Skip to main content

tv   [untitled]    January 8, 2013 8:30pm-9:00pm EST

8:30 pm
covered you can check out our youtube channel that is youtube dot com slash r t america you can check out our website that's our t.v. dot com slash usa and follow me on twitter at liz wall for now have a great night. well with. science technology innovation all the moves developments from around russia we've got this huge you're covered.
8:31 pm
good afternoon welcome to capital account i'm lauren lyster here in washington d.c. these are your headlines for wednesday january second two thousand and thirteen happy new year two thousand and thirteen we're back let's reflect on some of the economic predictions that never came to be last year so our thinking can progress pragmatic capitalist colon roche is here to explain why some folks were wrong about inflation as an example and what the fed's overly optimistic past predictions mean for its future guidance and we have heard about it add in. the senate strikes a deal on the fiscal cliff but not before we the fish really fall off the cliff just two hundred so just. your charger meaning it is now the house that.
8:32 pm
you are dear smart viewers i'm sure already know about the deal congress reached then that it leaves lawmakers wrangling again in a couple months over the debt ceiling and the spending cuts that they delayed but when it comes to the reported six hundred billion dollars over ten years in new revenue this deal is said to raise never mind the new deficit that creates what does that kind of money by any way we have a reality check plus why is the government involved in keeping the price of milk was no part of the fiscal cliff deal involved of burning what some have dubbed a dairy cliff will discuss and wall wrong cliffs we have five phrases we'd like to retire this year that's in loose change let's get to today's capital account.
8:33 pm
so the fiscal cliff has been averted kind of by a deal that pushes more wrangling into the future by a few months so all say the play by play of the twenty four hour cable network news that we are hearing and will continue to hear for at least the next few months let's move on to something actually interesting though for the most part it is a new year time to reflect on how we can it be better in two thousand and thirteen when it comes to the way we think about the economy money capitalism q we and just take an assessment of where we are heading into this new year what we maybe got wrong last year so colin rusch is here to help us about the founder of or can financial group and author of a blog you may know pragmatic capitalists or capitalism use me so first thank you so much for being on the show we're happy to have you here. or are you are you
8:34 pm
happy new year so let's just a little bit touch on the fiscal cliff and then we will move right past it we didn't go off it exactly still more deal making to come in in a few months on the debt ceiling and on those spending cuts that they pushed off in terms of the sequester ration that was supposed to go through we do have some tax hikes we do have some permanent bush tax cuts i don't know what's your take away on this deal there. are. basically. really been a problem here the whole. people standing on. the bench was almost. we're going to get in the rain maybe a little more. if it was you
8:35 pm
i think that. probably. you were not. all. right. a lot of. what the lawmakers and what they feel did manage to do is help lawmakers avert headlines today of markets plunged under their points on lack of fiscal cliff deal but as you said the actual meeting is really nothing to write home about so let's talk about something more interesting any time these kind of discussions come about about the fiscal cliff or or whatever it may be we're talking about prescription for the economy we hear plenty of ideas about what it takes to stimulate the economy or help the economy improve whether it's that the government needs to spend to make up for what
8:36 pm
the consumer isn't spending or whether it's the government know we need to cut spending to shore up the budget and get rid of some of these deficits or the magnitude of them or they need tax cuts to stimulate the economy now all of these are driven by economics theory by economists and their models but you argue that they're kind of a core problem which is that you can't really separate policy prescriptions from ideology of whoever that economist is or that school of thought is that giving a policy prescription so how so like explain that and also you know where is reality fit in. one of my big problem was the sort of the. economics that we have in the you know that you have to this is made up of really depends who you are who they call it in the song was cool and it was basically by. one guy when he bought a saltwater visor that. was all the. number and the two schools
8:37 pm
really dominate the entire field of economics not even their paramount is that we do basically outside the wire brushing. and i think that the problem with the fire is that. so much of their discussion is basically around. and around the political ideology for the most part the chicago guys tend to be a little bit smaller about energy more than they were focused on monetary policy and the. salt water guys and the more you know the name you know the the similarity between the two schools is that they all start with policy and i mean that you know the marchers always focus on. the pond. focus on. the treasury spend more money you implement some sort of.
