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tv   [untitled]    January 12, 2012 4:31pm-5:01pm EST

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lead to this. we're talking about herd mentality indoctrinated group think did this help cause the two thousand and eight financial crisis and does this continue to threaten the system today will break it down plus can you imagine it doing your monthly budget meant building a multibillion dollar hole well that is what the u.s. treasury does every single month it really is december is deficit today it was eighty six billion bucks the never hasn't been positive since two thousand and eight as for what plan for saving federal dollars is getting an award from the president well even though nasa is taking the prize let's just say this is a rocket science we'll tell you when let's get to today's capital account.
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ok we know the drill the u.s. is falling behind other nations in education but what impact is this having on the u.s. economic recovery and the problems with american education are they really what we think well first let's take a step back to see how the u.s. stacks up here are some fun factoids i found today from the o.e.c.d. the usa ranks sixteenth in proportion of young people with a college degree and a group of countries that the o.e.c.d. includes about thirty four american students ranked twenty fifth in math and twenty first in science compared to thirty industrialized countries america's top mass students ranked twenty fifth out of thirty countries when compared with top students elsewhere in the world higher education costs in the us are the highest in the o.e.c.d. area and here was a particularly depressing part of the report about who will fill those expensive
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spots as for beta verbatim with forty two percent of fifteen year old students scoring below proficiency level three in reading it will become increasingly difficult to supply institutions of higher education with students who are able to follow and complete their studies oh great so basically american students are becoming too dumb even to go on to pay more for college than in any other industrialized nation this is led people like us president barack obama to stress education is important we've heard it here is an example and yet as many as a quarter of our students aren't even finishing high school the quality of our math and science education was behind many other nations america's fallen in the proportion of young people with a college degree and so the question is whether all of us the citizens and as parents are willing to do what's necessary to give every child a chance to succeed. but what exactly does education as we think of it lead people
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to achieve we all know people with advanced economic degrees very smart folks who maybe have a low standard of living they're not exactly living the life so what's missing from the syllabus how about the pursuit of wealth and legacy building modern politics and power structure technology class consciousness how about a focus on learning to break the rules are those lessons that are keeping hardworking smart students from going on to garner the wealth influence and connections of say the vampire squid well let's see because deafening out of his role as heavy hitting financial analyst today reggie middleton is stepping in as educational analyst turns out add to his bag of tricks he's also been a teacher for his kids we're going to hear why he is so hard on the educational system today and what some of his solutions are reggie it's nice to see there in new york looking good as always but thank you very very much all right so you're a financial analyst we are used to you coming on here and sparing no words when it
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comes to something like goldman sachs and what the vampire squid is missing when it comes to financial analysis but what inspired you to go after the american educational system. i don't see them going after them as an american education system i'm pretty much calling it as it is not have experience with it i was born and raised in america i have three children and i've been through the education system of these four times per say between myself and the city children. at first i was naive thinking that the american education system was not working. and. with that ideal you know you bang your head against a brick wall. and once you take a step back and learn basically how things work you realize that the education system is working if the goal of the education system is to create fodder for the higher kepler's classes to increase their wealth basically you need to foot
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soldiers to fight a war and that everybody could be a general and that in a nutshell if i had to encapsulate it in one sentence what the american education system is doing unfortunately as industry changes and you go from industrial and many said society to information basic services. that model that mindset tends to fall apart and that risk having the entire country fall behind potentially for by other countries in terms of economic output so let's really break this down because kind of the core of what you've got to in your blog post that you were recently was that academic education is not the solution you kind of just talked a little bit about why you went on in your blog to say that this is creating an army of slaves or a slave army of rule followers so what really is the solution to that that you
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think will help people actually advance as opposed to becoming workers. the solution is to teach the students in school how to be successful in lieu of teaching them how to pass the test with said space agree and power preparing students to work for somebody else now success as a definition used my personal definition does not necessarily comp is being making more money money that somebody else success is basically compassing the goals with the goal should be freedom and happiness in a capitalistic society it's very difficult to have freedom independence without any some form of wealth so it would be very difficult to a growth of the equation but i also don't want any of your listeners to think that this is while they're for money like wall street movie which is not that they're going to and i want you to make that distinction because you were writing about you know money is that you teach your kids money isn't to buy things you're talking
