targeted killings of two american citizens abroad and if you missed part of this show or any show today don't worry because our interviews fall on our you tube page you tube dot com slash r.t. america and you can always follow me on twitter i'm at christine for. you. in the. world. it's technology innovation it's all the it's the bell immense

around russia we've got the future covered. good afternoon and welcome to capital account i'm lauren lyster here in washington d.c. and her your headlines are monday march fifth two thousand and twelve more than twenty five billion apps have been downloaded from our store according to the company according to apple is out on a meet has created two hundred ten thousand jobs now there isn't a lot of bureaucratic red tape standing in the way of a developer creating a new application so is this an example of the kind of entrepreneurship and innovation that's possible with capitalism which we see in what could be argued is that america's last three o'clock free market the internet will talk about it meanwhile china has lowered its growth target for g.d.p. to seven point five percent from eight percent trying to premier said in his report

believe the nation needs to shift to a more sustainable economic model cutting its reliance on exports and capital spending in favor of increased consumption but what makes this is dana bill economy really will debate the lessons learned from the mistakes and costs of the u.s. consumer economy hands. it. might be but you know what across the. well we hope his modern nordic tale we have is swept across the world and starts a trend that reverberates here in the u.s. because iceland's former prime minister took the stand in his trial today making history in the first criminal trial of a world leader over the two thousand and eight and answered prices so when will we ever see a u.s. bank c.e.o. or someone like hank paulson who was instrumental in bailing out america's banks during the financial crisis take the stand to answer for their actions we'll tell you what we think let's get today's capital account.

now as i said china has just come out and lowered its growth target for g.d.p. from eight percent to seven point five percent and its premier reportedly said in a speech that the nation needs to shift to a more sustainable economy so one that's more consumption driven shifting away from alliance on exports and capital spending so let's talk about what is a sustainable economy the u.s. noddle as a consumer economy has proven not to be so sustainable as we've seen that huge bubble that burst in two thousand and eight and a consumer economy that has sputtered along since we've seen it take a disproportionate toll the u.s. has for example five percent of the world's population consumes twenty two percent

of the oil according to figures from the energy information administration and people conflate consumerism and capitalism as one and the same but are they and how much of us consumerism is the result of marketing and propaganda better known these days as p.r. because there's a difference between what you actually need and what marketers tell you you need let's look back to the mid twentieth century and look at some of this at play people who are marketed the need for not one car but to. be one expensive car when you can enjoy the freedom of fine. families are. born. and people were market trading in their fridge for new or better refrigerators. you're pretty good so good the grid will also probably cover the ground payment. and p.r.

pioneer edward bernays was credited with marketing or with creating a new market for cigarette companies through marketing getting women to smoke take a look. thank. you but i got out ok. and when it comes to consumerism there's clearly a difference between consuming mobile device apps which have exploded creating four hundred sixty six thousand jobs and for years according to tech net and consuming say s.u.v.s they guzzle gas or flat screen t.v.'s that result in toxic waste that developing countries are left to deal with benjamin barber is here to talk about all this he's a political science professor at rutgers university senior fellow at demos and author of this book he's a perfect person to speak to because it's consumed so first i want to thank you dr barber so much for being on the show and you wrote

a great book which i just showed consume talking about the creation of artificial need so let's start off with that because what is the consequence of that in your view. well let me start by reminding your viewers that in the beginning of capitalism in the fifteenth and sixteenth century it was a remarkable idea because the idea was that if you manufacture and create goods and services that people need you will make a profit and you will serve society so you link together altruism and self-interest in a really good way and for a long time capitalism worked that way but the trouble is it worked so efficiently and productively that an awful lot of essential needs got producer with by the middle of the last century we had in developed countries like the united states most people having already purchased most of the things they needed and at that point capitalism had a problem because either consumption drops off this we have what we need or you have to create not new goods for old needs but you have to manufacture needs and

capitalism today is as much about manufacturing needs to hold the goods capitalism needs to sell as it is about manufacturing goods to meet needs and the result is that marketing and advertising have really become and you ran some old ads that show how that works getting people to want things and even feel that they need things that they may have never heard of the i phone when it first came out the i pad when it first came out the i pod when it first came out were new technologies nobody knew what they were and most people had devices to play their music and watch their videos and so forth but people were talked into thinking you have to have this new gadget it's the thing to have and i read back a couple of years ago on the i pod first came out people on line at apple saying i've got to have this new device it sounds so great can someone tell me what it is yeah yeah now we think it's all fine and. so i want to get to some of the it sounds like you think that capitalism plays a role in this but to give an example and i gave an example in my lead up to that's

