in broadcasting live direct from the heart of moscow this is r.t. glad to have you with us let's take a look at your top headlines. mass arrests in new york as police of forcibly dispersed the occupy wall street demonstrators in an aggressive security operation that carries echoes of the arab spring more than seven hundred people were detained after marching onto the brooklyn bridge many protesters claim a police used excessive force. while in the u.k. anger at budget cuts and forced to return seize brought more than thirty thousand

people onto the streets of manchester demanding prime minister cameron's resignation the rally was at times to coincide with the conservative party conference that forms part of the governing coalition. and in our review of the week's top stories president medvedev it says the main consideration behind his choice to back loaded near putin for president in two thousand and twelve is the prime minister's greater popularity the interview to the russian it media has sparked a debate about the country's political future. in the besieged libyan town of syria the humanitarian situation remains critical people are dying because of a lack of vital medical supplies amid fears fighting between pro and anti coffee factions thousands have already fled the battle as of forces loyal to the interim government claimed they are slowly winning the fight. my colleague marina joshua be here in thirty minutes with a full look at your news quote right now next on our t.v. the latest edition of our debate show crossed out sees it peter lavelle and guests exploring whether western social democracies are heading for

a quick and painful death. the first step. you can see. the subtle.

blowing welcome to cross talk computer all about the life and slow death of social democracy in the west an idea once deemed to be part of the very foundation of democratic values and economic prosperity is not only question today but also scorned by some is the west entering an era of radical ideologies and policies the same can see the same. cross-talk the condition of social democracy i'm joined by allan meltzer in pittsburgh he's a professor of political economy and public policy at carnegie mellon university in new york we have richard wolfe he's professor of economics americas university of massachusetts amherst and in chicago across to steve stanek he is a research fellow at the heartland institute all right gentlemen this is crosstalk i mean you can jump in anytime you want i very much encourage it but first marcia this is not the first idea to be batted around exactly at a time when free market capitalism is coming up and uncertainty as it's pervasive

as ever the political and economic discourse in the rich industrialized north. shifting rapidly the current crisis has exposed the flaws of rampant capitalism as well as political forces and power with the global economy is experiencing is not merely a recession it is a nun precedented post work contraction when the developed world's governments first stepped in to socialize debts accrued by the financial markets the public sector was the first thing to suffer education health care public pensions full employment the basic provisions introduced as a bulwark against the precariousness of earlier decades were hardest hit what's really missing is that steer the average of the real way where the fruits of productivity are broadly that's stop. brave new world of sort of milton friedman capitalism the great experiment of deregulation killed that natural

progression that we had going since world war two at the same time however many pundits have sounded warnings of capitalism step and some have even heralded the advent of the never before seen socialism in two thousand and nine the american newsweek magazine wrote we are all socialists now indeed continued financial disintegration leave little choice for western governments but for their baby bailouts and this means government oversight on a scale that would send europe for example back into the one nine hundred fifty s. all the while generations of classical social democracy policies could be raised from the present and future the entire social democracy experience in the west has its origins in assuring that the rise of radical anti-democratic politics like fascism could not mona's societies again as this mindset and policy agenda decline it remains to be seen how the west will protect itself from the worst of ideological extremes to ponder there peter thank you very much for that richard if

i go to you first in new york when you hear the term social democracy and i think that it's fair to say i think we all agree is that it's very much associated with the post-war era that mean the end of the second world war up until somewhere around now but it's a lot of people are beginning to question it so what does it mean to you in two thousand and eleven the term social democracy. well i think it's a leftover of the past it was mostly a reaction not so much to world war two as it was to the great depression the last time capitalism as a system collapsed it was a new policy regime forced on capitalist governments by the mass of people their suffering their anger their bitterness about inequality and it was put into effect over the objections of the business community and the conservatives for many many many years it lasted really well but capitalism in a sense cannot afford it right now is cutting back sometimes over

a period of time that lasts for decades and now because of the latest great crisis of capitalism and acceleration in cutting it back but i expect and i think i already see the reaction there to the beginning of a new groundswell to reestablish a last contract around social democracy it's already evident here in the united states and i think we'll be all watching that as it unfolds in the years ahead steve if i can go to you i mean richard covered a lot of ground there very interesting answer right now you've been on the program before so you go first go ahead. i'm appalled at the nature of what you're proposing first of all capitalism is not die and it is spreading all over the world what's going on in asia in china good luck in america alan we're not talking about tomorrow we're not talking about capitalism for say we're talking about social democracy that's something

