the i.m.f. . and we want to be anti-democratic empire labor and you say that's the whole market democracy but how on earth are you ever going to have a civilized difference from ocracy in the euro is well that is a toxic mix very much so i mean essentially we're dealing with a neil version of plato's republic being played out in central banks i think it's absolutely terrible there's no democracy to just follow up on a point that you made you know i would argue that there is a real structural dimension to this crisis and the response was asian has starved of the real economy of alcohol and entrepreneurial energies that would have gone into innovation previously and as a consequence of that we're not seeing the deployment of this many innovative technologies as we perhaps would have in the past oh nor the development of them so i think you're right to a certain extent it's a false crisis but on a deeper level there is some real dimension to it as well your job and you're going to be i mean i agree i mean every year in general global problem about our financially job and you know financial services about how about

a banking sector you know but i mean if that's true of and i come back to what i said i think i think year at the year i was a currency you know it's kind of it's kind of christ in most of the way you know the sort of. standard view i mean i think that these was working that he imposed it or severely deflationary policies or on countries that could survive it i think you've got to separate issue what do you hate anglo merkel so much i don't hate her it's the fact that you may be interrupt although there are the programs she has bought the banking myth she says we have to give money to the banks and make them solvent if they lose all the money in the bed that make them good you've used the word financialization she doesn't she thinks that the economy needs bankers to run it in to make it work but the bankers pro about this and the reason we're in a crisis is that the debt crisis because the bankers have created irresponsibly not the government to tell banks to be productive the parasitic that's the free market or. soft pay that's the free market our job is to give the bankers enough money so

that when they make bad loans they can do everything they get paid and we're willing to sacrifice the economy year after year we're willing to say so what merkel is an american politician she can deliver her constituency to her campaign contributors and if that's the kind of politics you have a new europe then the american. system the right of the eurozone in referring to old europe the way he says i'm going down the road see while one point which is the best thoughts you scared of the most serious of european banks what would suffer if you know for example i mean it's obvious to anyone that thinks we should default but instead yes hundred seventy percent of g.d.p. it has an economy contraction is sort of the said yeah there's absolutely no way to begin to that it actually if you talk if you are in the bottoms are mostly kind of hedge funds and they're not going to have you paid out to settle on it was that on the year i know that i've been lucky to get fifty cents on the year i. set up something about but i said scared of the losses b.n.p.

and those bank in the restaurant that allowed it to happen it would be much better for everyone if they peripheral countries to default and then if they need to rescue those too bad to go that you could have a debate about afterwards if you do. this you are going to be have to. do it i said why where everything is above board and everyone can see the figures be much better and we have the same issue with sweden and lot of course the swedish banks were terrified as was the swedish government lothians with default i think you're absolutely right matthew we need to get rights on we have to stop maintaining this fiction that these debts are retail they're not just to just take a huge haircut everybody will know what that came so right just cancel the public would actually benefit from this so the banks would take a haircut but just to also get back to the point michael made i mean i think what he was describing was a kind of a functional outcome of the system i mean michael has used an analogy or metaphor before they're about alike and that is of a parasite that actually convinces its host to act in ways that it wants and so we have this idiology that's. as it and that's how the system runs in

a very parasitic fashion you have a column of this who actually control intellectual production and politicians pick up on that and i think many of them think they actually are acting in the public interest so where jeff and i disagree with the europeans is that we're free marketers we believe in what adam smith said adam smith said that no government has ever repay its debt and he was right and we believe that the pretense that governments can repay the debts the banks know very well that they can't repay the debts what they want is now foreclosure time is arrived oh you can't pay give us the parthenon give us your water supply give us your purest land this is the big gray up and that's finances now doing what military wasn't that kind of famous myth of in your view the last thing that kind of is that kind of finance destroying the real economy. well i said this that in the u.s. i mean the assistance the peripheral countries can be paid out days he's absolutely catastrophic for these and for these economies i mean i think you know people just

need to look at the figures of what's happening in places like greece and not just the most extreme example savings happening if portugal and spain you know we see recessions in the u.k. the united states but this is a nine hundred thirty style session this thing is taking on these countries and it's it's completely crazy i don't move all in a lot of very pessimistic note always happens when we discuss the hero i want to thank my guests here in the global policy forum here and yet us love it thank you very much and thanks to our viewers for watching us here arche see you next time and remember crosstalk rules. of the. evening news. if. you're.

