welcome to the lower show we'll get the real headlines with none of the mersey coming live in washington d.c. now and everyone talk a lot about the economy first we'll have our weekly financial check up with lauren lyster host of the capital account here on r.t. will compare jamie diamond's grilling by the house to that of the senate and we'll talk bank downgrades by moody's then william k. black and soren dayton will join us to debate about where our priorities lie as a nation republicans are waging a war on food stamps at a time when one in seven americans depend on the program and as corporate profits hit highs and wages hit lows what's the american worker to do we're going to all of that morphy tonight including a dose of happy hour but first let's take

a look with me through media decided to miss. well you can definitely tell that it's an election year as we see both political parties trying to outdo one another and paying attention to the latino population this week on the name of getting those precious votes and the largest growing voting bloc today the president gets his turn speaking to a cheeseburger with tito officials in florida the nation's largest group of latino elected officials we'll hear from florida senator marco rubio at one thirty five eastern president barack obama will address the group yesterday romney making his own pitch to the group did his best to rent the president from running up the score is latino voters yes florida senator marco rubio will speak to the group a couple of hours before the president does this afternoon he'll give a speech that could be critical to his reelection because he'll be addressing a conference of latino leaders in the battleground state of florida that romney

going to quickly reform the country's immigration system if elected president romney softening his stance yesterday softening his tone on illegal immigration promising to give green cards to those who serve in the military or who get advanced degrees mitt romney taking a shot at president obama's immigration policy while speaking at a come in of latino leaders in trying to really focus on the economic can do. a latino communities and you left out a phrase he has used in the past self deport he doesn't expect to get the job but his game is to try to create the white majority by which obama wins romney is getting mixed reviews from a decidedly skeptical group that could decide several battleground states for a new poll shows the president has a big now this is definitely an important issue in the latino vote i do believe will make a difference in november but then again you also hear me rail against the mainstream media all the time because they often do treat immigration as solely an issue of votes and completely forget about the human aspect now close to fifty million

undocumented immigrants in this country there's no such thing as an easy solution because we have to remember that these are people we're talking about so you can't just talk about deportation these are children families neighbors coworkers and friends but to be honest that's not what i'm actually here to talk about today it's an ad like to do a little juxtaposition between the kinds of pandering of the mainstream media focuses on and the stuff that they don't they don't talk about the presidential election the women's vote the latino vote the gay vote the religious right all day long because that's easy and it's partisan and all you need is a few talking points but also because it's acceptable now you guys really want to talk about pandering well why don't we take a little trip all the way over to saudi arabia because that's what a number of our top officials did just yesterday while president obama expressed his deep regrets that he couldn't make it there in person defense secretary leon panetta obama's counterterrorism chief john brennan f.b.i. director robert mueller and a few others all went to saudi arabia they were there to express their condolences

over the recent passing of crown prince and i have been up to lizzie's also and they were there to offer their best wishes to the newly selected crown prince soman beloved. that was you guys to think about this for a second saudi arabia while yes a u.s. ally also one of the most conservative oppressive religious regimes in the world for. all of our talk about supporting democracy standing up to tyrants worldwide makes them look a little funny when our top officials all run to saudi arabia to kiss the hand of the monarchy don't you think name me one other country where we see you official us see us officials grovel so shamelessly now he could say israel but at least they have elections right now sure there are obvious reasons for this oil israel being the two most prominent examples hell because the saudi arabia's importance to us interests our officials have still had very close relations with them despite the whole sending army to bahrain thing that whole financing of terrorist thing and once again the whole repressive monarchy that takes oppression of women to entirely

new level thing and sure you can call it real politic that's just how the world works you pick and choose your battles and your allies all based on their value to you that's just like you do here in the us right with voters but just once i would like to see the mainstream media actually bring that up have an entire panel of peninsulas sit there spit talking points about the strategy in which party is going to benefit more than again when it comes to national security there is no difference between the two major political parties these days anyway i guess we'll just have to remain wishful thinking on my part because the mainstream media no doubt will continue to miss. it so it's time for our weekly financial check up and as usual in these days of economic crisis and unchecked wall street corruption there's a lot to talk about so first to revisit yet another hearing j.p. morgan c.e.o.