a little bit different and is richard pointed out here and you know pretty good record we had a pretty good record for a number of decades now it's a question that's how this program was introduced so we're talking about social democracy obviously capitalism is part of that going on now and i value five percent of g.d.p. is twenty five percent of g.d.p. is spent by the government here forty five to fifty percent in europe that's hardly the end of social democracy i mean the germans have what they call social democracy and they like it and they keep it and it's their form of capitalism and there isn't the slightest sign that i can see the anything is going through road and yes there will be cuts in the budget but those cuts are coming after very very large increases over the last five to ten years so it isn't true i mean we've just passed the health care bill we have a government which is into the army now and there's a lot of people saying look if you look at the budget right now you can afford the

thing steve what do you think about that because i mean there's and it's easy to do you can't afford to leave i want to speak i mean it's easy to praise social the social democracy experiment and it's easy criticize it is well it's a very interesting phenomena go ahead steve. where you were with professor meltzer. in the eight hundred there was a french philosopher an economist named frederick who said government is the great fiction through which everybody and governors to live at the expense of everybody else and i think that's a very good description of these socialist governments that professor wolfe apparently believes are good the problem is that the fiction is dying it's dying because the reality of the bills are coming due governments all around the world at least in the united states north america and europe and some in asia have been spending well beyond their means and the idea that act consumption

can create prosperity to me is i think ludicrous consumption is not creation creation builds prosperity and as we have governments that redistribute income from some and to others we have governments that hinder creation and they hinder innovation but if it's a pick steve it's not clear to me it's fair to say that cheney seriously wanted better me to do anything and take me to one hundred everyone on the panel is that you know we have electorates voted for these kinds of programs for decades ok so don't say governments i mean if we're talking about people voting for politicians to to give me more and more and more and make other people pay for it later or maybe we can surprise some commonality that i read what they did with it i mean it really ends up to me that you can raise your. hand i want richard in new york to go ahead yeah go ahead. let me let me just respond to one thing this notion that

governments act as if they are the origin of what they do governments are elected and under enormous pressure from their constituencies and to explain what governments do without an adult who's pushing them to do what is a very strange logic here in the united states this statement that we can't afford social democracy forty years ago when we arguably began that program in the aftermath of the great the depression we had levels of taxation of corporations much higher than they are today relative to individuals we had income tax rates on the highest and richest americans are far higher three times what they are today it's extraordinary that we can talk about this inability to afford social democracy without noticing the government's so-called inability is because it no longer taxes corporations and rich people anything like it did before when this whole social

democracy got under way of course if you stop dancing those who made it harder able to predators who are then you can't do it is ignoring the. first alan johnson first like i'm very appreciative you guys girls are very very close here arjun alan go ahead. we never recovered from the great depression by nineteen thirty eight even members of the roosevelt cabinet were saying we failed the the unemployment rate is still high we haven't been able to do much until the war the war made a great difference was because for the first time roosevelt have a coherent policy that people expected to continue and that was something that the public shared they don't share government nowadays is not. doing what its public wants it's doing what its interest groups want at the moment those interest groups are the labor unions and this pressure more of big corporations who plays

well really and the labor unions are taking this really makes an excellent go ahead steve. what an extraordinary history meltzer and these are here let's remember one simple fact right in the united states today in the private sector that dominates our economy six point nine percent of workers are represented by a trade union ninety three and point one percent of our working class in the private sector has no union to explain government policy based on the union movement as probably any and powerless as this is a fantasy designed to obscure the issues when we all know that the distribution of wealth and income in the united states has become widely more all right equal right richard let me jump in here is steve resources and he's ready to embrace it and for him and he has no label to lazy to bandy so we want to break go ahead steve the

national labor relations board right now is suing boeing to stop it from opening a plant in south carolina even though that plant will not get rid of one union worker and will in fact create more jobs about forty percent of all government workers are in unions and they are a powerful constituency in this country when it comes to state local and. and the federal government tried then sue me for your obama administration it was treason for them issue or it was only all religions and straight until a although not all americans lay and lay also to private sectors of the union in one space by moving to another which is against the law in the united states that's the issue it has not they had the uprising anybody only all right gentlemen. are you going to embrace we're going to go to a parade and after that short break we'll continue our discussion on social democracy state are keen. to.