interested. in.

this is the building for the converts were called growth of the country this is the bill that will help. the price was. a crisis it just won't go away so with his entourage of american workers in tow obama sends his new jobs bill to congress but with a major bank announcing major layoffs and with such a volatile markets are developed economies on the brink of collapse. and iran is celebrating the launch of its first nuclear power plant thanks to help from russia the celebration for iran begets condemnation from others will dig deeper and have a report from from the grand opening of the blue share of power plant. the world as

you would be able to. but is it really that black and white a decade after nine eleven we'll explore the era of endless wars we are now in all thanks to the so-called war on terror. good afternoon it's monday september twelfth four pm here in washington d.c. i'm lauren lyster you're watching r t well fear in the markets today as investors and economists worry that greece could be closer to defaulting on its debt but it's not just greece there are also worries the ratings agencies may cut the ratings of french banks holding great gone so you can see the contagion there and speaking of analysts say they don't believe the u.s. can be insulated from this stress on european banks economists are already worried the u.s. is headed into recession and worry europe could be the tipping point but in

a crazy were. all during these crazy times president obama took to the calm of the rose garden to try to sell his jobs bill. he got a world economy. that is full of uncertainty right now in europe in the middle east some advance may be beyond our control. but this is something we can control. obama says the control that we have is whether or not lawmakers pass his jobs bill but president obama doesn't really have control to pass this measure with a divided washington so maybe that's why he felt he needed the support of an entourage of this morning he said they were teachers cobbs construction workers who could be helped by his bill but just as he was making these public statements trying to instill optimism and he kind of got

a little bit maybe not staged but coming out at the same time bank of america released a statement saying it was laying off thirty thousand employees to try to slash five billion dollars a year to save that money and this is just part of the ongoing saga with b. of a that's included a five billion dollar investment from warren buffett late last month if you remember to try to convince markets the bank isn't going bust so what message are we really supposed to take away what does all of this mean for europe for america for average folks on both continents well here to help us try to figure that out as a fantasy as an economics blogger also an artsy contributor can help us assess it thanks for being here so greece runs out of money october seventeenth is it going to default if there's a reserve if you will default and currently it's a matter of how you define of the fall because if most people think of the fault as a unilateral default on one hundred percent of its which is not necessary they

could default on the response and they could they could do a haircut but the markets pretty much expect a default of greece because if you look at one year greek government got to believe it's now trading at over one hundred percent so that means if you invest in greece now as opposed to the way your money back. the original investment so so dimitri level with me because it's the markets already think that greece is in to fall i mean i saw bloomberg says the chances are ninety percent and the next five years that kind of supports what you're saying sitting here in the united states sitting in this news room in washington what is that need as an american and in america is this the tipping point it sets the country into recession i mean there are a lot of economists like the roubini who are now being there he originally thought were going to be a double dip but more economists are saying that we are going to be in roubini thought it was going to be twenty thirteen now he's revised medicine and he's moving it upwards so the greek default could precipitate a financial crisis. because the system is so highly leveraged any sort of course in

the financial sector it can affect the economy so it could be the tipping point but it seems pretty clear that we're doing that in that direction anyway in the u.s. may already be in a recession which is something that people say so then why all of this concern over greece it's a small economy it's not one of the largest in europe can you kind of explain why it's bigger than just greece well i mean not the court not to draw a direct comparison between greece and women but lehman was not the entire economy it was just one firm and yet the collapse of lehman brothers sparked a freeze in the credit markets so the default of greece could precipitate theoretically a panic in capital markets because people would get worried about who's exposed so their french banks that are that are potentially on the hook with a lot of that now who's exposed those french banks then who's exposed to the banks that are exposed to french banks so you can cause a psychological panic which would cause investors and banks to go into the credit

