assess capitalism state today well i think capitalism is indeed in crisis it's been five years since. the crash of two thousand and eight and the multiple bailouts and the unemployment remains high and there's no real prospect of recovery and what is really becoming clear is that we're now but we're not having to live with a situation of very high unemployment high rates of poverty and capital which is supposedly the unit of capitalism essentially going to exclusively for one purpose which is finance and always just simply makes money off itself ok rachel jump in the state of capitalism today. you know capitalism was doing just fine until it was hijacked by socialism and what i think george is seeing and what we're all seeing and what occupy wall street has been protesting is

really the socialists a version of capitalism and not capitalism itself and george just touched on one the reason why we're seeing issues with a system that is no longer capitalist at all and that is capital no longer being part of capitalism it's been replaced by leverage by financialization of capital so capitalism doesn't have capital in it anymore and it's interesting because why streetlight is that. there's been a lot of wall street likes the current situation those of wall street but if you were to him but peter wall street has never been capped wall street's not capitalist either wall street is its own system entirely capitalism by definition is selling one skills and work and product of for a price to a need in the free market that has been corrupted that very simple direct relationship

has been corrupted so badly by socialists by. want to profit from the system by no and you know it's very you know why wall street but like i said it's not capitalist either but it's a whole other read capitalists are wall street and the fact that those two things are equated is is is just ridiculous but it's very interesting because i think it's important to pinpoint the genesis of this and and how it came about and it's really interesting because i think your views are find it really interesting especially on this network that there was a gentleman by the name of yuri besan off who gave a talk in los angeles in one thousand nine hundred three and he was a k.g.b. defector and he was a propaganda expert for the k.g.b. and he explained six different point six areas of ideological subversion of a population which would go unnoticed by the average person. which would undermine capitalism and a few most points are education and he said it would take a couple of generations for this comfort for russian for capitalism to basically implode on itself because slight changes slight influences the education system he

said if we can get it airy fairy and if we can get people away from the hard sciences and towards things that are kind of useless in the marketplace that will subvert capitalism another thing he mentioned all right i want to really make sure that we can go to all it's kind of pride for us i got really let's go to france first let's go to fred first go here there are six of them so i know fred we're going to we're going to go a long way away from where we started off this today you know earlier a person made this point better i think than your yuri did joseph schumpeter in one thousand nine hundred eighty two as for the capitalism could survive and he said no and he pointed out the intellectual class would find capitalism distasteful would write narratives disdainful of capitalism would gradually poison the well of public opinion to lead to the kind of collectivization of the capitalist system but that you don't blame the kora because people have tilted the road salie right off of it what we have done is it's an i do not believe it's the financial engineering that

has anything to do with this let's take you where ease of innovation and that could have been wonderful capitalist success stories the renewable energy area and the financial engineering areas that are riveted and all of the that type of activity in both cases there are wonderful ideas that can properly be hand be distilled and become a wonderful way of wealth creation but in both cases government randian and subsidize it to renewable energies that become a sink for wealth not a creation of wealth and in the derivatives area with fannie and freddie with the moral hazard of basel and so forth we created unstable system that had the stabilizing capitalism but you don't blame out the some for the fact that we've destroyed the senators that with effectively socialize the risk that's not capitol hill to grab socialize with georgia so none of this is cold comfort if you want. cloyd it well that's absolutely right and i'm also a little. strange when people talk about this idea that there's some pure capitalism because really capitalism from its inception had always been very much

a state run business i mean it's basically from you know you starting from going back to the american history. of the state has always been very much involved in helping out capitalism and even before the recent bailout i mean the great. american industrial success of the computer industry would have existed had it not been for government it was a government investment in the mainframe computers that gave us the computer industry it was government that provided support for microsoft or apple it provided support for the internet so all of these great innovations of all come about thanks to governments i don't think it was ever a moment when. this pure capitalism i mean what the reason i think is that similar markets are ya'll are going to where i was personally age that. let me finish please just so that there's a free market ideology according to which. you know with people you can go go out

