in today as president obama meets with the man slated to be the next president of china here is china's vice president xi jinping meeting with president obama he is also planning to head to iowa and the west coast during his time here in the u.s. now while no major breakthroughs are expected the visit comes as tensions rise between the two world powers the u.s. now shifting military focus to the asia pacific region as china's influence rises there but but as we as we've heard even from g.o.p. political candidates we've heard them praise the country for creating an economically friendly climate now to talk more about this love hate relationship former reagan administration official paul crags roberts joins us now welcome paul so the u.s. at odds with china on issues that range from trade to human rights how can we expect president obama to react to the leaders visit. the.

united states journeys relationship. idiology of birth could you generally. so instead of just accepting an economic relationship china it gets it gets mixed up with the superpowers drive to be the controlling influence in the world and so that sort of takes the economic issue out of its context and introduces an issue in a robbery and that's the real problem and it comes from this neo conservative. american kids enemy now paul now that it is the election year we've seen a lot of ads he china rhetoric but it gets kind of confusing because we do see candidates from michele bachmann to newt gingrich touting some of the aspects of china that make it more desirable to do business there and create more jobs why is

there this contradiction. well you see newt gingrich probably wants to cut the minimum wage drive down wages very talked about having school children clean the toilets and then tristram's and the whole notion from sort of the republican right wing is that. rewards to labor stand in the way of progress in economic development well of course the wages in general far below the american level and that explains the job offshoring which is so greatly benefited the chinese development you know with american firms take their technology and capital business to how they go to chatter and they build factories to produce there to bring back here to sell that the chinese gave all that knowledge and so in this sense the american corporations have a huge boon to the development of the chinese economy. and speaking of

labor and trade i want to play a for you paul this michigan senate campaign commercial that was played during the super bowl and asserting some controversy take a listen. thank you michigan senator debbie started now debbie stand so much american money jobs thank you debbie spend it now i think this race for u.s. senate is between debbie spend it now and can't spend it but i'm pete spend it not bookstore and i approve this message. now that a candidate is taking some heat now for possible racial claims that there is some racial bias and this and this car show but i want to get your reaction on this is there any truth to this ad can kite china be blamed for job losses in the

u.s. is that a fair accusation oh no not really the people who make that referring to the chinese peg of its currency to the doll and they claim the chinese currency is worth more but of course when china biggest currency to the dollar the purpose it was to show that its currency was as good as the day it was a communist country trying to get into a new game and that's why it pegs its currency now and the messages that we just saw is a misleading because it's not so much the chinese goods that are coming into america it's the goods of american transnational corporations who now produce offshore and bring their goods back here so the room the room blame lot is not in china but only american firms who are all suring their production for the american market you see this doesn't come out stead they blame china but at

least half of the imports from china or goods produced by american firms in china in order to sell here and they do it because the lower labor cost means more profits for the shareholders of the merc very much in greater performance bonuses for the management so when you blame china you really are deflecting the attention off the rules problem which is the jobs all suring well so you're saying that the blame should really be focused on these corporations that are sending the jobs overseas and of course they're doing that because it's more. fiscally. it may have been profitable for them to do so they've abandoned the american workforce for the sake of the they their performance bonuses and capital gains for their shareholders and that's what the real problem is right there you see until and until the chinese to change their mind and open their own khana me

to western capital this wasn't possible so it's a relatively new thing and it's really the fault of the american firms interesting also want to bring up another point the obama administration has announced this military shift from the middle east to china especially as china's influence is growing in that region i mean how can we expect china are can we expect china to remain guarded and skeptical of the u.s. amid this new military strategy. well that's what i was referring to earlier this rivalry that the united states feels it's trying to prevent china's rapid rise because it doesn't want to have anyone challenging its position in the world and that then explains so much of what's going on and explains the attacks on iran because john it's twenty percent it's all from iran so if you can interfere with

china's independent access to all you can slow them down that's the reason in my opinion for the whole attack in libya it was to disrupt jonathan it's all investments of the east and libya and so when you take that type of attitude and you start applying it to iraq as a country you're going to create animosity going to create troubles and but they're trying will seem to be coming out of this neoconservative idiology of american his enemy that doesn't seem to be china that it's. raising the stakes like this it's washington. now know paul so that this visit it's the first visit of this with president obama he's slated to be the next leader of china and amid all these conflicts between the two countries how far do you expect this to go in terms of mending the relationships between the two countries and making progress in that area. well i think with the chinese wall that is to develop their economy and