jamie dimon had on the hill and this time he was in the house so was there a difference in how he was treated and are two different chambers and then moody's announces they've downgraded fifteen of the world's largest banks that includes bank of america citigroup and morgan stanley and then again who doesn't love a deadline time prime minister mario monti has said that there is just one week to . save the eurozone so armageddon here we come. joining me is lauren lyster host of the capital account here on our t.v. lauren i want to start the banks want to start this downgrade fifteen of the world's largest banks how big of a deal is it really considering that a lot of this was expected right if anything some of the banks probably did better in their stocks because the downgrade wasn't as bad as they thought it was going to be that's right so i would say to put this in the context of your intro this is perhaps the furthest away from armageddon of the things that you mention because

when it comes down to it these ratings agencies have been out yapping about downgrades for a while it's become a bit of white noise and with these particular downgrades they had been telegraphing that they were coming for months so so people have been expecting this the market has been expecting this as you said they weren't as bad as expected which always seems to factor into how the market reacts to information and at the end of the day i just don't see this is that big of a deal that much different from the white noise of downgrades we've seen in the past on top of that the ratings agencies they don't have so good of a rap i mean. they don't matter anymore they don't care what the ratings agencies have to say they've already missed so much that everybody kind of says too little too late is that at least i don't know should we be comforted a little bit in the sense that they think that something's out there and gauging into risky behavior others have a more conservative financial model and so they're trying to reward those that

aren't as risky or no that's just kind of the way that they want to sell it well no because i think that if you were taking that argument people would say that the banks have been improving their capital situations improving their risk situations and so why is moody's being aggressive with downgrades now i mean that's an argument that i've seen you know whether i buy it i would use the. they're young i mean is there i mean is there an answer as to why now well i mean there's a lot of macro economic threats there are threats coming from europe there's threats of that are a big picture along with assessments of what's going on with these banks that is on their books in terms of risk taking i mean the one thing i would say because you know you mentioned jamie dimon who is on the hill this week and this will trade that is brought the spotlight on to risk at least for the public consciousness is kind of the takeaway is how do we know what kind of response are taking i mean derivatives can be used to hide risk because you say ok these are what's hedging my position but it increases your risk because derivatives can be very risky and they

don't necessarily offset the position that you had and so that's not a hedge that doesn't reduce risk instead it actually builds it there's off balance sheet transactions that high risk to the london whale trade just shows that that went undetected for however long there varr models which they change which are how they evaluate risk value a risk some of my guests have called it a risk because they don't know the very assumption that they could be used to measure risk james records who says that i've got to give due credit but the point is that that was missed so risk can be hidden at all of these so ironic then j.p. morgan for example didn't fare the same fate as let's say big america or morgan stanley or citi group they seem to be in this little grouping at least according to moody's of what they're calling the middle ground the safe haven banks like they're still not as bad as the other guys over the that's the refugee tried to give j.p. morgan all along and then came along. to go along with that maybe that's true j.p. morgan is the biggest bank in the country in my view it has an implicit guarantee

of the government because i think that if it was a real danger the government would have to step in if there was some kind of credit crisis that was instigated as a result so hey maybe j.p. morgan is a safe haven because at the end of the day it's got the biggest line to the government is it's the biggest bank that you could see perceive as too big to fail so in that way maybe it is. i are no further backwards here i was really now well let's continue so i've gotten to the last week we had our financial check out because he was in front of the senate banking committee and it was just it was embarrassing these guys were not grilling jamie dimon if anything some of them were grovelling in front of him and they were asking him for his advice what kind of regulations for the instituted in saying that you know sometimes the banks do better than the government does when it comes to keeping track of their money and it was just it was bad and so this week he was in front of the house and let's