of business if they can no longer meet the needs of the market but the free market ideology only works really for poor people i mean for for many years the rich have always been joyed the protection of the state and the bailout of two thousand and eight was just way in a long tradition of such bailouts ok fred you want to jump in go ahead. no no no that's silly look of course there have been government intervention we've never been virginal in the sense that we've had pure capitalism but we've had higher approximations than we do the day eight hundred eighty s. was when capitalism all us kids in america we had the robber barons but we all said j.p. hill we had the bankruptcies of the railroads that were caused by the government intervention go through today we have. capitalism has shrunk from ninety five percent of the us economy to fifty percent today government's massive in america today so of course you're going to have more of the problems that george and rachel

and i are all concerned about but you can't blame capitalism when you have less of it than you had before we were doing well when we were a capitalist economy and will do well again once we get past says idiocy of trying to go a mixed economy but don't blame capitalism for the fact that we don't have as much as we need. way and go ahead you've been patient go ahead. yeah. it's not like capitalism can't exist alongside the state. it's just that the problem is the inverse of that the problem is when the state jumps on a product of capitalism to tax it or to regulate it i mean we did quite well as a society without all the regulations we see now i mean it's just grown exponentially but i guess and i think it goes back to a cultural shift i think there was a time when you could do business on a handshake when hard work was the norm when people got up every day and went to work and didn't spend all their time protesting in front of the capitol because they you know they are complaining about the fact that their life isn't what they

think it should be instead of getting out and trying to fix it and using their brain and they're able body and to do something for themselves and i think that's that's the issue it's the inverse it's not like state capitalism can't co-exist it's just that when when the state jumps all over capitalism and that becomes an issue george jump in. no yes but what we do have now is a thought for many people there is such a thing as capitalism there they are told one fine day that where you don't really have a job anymore and there was a year and therefore they are laid off why because the company isn't making a sufficient profit. the are the c.e.o.'s and the shareholders still do very nicely they maintain their profit line so what we'll have now the business don't know what we had to trade on which is. the proper the practice of the finish the.

privatization of gain and socialization of losses this is. not because of socialism i mean these these people who the system that is being created is being created by people who have decided to make the system work for them so for everyone else there is capitalism pay well that's that's the way the market works for everyone else there is the nice little bailout of the golden parachute provided by the state ok rachel do you want to reply go ahead. yeah yeah there's a point you made about the fact that you know everybody just gets laid off and and businesses are trying to save money and they can only win by doing that there's actually a very specific example in the news very recently of wal-mart losing quite a bit of business recently because they laid off a large amount of the workforce thinking that they could do exactly that what they found out very quickly because the market will correct that you don't have to the government doesn't have to regulate that or force people to force businesses to employ people what happened is customers realized that i can't get the service i

normally can so they move to costco and target and that affected wal-mart's numbers so the market regulates itself we don't need people to meddle with it we don't need socialist or status or centralized government to to equal the field with the free market i mean. marx learned i want to jump in here fran it before we go to break let me go to for example let me go to fred for a while marc wal-mart is a classic. full well that rachel one other thing too is the idea that there's a lot of rigidity in the corporate structure of america or the wealthiest americans anyone who follows forbes richest people in the world index year after year after year all right or so i create i would have to jump in here we have to go to a short break unfortunately after a short break we'll continue our discussion on capitalism state which are to. believe these. things are.

they all see themselves as dying swans in their dreams. but only one in the cells and will ever make it to the till. they're ready to give their lives for the chance to die on stage if only once. not even broken wings can do to them. for generations at the madrid ski theatre ballet sweat and tears on a. he

. took me to. see. the oh social interests of the circle for celebrities a lawyer subpoena news media elite yes. i am.

sure your job. you really really want to do you know what he was doing and you know who it was already forced to. get off sometimes you see a story and it seems so for life you think you understand it and then you glimpse something else you hear or see some other part of it and realize everything you thought you knew you don't know i'm tom harpur welcome to the big picture.

up folks. i think going down of the sun and in the morning we will remember that we will. welcome back to cross talk we're all things or can some people a bell two minute we're discussing capitalism in crisis.

