to a different conclusion shall profile janet yellen in just a bit. and scandal after scandal is already precipitating and j.p. morgan exit from the commodities market but now goldman sachs and morgan stanley are in the limelight as well who have been key players for decades the fed is already doing special exemptions they gave banks to dominate these margrave's edac a big play given the recent spotlight it looks like the two banks are getting ahead of the curve and seeking to spin off their commodities division finally you've probably heard of g.d.p. well the bureau of economic analysis which compiles a figure decided it wasn't happy with the calculation as so the ministry of economic truth in this decided it's going to rewrite history and revised every g.d.p. figure going back to the one nine hundred twenty nine yes that would be the very year when celebrated economists were going fisher said the stock market had reached a permanently high plateau prober it we'll talk about author wrote john ralston saul about the decline of western civilization in

a minute. let's get to what's in your i'm interest. voltaire the french philosopher he believed in the power of reason as a defense against the whimsical monarchies and religious doctrines of the eighteenth century this emphasis of reason became a staple of modern democracy earlier i spoke with john ralston saul author of voltaire's bastards the dictatorship of reason in the west he first described the effects of the west rational methodology which includes the creation of bureaucracy that we see today. it's ended up with the free market being dominated people

by people who are pretending capitalists who are really managers bureaucrats of large corporations that ended up with people saying that they were taking risks when all they were doing was in debt in companies that they were taking over they weren't creating anything new did it up it produced the creation of the unprecedented arms trade which in turn has produced the levels of violence which we've seen around the world which is a relationship right up to today. and of course it led us into things like the financial collapse a few years ago and the economic troubles that we're in where you just you just try to cover the tremendous amount of material let's cut to the beginning here the modern bureaucratic state one could argue maybe began with the progress of teddy roosevelt how what was a mindset back then and how did we get to our current bureaucratic nightmare that we're in right now well really the i hate to say it but the bureaucratic state

really started with. what it was sixteen something that whole idea of centralized power secret service. control and so on what's really interesting is the way in which this bureaucratic approach is nothing to do with right wing or left wing it's is it's in sense it's far bigger in the private sector than it is in the public sector you know actually for example the american public services is in many ways smaller on a per capita basis today than it's been for a very very long time where is the private sector bureaucracy of the large corporation is bigger than it's ever been in history so it's this idea of worship of management let's put it that way you know think of the rise of the management schools both the business schools and the government schools that what room for getting this taking management leadership thinking managers are leaders really managers have taken over the role that used to be occupied by lawyers and before.

that i don't know priests and soldiers in a way so it's this idea that we'd think about everything is as what i would call form over content managing stuff and that means not really thinking about where you're going not think not imagining what you could do next so so yes there's an increase in government bureaucracy and some of it in the field is very very good that's how you actually deliver. programs but in the cutbacks what tends to happen is that the people who are in offices you know in washington or wherever they don't cut back on themselves they cut back on the delivery of services yes let's talk about some of these large corporations we have a corporation like g.e. for instance that is intimately tied to the government in many ways and they derive a lot of their revenue from the government but then you have other business models such as apple or google especially in the taxpayer where they really innovate new products and they're not as heavily reliant on the government itself do you see a distinction there in terms of what you would call the leadership or the the

management style. well there's no question that there are some areas where there is real leadership in the old capitalist sense that there are people inventing things and making things and i suppose the high tech area the communications area is probably the that and some of the medical areas are are the big examples of breakthroughs whereas you have other areas where you know today i mean i was just to get some numbers and and i think a third of the people with top secret. clearance in the united states don't work for the government and that's true it's absolutely amazing i mean so that you have this linkage which comes out of the whole movement to to make government smaller and to send government efforts out into the private sector you end up with. infect large sectors of the parts of the private sector living off government well complaining about government and of course in areas like secrecy that just opens you up to all sorts of things and it makes the idea of secrecy really a bit of