keep. we'll. bring you the latest in science and technology from around the world. we've got the future covered. you can. still.

welcome back to crossfire i'm peter about to rise you were discussing if social democracy is dead. ok alan if i go back to you in pittsburgh again i'd like to remind our audience why social democracy entire concept and we call it the welfare state or other kinds of isms that you want to add to it socialism whatever but we have to remember it is a in the aftermath of the rise of fascism in europe in the one nine hundred thirty s. and the great depression and it was a political agenda to make sure that people were inclusive in society where there was some modicum of education people would get a modicum of some kind of health care a modicum of maybe some kind of job but not absolute promises ok but it inclusive thing it was a political agenda we see the ideas of social democracy falling apart in some parts

of the world do you think that that's going to see the rise of radical politics again in europe in the united states. no i don't believe the people of the wealthiest states all remains it will be cut back it will be cut back because it's that we've overspent because productivity is well one because when we transfer resources from bike to high taxes from corporations and high income individuals to welfare programs we increase welfare programs but we lower productivity growth and then we do it with wads deficits we tell people look at taxes are going to go up in the future and that deters investment so that's really where we are and that's where the europeans are and what i see at the moment is a total failure of government to be able to reach agreements about how to solve these problems i don't see a major failure in the private sector i see a guy if they are fessor like alright i'm easy money say all right so instead you

read or ensure you go because this is crosstalk i don't think you agree go ahead. no i don't think a greedy not even a a little bit you know if we were all talking about a constant distribution of wealth and income this might be an argument that would make sense but we have a period of time in the united states above all of a vastly growing inequality of wealth and income with money earned at the top wildly disproportionate to anything that anyone else enjoys precisely because among other things out of a destruction of our trade union movement that's why we have such a low number of people in the trade union movement by the cut on taxes on corporations by the cut of taxes on wealthy people if that was not done if that was the undone now by a no new social democracy compact all of these situations would change and the capacity of the government to pay for these programs would be enhanced and in terms

of the politics let's take a little look the elections over the last few weeks in denmark bringing in a red block committed to social democracy the complete the first time since one thousand nine hundred fifty eight that the french socialist took over the senate in that country is remarkable and here in new york city surprising so many americans the upset of the european masses has arrived in the united states and we're seeing more and more demonstrations that are pinpointing the inequality in the united states that drives and funds government we have is the reaction of his growing sons a lot rizzi all right i want to go to steve in chicago steve go ahead because i like to stress it and i just received what i don't have knowledge of the ways prefer to go to steve here again i'd like to point out is that the whole social democracy project was to create our inequality ok rightly or wrongly for it was done the good way or a bad way that was one of the reasons why they did so go ahead steve you could reply to what alan said and what richard just said go ahead sir right now in the

united states virtually half the households pay no federal income tax. the largest tax fair by far are the very top income earners they pay disproportionately more of their income in taxes and fees to the government. lower quintiles do by many mar by many measures. he hasn't explained that he was only back true and these things are happening we have unions when he talks about the decline of the union in the private sector that is because the unions have failed to adjust to changing economic conditions over the years the unions have not been crushed by governments the unions are losing out as an individual a reason even if he has your size in the early in the hands it was decided to hold your own words they do you can blame it on whatever you want but you can't then

make your own unit when you lose it is going to settle all have it out of hell forgotten the mentality lot of power cells people and government wide. government unions do not the government you know now under the dangerous element not easily because the got even during the well being bush over many of them why it was the end of the line is really only you learned gentlemen we're all talking over each other here ok ok still. it happens on this program i want to ask all of you is it and it would say it when we look at the crisis starting in two thousand a to the present you know we talk about what government should do what they should do but it's really essential banks everywhere very the ones that have called the shots and now i'll give an opinion out now we have socialism for the rich and we have capitalism for the working class and the poor what do you think about that our. i'm opposed to the central banks bailing out banks i mean if people i objected to the eight hundred billion dollars bail out when the bush administration did it i did it

