the story of the middle classes in the developed world the middle class has seen its condition and fortunes under stress for decades and. for the full story we've got it for. the biggest issues get a human voice face to face with the news makers m r t. three thirty pm wednesday the eighteenth of may thanks for being with r.t. from moscow our top story letting jailed oil tycoon khodorkovsky go would pose no danger at all so russia will not support a un resolution on syria after events in libya and president vote it will soon announce whether he plans to run in the twenty twelve election they were among the highlights of his largest news conference in three years taking office.

revolution and religion fall of egypt's presidencies dictatorship replaced with faith based violence as muslims and christians lose the common enemy that united them. and crisis sit americans turned to booming defense companies for work and one of the few industries still thriving thanks to of u.s. wars abroad. more analysis of the day's media conference held by president votive coming up later today on our tape but for the next thirty minutes crosstalk in the company of his guests discussing what's happened to america's one psychotic middle class and what the government is doing about it. you can. start. to. follow and welcome to crossfire i'm peter lavelle the story of many middle classes in the developed world the middle class has seen its condition and fortunes under

stress for decades and the outlook is not encouraging that cannot be said of rising classes in the developing world are we witnessing an historic exchanging of places . keep. still. rising and falling classes i'm joined by geoffrey my run in boston he's a senior fellow at the cattle institute in washington we have samuel sheridan he's a policy analyst at the economic growth program at the new america foundation and in new york we cross to richard esko he is a blogger writer and a former wall street executive all right gentlemen crosstalk rules in effect that means you can jump in anytime you want but first let's look at the tale of a middle class. has long been the pride and joy of rich western countries but today this is rapidly changing the middle class is in danger under pressure for decades and assaulted during the great recession the middle class is

shrinking and there is little evidence this will be reversed and you time so long term unemployment in the current economy is the worst really the worst it's been in the post-war period currently something like forty five percent of all the unemployed have been unemployed for six months or longer the world is fundamentally changing and already the wealthy are getting even welfare money and power are rapidly becoming concentrated at the top and the big global corporations are earning more than ever before for example sixty six percent of the income growth between two thousand and one and two thousand and seven went to the top one percent of all americans meanwhile the middle classes of the developed world are consistently going to wing as american and european workers are slowly being merged into the new global labor pool and due to the globalization capital large corporations are leaving their home markets in search of much cheaper labor all to

the benefit of the developing world are huge growth of the middle class particularly in asia that in the other bric countries which is going to transform the relationships between consumer and producer across the world being able to save and consume with the same time russians brazilians chinese indians and many others have life thousand tastes resembling their western peers these are countries that are going to continue to grow if not rapidly at least moderately while the rest of europe and united states seems to be mired in in crisis the truth is that the middle class and the rich developed west is in serious trouble if current trends continue the very nature of western societies may change in the meantime the developing world will have what the. very well it's. across. ok jeff in boston i had to go to you first here and researching this program said

it is some of these stats are just astounding the bottom fifty percent of income earners in the united states now collectively own less than one percent of the nation's wealth also for the first time in u.s. history more than forty eight million americans are on food stamps and the u.s. department of agriculture projects that number will go up to forty three million americans this year so i guess it's kind of a rhetorical question what is the state of the middle class particularly in the united states well i think that there is an issue but it's also possible to overstate the issue we should remember that you know being the middle is a relative term means being between the people are very poor and very rich but in fact the absolute level of the middle class their ability to have a home to send their kids to college is still much higher than it's ever been they're still living a very comfortable lifestyle compared to a huge fraction of the world compared to people just a generation earlier and so on and so forth so i would shouldn't overstate the case

here at the same time there certainly are issues but the question is what should one do about it what policies should what a time to change to address those issues and i think that's the hard question that we need to think about it's interesting samuel go to you in washington in light of what we just heard there should we just have a new definition of the middle class because there doesn't seem to be a lot in the middle if there's so much concentration of wealth from the top. i don't think it requires a new definition of the middle class but i think it does require you know consideration by policymakers and an effort to kind of rebuild the middle class and the united states and we've seen we've seen a disappearance of the middle in a few areas in jobs and wages in the long term unemployment that we're facing now but also in kind of general middle class goods that we consider essential for a middle class lifestyle like health care and education and also somewhat want to disagree with the previous speaker dr jeffrey you know college is really an affordable for a lot of people in the middle and health care costs are increasingly eating away at