a joke but but that the same time what we've got over the last twenty years i mean i talked about in vulture's basterds. is is people talking about the necessity of capitalism actually reintroducing monopolies and all of all police which i always forget what it means but you know very few large corporations controlling the market so that the last twenty years all the talks been about competition the reality has been about a reduction in the competition in the big areas and that of course includes the high tech communications areas you know the big problems with the return of monopolies and all agog place in that area so i think we're certainly seeing a lot less competition in the financial sector there's been huge consolidation what is your take on the financial crisis in light of your theories well look i said in voltaire's bastards twenty years it's insane when it when we were putting together this twenty edition i thought maybe i should rewrite the chapter on the financial

financial crisis and i read into not changing a word because i was talking about. the way the west and the world bank and the governments of the west treated after african debt in the one nine hundred ninety s. and we basically destroyed africa in one nine hundred ninety s. by using these methods these these attitudes towards debt we destroyed solid governments we brought about civil wars we brought about poverty and fascinating enough there is this financial collapse a couple of years ago in united states and not so much in canada but in britain in europe and so on and the same people if you like are the children of the same people the grandchildren intellectually the same people are still in charge and they started applying to the united states and to the west exactly the same things they've applied to africa so that the damage that they've done with with their policies these of the dead over the last few years are exactly the policies they used to cause damage to africa and yet there's never any reference to the fact that what they're doing has already failed miserably in africa and you know i kept

saying in vulture's basterds you know history is clear we've got about twenty five hundred years of history of debt what do you do with normal debt what do you do wouldn't that gets out of control and what we know is when debt gets out of control smart civilization smart governments rip up the debt i mean i'm doing this really you know basically you rip up the debt you make it go away dum civilizations who want to commit suicide commit themselves to paying off the debt and thereby drag their citizens down drag themselves down and that was the basic mistake made through western civilization almost without exception getting us into this terrible those which was totally unnecessary frankly and history is still the united states used to financial collapse is after the civil war several of them leading up to nine hundred twenty nine which wasn't a happy story but they use them to clear out the debt and to get on with new business we've forgotten all those lessons and as

a result we've sort of tied our economies down in a really really dangerous why. well there are various ways of actually clearing talking about bankruptcy in terms of detroit i mean even hyperinflation is one particular scenario and we've had other guests on the show such as michael hudson talk about. jubilee what do you what's your take were do you see these different default methods or debt reduction methods fitting in well you know deflation stagflation hyper inflation those are all signs of you got it wrong and you know war is you could add in war to that you know the various forms of collapse are all signs that you got it wrong so what you're really talking about is how do you make this debt disappear in a fast efficient manner and you know that you basically agree that this will not be paid and there are various you know there are a whole bunch of ways of doing it frankly for example the mortgage debts instead of

giving the money to the banks it would have been far wiser not the first person to say this to give money to basically say all right let's say the government will pay off all mortgages in the united states up to and then pick a number two hundred thousand three hundred thousand dollars and we'll just do it we want to ask who you are if you will for an a thousand you still owe one hundred thousand and we'll just do that of course what you want if you do you solidified your gotten rid of debt you solidified your home owning class with lower middle class working class. the money goes from them into the banks you solidified the banks that can be saved and the people who no longer in debt can go out and borrow again so maybe you've relaunched your economy so that's one really easy way of doing it the worst thing you could do is give the money to the banks yes that's absolutely the most problem we did primevil that's what you did that's the spanish did that's an industry that's what everyone did it's absolutely the worst thing you could possibly do and of course it didn't work

because it simply didn't work but if you people allow. to cancel their debts if there is a mortgage or jubilee or whatever it doesn't that just engender moral hazard in other words would people just be more likely to take on more debt with the expectation that it would simply be wiped out again in the future at some time well look i mean first of all you know i think the people divide themselves into two they're the people and i guess you could say the humanists who actually have some confidence because they live in a democracy and therefore they have respect for the citizens they actually think that the source of legitimacy in a democracy like united states is the citizenry that's where that's the basis of your country the citizenry so the idea that they're all going to act badly is part of the other side who have had a lot of power and i've been right there wrote about bastards the people who built basically have contempt or fear of the citizenry. and. if you have

the other thing is look at the rules for the private sector i mean what is the private sector do when it gets in overly its head into debt and goes into bankruptcy this is a well established principle so why is it ok for the private sector but it's not ok for the citizenry why do we have more respect for the dignity of boards of directors then we do for citizens does that make any sense at all. that was my interview with john ralston saul author of voltaire's bastards the full fifteen minute version can be found online on our you tube and facebook page now coming up very and janet yellen that would be the federal reserve vice chairwoman to the wall street journal claims is the best at predicting economic well stuff sorry we do have to keep a straight face here but here in reveals another side of the bed front runner then i do well with our two producer rachel kurds years before poverty and amazon and that would be the company that the jungle.