on public television i was invited into the treasury too because they said well what would you do and i told him what i would do i told him the bank needs capital than the capital should be raised in the capital market half of it and then we'll give them concession away if they do but if they don't raise the money in the in the capital markets it dead and will take over the bank that's what i think the europeans should do i think the europeans are wasting money terribly to keep protect their bankers and to prevent the greeks from leaving the euro i've written a paper column for the wall street journal which says that's a fool's policy we need to do much more tightly knit it's all right governments are failing all right richard if i know how do you happen to let this whole region under richard here because it's you against want to go back to the links to against one of these programs and we have to be fair to it was this program we want to talk

about i want to get our insured richard in a new york would you comment on that what about what i said earlier about we have we have we have we have capitalism for the for the working class and the poor we have socialism for the rich because the new social contract is to make sure the rich stay rich ok and they're happy with that we can they have their congress is in their parliaments and their central banks and their pocket they've done very well here they like to say that no had richard then you and i could be contradicted by other guys go ahead richard. yes i think that i go back to the under cutting of social welfare by the inequality of distribution of wealth and income over the last thirty years that also allows the rich to have much more influence as the corporations have that's what we call neo liberalism and shaping government policy and that includes central bank policy what we've had since two thousand and seven when this crisis here is what we used to call trickle down economics the central bank together with the treasury or whatever the government agency is bails out

those at the top the biggest banks the biggest insurance companies the biggest corporations and it hopes maybe that it will trickle down to everybody else we now know all as we enter year five of this ongoing capitalist crisis that the trickle down didn't happen as most of us predicted it would not so now we confront the fact that we've wasted a lot of money bailing out the toc keeping them in a place they could call recovery while everybody else suffers through this crisis and now they have the nerve to suggest that having failed in this critical down policy the solution is an austerity that is not just socialism for the rich it's the worst kind of capitalism for them as a see people and they're not going to tolerate steve jumping go ahead steve. i believe the central banks have been major players in causing the booms they were major players in causing the bus and i will agree with professor wolf that what the

central banks have been doing now is is i think not just wrong it is immoral they are in effect stealing from millions of people all around the world to prop up banks the federal reserve's main client in this country anyway and i'm sure the central banks in europe of the steel the same way are the banks they are supporting banks that should have failed and allan meltzer is exactly right they should have been allowed to go down millions of americans overwhelmingly opposed the tarp but our congress and then and let's remember this was a bush administration with henry paulson from former goldman sachs's executive gave us a tarp that poll after poll showed was overwhelmingly opposed by americans it never should have been done we should all let chrysler and general motors go down and i have no doubt that if they had it happened their good assets would have been bought by other auto makers maybe some new auto makers would or is it would have arisen i

live near what is can osha wisconsin and i was in konoha just last weekend people in this country forget there used to be a big four automakers the big the fourth was american motors which used to be headquartered in into no shop went to notion went down part of that company was bought by chrysler people forget that erica motors used to own jeep i have no doubt if chrysler and if general motors have been allowed to fail other automakers would have bought good parts of those companies and we would be rolling along much faster than we are now all right now we're doing is playing engineer who nasa everyone who weren't. even ran their blood on the ice is going to i should hear our allan if i go to you when we were talking about social democracy is there a new social contract in the air now because of this crisis. the old social contract is still here look this raving about about the income distribution is

foolish nonsense the reason it's foolish nonsense is because he's entitled to his opinion but he's not entitled to his facts the facts are that the reason this yards of research on the question of why the income distribution is spread the answer is because the failure of the education system we just have a large number of people who are illiterate and richard richard i want to give you the last words until i second switcher the last words we're going to claim in the education system is what we used to call blaming the victim this is absurd our education system is starved for money we are cutting back across all of our state university systems the clinton leads. are implementing we spend money on education and even on stats occasion gentlemen gentlemen i want to thank you sincerely great conversation but we've run out of time thanks to my guest today in pittsburgh new york and in chicago and thanks to our viewers for watching us here at the phoenix

time and remember cross talk rules. can. be.