take a let's take a look at some clips of what happened. you know we're not too big to fail we believe that a bank should be bankrupt a bill and that when a bank fails that the claw back should be invoked and if it doesn't mean you should they're going to call back the people responsible if your compensation in the pot that's going to be considered for that but also said it would be solidly profitable quarter relative to earth it's not the question is that i would please don't feel for you gambling i would you lose the house once. that's been my experience would invest. ok barney frank you know a lot of people described it when i was when i was going through the reports the house is more feisty. i guess what is that relatively speaking to the very very low bar set by the senate a week earlier because by all accounts this would have been in a bubble without the senate this would be the one that was cast as the you know

overwhelmingly. that jamie diamond got by u.s. lawmakers because it was so much more of the same with an exception of a few better attempts at political theater from people like barney frank you could argue at the end of the day congress is investigating there were plenty of people lining up to sing jamie diamond's praises to try and get him to come do business in their district and it just all seemed like the same kind of love fest that do we see the same kind of connection in the sense that you know we broke it down by the numbers with the senate banking committee we did in the sense that so many in the committee chairman some of my committee members their number one donor morgan you have you know the manager of the committee who is a former j.p. morgan lot of the it was the same thing here well the house committee is a lot bigger so i guess it seems like you know there might have been more opportunities for people that weren't so entrenched with j.p. morgan but there are definitely absolutely still those connections so the chairman of the house financial services committee spencer baucus j.p. morgan and its employees and our it's our his law largest contributor yes the vice

chair not as much so a little variation there but overwhelmingly there are still massive connections of one hundred sixty eight thousand dollars in the two thousand and twelve election cycle came from j.p. morgan to pass through pacs and employees to this committee to in-house lobbyist with j.p. morgan were either on this committee or were an aide to a congressman on this committee three that are outside lobbying outside lobbyists lobbying for j.p. morgan were former staffers related to this committee and as jack a verb. off the super lobbyist who i've interviewed said it's those staffers that are the good ones when it comes to the revolving door and being the good lobbyist once they've left those were the ones that get to stand the spotlight a little more away with it so let us move on to europe and there is this doom and gloom we have one week left to save the entire euro zone statement from mario monti when at this point is it getting a little you know it was a historic election in greece too and at the same time after some people breathed

a sigh of relief after greece there were concerns about spain so it's kind of like we're back to ground zero right nothing has really changed so can we really take these these ultimatums these dates these deadlines into account the same way it's becoming a little boy who cried wolf ask isn't it looking back at the headlines because this came out you know one more week according to the italian prime minister who by the way is a technocrat one of those put in place to push through the e.u. desired reforms but looking back we've seen these headlines for as long as i can tell you know in november it was all the red monetary economic bureaucrat who was saying europe has ten days and then d.s. k. . in december was saying europe has three weeks and then in may there was a newspaper headline forty eight hours and george soros to give a little more credit in june said europe has three months so we're still within that timeframe but yes i mean we keep seeing these deadlines and then europe keeps muddling through i mean the big picture is that at some point this isn't going to

be sustainable in the same way anymore but when that happens is anyone's best guess i mean it's not to discount the problem as it is riddled with by any means. to freak out every single time that we hear this these kinds of dates thrown out aren't that great thank you. guys it's time for our first break the night stick around because we'll have more economic analysis for you we have black and soaring data be joining us to talk about the priorities that we have as a country will talk about corporate profits wages and food stamps after the break.

our let's continue talking about the economy tonight while the eurozone crisis may feel far away for a lot of americans and j.p. morgan's london whale trade might seem a little hard for some to comprehend we do have some charts night that show real world effects on our economy here on where we are as a country so we need to think business insider they put some of these together today and so first look at this chart that shows you that corporate profit margins just hit an all time high that means that companies are making more per dollar of sales than they ever have before now while corporations are raking in the dough they still are managing to do it with fewer american workers and they used to in fact fewer americans are working now that any time in the past three decades and then if we move on to our last chart shows you know wages as a percent of the economy are also an all time low so factor in all that all that along with the battle being waged against food stamps and we have to talk about