8:38 pm
help me pond work do which i think it was both its policy agenda if you will the real world guard was the real work so when i started to do a lot of my work. a lot of the what we're trying to do with. them is what we call and now. we're starting from. we're starting from. the. not in the monetary system and really getting it out of. our system works. our agenda saw a lot this was a world work with a monetary system. this is. core to the role of the party but we're not really. ok we think that monetary policy will
8:39 pm
power were dispersed and ok you know the thing. to our work is the work done. is more broken rather hear what your focus on the descriptive rather than what we hear were so many schools of thought which are both descriptive but also prescriptive which are saying you can't really then separate the ideology from that so then tell us your reality what are people missing about the monetary system and their version every ality that doesn't necessarily gel with what's going on. yes i think the biggest myth is actually more of the current economic model is a bank. is that your focus all or. they really don't. think of them in their economic model for the most part. broader work with the focus of the most long banking system because the banking. i
8:40 pm
mean credit is the life. is the primary form of money just part of. its beauty supply. hebrew or god. called make money by creating long and they do this who are are without a government. with more of our mom. and the law with a lot of modern economics that you just have to know for with that all this from the boss who signed on is in the human body. in the grass. growing more or. more understand how to. work with them. we need to serve them because it's their world our also exacting sensibly performing our show our short when that circulatory system isn't
8:41 pm
performing well the fat comes then and is i don't know what you would compare the fed to the doctor that then support the circulatory system gets the blood pumping or so we're led to believe so you know what. i got here is that but i am but i'm sure it's very very very funny i'll let you fully respond because what then is the role of something like and federal federal reserve stimulus or cueing what does that actually do because the idea is that that gets the money to the banking system . good and then lend the money out and get it you can main straight for businesses or individuals are or what not but what do you think then really is going on with killing. the weird sort of entity because the primary purpose but actually really for a while. actually go back to the way that it was. actually being brought into one market what we call inner bank markets now and
8:42 pm
they think we really are all a person has moved with the sound process from the way that we are that our colleagues you know i buy. if i go out and buy a new car and i think that you know the more. things that are going to mark up the bank. almost as bad. for the store that the. sound from. that in the hundred days with the column a lot of who's. going to be involved in the last five years is the. south bank marketing the action. on the. home is the sum it's not. actually have any impact on policy.
8:43 pm
quantitative easing or are i think. it's why. you meet with monica. were far more who you meet you know i think. we. are you know. are in. wrong. or were you making. then you are home. where your grades. aren't working because her assets or what's more. or. marginal. in the world you need is remote already you know the sort of.
8:44 pm
more negative impact on the. area there and when we get back we're going to go to break but i want to talk more about the ways in which the monetary system is misunderstood as perhaps lend itself to wrong predictions that we've seen in the past year or so some more color and then again in the past year or so some more color and then it also still ahead how jack did new tax revenue from the fiscal cliff deal pay for take a guess do not google it will tell you after the break and put the fiscal cliff deal in context plus more with our gas call and growth first or closing market numbers.
8:45 pm
thank. you. the worst you're going to face. the white house of the day a radio guy and a lot of male minestrone they all want to watch what we're about to go get you never seen anything like that i'm telling.