so they don't want external troubles and i would imagine that that would be made clear to all and so then the the it comes back to the americans what will the americans do with. permit this rise or will they try to block it. in the 1930's from japan was to rise in power they tried to block restricted japanese access to energy to minerals and try to do private of the resources that it needed so i don't really know what will happen in the united states whether they will decide that all this world or gentlemen is too expensive and i who are well i guess we show way and the great to have you on the show as always that was former reagan administration official dr paul craig roberts. well the capital account is up next on our t.v. let's check in with lauren lister to see what's the agenda today hi there lawrence

hi liz nice to see you i heard you talking a bit about the china the peace visit to the united states we're going to talk about that to look at the economic aspects of it though we've heard a lot of the campaign rhetoric we're going to separate rhetoric from economic reality when it comes to this ongoing discussion i've heard for years now about currency manipulation and trade we're going to really break it down with professor and author and lee we're also going to talk europe now greece of course the austerity measures passed and another hick up now the e.u. ministers the finance ministers say or cancelling this meeting over the bailout we're going to have a conference call so we're just really highlights that all of these solutions these so-called solutions are a lot more complicated than meet the eye a lot more complicated than they're played to the press we're going to break it down certainly a lot to talk to talk about and look into amid his visit thank you lauren well that's going to do it for the news for more of the stories we covered you can head on over to r.t. dot com slash usa and check out our youtube page it's youtube dot com slash our

team america and you can also follow me twitter liz wall the capital account with lauren lyster is coming up next we'll see you right back here at five. wealthy british style. is not on the. market why not come to. find out what's really happening to the global economy with max cons or for a no holds barred look at the global financial headlines tune into kinds a report on our. resistance to politics but

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costs and already says feeds now in the palm of your. question on the dot com. good afternoon and welcome to capital account i'm lauren lyster here in washington d.c. here are your headlines for tuesday february fourteenth the two biggest economies sat down to the table and missed an ongoing trade rift i'm talking about china's v.p. who is also next in line to president is in washington meeting with u.s. president barack obama at the white house as they do the diplomatic dance we've recently heard tough talk towards china from both obama and republican presidential hopefuls we will separate campaign rhetoric from reality meanwhile the eurozone meeting to talk about greece's bailout tomorrow has been cancelled meanwhile in

moody's rash of european sovereign credit downgrades most were similar to moves we've already seen from other ratings agencies this surprise though was the u.k. moody's is the first big firm to warn the u.k. could lose its aaa status it put it on negative outlook the heavily indebted u.k. is often left out of the euro zone crisis debt domino zone more look at how the chips are stacking up now and how they may topple finally our breasts the new mini skirts last week we talked about the headline indicator for the economy's direction but is that how things are breast implants really a better modern measure of economic mood will give you the evidence let's get to today's capital account.

well folks we have a game changer today or it could be so the eurozone finance ministers were supposed to meet tomorrow over greece's bailout after greece of course approved austerity measures reportedly they'll now hold a conference call the meeting was cancelled last minute reportedly showing the eurozone wants tougher guarantees from athens and here we were thinking and how you were weak this was a done deal once greece got this passed it was just smooth sailing from here it's really showing to us that economic solutions are a lot more complicated than they appear on the surface or than how they are portrayed in the press there's a lot of dominoes to get in order a lot that could topple to this wall of course we've seen more sovereign downgrades so here to help us figure out all of this is founder of credit write downs edward harrison in studio with us i'm happy to see you as always good to be here thank you

ok so this new you know canceling of the meeting when we thought this was a done deal with greece to me shows it to us shows the complexity of the situation you know this was played as to the press and kind of i just think more broadly to the public as once greeks parlin monks once greece's parliament gets this through then this deals done and now you see there's all these other aspects that are set up there's the e.u. officials there's the i.m.f. there's the private sector creditors so what's the likelihood that this deal breaks down because of say private sector creditors wasn't that the deal will happen eventually i'm optimistic that it will happen because basically the alternative is an uncontrolled situation and so they'll do whatever it takes to at the last minute make it happen the rule in a day is as and you know both in the greeks what we've already seen that they have made it happen and then also on the german the fin is that. you know there are

