three stooges free. old free born killers quality videos for your media projects and free media jumped on. the top story smarties another night of cheers goes for a few years after the presidential victory tens of thousands rallied but police had to step in as well and some went too far. politician john mccain calling for strikes on syria despite the political reform already underway in the country. and also headlining from. nuclear inspectors to visit a secret military facility. for israel despite his threat to the islamic republic of europe today this is our team laura lister assesses china's economic successes in tonight's capital.

good afternoon and welcome to capital account i'm lauren lyster here in washington d.c. and here are your headlines for 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 it's out economy has created two hundred ten thousand jobs now there is 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 america's last free at 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 china's premier said in a speech reportedly 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

a sustainable economy really will debate the lessons learned from the mistakes and costs of the u.s. consumer economy and. it is good. for you. 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 this stand in his trial today making history in the first criminal trial of a world leader over the two thousand and eight than and so 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 to 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 his speech that the nation needs to shift to a more sustainable economy to 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. model 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 but 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 i. am people who are market trading in their fridge for new or better refrigerators. part of your crew and there are usually good so good. probably cover the down payment. and p.r. pioneer and bird 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've got on. and when it comes to consumerism there's clearly a difference between consuming mobile device apps which exploded creating four hundred sixty six thousand jobs and four years according to tech net and consuming say s.u.v.s guzzle gas or flat screen t.v.'s that result in toxic waste the 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 consumes so first i want to thank you dr barber so much for being on the show welcome 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 awful lot of essential needs got producer but 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 because 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 sell whole 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 a new ground 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 that i 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 yeah we think it's all mine and that's typical so i want to get to some of the if 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 this where i talked about aborigines and how he created a new market for the cigarette by marketing it merely to women and that we're all

holding a lot of customers so is this really capitalism that 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 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 not just advertising sabotage just says here's a good if you need it buy it marketing is about creating needs is a famous story about a famous british advertising guy who said i am the perfect customer for head and shoulders head and shoulders as it is a hair care product for people when you take a shower and he said i love head and shoulders and it proves that brehm's 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 them being 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 an op a 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 that we're talking to say no you got to be a homeowner you got to do it and then of course when they defaulted you've got the beginnings of this collapse yeah i totally hear that but can we i'm wondering if it's if it's a little disingenuous to conflate true capitalism with consumerism because there have been times where there was capitalism in the united states and the economy was

growing for example in the industrial revolution and yet this wasn't a consumer based economy people saved people 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 it is 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 it real needs and made a profit for capitalists nowadays it creates and manufactures needs to sell stuff whether or not we can afford it whether or not we want to and that's the 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 and a problems with people just accumulating all of this happened 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 limiting 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's 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 a pool 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 euro's 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 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 from needing 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 to make money then and you meet a real need to write the thing dr barber does not mean getting the government out

of the economy in order to see what real needs are because right now you have an economy that subsidizing the oil industry for example now. i'll get rid of those and feet what the true needs are and it's true prices are and energy as just one example. how about getting them into the business of subsidizing alternative energy and stop subsidizing the big growth companies the reason they subsidize the big oil companies of 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 were it helps us hurts us right now government subsidies go to an

industry that doesn't need any oil subsidies because it's already making a ton of money off us producing oil which is very detrimental to the environment and allows us to buy more cars so it's not about governments or no government it's about what government does does that help subsidize it incentivize in areas where there are real needs and work and 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 brought in a by those it's yeah but dr margaret sounds like there's that issue out of that and 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 so stick around. 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's not a desire or need for new banks or is that because there is a monopoly by the too big to fail will debate it but first your closing market numbers.

down by the official ante obligation to join a phone call time from the shops to. buy on the. video on demand. among those. on the registry now in the palm of your.

goal. 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 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 needs and one example that you know i just saw on the news today apple apps 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 need 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 i 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 on heat that is wasted and very little of the energy 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 room westinghouse oh my god are you crazy people don't want these bulbs are forcing us to make bulbs for 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 white 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 they're 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 to get it can't do it 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 that one had to go to and said you're going to have to do it it was done well they've got going for everybody that's why i want to get in there because we're that the market then we think we don't want to do this and with it really the market it was a jack thing 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 won

a little power in crony capitalism. i'm 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 that pales 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 thoughts 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 crony capitalism without us having the option of actual capitalism the really interesting discussion and i would like to continue with a it with you if we had more time but we're going to leave it there for today that is that benjamin barber a senior fellow at demos. 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 when to bring into nutri coziness our producer in studio and he's hold down the fort firsthand 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 are 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 and 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. because 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 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 they're organized so it's an oligopoly so it doesn't you don't have the same forces that work that same technology space if you're a sort of company you want to create a new game on the i phone five form all you need is the developers for apple and you can do that in the banking industry but simple even if you have the money to start a bank you could posits if you have partners that have money to lend out you still wouldn't be able to necessarily do 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 de 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 one nine hundred eighty four so what is it about this year about two thousand and seven it's gotten so much first you think well we're in a contraction of money supply i mean in the sense that you've got

a lot of bankruptcies going on and the banks that are in a position that have actually the fed this kind of window liquidity facilities they can stay afloat while everyone who is not as well connected so it makes sense i think banks like this period of consolidation as long as they can they're too big to fail yeah i want to ask unfairly if they can come by the man on the cheap or consolidating edition further that's what we've seen over the course the united states since the photos are bust and eventually you have the biggest. banks has their power they have consolidated more of the banking industry even then during the financial crisis so let's stick to this and talk about how do i wind it we have the nordic tail. first. across. as they do that. all right so it's not exactly vikings but an ice land 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 the two thousand a panel prices the first world leader 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 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 since been growing to do they went through a very sharp oppression but this is what you need to put these people on trial like this again paulson there's a question as to why he has to go forward through houston so exactly exactly and to add there the c.e.o.'s of the three biggest banks face criminal prosecutions they practice dekker get this thirty 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. i'm going to cut it with me. when i'm back to the future. you know you still don't. i mean 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 stealing 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 the free market working and i'm out being sarcastic there saying what i meant i'll go to kitchens or give you access pretty well i think they're stealing involved i don't know but i do hear you small producers out in l.a. still control this market that we're going to leave it there though that's all i have time for from everyone here at capital account thanks so much for watching and

have a great night.