where i talked about aborigines and how he created a new market for the cigarette by marketing it merely to women that we're all whole new swath of customers so is this really capitalism is creating this or is this marketing. well the trouble is capitalism today is as much about marketing as anything else because as i say in the old days capitalism provided goods and services people really needed but when it's capitalism succeeds as it has in developed countries in satisfying most of those needs to stay in business you have to create needs to sell stuff that people really don't want or need or even know about so in the last fifty or seventy five years marketing advertising sabotage just says here's a good if you need it buy it marketing is about creating needs there's a famous story about a famous british advertising guy who said i am the perfect customer for a head and shoulders head and shoulders is a is a hair care product for people when you take

a shower and he said i love head and shoulders and it proves that the brand has succeeded because i've been using it for the last fifteen years and i'm bald he says so here he is using his shampoo and shower product when he's bald because he's so stuck on the brand so marketing is about branding buying brands whether or not you need to be attached to brands whether or not they really serve your needs in the trouble is when capitalism is so dependent on consumers buying things they've got to find ways to get people to buy things whether or not they can use them whether or not they need them and whether or not they can even afford them part of the housing crisis that led to the financial collapse in two thousand and eight was that an awful lot of people were sold homes they couldn't afford but they were talking to say no you've got to be a homeowner you've got to do it and then of course when they default and you've got the beginnings of this collapse yeah and i totally hear that they can we i'm

wondering if it's a little disingenuous to conflate true capitalism with consumerism because there have been times where there with capitalism in the united states and the economy was growing part of damp on the industrial revolution and yet this wasn't a consumer based economy people saved people i deferred having. you know getting what they want exactly right and that's why i keep saying that early capitalism was about producing goods to meet real needs and that made money for capitalists and it made goods and services for people but when capitalism succeeds then you've got a position where a lot of people don't need to consume anymore and have to be talked into consuming i mean when president bush went to china a couple of years ago his measure to the chinese was stop saving so much and consume and now adays the chinese have begun to consume more and that is something that americans want to see happen because we have to produce goods for people whether or not they need it and that's the difference capitalism in its original form met real needs and made

a profit for capitalists nowadays it creates and manufacturers needs to sell stuff whether or not we can afford it whether or not we want to and that's a kind of distortion of capitalism but the problem is we live in economic times when consumers stop spending the economy collapses and so we've got to talk them back into consuming whether or not you need things we've talked a lot about oil prices over the last couple of years and talked about the c o two emissions that come out of oil the fact is during this period global warming has slowed down it's slowed down because of the global recession and people use less energy that's actually a good thing for a green environment but a bad thing for capitalism so we have a capitalism that needs to destroy the environment needs to sell more gas and cars and so on in order to keep functioning the bad things that you're describing there with all due respect sound to me like consumerism not actually capitalism and i

totally hear what you're saying about the problems with consumerism in the problems with people just accumulating all of this stuff that they don't need and the artificial need being created but what do you argue that is the solution to that because at the same time you don't want to go when you know living people's freedom or liberty to create things. by the way i mean that's my point it's not capitalism it's a special form of capitalism consumer capitalism early capitalism relies on production modern capitalism relies on consumption that's the problem and it is very tough because you know you do need consumption but here's the thing how about focusing on real needs there are still an awful lot of real needs around the world two thirds of the world's people don't have enough water for example there are new technologies that produce water from which you can make money a lot of the world's water is tainted there are new technologies that filter water and make it drink up all and potable even for poor people there's a danish company that makes something called the life straw with nine filters in it

just for a couple of euros a couple of bucks a couple dollars and it allows people to drink water for a year through that straw the people in denmark who made it are making a lot of money and they're providing a real service how about housing that resists flooding and winds and all of the storm areas of the world during global warming in those areas of the world where so much flooding takes place there's lots of money to be made for meeting real needs so one of the solutions for capitalism is to go back to figure out what the real needs are and begin to produce goods and services that meet those real needs president clinton love to talk about alternative energy we're trying to make money off selling people gas and oil which is very bad in the way it's brought up from the surface and also the way in which it pollutes the atmosphere and creates global warming why not make money off of alternative energy the firms in germany and in china and even in texas that are making a lot of money from turbines wind turbines that produce electricity safely we ought

to be putting more money right capitalism ought to be putting more money into alternative energy you make money then and you meet a real needs right then dr barber does not mean getting the government out of the economy and order to see what real needs are because right now you have an economy that subsidizing the oil industry for example well. get rid of those and feed what the true needs are and the true prices are in energy as just one example. how about getting them into the business of subsidizing alternative energy and stop subsidizing the big wall companies the reason they subsidize the big oil companies is the big oil companies have basically bought both parties democrat and republican the super pacs now you see them at work pushing energy pushing. pushing gas pushing the x.l. pipeline that's going to be so devastating to the environment so it's not that we need to get the government out we need the government to be subsidizing and incentivizing the production of things that meet real needs and not incentivizing