a lot of different constituents to get together there but again you know the alternative to getting the deal done is. the potential for a default credit default swaps contagion to portugal contagion to spain italy excessive and so forth could private sector investors derail this deal they could potentially do real part of the deal i don't think i think eventually what we're going to see is a larger default i think d.c. probably will have to take a haircut i think that you know we're going to have to see greater public sector participation in the deal because we're not going to be able to get as much from the private sector as we initially had hoped oh gee what a shocker there at the banks are going to make out better than everybody else even if there is a deal for refinancing though aig could not be over then i mean how many people how many private sector investors are going to take this to the courts and push for either c.d.'s or push for repayment or bonds of course i mean why would you do that why wouldn't you push for what you want i mean you want to get the best deal for

your input for you as an individual the only investors that are going to actually go with this data are going to be the ones against whom the countries have leverage like the big banks because those are the cons those are the the and it is that will be bailed out potentially if down the line and this contagion with portugal etc and so forth so there's a quid pro quo there look you help us. and we'll make sure that you know everything works out for you in terms of the long term refinancing operation by the e.c.b. in terms of bailouts going forward and so forth sounds a lot sketchy to me you said you think this is going to go through because there's just too much at stake no one wants a default they will push this through why can't greece defaults and stay in the euro zone why is that considered to be you know two separate scenarios where you know the interesting thing in my default scenario. no pun intended originally was the right now you're there for your default an area default scenario for the

eurozone was is that the weakest that is. that would be greece and probably portugal would default but stay within the euro zone but we've gotten to the point where basically the the mood the political mood will become so ugly as a result of the austerity measures that are being taken that the only solution i see as probable is a complete. removal from the euro zone because let's look at greece as an example where you stay in the euro zone one thirty six to the dollar is that going to be the sort of thing though is going to get your current account imbalance is that the sort of thing that's going to stop you from having more government deficits in the future no of course what you really want is you want to devaluation and the only way you can get that is by leaving the euro zone and so ultimately when the time comes after huge austerity these politicians are going to say it's

not going to be the politicians that we see today is going to be much more extreme politicians much more nationalistic politicians they will have amended to do what's necessary for their people to stop twenty percent unemployment and they're going to say we want a devaluation and they're going to go for the you know this is interesting because now we're talking about the political and the social and you know in the past when we've talked about this at work it's always been the banking crisis the financial crisis but now we're seeing more the political crisis and this social crisis and we've seen the political crisis so far papered over by technocrats ok well put technocrats into these governments to handle the financial business and the social unrest we've seen papered over with police of course on the streets of athens there's you know tons of police that are trying to you know do everything they can i guess to restore some kind of order but now that these are getting so big and we've you know papered over everything just to try and push through this financial agenda is it time to give these issues the bigger states the political and the

social issues certainly in greece that that's the case and i think that what's going to happen is that going for. forward the people who are saying let's do what's best for greece forget about everyone else let's get rid of unemployment let's stop the riots in the streets those are the those are the voices that people will start listening to more and more and whether those voices come from within the party or out ultimately what's going to happen is it's going to affect the political position of those in power you know you could see a splintering of parties you could see a reforming of more nationalistic extreme parties together to form a government but coming forward in the next few months there's a huge likelihood that we're going to see a new government and it's not necessarily in their interest to start the whole process with the exact same baseline as the old government they want to have some sort of difference this is why you should vote for us this is why you installed us we have a mandate to do x. and x. is to reduce unemployment and to stop this from happening do you think we're going

to see that more broadly when there's elections in say italy and when there are other elections in other european countries where there is more of this nationalistic wave of politicians gaining steam oh yeah definitely but the question is how how does the economy have to go down before that happens you know greece is sort of the leading edge on this you know they have twenty percent unemployment spain is twenty percent unemployment also there their g.d.p. is in the cloud as much but i would look at spain as potentially a place where you could see nationalism coming to the fore as well and what about portugal this is something a country that we here compared to greece in terms of the situation it's in often but but what is really the deal in portugal i don't know that much about it basically portugal has a private sector indebtedness just like other countries that have her like ireland and spain and so they've had a very uneven recovery and i think in two thousand and ten they actually had plus