ok fred i'd like to go back to something was mentioned earlier that you know you rich people have socialism in poor people of capitalism. you know what yeah the i get mad that that's the argument out there but in fact if you look at the list of the richest people if you look at the children of the largest corporations that america over the last century massive amount of churning from decade to decade going up and going down americans are fairly tolerant of creative destruction the realisation that the old has to give way to the more efficient more affordable products for more people than one thing happened in two thousand and eight believe that didn't happen in the two thousand and eight did it they had that's right that's right they have to believe it's done fairly and when they see government keeping people artificially alive that is what led both the occupy movement in wall street and the tea party movement to in many ways react exactly the same way they weren't opposed to capitalism they were opposed to its distorted form of crony

capitalism or is rachel says socialized capitalism that is what people are opposed to and that's why we went to capitalism again would have a much more unified america on the left and the right george go ahead. well here's the this capitalism there's been around for a while i mean the the bailouts of two thousand and eight follow on from the earlier bailout in one thousand nine hundred five of the goldman sachs also there was of the see the huge crisis goldman sachs needed to bail out over its loans to mexico that was the bailout of the s n l's that was the bailout of the banks in the one nine hundred eighty s. each time there was this bailout we have the same situation which is that the bankers they go to government and say well we've taken all these risky loans and if you don't bail us out the entire economy of the world will come tumbling down and the politicians are don't know whether this is true or not and immediately whip out their checkbooks and write it out this is what capitalism is and therefore what is

precisely that the richest are bailed out they continue to earn their massive bonuses while everybody else has to pay for their risky loans and you know risky you know nonsensical decisions and lose their jobs and are then but basically are out for you know the permanently unemployed if you look at the. unemployment statistics are you can see that there's a there's a rising number of people who are basically permanently unemployed they just essentially were just the waiting to die off because there's just no prospect of their getting any jobs and this is the direct consequence of this system which rewards. risk taking which isn't real risk and punishes the people who've just been doing the basic jobs rachel go ahead. george let me go to rachel first legal. where first ok.

where were the purple responsibility in all this i mean if there was nobody willing to take on loans that they couldn't afford to pay back or take on mortgages that they couldn't afford to pay. there wouldn't be a crisis i mean if if banks where they're saying to people look i want to force this loan upon you and if people say look i really can't pay that i really should be taking that because it's out of my knee and should really show it what i mean to me is that right from the way around why there's no other way for the making of this woman isn't it the other way around these banks these people who could not pay these they know you may also really know they knew what they know nancy your question go ahead but the banks knew the banks knew no but you know what it's where well that's fine the banks can try a con if they like but and then they get you but then they get bailed out person that i don't know why it. and and they get bailed out because people were too stupid to say look i can't take that loan because that's out of my means so where's

the personal responsibility where are we as a society to say you know what we screwed up not the banks we figured out we fell for capitalism screw our capitalism screwed out of somebody from capitol it's going to dread going to both the frame go ahead you know we're going actually things that are not good and not going to be proud naturally going for it one half of the cawing. wait rituals focus on the irresponsibility of the lenders who went out and got over their head of the credit users they did it perfectly acceptable and of course there were banks who did the same thing on the other side and there were individuals on both sides who didn't the cultural collapse said rachel fears i think certainly there's been some cultural arose because of this moral hazard we've created but generally speaking some very important banks b.b. and t. decided not to make those kind of loans and a very large number of people including friends of mine did not buy a house that they couldn't afford most people reacted normally the troubled grades

the system was so destroyed in the sense that we just disconnected the fire alarms and we were surprised that the building burned down that's the solution you capitalism requires on a sense of checks and balances you can you can take risk but if you lose you lose and we all understand that that system was weakened by the model housing problems we created but those didn't come out of the private sector those came out of the political sector it wasn't capitalism be saying we're not going after all since because capitalism can't do that it was the government doing it ok george. right and we're going to merge with you're going to enjoy. the bankers were extending the bankers were extending these loans and they were earning enormous amounts of money on these loans they didn't do it out of some kind of charity they were making money on all these loans so the fees were accumulating