where our priorities really lie these days so joining me to discuss it is soaring dayton republican senior strategist with new media strategies and william black soci a professor of law and economics at the university of missouri kansas city and author of the book the best way to rob a bank is to own one gentlemen thank you for joining me tonight and so so i want to start with you just piecing together all these charts that we have here in terms of corporate profits in terms of wages number of american workers what would you say the overall conclusion is there. it's important i think there's a couple of charts that are actually missing from the one which was actually run by the atlantic a couple of days ago based on the mckinsey study which shows that there are similar patterns across basically all of the developed countries and the second thing is that much of the corporate profits of all the american based multinationals are coming not from us in revenue but from global sales and revenue and off in the

developing world and so the issue here is american based companies are making their money by selling soap overseas you know. one and number two across the entire developed world workers aren't getting as much and this is probably globalisation this is probably technology but you know the business insider piece by henry blodget focused on the u.s.'s back and i think that's wrong because it misses the fact that this isn't a fundamental feature of the world we live in and nobody seems to have any policy answers to it yet but i think you could say that it's you know directly applies to americans the way that we see things because we hear so much about outsourcing right you can find workers that will work for a lot cheaper because you don't have the same labor laws and expectations and whatnot in other countries and so you know as globalization increases that we kind of keep it seeing it skip across the board from one country to the next but i mean is it can it be kind of cut and dry william and i want you to come in here too and

saying that the fewer american workers you hire probably the higher the higher your profits may be. well it is correct that this is a phenomenon that is occurring in much of the developed world old and that's very bad for most of the developed world the basic economics are that of productivity increases you expect the benefits to go at least in substantial part to the workers and that that can happen without inflation and over the last about twelve years that has not been happening very much at all and that means that inequality is grown through virtually all of the developed world as my colleague has been explaining but not good news for the world that's bad news for the world yeah i would say that's bad news for the world so how do you describe that to people how do you tell workers why it is that the inequality is growing so much that your lot

in life just seems to kind of suck these days because it seems like wages are going down. overall. this is a fundamental political problem that we are facing all over the world and as of yet i'm not sure anybody has an answer and it's compounded with the fact that at the same time global inequality is actually being reduced sharply because africa in china you know there are people who are doing much better and frankly being able to buy our stuff and so it's a real tradeoff and the tension is one of the you know honestly i can't point to a political leader anywhere in the world who has what feels like a serious answer to this question i know will you would you say to anybody out there hasn't it it's kind of hard because there are a million economists making different predictions every day there are a million lawmakers that are spinning it in one way or another and so you know what would you say does anybody have a vision that you think works. yeah i think part of the vision as you just heard

again from my colleague if you look at profits they're occurring to some extent in the international sales but where they're mostly occurring is in finance so finance is supposed to be just an intermediary a middle person and the efficiency condition for a middleman is to take minimal profits and get the money to the right productive uses instead it's going to an enormous share of profits in some years up to forty percent of total corporate profits to finance and on top of that finances misallocating those resources causing bubbles destroying wealth and then sending much of the remainder of wealth away from developed nations at least less skilled workers in favor of less skilled workers elsewhere in the world and that combination has been sort of a triple whammy for many americans in the middle class working class so would you

say i mean what are some of the initiatives that we've seen out there aside from perhaps taxes on capital gains and about this these robinhood taxes that we've heard about are you a fan i have a feeling you're not i'm not a fan and frankly i don't see and i'm not sure that. that's the problem per se i mean i don't think the problem is that people are trading financial instruments of some sort or another i think the problem is probably that you have these sort of parameters to the trade whether it's you know poorly regulated things or reserve requirements of some sort or another and you know number one and number two there's just no way there's going to be a sort of robin hood tax on the form of a couple of basis points on transactions like that's just not passing in europe and that's not passing here and so we can have this this conversation at a level of abstraction but it's not realistic one of the a lot of the. aren't passing and that doesn't necessarily mean that they're bad

