigger urban labor radical socialist movement because we also know we also have this incredibly punishing to everybody who is in

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 doubt. in the wall in the nineteenth century things were when from when from some 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 mark what 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 low interest rates and by gigantic debt which nobody can finance the farmers are going to give up on us 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 get the money out of the hands of financiers and into actual productive investment ok and elsewhere goes to which future of the middle class well who is going to decide where that

productive money goes to if the government decides what the industries need to find 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 in the private sector there are there communist in name only there communist in their political class but but their economy is run by entrepreneurs and business people ok on that you know generally more capital 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 the york and in singapore and thanks to our viewers for watching us here to see you next time and remember prost on. the. street. hungry for the full story we've got. the biggest issues get

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