i. told you my language of what i will only react to situations i have read the reports. put in no i will leave them to state department to comment on your letter . say it's six am because i'm going to. go no more weasel words. when you they need a direct question be prepared for a change when you're done you should be ready for a. freedom of speech and

a little down to freedom to. the judges a sense own son. killed in the streets. that women kidnapped and converted to islam by force will be another layer of moses from the coakley christians of egypt to the cross to his muslims future victims. the way of the cross.

i. want to speculating who is going to be the next fed chairman or woman the two front runners are larry summers and janet yellen we already profiled summers he was president clinton's treasury secretary and the president of harvard university but how different is janet yellin let's dig into a profile janet yellen is sixty six years old and would be the first female fed head it would also be the first time a current vice chair as soon as the top position she received her degree in economics from brown university and obtained a ph d. in economics from yale similar to summers she has spent several years in academia teaching at harvard the hospital of business at u.c.

berkeley and at the london school of business her career took off in public service in one thousand nine hundred four when she was appointed as a member of the federal reserve board of governors i've just been in three years they are she revolved into president bill clinton administration as the chair of the council of economic advisers back to the fad and spent six years as the president and c.e.o. of the federal reserve bank of san francisco and she has spent the last three years as the vice chairman of the federal reserve system as some as someone who is more concerned with unemployment than inflation she is considered to be a dove at the fed and therefore more prone to support an expansionist monetary policy the federal reserve operates under a dual mandate of maximum employment and stable prices today the fed has a two percent inflation target rate to achieve what it considers stable price is now when yellen was serving on the board of governors the doves and hawks debated over whether there are having

a two or is. zero percent inflation target rate yellen took the two percent side and was quoted saying i believe that heading toward two percent inflation would be a good idea and that we should do so at a slow fashion looking at what happens along the way and see deflation as more of a threat than inflation because to cause the cost of credit to increase on the other side of the argument hawks prefer price deflation over price inflation because deflation and creases purchasing powers for consumers it's also important to note that the term hawk is a relative term when used to describe personnel all reserve governors and presidents support price inflation the question is just simply how much now former congressman ron paul believes the fed's inflation target rate is immoral as it acts as a hidden tax on consumers he stated that devaluing the currency at a rate of two percent as a year is an insult to the millions of americans who are struggling to pay higher

prices each and every day when prices fall purchasing power for consumers increases among economists larry summers is seen as neither a hawk nor of he is not supportive of ben bernanke he's quantitative easing program making him relatively hawkish on monetary policy but during the housing collapse he supported tarp and other federal bailouts making him a fiscal. summers and yellen differ on monetary policy but they do have some similarities first starters they served together in president clinton's administration and went back and forth through academia but more substantially they showed weakness in their ability to recognize economic downturns as it relates to the housing market summers ignored warnings from an employee at the harvard endowment fund iris mack toxic mortgage derivatives would cause significant losses to the fun and they did it and she was fired shortly after her whistle blowing warning janet yellen also had no idea of the great recession was coming. in two

thousand and seven she was quoted at a f o m c meeting saying housing remains a concern but i think the process prospects for a really serious housing collapse that spreads to consumer spending have diminished substantially well the housing collapse eventually did become one of the biggest concerns as the entire world to watch the fed bail out the financial system. now everyone is fixated on whether president obama will nominate a hawk or a dove to be the next fair fed chairman but what about the evil versa turkey summers could conceivably end and yellen would probably keep pumping bonds into the markets good would we be better off with the fed chairman who foresaw all the financial panic ahead of time and could have possibly prevented resorting to extraordinary q.e. measures in the first place chairman bernanke he is expected to step down and january this is the profile of janet yellen a front runner for his replacement. joining