and subsidizing the things that are false need so let's put the government's hand on the scale who are it helps us not where hurts us right now government subsidies go to an industry that doesn't need any oil subsidies because it's already making a lot of money with us producing oil which is very detrimental to the environment and allows us to buy more cars so it's not about government or no government it's about what government does does that help subsidize it incentivize in areas where there are real needs and where it can help real needs be met or does that help the old industries that don't really need that help along because the parties have been bought and paid by those in this yeah but dr barbara it sounds like there's that issue of the government is choosing what needs are i want to continue this conversation it's really interesting we have to go to break quickly but we will come back in just a moment and have more with benjamin barber sr and. and still ahead we're going to talk about banks because no no banks were created in two thousand and eleven so was

that because there is not a desire or a need for new banks or is that because there is a monopoly by the too big to fail well debated the first carrier closing market numbers. it really has put a picture of me when i was like nine years old on the show look through. my confession i am a total get of friends that i love crime and hip hop is a pretty. but it was kind of it but yesterday. i'm very proud of the role the belgian she has played.

you know sometimes you see a story and it seems so. easy to understand it and then you glimpse something else and she hears you some other part of it and realize that everything is ok if you don't i'm trying hard luck is a big issue. what drives the world the fear mongering used by politicians who makes decisions. made who can you trust no one who is you know view with the global machinery see where we had a state controlled capitalism in school sessions when. nobody dares to ask we do our t.v. question more.

welcome back before the break we were having a really interesting discussion on consumerism versus capitalism because they are one in the same we have a consumer driven economy today but how do we get back to true capitalism is that the solution benjamin barber a political science professor at rutgers university senior fellow at demos and author of this book consumed is letting us know everything that he sees as a solution and i want to talk more about it because before the break we were talking about alternative energy we were talking about actual government intervention in capitalism but one thing that we were talking about too earlier and in my editorial meeting was there are always going to be new me and one example that you know i just on the news today apple outs for mobile devices have surpassed twenty five billion downloads which is a milestone and you know for

a developer to develop an app they are meeting a need and they're not creating a lot of waste or physical harm there's no footprint there's not a lot of red tape getting in the way as far as regulation there's not much standing in the way of of someone saying oh hey i think that this would meet a need if i create this app and you go ahead and do it so isn't this an example of capitalism actually working in what many consider to be the last free market in the u.s. which is the internet. well yes and that's not a bad example though keep in mind the internet is anything but a really free market thing it's owned by four or five or six very large companies that do the programs that do the hardware that control the software if you take amazon and google and apple and facebook for example you have an awful lot of the traffic already accounted for and the guys who run those firms are making a lot of the decisions you worried earlier understand why about government telling us what our needs are but as i said earlier these big corporations also sit around

telling us what our needs are and what they're not because they're the ones who identify these things but let me give you a very concrete example of how government can work without interfering with the market but actually helping the market to work. a couple of years ago the u.s. government passed standards that said incandescent light bulbs are bad why are they bad because they use most of their energy and heat that is wasted and very little of the energy on light and so they put into place legislation that said starting this year two thousand and twelve you can no longer have in candice and bulbs well at the time a bunch of folks from the gold market g.e. and others scream westinghouse oh my god are you crazy people don't want these bulbs are forcing us to make bold people don't want the trouble with these new bulbs that you want to the non even candice and bulbs as maybe they'll give off heat but they give us here unpleasant light light they can't be dimmed and they're expensive forget about it the government said too bad we're not going to tell you

how to make bulbs we're going to say they can't be in candice and guess what three years later this year when it went into effect we've got a whole array of bulbs that can be dimmed that aren't harsh and white some of them are l.e.d. some of them are others but the fact is the industry has it that good just like when the government said you have to make cars that get thirty or forty miles to the gallon the automobile industry said no it's impossible for get it can't do it right and the government said sorry that's the law and guess what they're doing it and indeed they're selling a lot of cars and one of the reasons g.m. is back and competing again with other dealers from japan and germany is that they are making cars that run more efficiently the market didn't want them to do that the companies didn't want to do it when they go in and said you're going to have to do it it was done well they got the money for everybody that's why i want to get in there because what that the market and we think we don't want to do this and with it really dumb market it with a jacking or is it the issue of big corporations that have outside power a lot of them because of their political power and that's the problem and that

