it's now at seven thirty pm here in the russian capital with the headlines now a forceful breakup of. the wall street protests gathering steam in america people frustrated over the state of the economy and corporate influence and politics saying it's time now for an american spring. threesome it's going to deal with this deficit in time to meet a deadline set by e.u. creditors that's despite multiple rounds of austerity cuts already implemented by the government. and russia is the latest launch of

a navigation satellite brings the number of its units in over to twenty four the system is now at full strength. all right in half an hour's time i will be manning the helm here about c. but for now it's our latest edition of crosstalk and his guests debating whether western democracy is simply a tool of propaganda and is corrupt to the core and working out. wealthy british scientists. sometimes tirelessly. margetts weiner scandal. find out what's really happening to the global economy in the kinds of reports on our key. list you

can start. listening to the long list. below even welcome to cross talk computer a little 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 live can. live. across the condition of social democracy i'm joined by alan elsewhere 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 we cross the steve stanek he is a research fellow at the heartland institute hard gentlemen this is cross talk that

means 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 is a superb ace of as ever the political and economic discourse in the rich industrialized north is 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 in the president and post war contraction in 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 rise of the real way where the fruits of productivity are shared broadly that's stopped we. brave new world of sort of

milton friedman capitalism the great experiment of deregulation killed that natural progression that we had gone since world war two at the same time however many pundits have sounded warnings of capitalism steps and some have even heard a little bit 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 the further 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 meant to 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 their future 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 it's fair to say i think we all agree is that it's very much associated with a post-war era meaning 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 the answer of the hour right now and even 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 love america alan

we're not talking about tomorrow we're not talking about calico isn't per se we're talking about social democracy that's something a little bit different and is richard pointed out here and already for the record market 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 go ahead alan 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 that anything is going so well wrote it 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 money now and there's a lot of people are saying if you 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 it's easy to really turn to for as the you i want to see i mean it's easy to praise social to social democracy experiment and it's easy to criticize it as well it's very interesting phenomena go ahead steve. with professor meltzer. in the eight hundred there was a french philosopher an economist named frederick and said government is the great . through which everybody and 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 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 they hinder innovation going to sleep but steve it's not clear to me it's fair to say that's a very serious and learned that only going to do one thing and take it and i just point out to everyone on the panel is that you know we have electorates that 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 that say give me more and more and more and make other people pay for it later or maybe we can supply some commonality that

i agree with i didn't want anyone to really answer me. here and i want richard in new york to go ahead yeah. 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 analyzer and 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 far higher three times what they are today it's extraordinary that we can talk about this inability to afford social democracy

without noticing that 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 taxing those who made it harder it will prejudice war then you can't do it is ignoring the issue. allan jump in first i'm very appreciative you guys crossed our 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 who say we failed 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 had and coherent policy the 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 is throughways well ok and labor unions are treated really makes an excellent go ahead steve you're being so let's get john meant what an extraordinary hastily belts are uneasy 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 tiny 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 wildly more alrighty chlorate

richard let me jump in here steve resources. bracing for an escape national a bit lazy abandon these are we going to break go ahead steve the national labor relations board right now is suing growing to stop it from opening a plants in south carolina even though their plant will not get rid of all 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 the federal government tried linseed oil the obama administration and the reason for them issue one hundred is only all religions and so i think you're meant to label them outlaw all americans laying label to products workers over union in one state by moving to another which is against the law in the united states that's the issue it has not they have little pride anybody on your agenda. we're going to go to a break we're going to go to

a break and after that short break we'll continue our discussion on social democracy state party. taking a. stand. oh . it was created to serve public interests to inform and to entertain. these days there's nothing easier than opening a new media outlets but there is nothing harder than revoking its license in case of corruption. and. you can involve in a community where you have one large corporation controlling the delusive pay for

radio stations television stations the cable outlet or you tell me that that sounds like a marcy the public opinion versus f.c.c. broadcast blues on the march and. even the rocks this. sacred. magic is the place. where there is a buddhist prayer. or a shamanistic ritual. crossroads of children a child's. face his strong spirit his heart. can see. the. welcome back to cross talk on funeral delta airlines we were discussing if social democracy is dead. you can

see. ok alan if i go back to you in pittsburgh i can i'd like to remind our audience why social democracy entire concept to me called the welfare state or other kinds of isms that you want to add to it socialism whatever but we have to remember. in the after. 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 a 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 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 and 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 spent because productivity is well one because when we transfer resources from the high taxes from corporations and the high income individuals to welfare programs we increase welfare programs but we lower productivity growth and when we do it with large deficits we tell people look your 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 player in the private sector i see a military lawyer fessor like all right i say only say all right so instead you hear it richard 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 of love 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 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 a poem gone 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 realises the election of destroying so it's a little risky all right i want to go to steve in chicago steve go ahead because i like his message and i just received word o'halloran jesse always preferred not to go to speak here again i'd like to point out is that the whole social democracy project was to cut down on the inequality ok rightly or wrongly for it was done the good way or a bad way and i was one of the reasons why they did so we had steve you could reply to what alan said and what richard 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 and the lower quintiles do by many mar by many measures. but he hasn't explained that he's also not only factual some of these things are happening we have unions weak he needs 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 and present in the joys of the one your size in the everyone handles decide how to build your own words they do you can blame it on whatever you want but you can't then make your new millions in his eyes that will all have a lot of help in getting the government out a lot of powers is evil in government what. government unions do not the government

you know now under the name first element of the government here in the well being bush over many of that is why you are in atlanta as you know him right gentlemen we're all talking over each other here ok ok still. happens on this program i want to ask all of you is that it would say that when we look at the crisis starting in to in two thousand a to the present you know we talk about what government should do what they shouldn't do but it's really the central banks everywhere they're 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 dollar bail out when the bush administration did it i did it on public television and 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 with

a bank needs capital and the capital should be raised in the capital market half of that and then we'll give them concessional aid 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 believing 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 in this are right governments are failing all right richard if i know do you want to let me get this whole region under richard here because it's two against one is all but actually it's two against one of these programs gentlemen we have to be fair it's two again was this problem we don't want to talk about i want to get our insured richard in a new york would you comment on that what not 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 in their pocket they've done very well here they like not so great go ahead richard and then i can be contradicted by another guest 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 on 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 may be that it will trickle down to everybody else we now

know as we enter year five of this ongoing capitalist crisis that could 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 trickle down policy the solution is an austerity that is not just socialism for the rich it's the worst kind of capitalism struck them as a sequel and they're not going to tolerate steve jumping go ahead steve. i believe the central banks have been major players in causing the loans 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 clients in this country anyway and i'm sure the central banks in europe of the c.d.o. 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 decade of 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 they're 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 an ocean wisconsin and i was into an ocean 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 in can osha when can osha went down part of that company was bought by chrysler people forget that air merica 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 drilling is a synergy i mean i want to ask everyone i want you to turn in ray and they're gone and 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 there's a 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 and are on that richard richard i want to give you the last word to carry second switcher deluxe last words we're going to blame 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 universities to han's the clip that we. are implementing we sat down education when he announced it's occasion gentlemen gentlemen i want to thank you sincerely sorry and great conversation but we've run out of time to ask last of my guest today in pittsburgh new york and in chicago and thanks to our viewers for watching us here r.t. see you next time and remember cross talk rules. can.