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about the importance of money in a different way what do you see money and wealth as achieving in this society economically for people. well i tell my children. simply tell me the money is a proxy for labor without money you have to work and if once you gain money or capital you can use that money as a proxy for your labor and potentially others labor when you ask those who are this is a very controversial topic but i'm going to come out and say go for a lower economic ladder on a low around you as many have as many people what money was the purpose of money the first thing out of the mouth is to buy things you know monies to buy and then name you know consumer electronics you know jewelry cars etc but my from my perspective and i believe in perspective of those who are successful in building longer term legacies and building a lot of money is a proxy for labor the more money you have the less you have to work. yourself and
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the more money you have the more control you have over the. sources of labor the productive income and it's leverage it builds upon itself moderate amount of money because it's more money which becomes a large amount of money would be gets more money because we have a large amount which causes a significant balance between the wealthy and those who are not but if the schools are truly doing their job they would teach people basically what money is teach people class consciousness and create a dash for mobility where everybody would try to climb up the ladder versus being content sitting in a cubicle making somebody else wealthy now everybody cannot be wealthy you know you need to be you need those in the you need those in the top but if those who are in the top able to remain there static in the status quo without any competition and then the quality of those on the top ten to state. that in general
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creates a stagnant comp country what you want is constant competition for everybody to. up to the top of the letter and then you have three people on the that are there one hundred people you want to fight with one hundred people that you don't stop to get that letter you know you want to vote for five people competing out of one hundred three and you may have the diversity and you make the point with people up there on the top staying the same getting complacent that that is really the real threat where countries that are hungry for this that are fighting for this are fighting to be on top that that's where they're going to make gains over the united states and that's a real problem right exactly exactly in that show ok so let me ask you this then because you're talking about incorporating things like wealth the pursuit of wealth class consciousness in education what about the fact you know you even point to a sociologist who talked about the power elite and what they do how they move up the ladder and they use their connections they use their insular access to
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institutions to move up in a way that other people can't so how are average people ever going to be able to compete with those kind of connections and that kind of status. well one thing is to learn you look at nobody in general. everybody has an equal opportunity to network to form to. insulate that opportunity so if everybody if you take this world and shook it up and threw it on the ground everybody would start from scratch everybody would probably have of similar opportunities some will climb up and some won't those who have climbed up or going to create mechanisms to prevent competition because they want to be knocked down from the top of the letter one way to get up there is to learn how everybody else got to the top so if you learn how you but it's got to the top you replicate the methods that they use to get to the top that should be the purpose of schooling ok put schools don't teach that they don't teach you how to get to the top you know you first grade you every fifth grader doesn't learn entrepreneurism
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a school they don't structure class consciousness they don't use they don't learn geo political power structures you know these things before you know you talk to a kindergarten first grade teacher and there are some of them are still stuck on things such as penmanship and grammar you know of course there's a place for that but when you have entire school systems entire cities focused on how to pass and that they make test first is how to make more competitive children then you're breaking the system and you could be getting you know also rans in the school system you know you bring about a lot of what he gets paid just one at this point nobody that i know of personally gets paid for passing taking a test i can't think of one person it might be different down in d.c. but i don't think it's people taking tests i don't know anybody that gets paid for taking a test either but i do know people that get paid for breaking rules and i think it's interesting that you're bringing this up because it's a conversation we've had here amongst the capital account team because let's just
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say that i work with some rule breakers and i've noticed the limitations of always growing up being taught to follow the rules just do what you're told be to straight a student that's how you excel that that's how you succeed and then you get it out . into the real world and you really learn the value of not always doing what you're told and you see how much more that can actually get you in terms of innovative thinking and taking the actions you need that's my two cents i want to continue this conversation with you reggie because i know you think that this all plays into some of the economic problems we're seeing some of the group think that is continuing the economic problems we're seeing i want to get into all of those discussions with you we're just going to go to a break but we'll be back with more with reggie middleton. so at eighty six billion that's the whole u.s. treasury has to fill from december so no wonder the federal government had a contest to try to save some money the winner though no shocker there a guy from nasa but just wait until you hear his scientific solution first your closing market numbers.