markets and. the man more money at the same time not be willing to lend money out which is what we saw in two thousand and eight that's the concern and there's also political concern because if greece were to default it would really. cause the unthinkable because. far people have not been willing to discuss that only lately is it being talked about more and more you know what can we do because there is no real exit mechanism from the euro if you're part of the v.n. you you're part of it supposedly for life ok and it's so we saw how chaotic it was in argentina default on its debt and exited the dollar peg in the case of greece it's not even a peg they've given up their currency and they're no longer just after mastered so it's a very dangerous and scary situation and the greek government simply not prepared for it and they've gotten used to governments in europe have gotten used to especially under like greece and portugal for example gotten used to operating under this european patronage system where they don't have to make as many decisions of the sovereign country they used to in the past they defer to europe and that's what you see in the case of greece

a lot of those leaders if greece defaults to go again. no i don't think sort of surly i mean there are different ways that. the european central bank and the e.u. could go about dealing with a default of greece or an exit of greece portugal or some of the peripheral countries they could break the euro into two different types of euro two or one speed europe and a two speed europe but the fact that no one is willing to talk about that option openly and kind of admit approach where we are with an unsustainable debt like greece has and now the fact that you have one hundred the size of italy which is no longer really able to access the markets the way that they're access in the private markets but the e.c.b. isn't there buying spanish that they've doubled the size of their purchases in insolvent in the last month alone so the fact that you have these countries unable to issue their paper on their own is is frightening for the european union for the euro zone and also for the united states it sounds like you know one of the issues you're touching on its capital requirements and that's something that's an unknown

we still don't know about all of these banks in europe or in the united states what exactly is on their books but it's kind of interesting because speaking of the europe and american connection the c.e.o. of j.p. morgan was saying something about european regulations and the impact on u.s. banks and how exactly to do with that with capital requirements because of basil he said i'm very close to thinking the united states shouldn't be in battle anymore i would not have agreed to rules that are believed totally anti american our regulators should go there and say if it's not in the interest of the united states we're not doing it. are these capital requirements as part of basil anti-american well if america is synonymous with j.p. morgan's profit margins then yeah it's anti-american but think that's all that james brown is all to be concerned about and secondly he's going to talk about the financial system which has grown in importance and it's grown. as a source of economic activity in the united states for the past thirty years so he doesn't want capital requirements to be high just like he came out before the audit

of one of the major irish banks when they were doing their they're operating it was back in march and he said he thinks the capital reserves their reserves requirement should be some around seven percent and he doesn't want reserve requirements because it puts it puts a damper on what the bank can do as far as leveraging up he prefers and a lot of the banks prefer an environment like they've had now which is we can lever up as much as we want doesn't matter and if we lose we just get bailed out there they're structurally adjusted their business model and their profit making mechanism to this new environment which has been perpetual bailouts that we've seen since nine hundred eighty and it just goes to show that perhaps dodd frank which it was supposed to answer big to fail didn't as many economists that i've spoken to have set but it doesn't bank of america prove that these kind of requirements are necessary we've seen bank of america eighty five billion dollars from warren in order to calm markets now they just laid off thirty thousand people to save five

billion dollars is this kind of the poster child for making the case for the kind of capital requirements in basle or bank america is a disaster because they keep coming out and you keep saying that were adequately capitalized which is a story we hear all the time you heard about person right until they got bought out for two dollars a share you heard with lehman brothers up until the weekend that they had to file for bankruptcy so it's a joke that they're coming out and saying there's no one to take it seriously when you have to you have to do is you have to look at what is bank of america doing as you said they're laying off workers why are they going off so many workers of their article we have allies why are they getting money from warren buffett well they say we just want to prove to people that we don't need money. we're asking for money but people are scared and they have a right to be scared because bank of america bought up countrywide they bought up merrill lynch ok so no one knows how exposed they really are and in the case of a contracting u.s. economy that's already in the tank if you were to contract more of them to go back into recession all of a sudden all these assets that banks have on their books that their value x. people are like well what is the real value of these assets the same problem of

