tonight on r t when it comes to the u.s. economy it's a game of hide and seek america's ultra rich look for new more creative ways to hide their money while millions seek gainful employment so whatever happened to trickle down economics i'll take a look at the state of the union. and speaking of unemployment is a clash of two worlds in los angeles lifestyles of the rich versus the homeless we'll give you an in-depth look at the tarnished side of tinsel town. and there are scenes that would make any parent cringe and anaheim rally turns violent when police fire rubber bullets at protesters and even unleash a police dog on a mother and child those disturbing images head. let's

begin with a look at the economy and talk today about trickle down economics how this phrase actually dates back to the great depression but it's closely associated with republican party hero president reagan's economic plan also known as reaganomics or supply side economics in the modern day it's the main argument for those who think the wealthiest americans deserve bigger tax breaks because they are after all the job creators and will reinvest that money into hiring and building more wonderful businesses to fuel america well guess what that is never how things have worked and it's certainly not what's happening now with those bush tax cuts remaining in place in fact a new study has found that instead of trickling down much of that wealth from the world's richest has actually been trickling or rather over flowing to offshore bank accounts take a look at this you can see that blue portion there on the bottom that is money from the united states that flows. offshore accounts four hundred fifty nine billion

dollars in two thousand and two all the way up to seven hundred twenty six billion by april of last year joining me now from niceville florida is karl denninger proprietor of the market sector hey there carl every country of course is guilty here in the u.s. so let's talk about the enormous wealth being made by the u.s. business people and then trickling down but out what do you make of this i think there's a little bit of a misnomer there goes with the sore after all this is after tax income so taxes have already been collected on this money but there is an argument to be made that we have a system where we have incentivized people to be unproductive and bill clinton factor do quite a bit to change this and was rather successful in doing so now a lot of people will look at that and say well you know you have to be president when there was a huge internet boom and that had a lot to do with it really didn't have much to do with productivity improvement in

the in the common man but the fact of the matter is is that he did sign welfare reform legislation that cut the well for dramatically and people went to work so if you look at poverty from a standpoint of people's standard of living and of course the basis is having a job and everything to do as opposed to not there was certainly success to be found in the ninety nine point zero saying karl that you use the word incentivize the system that we have in place right now incentivize people to move that money offshore are you contact the corporate tax rate what are you talking about what's the biggest thing that is preventing these wealthy quote unquote job creators from in fact creating jobs and keeping that money in the united states. well the money goes somewhere this is you know this is a misnomer is that when you keep the money offshore what you're doing is you're funding offshore businesses either directly or indirectly you're providing capital that can then be loaned out somewhere other than in the united states and one of

the realities of capital is that it is a gnostic it doesn't honor flags it doesn't honor political parties it goes words treated well and so if you put in a system that incentivizes the movement of labor into places that have effective slave labor and use environmental arbitrage in other words dumping toxic waste into the air and water where you can't do that here in the united states then it's not a surprise that capital flows to where it can be exploited by those businesses we need to take a very serious look at how we look at trade and now we look at policies related to trade and labor in that area because we're essentially driving jobs and opportunities out of the united states we've been doing it for twenty years but coming back to some of these big companies and these big corporations that twenty years ago were making decent profits the fact is that they haven't had to change their policies to keep those million and billion dollar profits number so karl that these corporations are making more and more than ever before and

a lot of that is because you know they're doing like you say they're opening up factories and india and china where they can pay people nothing these people are still making more and more money. yeah but you can't fix this by trying to tax that money away because you're not going to change the incentives to have the labor there which you have to look at us is this a fair labor and production practice and if it's not we have in our constitution the means to address that it's called terrorists and we just refuse to put them in place because we respond at a government level to those people who say oh free trade is the most important thing on the menu for everybody and the truth of the matter is that it hurts the american worker because those jobs them become uncompetitive to do here in the united states i think a lot of people especially those that we've spoken to has of unions might actually agree with let's connect the dots here i mean how would the wealthiest citizens in this country simply keeping their money here as opposed to sending it offshore how

do you think a change things i don't think would change things at all because the money's already have taxes paid on it so if they were to put it here in the u.s. what would be the difference functionally it doesn't change anything the what you could do is try to tracks it away from people but as i pointed out some time ago in the article i wrote if you were to tax all income over two hundred fifty thousand dollars a year and one hundred percent you couldn't close the budget deficit the problem with doing that is of course the next year nobody would make more than two hundred thousand dollars a year because they would get to keep any of it at all but you're saying you're saying things wouldn't change i mean i think that an argument can be made that these large corporations these really wealthy people if they kept it here and they created instead of two thousand jobs in india perhaps they created eight hundred jobs in the u.s. don't you think that would contribute to change eight hundred new job there. sure