personal income and it's really become difficult given the joblessness but then also kind of the basic costs of middle class life richard if i'm going to you in new york what do you jump in on that. well i would have to say i don't think it's possible to overstate the severity of the problem for the middle class in the united states i think that sure you can argue that the middle class standard of living in this country is better than what you'll find in much of the rest of the world but compared to what it used to be a decade ago two decades ago a generation ago it's in the process of substantial decline i think that basic issues previous samuel mentioned health is streaming expensive education extremely expensive employment the new normal is getting higher and higher and by the way your reporter referred to this what seems to be an ongoing sense of crisis and this

is not artificial all of this is the result of deliberate policy choices that are being made that are rapidly eroding the the north american middle class and will continue to do so unless we have a very honest discussion in this country about whether we want to preserve the middle class and an economy that's based on the prosperity of the middle class jeff what do you think about that is there political will out there to protect the middle class grant jump right in. let me respond to this point about health care it's certainly true that expenditure on health care has gone up dramatically and in a bad sense you might think well the middle class family with a given income is worse off because now health care is more expensive but in saying that we're not comparing apples to apples the quality of the health care that's available is dramatically different than it was say a generation ago there are hundreds of new medications available there in court in new surgical techniques there is equipment to do very detailed scans of people's brains or bones or things so we're spending more but we get

a lot more things there's so much more available so in that sense everybody middle class lower class is better off because the quality of what's being provided by the health care service is so dramatically different sorry i didn't mean to drop you but that's that's the whole point of the president's going to. go ahead and this is one of those samuel or so this and we'll jump in and then we'll go to richard samuel go ahead. i think it's important though to recognize that health care isn't available to a lot of people in the lower and middle income you know for upper income americans health care health care plans are fantastic and access is fantastic but for the lower and middle income families it's often not and i wanted to make one kind of point that was you know dovetails off of what richard said is that going forward i think the prospects for the middle class are very worrying so if we don't look so much at what happened over the past couple of decades but we look out a couple decades you know i worry about people in my generation a generation behind me you know not not finding a job out of college you know the unemployment rate for people under twenty four is

now nine point seven percent you know so keep even those people with a college degree. who are under twenty four you know have extremely high levels of unemployment higher unemployment than the overall population so i think you know the prospects for the middle class increasingly looks fairly grim and i kind of worry about a lost generation effect you know for the in the middle class kind of in the next couple of decades richard jumping to go ahead. and i just want to that sure i just want to say two things here first about health care i think that while more its services are being delivered to certain people at certain times we have to look at the numbers and the numbers tell the story the united states spends far more on health care than other developed countries and it's far worse in outcomes in terms of overall state of health and terms of mortality rates morbidity rates we're not getting the job done and health care is radically different among different social groups so we have a broken health care system that's extremely expensive that's like

a shiny cadillac that doesn't go anywhere in terms of the numbers when what we really need is a good city and they can get people back to health so that's health care and i couldn't agree with samuel more on the generational issues studies show that young people's overall lifetime in earnings are going to be largely determined by their first several years of on an employment or an earnings and what we're seeing now is probably one of the fischel number the unofficial numbers are higher we're seeing in effect as he said a new lost generation of americans and we are seeing in a row zhen of the social contract that guaranteed that previous generations we number one could work and earn a good living and number two would be provided i decide how to care health plans in this country for people who are employed cover less and less and people are paying more and more it's getting to be an enormous number and three that when people gave a lifetime of work and service that they could retire and financial security all

three of those elements of the social contract between the middle class and the nation are being severely dismantled now and again i'm going to say as a result of the liberal policy choices rather than as he will go back to deliberate moment i'm going to go to jeffrey before we go to the break here it's a very interesting point about the social contract because as an american we always were brought up that we would be better off than our parents but that's not the case anymore is it. well i mean that remains to be seen but i think the crucial thing to say about the social contract is there certainly was that idea around and as part of implementation of that idea a policy adopted a promises in terms of how much we could help people have a secure retirement of how much we could provide health care so everyone who is elderly so everyone who's poor and now to more or less everywhere and those promises that social contract is basically a pipe dream it's a completely unsustainable goal to guarantee the amount of retirement benefits

health care etc that the u.s. and most developed economies have promised their citizens that's why greece and portugal and ireland are bankrupt that's why other countries are following that path that's why according to existing projections the u.s. is our only bankrupt because we engage in the social contract that was completely divorced from the reality of how productive the u.s. was could ever possibly be and what we could afford to spend given those levels of productivity again that person is going to be going to a quick break gentlemen here after a short break we'll continue our discussion on middle classes stay with our g. eight.