europe you have underperforming or non-performing loans on bank books as assets that banks are holding and lending against and the concern is what happens if these things aren't worth what we think they're being worth and it could it could essentially blow up the system so bank of america is a prime example because the fact that it's so heavily exposed to the mortgage market and because it brought up merrill lynch that's a that's a big concern but it's a concern for any bank progressively because all banks are exposed to other banks and that's the contagion effect and that's the fear and the fear that's going to continue would you say though that this bank of america example and what's going on in europe are proof that regulations have just not done anything. you know woman regulations we've seen time and again despite before it could be regulated the banking system right but even the deregulation that they've done banks are found ways to to lever up despite those regulations so we've been talking here and hearing talk about regulating o.t.c. derivatives which are over the counter derivatives right the derivatives market but

that still hasn't really happened and that's a perfect example of the need for regulation because you have all these banks making all these these deals and no one and that again creates the contagion risk because if you have all these side bets that could go haywire at any minute it creates uncertainty and that uncertainty can freeze a credit market so it creates a state of dependency where the banking system constantly needs to be connected to the to the to the umbilical cord of the central banks which is why why why need capital when you have credit when you have in france because of her and so they are connected to the central banks but yet average americans and i'm i'm guessing average greeks dealing with their debt crisis are cut off and they end up losing in the end we're going to leave it at that but thank you so much for being here if you can find us now is economics blogger also an archie contributor and from banks possibly going off line to new power coming on line to share nuclear plant is now on the grid in iran the plant was completed with russia's help it's a cause for celebration in iran but it's

a cause of condemnation from others the head of the u.n. nuclear agency says it is increasingly concerned about new intelligence on iran's nuclear program and reportedly this opening could still dismay some of the usual suspects in the united states israel and europe who are suspicious of iran's ultimate nuclear intentions but are those fears unfounded ivan eland will be here to tell us the first of. all the details about the new plant from iran. this is a truly historic day for iran as its first nuclear power plants in there is joining the national energy grid it's going to start operating at thirty five to forty percent of its capacity that is the plight thirty five to forty percent of energy and it's going to reach the hundred percent potential within the next couple of months now this is something that has been in the making for a very long time this is a joint russia iran venture russia's adam story expert has been vigorously helping the really inside of and construction of this nuclear power plant specially since the one nine hundred ninety eight the opening of the plant has been attended by

russia's energy ministers and also by the head of story expert both of whom have underlines the importance office then sure for both countries now russia's energy minister has said that all of this year of course conducted by russia and iran should be simplistic or nice with international standards. incompetence through difficulties and problems building to share power plants and to deal with can be proud to the results of their drawing the attention of the whole world i'm sure the cooperation in operating the station and developing now the nuclear energy projects will be distinguished by the atmosphere we created working together you have to remember that this is the first nuclear power plant in the middle east so we should never underestimate its importance it's absolutely integral to iran you know russia is going to supply the fuel for the power plants and it's also going to discard off the fuel if this is going to continue for the next three years so russian engineers and specialists will stay at the plans for the next couple of years but then

afterwards they will slowly handed over to the iranian side and then by two thousand and fifteen. the plant will should become fully operated by iran on its own like we said this is a very important venture for both iran and russia and of the there is a lot of hope for this power plant which is which has just become operational in bushehr in iran so out of that whole fear and. nation joining us now in studio is ivan eland to talk about that he's senior fellow at the independent institute thanks for being here so there is a difference between producing nuclear energy and trying to develop a nuclear weapon. well one could lead to the other but in this killer case this reactor is a light water reactor so there's less proliferation danger meaning there's less of a chance that they could use it for nuclear weapons the other thing is that russia is selling the fuel and then taking the stand you