ideas of sure we have not solving a problem we do have partisan gridlock and that's part of why problems aren't being solved and so now i want to get into this other discussion. of food stamps and so what we saw even with amendments being brought up. to the farm bill of trying to cut food stamps out at the moment they're almost one in seven americans that are depending on how it stands for a very tough economic times and so why have all times would now be a good time to cut down well there's there's a couple of concerns i think in some ways the largest is. really a reaction to a structural problem in our economy that we haven't come to terms with there are a lot of people that we are very afraid aren't going to enter the workforce and that's going to mean an explosion of a variety of entitlement benefits that were previously intended for a relatively small number of poor and so i think what what the going to do and more informed us the the republicans are looking at this in saying geez we don't want

this to grow like mad and we're at the beginning of a discussion about how we reshape that night and i think the the amendments offered over food stamps are a really the beginning of a discussion and i you know i think very few people think that's going to be written into law but it's a way to force us to talk about the consequences of the structural change will be hard to tell trying to read into law but i don't know really what do you think about this preemptively we're trying to cut off cut off food stamps for americans just so that later on it doesn't become a problem even though right now it's actually so many people do that their livelihood depends on it. this is incredibly bad idea so in answer to your first question just lead into this what we need is jobs programs to get people working. and you get income out in the end you get a faster recovery and you get a lower deficit so that's the when when instead we are sliding two thirds policies

of austerity even though we've seen those policies of austerity put de euro zone back into recession utterly gratuitously and so attacking. food benefits in the midst of the great recession you know what i think is a relative to the weak recovery from it is not simply mean spirited and it is being spirited but it is also incredibly destroyed economically and why we would want to go down the path of europe seen the how disastrous that path is is absolutely beyond me i mean to me it kind of reminds me of the entire voter fraud national i.d. law thing that we see going on right now where voter fraud is an actual issue and there aren't really you know statistics to back that up and so often they're the argument that we hear from republicans to you is that you have people that is taking advantage of welfare but then if you look at certain studies maybe from the u.s.d.a.

they'll say that that people abusing the welfare system are those numbers are also at an all time low right now that somehow isn't that like the people like yourself square away corporate welfare and yet we have to tackle it live we can't really have a welfare for the poor because we don't want them to take advantage of it where where did i say i was for corporate welfare i mean to me to be clear i would log in i made it i would live a very long if i was learning it probably why you probably think though are you ok with some of the loopholes that we have there i would love to get rid of a lot of loopholes you were talking about we're talking in the context of farm bill we could wipe out most of the farm bill which is corporate welfare and in fact there was one proposal in the senate to go. clearly separate the corporate welfare i think this was a amendment by senator to me to separate the corporate welfare from the welfare for the poor and deal with them because i think frankly the corporate welfare would have much more trouble standing on its own if we were only talking about support for the poor as opposed to support for wealthy multinational seed companies would

be in a different place and unfortunately though that's those are also those pipe dreams in congress these days right and that we start hearing talks of eliminating certain corporate loopholes but they never actually come to fruition why do you think that is why i am. well let's get to the real litmus test will the republican party support eliminating the too big to fail organizations right shrinking them to the point where they no longer receive this implicit federal subsidy which is enormous and sometimes measured in the trillions of dollars so right now j.p. morgan in the others are the new fannie mae and freddie mac. the republican party has often criticized fannie and freddie of i've often criticized them as well so this is a potential area of agreement under conservative policies under libertarian policies we should not be subsidizing institutions like this but we are massively doing so and pretty much economists across the board think that's

incredibly risky and likely to cause the next crisis so is that the type of thing we could get agreement on i have to wrap it up in force exactly how to break the gentlemen thank you for joining us tonight well am i i don't know that seconds in traffic at a stop on the side of the road so thanks for making it work thanks guys. hard just to have a show the senate doesn't want consumers of making informed decisions so find out which industry they're doing the dirty work for in our tool time aboard. news today violence is once again flared up. these are the images the world has been.