8:46 pm
welcome back so we're talking about monetary mechanics and this issue of monetary mechanics brings me to economic predictions that never came to be with the fed's unprecedented actions starting back in two thousand and eight and since we've had many a prediction for massive inflation one that our guest was writing about was a gentleman named robert murphy who made a bet in two thousand and nine as the story goes that headline inflation will hit ten percent by january of two thousand and thirteen that is now it hasn't done so here's just a look at the consumer price index for all urban consumers just for a little context so you can see that it's not anywhere near that mark and we don't need to single this guy out ok plenty of people thought this would happen i'm sure there were many of bets like that so what are these folks missed and what we're talking about missing predictions the fed has missed the mark on plenty of its predictions ok here the fed's forecast of growth versus actual grow ok which would be more funny and less concerning to us if it weren't for the recent guidance that
8:47 pm
the fed issued wish included for example that the committee currently anticipates that it's exceptionally low range for the federal funds rate will be appropriate for at least as long as inflation is between one or between one and two years ahead is projected to be no more than a half a percentage point above the committee's two percent longer run goals so i don't know what could be the impact of the fact fact that the fed is in accurate with its predictions it is basing its guidance on the let's ask our guest colin rose because we're talking all about the monetary system and how it really works in the role of banks so cool and with that first issue of inflation predictions predictions that we would have massive inflation by now what if people kind of missed well run. over. or. lower.
8:48 pm
it was going to be very much. that. we think. if you look back and look at my work i think that something like the earth that our banking system and our private sector. who are misunderstanding of the way that we intervene in. burma and we're. doing is they're swapping for every bond. with the people obviously understanding that one by one make won't they don't do so. and they do it based on our mission and if you look at what do we do you really respond to the bond or reserve actually doesn't change the tower vision of the bank at all so it integrates more sir rather make more in both of them a loan and thirty back then but i go and i'm sorry to have thirty seconds before we
8:49 pm
go i just really quickly want to ask if we should be concerned about ben bernanke and his colleagues at the fed wrong prediction yeah well i think you know the problem is that you know a lot of these guys who break the have very little actual thinking. you've got a buyer. right now the more bank in the world. bank or my more. that these are. very little real world. who really hearing them work in order to promote the world. with great power comes with ability to act to act. on it is huge and i think that the record sort of. what are the various work. in the future of the for both you and i think the broader. issue brown why policies are. the backdrop. so doesn't
8:50 pm
bode well for the future but we're happy that you are to explain what people should know looking for i appreciate it congress founder of our campaign anshul group and he is a pragmatic capitalist. all right it's time for a reality check i think it's fair to say more political theater lies ahead when it comes to the fiscal cliff deal but let's just quickly touch on it ok when it comes to the tax hikes that were passed by congress as part of this deal those are set to raise six hundred billion dollars in new revenue over the next ten years that's according to the wall street journal but just put into perspective what does six
8:51 pm
hundred billion dollars over ten years actually. because it's important to know that right so let's put it in a little perspective one year's additional revenue from this six hundred billion dollars us sixty billion could cover the u.s. as current expenses for how long oh a temporary five billion dollars that is less than six days that is five point seven days according to tim phillips of townhall dot com we've crunched the numbers or the additional revenue if you started saving it for about five years so half way through that ten year projection you could pay for the f. thirty five fighter plane program which will clock in it three hundred thirty one billion dollars according to forbes citing defense department in two thousand and twelve dollars so house way through you can get to that number of one plane program morning we have not adjusted these numbers for inflation and based on expectations of inflation but hey these are estimates to begin with the let's just keep having some fun so at the end of ten years if you saved all of that money this six hundred
8:52 pm
billion dollars in additional revenue you're really good you saved it you didn't spend it you could pay for one year of defense spending after all that saving one year. at least as far as we can tell from projections that in two thousand and twenty two defense spending will be six hundred eighteen billion dollars that's under obama's budget estimated by the c b o and the office of budget management and after ten years saving all that dough it will oh it's pay for the federal spending on the net interest on america's debt which is estimated to be seven hundred forty three billion dollars and twenty seven hundred forty three billion dollars and twenty twenty two again this is according to cvo and this six hundred billion dollars if you a save that all could pay less than one sixth of the four trillion dollar deficits says this deal is also likely to create because it makes most bush tax cuts permanent so much for curbing our national debt just a quick reality check for you. all