but the way you do that is you make it on economic for people to employ what amount to slaves in india their capital flows back to where it's being treated well which in this case would be the united states actually trying to tax the money away isn't going to change behavior someone who has that much money can simply choose to live in the philippines or go somewhere other than the u.s. they can't be forced to stay and you know we are starting to save one of the co-founders of facebook even left this country we see multiple examples of people with a lot of money getting rid of their u.s. citizenship so they don't have to pay taxes on the profits or revenue that they made i want to talk a little bit more about this report something i found pretty interesting that came out in this report is that africa which we know major problems with poverty you know if some of those oil rich citizens would have paid taxes on their earnings we're talking of sub-saharan african countries they would be in better shape you think about nigeria some of those people who make so much money on oil there what

was your reaction to that. gap between wealth and severe poverty people who really don't have anything to eat tends to be well correlated with how corrupt your government is and so what you have in these these nations is essentially failed states where there is no rule of law there is only the rule of the gun and when you have that kind of thing going on you have revolutions all the time and coups and all the kinds of things of that nature then those people who have all the money get to keep all of it because there is no check system you can impose that works and everybody else goes so that the solution to those problems is the rule of law unfortunately we're seeing united states the same issues arise here in that we have people who have committed financial frauds in gross scale and yet they've not been prosecuted and so you have the same sort of disparate shows up in the united states for the sing basic reasons and speaking of that disparity i think that there's some dots to be connected in the way that the wealthiest spend or hide

their money and also the fact that more and more people are having trouble staying afloat here in the united states and we always like to illustrate this you know with some kind of contrast and we sent our to correspondent rym uncle window to take a look at this contrast where it's quite sharp the city of los angeles california so we'll play his report and carl then i'll bring you back in to discuss. from exotic cars to extravagant fashion the rich and famous give los angeles a reputation of opulent prosperity but just around the corner from this glamour is the los angeles of utter despair here on skid row the homeless live in third world conditions and things they say are only getting worse and feel there is no hope for them they're afraid of the police l.a. remains the homeless capital of the u.s. with more than fifty one thousand people living in shelters cars or in homeless

encampment. like he's saying the shelter you know getting bit every day having scars and scratching and whatnot and it's really bad i would just rather be on the street while mary and her neighbors sleep on tattered blankets just a short drive away are some of the wealthiest neighborhoods in america in this city of extremes the celebrities in the super rich enjoy pampered living in palatial hillside mansions homes like this give los angeles an image of glitz and glamour behind these fences lies a multimillion dollar home complete with a swimming pool and even a suite for a maid the wealthiest rest safely behind their elegant walls while some of the city's poorest face another long night next to a warehouse wall a lavish mansion costing more than fifty million dollars and beverly hills is

thinkable for most people in a city where one in five children live in poverty have time with two o'clock in the morning and my kids were enough with them on the bus not only for some women but after the real estate crash and one hopes beth lost his job as a mortgage loan officer and became disabled now he struggles to feed his wife and their three sets of twins i don't want simply. can't have it while they wait in line for a sandwich las wealthy dine in pricey gourmet restaurants and inside the massive dining room upstairs from. the starling gap between the haves and the have nods is seen in the growing number of families who cannot afford food and housing we've had families that a say but always here and yes that's sad but we're still trying to do our best to make sure that we give them the best that we can give them and definitely connect them with the resources as financial austerity looms those resources are shrinking

it. be those in line for the soup kitchens not grass fed beef and organic curricula who will feel the pinch of california's belt tightening. in this economic crisis ellie's rich flaunt their high end lifestyle while more families fall into poverty making it likely the city will remain a place of fame and fortune but also a great financial anguish in los angeles ramon guillen though archie hey there are welcome back earlier you and i were talking about you know hundreds of billions of dollars that the wealthiest americans wealthy people from all over the world. people here who call themselves job creators are sending to offshore accounts or sending offshore now we just saw in los angeles you know playing out in several cities in the united states actually don't you think there is some connection here with the system as it is today in the u.s.

and a growing contrast a growing gap between rich and poor. to a degree but take a look at what's going on in l.a. most of those palatial mansion is are owned by movie stars well. i sat in line to go watch batman a few nights ago and guess what i contributed to the mansion that all of those movie stars have a californian i did it willingly i took my wallet out of my pocket i paid for a ticket there is there is a disparity here and there is a difference between the people offshoring jobs that result in the kind of poverty that you're seeing here and those people who have a challenge and are being paid willingly for their exercise of that talent so i think we need to look at this from the perspective of the fact that somebody is rich isn't necessarily evil or bad the question is how do they get rich and if they do it by exploiting others well i think that's a totally fair point in los angeles a good example because of the stark contrast sometimes within