then when they were securitized the bankers were making money off of the derivatives so all of this was that this continually churning. money vos profits to the owners of the banks and then of course when the whole thing when belly up then they went to the government but in fact this was all of this was well know there was probably a great surprise in this because there's been a long pattern of bankers being bailed out by government so there's literally no risk they knew perfectly well what they were doing they were making enormous sums of money and when inevitably the collapse came they were they went to the government i mean it's a pattern that's been repeated over and over and over again rachel you want to reply go ahead nobody on on second going to yeah yeah but going back to what fred said he has he has a point and it fits exactly here he was talking about the fact that there was a political impetus for this move and that is during the clinton administration family and freddie mac. were mandated to deal with loans to people who were minorities racial

minorities he could not afford to repay these loans but clinton want to be able to say at the end of this term the minorities under my watch the minorities in america were able to buy houses so it's better for you as a friend of my reasons for my wrong on going. right maybe and right and enjoying some support today. thank you yeah. absolutely right it's not only the clinton decided to have an operative clinton's idea was where we're less races more blacks will own their homes did bush can drown in the end with the ownership the same doing the same thing. we were basically pushing. the throats of people who couldn't afford lives everybody so it's ok but that was criminal over and over that who popularized the religious. jar those who had george yeah but who

paid that though it came who paid the price for this the people who pay the price are the homeowners because they were foreclosed upon they got kicked out of their homes but the banks didn't pay any price for that they they made enormous sums of money on all these loans they made enormous sums of money on securitizing these loans and then after the bailout they continued to earn enormous sums of money for these decisions those people that clinton supposedly helped well they lost their homes i was thrown out on the street but the bankers they did very nicely thank you very much fred you said something earlier in the program i think it's really interesting to have a friend you said something earlier in the program you said real capitalism how would you like to see it in america go ahead. i would like to see the a ray of moral hazard that i would like to reconnect the disciplines of capitalism grew up with we should get rid of deposit insurance it was a win when deposit insurance was started in the one nine hundred thirty s. f t your not exactly

a you know what i champion of capitalism said this was very dangerous it would encourage people to choose to ignore the soundness of their banks and banks to be more imprudent we did it again and yet he s. and l. crisis over and over again we have weakened what the what catalyst offers which is which is you can take risk within you the risk are yours if you lose by weakening those we destabilized a large part of the financial industry maybe we should nationalize the banks that we nationalized. we had bailouts what would nationalizing the banks will mean that we totally protected the nationalized banks of other countries or less stable than ours i mean there are all of them it's a moral hazard problem you've got to recognize that if you're going to let people take risks they have to bear the consequences when they're wrong and every attempt to eliminate that to make sure will take risk and then nothing will go one on one about limiting risks with this this and limiting risk with. what about the banks

fred keep going what about the banks well the banks down at the banks would not have a problem if the other banks of that would be stupid banks and he kept stupid people of any institution well wall street the moral hazard problem but gone straight fannie and freddie of giving them good. wall street so figure now for ever as up they are doing all the handful of people and yeah while the one percent of their people are not angels it depends on the institutional framework you created we created a system designed to fail and it failed but it was not a capital ok george i want to go to you know when you have george the last words it was because it looks like capitalism is working just fine for one percent go ahead . and you know i don't know whether the deposit insurance is ready or very much to do with it i mean look at what's going on now i mean the banks are essentially getting interest free loans from the government which they then look back to the government and then pocket the interest that they make on that so and then this

money then goes into the stock market so the banks are again making money twice over and this money is not being used in any productive way so something to do with the you know with the deposit insurance it basically the banks are encouraged to lend recklessly and this is contemporary capitalism nothing has changed in two thousand and eight all right lady and gentlemen thank you very much many thanks to my guests today in paris new york and in washington and thanks to our viewers for watching us here r.t. see you next time and remember crosstalk. welcome

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of the globe people are protesting against austerity growing wealth inequality and other failures and the government policy now will dive into today's events and take a look at labor history. and ten years ago today president george w. bush gave his famous famous mission accomplished speech now he was declaring victory in iraq it turns out well that was a little premature but we're going to take a look at what happened inside iraq a decade later. and more on the arrest in the boston marathon bombing police have reported that they have three new suspects that they've apprehended and we'll tell you what police are saying about the suspects just ahead.