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you just put a picture of me when i was like nine years old i want to tell the truth. i'm a confession i am a total ghetto princess i love driving hip hop is a planned trip. but it was kind of the jester day. i'm very proud of the will without you she has played. oh oh oh. oh. you know sometimes you see a story and it seems so you think you understand it and then you glimpse something else you hear see some other part of it and realize everything you thought you knew
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you don't know i'm charged welcomes a big picture of. what drives the world the fear mongering used by politicians who makes decisions to break through that sort of a being made who can you trust no one who is you know of you with a global missionary see where we had a state controlled capitalism is called sessions when nobody dares to ask we do. r t question more. back to independent thinking here is one of our favorite examples of it that we
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caught on to take a look. at the girl. who doesn't. if she's really got that figured out on her own i just hope it doesn't get stamped out but is society and our education system stamping it out and when these people grow up to be wall street analysts for example what are they missing entrepreneurial investor reggie middleton is back to tell us reggie i want to bring you back into the conversation. as far as the people that have grown up in this educational system gone to the best schools or the best families or made it there and end up on wall street you talk about a group think that this is led to that has contributed to economic the economic crisis in two thousand and eight and some of the economic problems we see today how so well. when everybody crowds to one side of the boat it is
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a matter of that boat is going the correct direction and flips over. that's what happens when you don't have diversity diversity genetically from idealism or even weight distribution on the watercraft and that's basically what happened during the credit crisis and the. ten year old child ok you can sit there and look at the. incidences of the events that led up to the crisis include pointed out this isn't right you know this is unstable and i don't think it's going to end well but despite that you have a raft of ph d. award winning analysts bankers central bankers politicians regulators the cetera who somehow did not see this coming despite the fact it was the largest run up in the housing in the history of this country even greater than that of the cold despite the fact you had credit flowing to dead people getting mortgages and despite the fact it was easily seen the reason is everybody was taught to do the
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same thing look at everything the same way even as the bubble sort of busting you had obviously and some of it such as bear stearns how many and this had a sell on bear stearns. but for months before they went bust nobody i think from that mistake and i think was the only. public declared a person of the sense of it the same for lehman brothers there were two or three other investors who were a student of us who did it safely for general growth properties these were obvious imbalances in the system but they couldn't be seen because everybody was taught to look at things the same way at the same way they went to the same schools with the same professors the same curriculum with the same deals graduated went to the same banks using the same trades with the same methods and techniques the same message there's no diversity that lack of diversity creates you know a lot of the system so harvard degree didn't mean that you were going to see the financial crisis coming and in fact
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a ton of people missed it. how is this playing out today because you're talking about two thousand and twelve predictions how a lot of people see kind of the broader threat to be iran you have your eyes on another country entirely tell us who it is and why. yes i think maybe the biggest threat to stability would probably be germany for the mere fact that germany is the linchpin that's holding the entire sovereign debt debacle together and you have a lot of such as banks in insurers who are highly leveraged into european nations and you have these european nations. who are trading at discounts of up to eighty eighty five percent of part of what they were issued it was such large just. losses the profiles of these financial companies have taken losses of nine ten twelve percent but you would think the losses would be much much greater the reason they haven't been greater is because they are also invested in germany which gives them diversification germany's bonds are trading have traded very recently negative
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which means you literally have to pay germany to lend the money yeah right so because germany's bonds of went up so much it has counteracted the losses of many other countries now the issue is germany is in the explanation which means they export they make their living economies trials of exporting to their trading partners which is the balance of the e.u. china japan and united states all their major trading partners range from having a hard economic landing to going in a recession or being in recession to actually risking quasi semi depression so if you're an export nation and your job is exporting and the people who are buying exports are broke you know things are not looking up despite that they are trading above par at issuance so what happens if you just have the bonds come back to trade what they historically traded that over the last several years if you did that you have to take
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a thirty percent loss in ten to equity which means there were thirty percent less instantaneously that's just if germany were to go back to a normal trading range and the profit in nations that are spread to germany which means that training for less of. only goes down greece portugal etc will go down significantly more that wipe out the equity of many sure banks pension funds etc so imagine if you know woke up one day and none of your insurance claims you couldn't pay your insurance benefits are totally wiped out and your bank just didn't open and that it's a scary bird veggie it's a scary world it's a really interesting point you bring up going back to the point of education though just because i want to get to that before we go you kind of tried your hand at trying to make an impact make inroads in this area you taught a class for your kids in schools when you were seeing the impact that that all of this was having on them and you ended up getting a boot from the principal because it was just too successful in your words so do
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you have any hope that the education system is going to change i mean it seems like a real pipe dream to put into schools what you're actually talking about thinking they will need. well it won't change without a significant paradigm shift basically the system has to be said you know you do understand what i said when for sort of the interview the education system is working in a way it's working to create. a quasi caste system of workers to create role for those higher up on the food chain. and that's why when you said when you were at the school you were taught to follow the rules and do this and do that you know to understand the rules are there for a reason those higher up in the food chain create rules to keep you walking the path that they need you to walk if you break those rules you compete with them if you follow those rules you make them wealthy well it's a little bit there how far away are saying reggie you really believe that's a little conspiratorial i got to run we're almost out of time but do you really believe it's a concerted effort. well what i would call conspiracy i see it as plain vanilla
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that's realistic the rule as. you should go and get a job and work for yourself and stick with one company you do that will become your entrepreneur competing with those who own that company if you had a choice and you own the company make a rule that says try your best to be entrepreneur and compete well come work for me in the queue google and make certain weights with security and security is lead security because you see companies going bust regularly now it's a good point so do you think it's conspiracy or there's a logic behind it well i think that you have some good logic behind it i appreciate you being on the show and sharing it with us or because it's all really interesting stuff i'm glad that you took off your will you still have your financial house on but this is an interesting way to apply it that we love all the cowboys that are part of the herd here on capitol account thanks reggie that was rising middle ten entrepreneurial investor and a boom bust blog. all
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right before we go let's hit up a little loose change with our peanut gallery here our producer dimitri kofi anan and shana donahoe in the control room because the treasury released its monthly deficit today just a little trivia the number hasn't been positive hasn't been a surplus since two thousand and eight luckily the government came up with a contest to save some federal dollars so who had the best plan well it was a guy from nasa check it out. it's like using a tool shed everyone has one at their house and everyone has a toolbox when you need a hammer you go use your hammer and you bring it back together over there was the.