a few blocks of each other but that doesn't mean that you know we don't see a similar thing in new york with some of the wall street people who as you say have committed mass crimes and they you have not contributed to their mansions by. paying them for a service they have contributed to buying these palaces by cheating the system by frankly screwing a lot of other people out of money so it is different from place to place. oh absolutely and i have always been a very strong proponent of taking the money that has been gained by fraud clawing it back and giving it back to the people the victimized and at the same time i believe that it is only appropriate that we stop the off shoring resources into places that are effective sleep liebert champ's. fortunately this is something that's very profitable to do all sides of our political aisle refuse to address it i want to take a look it's always good to sort of put some numbers. with what we're talking about

this is a recent report by the associated press basically they spoke to several economists they looked at recent census figures and they determined that if they determine that the official poverty rate will continue to rise from fifteen point one percent in two thousand and ten all the way up possibly to fifteen point seven percent now this is a level just to put this into perspective not seen since the one nine hundred sixty s. so carl i guess i want to ask i mean does this mean that those gains made in the war you know the so-called war on poverty could be wiped out. i don't think the war on poverty was ever appropriately prosecuted if you want to look at it as a war in the first place empowerment is the answer but empowerment only works when people are playing on a level field we have to look at the reality of the world stage and there are a number of nations that do not have the kinds of basic civil protections that we enjoy in the western world including in america it's perfectly fine to have open

and free trade with countries like germany that have the same sort of protections we have it's an entirely different thing when you have it with china which does not honor the kinds of civil protections that america does nor the right to simple things like clean air and water and we cannot allow this to go on this is the kind of situation that has led to this sort of squalor and it is led to the closure of major manufacturing plants the united states and it's the industrialization of our nation these are very good blue collar jobs that a good salaries and they're gone and speaking of some of these blue collar jobs i just want to wrap up today here in washington at the national press club a big event a bunch of organizations got together we're talking the n.f.l. players association the a.f.l.-cio a bunch of other union members and they announced that they're launching a global boycott of hyatt hotel this is due to workers' rights violations and i just want to play really quick what some of those organizers had to say there are a lot of corporations divide them. it will be worse for everyone so far players' union as

a member of the a.f.l.-cio i sit on the executive council. as important as our fight for health and safety to have a company like that is a very very profitable company that keeps asking them to do more and more and more and more it pushes them beyond the breaking point you were talking carl about these blue collar jobs we're selling here and the frustration with labor mismanagement how do we reverse course here. but think that the people of this country need to stop taking the pablum that served off i think the left of the right and start holding our politicians to account we have the right in this country to do that to put those people into office that will respect human rights or grown the globe and stop you know that everyone says will do so much money in politics they buy the basically buy elections the fact of the matter is that you can run all the advertising you want but at the end of the day those corporations

cannot vote only people vote and so if you go to the polls and you send your congressman back to office in november without him making a promise to actually address this and he doesn't follow through on it to get up and take a look in the mirror because that's where the problem is coming from now right certainly an interesting discussion as always karl denninger pyotr of the market tech or thanks so much thank you well let's turn now to a horrific chain of events in california over the last few days several incidents involving police officers taking extreme measures using violence to try to control nonviolent people let's begin with anaheim california police on saturday a person few men in an alleyway there and when those men started running one of them was shot dead by police so he was unarmed and really posing no danger to anyone then as the hours passed and the neighbors began to protest and demand answers from police police responded violently once again take a look at this. they

don't really like maybe the lady living. you see here a bunch of upset residents here police were using rubber bullets they let go of one of the dogs you can see it attacked this man who was just standing by here and also ran at this woman who you saw she was holding her baby witnesses are visibly upset they're angrily angry and frankly many of them say they were scared for their lives i want to talk more about this with scott shackford editor for reason dot dot com he's got i know several reasons journalist were tweeting about this and writing about this over the weekend what was your reaction. i was a bit surprised not completely surprised by it kind of police are getting better at dealing with this but this looks a lot like a another step back but it will take some time before we get all the information

but it does seem. police and orange county police still seem to have some difficulties with managing large groups of people who are not doing what they want them to do but aren't being violent let's broaden it a little bit not just to the l.a. orange county southern california area let's play some video something that happened just a few days before on thursday in san francisco. we have video here what happened here apparently a man who was accused of using a box cutter to try to stab his coworkers at a factory so police show up and at least according to witnesses they handcuffed him and then after he's cuffed shoot him to death and we have been able to confirm all of these details but part of the problem here is that very few people are even talking about this so this happened you know before the shooting mass massacre in aurora colorado and yet got almost no media attention at all why do you think that

is. it depends on how much the public is able to capture police behavior and we've shown that this is extremely important in creating reform about how police deal with problems is it captured on film in this case and in a home we're going to see a lot of discussion about what happened simply because citizens there captured the police behavior and that is becoming more and more common across the country and it's become a vital tool in keeping police behavior in check i think that's a really really good point again not to hammer california so much but it's no stranger to police brutality and we did want to put together some clips of incidents actually captured on camera first of all we're going to show you scott olsen you may remember he was critically injured during an occupy wall street protest in oakland after that video of a bart police officer fatally shooting oscar grant also in oakland and finally kelly thomas