news today violence is once again flared up. these are the images. from the streets and candy that. challenge for asians to rule the day. wealthy british scientists. like. markets. find out what's really happening to the global economy in the kinds of reports. claiming to keep. the faith. welcome back around the time peter lavelle to remind you we're talking about

different middle classes the same can be. ok richard you you were just itching to say something before we went to the break so go right ahead. sure you know jeffrey said we can't afford the social contract that was promised and it we hear that argument a lot but again you know you have to take all of these statements and contacts we just had a report from the social security administration here in the united states saying that it's going to be even tougher to fund medicare and social security is going to start to run into a deficit situation sooner than expected but the number one reason why those numbers changed is because unemployment is so high and unemployment is high because we made the decision it's a nation and one that not to invest more and job growth and job creation and

economic growth so this is not accidental what we're seeing in effect is a death spiral a policy driven best spiral element of the social contract and number two because we've had a generation now of tax cuts for the highest income people in this country and as a result it's starting to bleed dry some of the basic. social services that have been part of the deal what we're seeing and here's another example that i'd like to give you in the nineteen eighties that social security had a true financial crisis and under ronald reagan democrats and republicans got together and worked it out but were none of them anticipated was the route to be extreme accumulation of wealth by the top one percent of earners in this country meaning that far less of the country's income would be taxed for social security than was ever anticipated even by alan greenspan who led the commission so now we're seeing long term cash flow problems with social security again not an

accident but all right we are asking are you a mater of the you see the same thing i see jeff weise and jeff zoe in story that are not i see josiah go right ahead. so it's certainly true that the projections of when social security trust fund in the medicare trust fund are going to run out of money has been exacerbated by the recent recession there's no doubt about that however the long term ok for medicare in particular and social security was somewhat significantly lesser extent has nothing to do nothing important to do with the recession has nothing of any quantitative significance to do with the bush tax cuts it's because it was a completely unsustainable program because given the rate at which health care costs go up when everybody has their health care paid for and therefore there's no effective cost control that is three four percent faster than any economy has ever grown for a sustained period so that's just impossible no matter how low it started its

eventual going to be the whole economy and that is very very little to do with tax cuts with the relation of wealth by the wealthy or with anything that happened in the two thousand and eight recession there is a fundamental problem yes it's maybe a few years earlier because the recession but that's really a very minor issue sammy would be coming around because is it because he was certainly oh right and then i want to i want to go to samuel go ahead let me just clarify here. sammy go ahead sam i got it ok. so on health care i mean i think that there is certainly a cost issue and that is in our long term fiscal position in the united states health care is the issue social security is not very minor and so you can be fixed with a couple percentage points of g.d.p. it's just it's a small problem on the health care issue though we have a cost problem we don't have a we don't have a problem with access or we have a problem with access because of costs not because we're delivering you know superior health care you know many procedures in the united states cost twice as

much as they do in other countries and there's no reason that should happen so you know saying that we can deliver health care to the middle class i think is is the wrong way to approach the problem the right way is say we have a cost problem we need to control costs in the united states and we need to provide health care to every american richard you want to put employer earlier is question is how are you going to control our eyes jeffrey go right ahead. you have first of all the question of the jury not to judge basic written first of all jeffrey go ahead ok jeffrey go ahead and have a carefree made a couple of statements about my right so we all agree on one thing we all agree that health care expenditure is going up at a rate that is not sustainable ok so we all agree that we need to do something to try to slow that path to get it consistent with the long run path of the overall economy the question is how and there are basically two approaches one is the command and control approach that europe uses where they limit access to many procedures or they control the prices that which doctors can get reimbursed

hospitals can get reimbursed and so on an alternative is to have patients have much more skin in the game for patients to pay a much higher fraction of the health care that they're receiving now yes europe has kept its health expenditure more moderates by using the command control approach a lot of the cars believe that that leads to stifling of innovation that leads to over time much worse quality health care sector and quality of health that's going to be available that's just and that if we do that in the united states which has been at the forefront of provide low inflation because you know no other country was doing it that we're going to have an incredibly ineffective health care system that won't benefit the middle class it will be the middle class stuck in the lousy commander control system and the rich will buy their way around it so ok that's the wrong way to try to read you want to you want to jump in there go ahead richard. look first of all first of all my only point about the social security report was that medicare is going to go broke even earlier because of the recession and we