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yeah it is a brilliant idea was to create a tool library for space projects so nasa wouldn't have to buy this same tools over again can you think of one thing more pathetic this is the most. solution that i've ever heard i mean come on that just you know where you stand i don't think you would enter a contest with this when the prize that you don't know is that just out of this now there's actually a story if it's true but apparently the us spent a million dollars or something some extraordinary amount of money developing a ballpoint pen that could write in space right because normally you get the info drop with gravity the russians that have a pencil. so. the government looks for ways to waste and spend money this guy would basically care just want to just think this is all tools to just reuse them but i wouldn't think of that we thought we had to waste money all the logs that's what we do this guy is obviously of pissing off a lot of contractors down in florida but none of it's going to get out and he's
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like the whistle blower for waste fraud and abuse if you like allowing the was law they're going to fire their brain making i'm going to do is shut up like we make money from waste so shannon do you want to weigh in here. just a correction on the space time it was only twenty dollars we're talking about the space pens space you're talking about development are going out there i go but i don't know cause more than twenty bucks to guess so i got in here. but there's a you're wrong one hundred percent guaranteed we're going to look it over for we're going to get. you know why you're going to get out later we'll let you guys know who i want to move on to this story because the barclays capital study says the world skyscraper mania over the past one hundred forty years is actually not paying off it's an indicator of an imminent financial collapse the study points out the new york construction boom that the chrysler and empire state building came out of the pursuit of the great depression also dubai built the world's tallest building before having to be bailed out by. the question of who's next we don't know i mean
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china is home to fifty three percent of the hundred twenty four skyscrapers currently under construction. and i don't know what you think you think this could actually be a predictor of financial crises who's trying to build the tallest skyscrapers and wasting all their money there's no question command ever learns from the tower of babel remember what god that he destroyed. and he spread humanity across the globe they were all babble about different languages something that we had to do by the challenge and they're trying to build these cathedrals the space for god to become deities with credit credit being the kind of magic carpet for humanity and i don't see it working there a lot neither does barclays but maybe that's changing because there was a report that architecture majors are the most highest unemployed coming out of school shannon what do you think this played out you mentioned chicago you seem to be convinced i mean chicago has the world's first skyscraper back then obviously it was only ten stories but we all know how chicago's economy turned out not doing so
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well that's a far show that will have to let you figure out if you think this correlates that's all we have time for i'm lauren lester from everyone in her capital account. have a great night we'll see you tomorrow be chair to check out our web site you tube dot com slash capital account in the meantime to see anything in it. if they shoot something inappropriate for public they can easily be shown to. cast his was ok. i wish he would have never happened but it has. been a war a t.v. camera becomes an unnecessary what does their own safety all foreign nationals including journalists and inspectors should leave. and the sclera berthoud ones with such witnesses i got him on my site. ready.
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to. shoot her shoes shooting on our. well see british study done some time to write for the. market why not. find out what's really happening to the global economy with mike stronger for a no holds barred look at the global financial headlines tune into cars a report on. the official t. obligation. one pulled time from the. life
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on the go. video on demand all keys minefield goals. and omissions feeds now in the palm of your. machine on the dot com. well it's no secret that war is an ugly business but rogue u.s. troops can't seem to stop make singing business and sick pleasure is from bob graham photos of the newest video coming out of afghanistan showing troops urinating on dead afghans are images like these feeling anti-american sentiment in the middle east. and don't read into it the new york times the so-called icon of american journalism is getting the facts wrong again this time about iran's nuclear program scared readers into believing that the country is creating weapons of mass destruction will read between the lines percent. forty.

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