a thirty seven year old homeless man beaten to death by officers in santa ana i want to show this to you and our viewers. was was was. was would have a lot of. shot. was what your what your. was. was was was was. part of my work. was just so i guess i mean you say that this has changed things because it was caught on camera some of these incidents prompted mass protest and yet this is still happening why do you think that is. there's resistance is some of the takes a lot of time and and the only is that we know we know it's happening more

frequently it's not so much so we don't know whether or not it's increasing or decreasing we're more aware when it goes on because of these citizen videos and because these are coming for coming forward we are more likely to know when police in gauging this behavior and we as a community are able to respond and force the police department to investigate this behavior and hopefully in the future and it's a long is a long change for this we will see police officers responding more carefully yeah and that's the thing it is one of the things that people you know come out in mass to protest is not the incident itself but that a lot of times as we saw in the case of grant i believe the officer's name was yonathan as really given very little punishment we saw this with the rodney king these officers are not being held accountable. how does that how does that change i mean we now have cell phone cameras we now have surveillance cameras everywhere i mean do you see this changing or is you know are these officers just so powerful

that they're just always going to be let off the hook. well one of the big challenges are the police unions who do a lot of work protecting police officers from the reprimands of punishment for small behavior or various types of misbehavior that goes up the line and creates in effect in the police department where they really do feel as though they're immune to punishment so it's going to take a lot of work on the community's part and on juries part you know the community needs to not just excuse police misbehavior which happens a lot with the case that happened over the weekend you know there are people apologizing for the police behavior without knowing the entire situation at this point we don't know why they shot the guy in anaheim he had their police there are people already forgiving the police department or apologizing to the police for their people already indicting the police department so people have to first of all be willing to look at the police department as though they're people like the rest

of us who have the right to shoot others well i don't want to hand that you know a good point to make but when you see these pictures scott it's very hard not to indict the police officer when you see them you know releasing whether on purpose or accident they're canine dogs which can be very dangerous and we also have residents there saying these officers knocked at my door and tried to purchase my cell phone video so that no one else can see it this happened several times several different neighbors there saying the police tried to you know buy their video so that it wouldn't be shown can you understand why a lot of neighbors are angry and at the police department. absolutely absolutely there is a lot of response in the police department dealing with with video that's completely inappropriate there are some who are just resisting the idea that they're now going to be videotaped at all times at the same time as they want to increase their

ability to monitor what their own citizens are doing so you're going to see less and less trust the police except this except that the community is watching what they're doing and so does the resistance the more the police resist the more the community is going to resist i think some good points you make about you know some of the neighbors in the in the community members holding officers accountable juries holding officers accountable i guess you know why is it that your organization reason dot com i mean so many as i mentioned earlier journalists were really into this story what is it you think that really sort of resonated with them . that there is like i said before that the video was available and it's amazing how interesting that video also helps the media keep itself accountable over the weekend the l.a. times did an initial story about the end of time shooting that was very kind of

superficial and kind of one sided towards the police video came out that showed a little bit more and we saw today the l.a. times is a little bit more of a thorough story about it so that video helps our local media even become more accountable to what has actually happened and the more the public provides these videos to the media easier it is for us to show all sides of this absolutely totally agree appreciate having you on the show hard at it or at reason dot com. well i want to bring you the latest now in the case of mega upload founder kim dotcom you might remember back in january he was arrested and his new zealand mansion raided and much of this case was led by the f.b.i. here in the united states that he was charged with fraud money laundering and copyright theft among other things and mega upload the cloud storage service with millions of users has since been offline with a lot of users unable to access their content kim dot com has been working to have

those charges against him draw especially since his company is not based in the united states if those charges are not dropped can dot com says he will continue his campaign to get americans to vote against president obama he says the president promised more internet freedoms and instead that the u.s. government has declared a war on the internet to try to get his message out to the masses kim dotcom has a new internet protest is about four minutes long and we spliced together a few parts of it to give you a glimpse. of it and. want to. blame us. for.

became dot com born kim schmitz has launched a new web site guess what it's called kim dot com you want to try to get the word out and starting august first dot com says he'll be launching a campaign trying to rally two hundred million former mega upload users using their e-mail addresses now the f.b.i. says the founder of megaupload game dot com cost hollywood how a billion dollars in revenue he and the few others arrested alongside him face up to twenty years in prison and hundreds of million dollars in damages if convicted. well that's going to do it for us for now but if you're leaving the house don't forget to take us with you just go to youtube dot com slash r t america on your smartphone and you'll never.