have a cost problem in this country all three of us agree on that now all of the evidence the experience of western europe the experience of medicare in the united states there is a working model for a system that works better and then there is a pipe dream and the pipe dream is a magical system where everybody somehow chooses an ideal such as super blend of health care that works it's never existed anywhere the real choice in the real world is care free calls it a commanding control the system in western europe and medicare and so on which is enormously popular for a command and control system you're always going to have command and control the only question is who's in command right now the insurance companies are in command the insurance companies are the that panel is the insurance companies are the utilization review and you lose if the insurance companies are taking over we have a system of perverse incentives for health care providers in this country to

provide more expensive service rather than better service any time we've tried to experiment with this idea of patients having sittin in the game so gone it's turned into an arche for patients and profits for other areas i am not look i spent many years working in the insurance industry i am not morally or even logically opposed to the private sector even in an in social industry but the fact is we have a broken system if you are serious about the united states and its future fiscal health the answer is not to say we can't afford the social contract of the middle class the answer is to say let's get serious about looking at all the solutions to a chronic problem in health care which means not stop pretending that there is a magical solution that involves more of the same and somehow getting a better result. sam i'd like to go to you and kind of broaden this out a little bit here again going back to going back to the term middle class people in

the middle and it least by western european and american standards they're the majority also but where is the political leadership for the majority of the people i mean again if there's the income is so different the differentiation is so huge in the united states but where are the politicians i mean where are the why aren't they there to protect those people because they won't go after the rich but they don't help the the the middle class people but they were elected by the i mean i think even in the last election i figured the republicans were going to go after the middle class and say look the democrats out of this coming out of this recession have not delivered to you and we're the party that's going to do it and i thought that would have put tremendous pressure on democrats i thought it would have been a very smart move politically and i think they would have picked up even more. seats in congress than they did and i think the two thousand and twelve election is i think we're going to see a dramatic swing i think we're going to move you know the obama bounce as they call it that's that's going to be over as soon as unemployment rates you know continues to hover around nine percent and people realize that their standard of living is

you know on static maybe you know a moderate decline is real wages are falling you know so i think that there i think political leaders are really slow to get around this issue i thought it was going to be republicans but i think it's going to be a defining you know the twenty's whatever action jeffrey what do you think about that there is a political will where is the political leadership for the middle class again the majority of the people. well i guess i don't think it is so absolute i think if we look at what's happening in the dynamic in the u.s. we have programs that need to be scaled back but they're popular with the middle class and so they end up not getting scaled back and i hope all ryan the congressman from wisconsin proposed his major scaling back of medicare and the republicans voted for it but shortly thereafter they realized they made a mistake and most republicans went running away from it because medicare as richard pointed out is very popular with the middle class and almost every one of these are getting medicare or expects to get medicare so i don't see that the

politicians are doing such a bad job of trying to represent the middle class as you said there are lots of votes in the middle class so they can to distance themselves from the middle class too much now of course they also do a bunch of things to get contributions from various special interests so of course they vote for some things which are payoffs to various you know people of high income or paid to rich industries and so on banking being a you know a prime example but i think you know the case may be overstated they can't afford to just completely write off the middle class that's where a lot of the votes are ok richard if i go to you the generation of entitlement you know maybe everybody wants something but not everyone wants to pay for it. no not at all i mean i think there are a lot of solutions and it's fascinating i love your previous question because my organization campaign for america's future has been doing a lot of polling polling and studying the polling and actually the much a vast majority are registered republicans registered tea party i do not register

but self identified tea party followers agree with a set of policies that's not only pro middle class and pro social contract but absolutely sustainable and doable economically they they would rather see. taxes on the very wealthiest americans to support the preservation of social security as a currently exist by lifting the so-called payroll tax cap they'd like to see more done to rein in the costs of defense spending there is a there's a whole range of areas where the entire nation by sixty to seventy even to eighty percent majority feels one way about subjects you have leaders of neither party are representing their point of view polls show still overwhelmingly believe that people feel government action to create jobs are going to jump in here we are running out of time many thanks to my guest today in boston washington and in new york and thanks to our viewers for watching us here at r t see you next time and

remember cross talk means. that you can.

in taiwan multis available in the phalangist typee which sounds minimal gulden typee but how it feels a hotel type be sure since might be hotel hotel one shall his big room photo the show which has shown some wolfenstein typee hotel kuvasz and so photo from the hotel the resort evergreens the hotels like the grand victoria hotel glory of prince hotel oil hope springs resort and spa tycoon hotel while she plans on pulse of the town you know that hotel the westin type a evergreen clothes a hotel in thailand thailand as hotel time ambassador type e hotel full points pleasures and i would print certainly the splendid hotel in touch with the hotel in time.