g.d.p. and now they're going through a second round of austerity cuts and therefore. g.d.p. is going on employment rate is increasing so as far as the four countries in the periphery that includes italy. or actually let's make it five including italy and spain they have the fourth largest amount of debt actually italy has more debt greece has more debt on the public sector. and ireland has more debt what are we going to see portugal look like greece and at a time i think the for whatever reason portugal is seen as the weakest link and they will probably be next in terms of a debt deflationary spiral the reason of this is because austerity is not a good solution what really happens is that cuts in the private in the public sector are met with cuts in the private sector because people in the private sector

are indebted you know there's a high private sector indebtedness so when you cut over here suddenly the people who are here who want to say who want to pay down their debt they have even less money so what do they do they cut as well so get an a and the whole thing takes this cycle is which is a really great point that you're making ever the one thing i want to ask you everyone talks about these common solutions that europe needs but as greece shows us you know very visually and very aggressively right now that's the situation in every country in the sense that greece is domestic politics are as different as italy's as germany's these are all different countries how in the world is there going to be one european solution that is going to actually deal with the situations in each of these countries will the way to do that is to automate the the fiscal integration you know i think that they're starting to try to move towards that that was you know if you think about the politics of california versus

illinois versus florida or nevada those are states that have been hit hard by the fight it. crisis they have their own politics but you know at the national level they're insolent we're insulated from becoming a talking point because you know you have the fiscal transfers you have complete fiscal and political integration and so one of the keys for europe going forward is to increase that integration yeah we'll see if that happens a really quickly before we go i forgot to ask you about the u.k. that's really the standout from this moody's downgrade has all the other ones that happened from other ratings agencies negative outlook for the u.k. will it even matter though short term because even the u.k. has high debt i call this the u.s. in fact you know everybody else is doing so poorly and people want somewhere that safe to keep their money short term where they can print their own money so is the u.k. going to be ok really from the standard the short term the political reaction from oz born he's the chancellor is going to be look that means we have to double down on our own what we're doing in terms of austerity so short term it's going to

actually be they're going to do that exactly what i told you before spain in the u.k. have the highest indebtedness of total debt is private and public sector together so in an economy like the u.k. where you're cutting you're going to get cuts here and that's going to produce cuts over there so that's going to create a negative momentum but internationally because i've got to go further just mean in terms of the money going in there are people still moving cars because they can print through money that actually means yields will go lower so the reality is they're not in the same position as the eurozone countries exactly they can print money when the economy goes to the yields go lower and that's what's going to happen the similar to the us thank you so much for breaking this all down for us in a way that is very you know good and different at work it's nice to see you out of the united harrison he standard credit write downs. still ahead obama opened the doors of the white house the oval office really to china v.p.

to day but with the tough talk coming from obama and g.o.p. hopefuls to go on china will separate fantasy from reality when it comes to the world's largest economy but first your closing market number. you just put a picture of me when i was like nine years old until she told the truth. i confess and i am a total ghetto princess i love driving hip hop music and pretty. much it was kind of the jester day. i'm very proud of the world without you she has played. oh.

you know sometimes you see a story and it seems so. you think you understand it and then you glimpse something else hears you some other part of it and realize everything you thought you knew you don't know i'm sorry welcome to the big picture. what drives the world the fear mongering used by politicians who makes decisions to break through it's already been made who can you trust no one who is you know view with the global machinery see where we had a state controlled capitalism is called. sessions when nobody dares to ask we do our t.

question morning. welcome back u.s. president barack obama met with china's next leader today at the white house he's china's vice president xi jinping he's set to become head of the communist party later this year then take over the presidency in two thousand and thirteen now bombers reportedly having oval office talks with this is usually reserved for the closest allies now the countries of course have an ongoing economic to for issues like trade and currency here is how obama played that one publicly today but we want to work with china to make sure that everybody is working by the same rules of the road when it comes to the world economic system and that includes

ensuring that there is a balanced trade flow very diplomatic said strong relationship with china is vital some other nice things it's a little more diplomatic than when he played to the state of the union crowd in an election year just recently it's not fair one for manufacturers have a leg up on ours only because they're heavily subsidized tonight i'm announcing the creation of a trade in forstmann unit that will be charged with investigating unfair trading practices in countries like china he singled out china there mentioned china four times during that speech we've heard republican presidential hopefuls like mitt romney do much the same as far as singling out china and saying similar to what president obama did there so here to separate campaign rhetoric from economic reality is an economics professor and author of this book what the u.s. can learn from china an open minded guide to treating our greatest competitor.