a lot of times the spent fuel can be. used to mean fuel and so that's an added safeguard in this case so i think you know people who say that this is a proliferation risk there might be a little bit but it's not it's not a it's not that much of one i think ok so you're saying that for example when the u.n. nuclear watchdog comes out and says that it's concerned about iran's nuclear intentions when their plant goes online are you saying these errors i'm found. no i think there's some foundation to the fears that iran is seeking a nuclear weapon i'm not sure that this reactor will give them that much help in any time they get its expertise etc but the political ration risk comes when you take the fuel and you can make a bomb with it the iranians have done uranium fuel they have centrifuges going this particular reactor as long as they send the process plutonium back i think they

will be fine or at least it will be a lower risk so i think there is a proliferation danger from iran but i'm not sure that this reactor. adds to that very much so so there's not the fears over this reactor and this plan right now in fact yes in fact if we if the international community want to do something they could allow iran to have these types of reactors and maybe that would get them encourage them to forego the bomb making but we don't know for sure that they're after a bomb but there are some indications and there's a lot of fear among western countries and also the international atomic energy watchdogs that they are ok now let this plan. to iran as promised to play by the books at the u.n. and let them inspect day that's just one example since so they've agreed to play by the rules why is that not enough well iran has been secretive about some facilities not this one but other ones and that's what leads to the suspicion so i say if they

would chant try to channel iran into more peaceful nuclear activities like this where you have the fuel coming in and going out and russia monitoring it and also the international inspectors monitoring it perhaps and there's no guarantee of this because iran is in a bad neighborhood basically. israel with nuclear weapons there's other countries that are clearly trying to get nuclear weapons. there's other countries that are big in important turkey and you know other countries and they have the saudi problem the arab problem so you could see were in there of course the u.s. . there's been some talk of taking out the iranian regime by in the u.s. so iran does have some incentives to try to graft their weapons but you know and it's very difficult to say what would an incentive for them to do to give that

program up but one thing might be to say listen you can have all the civilian nuclear power you want and or international inspection you know this is a prestigious thing for them to so there's no guarantee of that but i think that might be a better way to go than stopping saying sions on them and that sort of thing right so you're saying that they international community should be celebrating with iran this kind of kind of a development when it comes to nuclear blood circulation is worried about it as some people are and i think the united states is excessively worried about this particular reactor and they just saying anything iran we've got to stop this you know because iran is there and we've got to you know this is there and you have to you have to i think think it through a lot why is. the distinction made between peaceful nuclear energy and scary nuclear energy by the mainstream media in the united states and some politicians and maybe you know neo cons in the united states like you're talking about i think just not smart enough to look at this or are there more sinister reasons why i

think when you say nuclear energy in iran in the same sentence you know you can make mileage out of that and i think some people are doing that and the other things there is some proliferation risk and any time you give countries more expertise in doing those types of stuff so there's always some risk but let's say certain things are riskier than others and i think there's a there's a combination of making political hay they're not thinking. about it sufficiently or they may just be ignorant of the details the nuclear energy is certainly very complex and that sort of thing and i don't pretend to be the all knowing all seeing person on either but but i think you do have to make distinctions and the problem with our security apparatus in the united states and in other countries as well israel etc. is that they tend to overinflate threats everything from the soviet union to al-qaeda to iran and i think you know now that al qaeda is on the decline i think you know things have to fill for the security of this china iran whatever

and so. iran has been demonized and certainly the iranian regime is not a very pleasant regime and i would certainly like to see it replaced with a democracy but but on the other hand demonizing it and not allowing it to have certain things and not allow an out saying well you know they do have legitimate security concerns and there are countries that region the arabs don't like most of the arab countries israel doesn't go along with them so you have to you have to say that they do have security interests now so you have to discuss those you have to you have to look at all of those but speaking of inflating the rats and demonizing looking back iran was part of the axis of evil that george w. bush named after nine eleven and our reporter guy in chief you can on the ten year anniversary of nine eleven look back at the justification of this and it and packed on foreign policy sense let's watch. well.