8:53 pm
right let's wrap up at least change dimitry. let's we get from cliff let's talk about one more because there was another clip that lawmakers worried about this week the dairy cliff one provision of the measure passed by the senate avoids the so-called dairy cliff it extends portions of an expired farm bill through september so that will prevent milk price increases without the legislation mentioned yesterday milk prices were expected to double up to eight dollars why is the
8:54 pm
government involved in subsidizing the price of milk milk is not even good for you we're the only mammals that drink our own milk this is not a good thing to be involved in not that the government should be involved in the prices of anything you mean we're the only mammals that drink other men. these are it's ridiculous i rail against subsidies the subsidies in the farmers to go back at least as far as before right part of the great depression when the farm industry and agriculture was hit hard before the crash of twenty nine and this is a disaster and i'll tell you what they were very clear. the methane hot air balloon bubble because the reality is that these subsidies for milk i've seen reports of sixty percent ok of humans cannot digest milk are lactose intolerant that we are not built to go there and so we're subsidizing human farts plus plus cows apparently fart like crazy as he reports that there's a huge concern that could actually be proud methane could actually be contributing
8:55 pm
goble warming so they're creating these for capturing devices that they put on the backs of cows and plug them in and then that methane gas goes and somehow it's basically it's a threat to global warming so when you said that warming lobel warming when you're when there certainly is these cows you know the proverbial butterfly like the cow or whatever these cows are being like alice california happy cows are from barton cows though not having well i'll tell you when you're talking about the methane bubble that is one bubble you would really not want to be on the wrong side of when it pops a special there's a lot of the wider standing army behind the catechisms the cows below it all up ok let's move along from the fart jokes ok so milk may be saved but according to the web site deal news here are products that will not be safe from price increases in two thousand and thirteen now this is a list of twelve to just give you a couple grocery cases cost expected to rise remember we had a drought this really you know impacted food prices another one copper prices rise
8:56 pm
which could impact the price of beer can drink wine or drink milk and call edge according to the college board advocacy and policy center tuitions will increase because i guess i will fan can subsidize in stating situations as not. and shipping u.p.s. that x. announced that consumers can expect to five percent and shipping costs this year so milk is saved but these are not the copper calculation was based on the fact that now it can be speculative with like the j.p. morgan e.t.f. i don't we were particularly worried about any of these particularly we're going to you're worried about the one that you're about to tell us about more and i want to talk about that i want to get the want to say we are sure that it was saved no right now i'm sure it was the next. how do you remember why i know i'm not going to memorize it and i was still in a different gear here so if you take a long time to get from second or first of the fifth year ok ok you nailed it the first time around it's cool we're going to google. two thousand and twelve we had
8:57 pm
so many phrases that we were over and over again. the effects of the fiscal cliff so-called dairy cliff i don't want to use this phrase but kick the can down the road tax credits from from the stimulus in two thousand and nine supposed ability of there being too much austerity at the patriotic thing for them to do is to pay their fair share. so we have six phrases that we would really like to retire in two thousand and thirteen clips of any kind dairy cliff fiscal cliff patent cliff earnings class no more kicking the can down the road over here that one more time i'm going to. jump off a cliff yes jump off a cliff with a can in my hand so it can't be kicked stimulus and we need it we don't need it blah blah blah austerity oh gosh austerity austerity protest blah blah blah and paying their fair share what is that even mean and this one of the wild card for me a green or arguing i don't think it's a liberty policy debate policy is just
8:58 pm
a normal word in the dictionary it's become a great thing where that makes revolve want to vomit all over myself because you very very guys are going to be able to like we have a justice policy group tweak this policy so maybe. no it would be better bedwetting really doesn't have any policy tool our word is the scots think we are with the policy makers i only want this method i don't want loads policy no more policy i don't want policy i just want markets get some markets and here we are our approaches are our approaches i'm going to go so i thank you so much for watching be sure to come back tomorrow until then have a great night. the
8:59 pm
news today is once again flared up. these are the images the world has been seeing from the streets of canada. showing corporations rule the day. the government no longer represents the. people or going to take the term. traditional. the way our economic system currently.

24 Views

info Stream Only

Uploaded by TV Archive on