again is not true capitalism that it was a little power in crony capitalism. i am with you on that totally but the problem is most of what's called capitalism today is crony capitalism is big money capitalism is banks too big details because they get bailed out i mean a lot of the people in the so-called capitalist market complain about socialism but the only socialism i see today is where you get risk socialized banks can't fail taxpayers pay the cost of risk on bad and private profits are privatized so you get the socialization of risk and the privatization of policy of profits the worst possible deal for the taxpayer so what we need is prudent government oversight and regulation that guarantees real competition guarantees real markets and provides incentives for the market to deal with long range consequences that can't make profits from and that's the real problem is you can't make profits initially from

changing from incandescents other balls but in the long run it's better for everyone and the companies do make profits once they make the new bulbs sounds like you're trying to work within the framework of this reality we now have which is currently capitalism without us having the option of actual capitalism the really interesting discussion and i would like to continue with it and with you if we had more time but we're going to leave it there for today that is that benjamin barber senior fellow at tennis. all right before we go we've talked consumerism and capitalism let's stay on this discussion with a couple of the stories that caught our eye opener bringing to nutri our producer in studio and he's holding down the fort first donahoe too because she is still out

she'll be back tomorrow so let's talk about this because sticking to entrepreneurship and innovation and capitalism there were no new banks created in the u.s. in two thousand and eleven making it the first year in decades that the country has gone without the establishment of a single startup lender now before i get to what i really think maybe you know it's possible that not enough eager entrepreneurs caught this truly inspiring video from the f.d.i.c and how exactly to get into this business we're talking about establishing a new. again we're talking about applying for a charter on the one hand to get your license if you think of it lowe's terms. it goes on and on if you want to catch it online but is this problem really more of an issue that the too big to fail banks have a stranglehold on this industry and there is no opportunity for smaller folks to

get in but i think i agree with you but we've covered this a lot on the show covered a lot and we talk about it a lot and that is you have a bank cartel and that's not something that's subjective it's an objective reality if you look at how the banks operate how to organize it's a cartel it's a it's an oligopoly so it doesn't you don't have the same forces that work with the technology space if you're a sort of company you want to create a new game on the i phone platform all you need is the developer's kit for apple and you can do that in the breaking industry something simple even if you had the money to start a bank if you had posits if you had partners that had money to lend out you still wouldn't be able to necessarily do it is it getting worse because there were some new banks created last year this year the new banks are truly new banks they are takeovers of failing banks which is that what is called a day novo bank which is an actual new bank this is the first time i think since. the lowest annual since one nine hundred thirty four this is the first year without a truly new bank since at least nine hundred eighty four so so what is it about

this year about two thousand and seven it's gotten so much worse we're in a contraction of money supply i mean in the sense that you've got a lot of bankruptcy is going on and the banks that are in a position that have actually fed this kind of window we couldn't facilities they can stay afloat while everyone's drowns who is not as well connected sort of makes sense i mean banks like this period of consolidation as long as they can they're too big to fail yeah they were also in fail because by the end of the cheap consolidating edition further that's what we've seen over the course the united states since the photos are boom boom bust and inventions of the biggest the cargo bags banks because they're out and they have consolidated more of the banking industry and even then during the financial crisis it so let's stick to this and talk about how do we have a nordic tail. biking. across. the board. all right so it's not exactly biking but an ice planned this is history making because the

prime minister is standing on trial it started today he defended himself and said he's not guilty but he was answering for his decisions in a two thousand eight hundred. to stand trial to face a criminal trial in the financial crisis is iceland a model of what to do yeah. that's only because they give the banks the middle finger and they said we're not going to let you just take over our country and privatized a leveraged buyout and so on in pieces to the rest of the banks in the city in the city of london and i was absolutely i mean i have been growing i've been through they went through a very short depression but this is what you need to put these people on trial to see who paulson there's a question as to why he had to go forward to recuse himself exactly in the exactly and to add there this years ago three biggest banks face criminal prosecutions they practice debt forgiveness thirteen percent of the g.d.p. was forgiven in debt people with more than one hundred ten percent of their home's

value and debt that had to be forgiven by state controlled banks that were bailed out basically and it's doing quite well really quickly before we go in this tough economy coping with rising oil and gas prices people are resorting to some pretty bizarre things. you're going to come with me. back to the future. where we used to go with god. i mean if you. yeah a lot of people need fuel and as a result the n.b.c. reports that that of cooking oil from restaurants is on the rise it is a massive problem it's happening everywhere from california to maine people and going steeling restaurant oil to make biofuel because there's a market for it because gas prices are so high it's closer in price now there's a free market working and i'm not being sarcastic they're saying what i meant i'll go to kitchens or give you access cookie well i think they're stealing involved so i don't know but i do hear you small producers that at least the control this

market that we're going to leave it there though i'll have time for from everyone here at capital account thanks so much for watching and have a great night. wealthy british style. time. market why not. find out what's really happening to the global economy with much stronger or no holds barred look at the global financial headlines tune into cars report on r.g.p. .