me is our t.v. producer rachel perseus things first stepping over to our side of the floor here glad to be here let's talk party let's talk about ok recent data from a piece shows that eighty percent of u.s. adults have. ordinary poverty. in the quality income inequality in a drop in manufacturing jobs as explanations for this trend so is the recession really over but i think that that's the key question that people are trying to ask is on the road to recovery what are we looking at here and i think if we look at the jobs data that that's come out recently the answer seems to be yes we're on a road to recovery really this is what the recovery looks like it's not equal for

ever and ever and it's going to recover and it is really we're not going back to where we were we're going to some future place in this future place includes a lot of low wage jobs that don't have the benefits that jobs in the past used to have that's definitely a trend that we see increased number of jobs but they are not high quality jobs there in the retail sector the hospitality sector but also a lot of people are dropping out of the workforce so when we hear these headlines like seven point six percent unemployment well it's actually closer to sixteen or seventeen percent when you use a broader gets people who have been out of the job that it's not that a lot of people are giving up and they're throwing in the towel and saying nobody's even taking a look at my resume and statistics and you know there have been studies that show that that if you send in a resume that has say two months out of work versus six months out of work you are significantly more likely to get a call if it's two months so it's there's a kind of discrimination here at play for people who essentially become this missing generation of workers so so log on your resume is that your solution i would never tell anyone on television to lie on their resume when you're there with

ok the thing about this survey is it says eighty percent of u.s. adults face near poverty or unemployment but this also includes the definition of experiencing unemployment at some point during their lifetime i mean that's pretty broad it's a super broad statement right this idea of the so if we're out of five americans if there are four to five americans are on the brink of poverty right and certainly both sensational and i also think that it speaks to a larger reality in american society which is that more and more people are unsure as to whether for their entire lives they are going to feel comfortable they are going to know that they have a. job that's going to last for a long time that that job that lasts for a long time is going to include the kind of benefits they want that's a reality that joint security was an historical moment i'm just going to point that out there do you think that it should be though no i don't think there's any way to make it we live in a competitive world and unfortunately you know the boom that we saw in manufacturing the fifty's and sixty's it weren't even up until the eighty's we see in places like silicon valley i mean that was manufacturing that powered

a huge portion of the united states in till they decided to send that manufacturing off to asia so i guess my question for you if i can toss the sword on is what is you know do you think that this kind of competition that we're looking at regards to manufacturing outsourcing and things like that if that's the sort of competition that we should be well here's the thing is we have we hear all these these free trade accusations the road most of free trade is actually just giving speed corporation special privileges it's not free trade it's a misnomer but in terms of outsourcing you know if you want to if somebody else is going to do something cheaper in your business you should be able to do that the problem is when we get into a currency situation like we have with china where they pegged to the u.s. dollar so that artificially depresses you know their prices and it allows them to export to us at a lower price so they're saying free trade is not free after all that there's a big bird in the burden is being one that says consumers as well as people who used to work in the manufacturing in the u.s. we're the ones paying for that not free just put

a lot of words into my mouth but i'm going to you're part of this we're going to move on to the next story here ok we've got our next story is oh it was and khan is adding seven thousand jobs and we're just kind of talking about this five thousand of which are full time jobs at u.s. distribution centers and tomorrow president obama will give his next job speech at one of these centers so some of criticized obama's choice of the venue claiming that amazon doesn't have the best track record of job quality so what do you think about him as. well i think you nailed it right there right we've seen that mother jones is matt mcclellan just went undercover in one of these packing. it's for a while and she essentially said when you're getting your you know your book or your whatever you're getting from amazon the next day there is a cost incurred there and you might not be paying it but somebody else's back breaking is definitely pick and choose not to take the job i think that the question of choice there is a really interesting about right because sure you know we're going to get in a free will shall we no i don't know plenty of time for it on this so you know what

i think maybe i could yeah but the idea of having choice like oh you choose to apply to take this job right it's a lot more complicated than that when you think about it it's an asymmetrical choice of people don't have any other legitimate option will examine pay that and so then it gets back to this original study people don't have very many options and it gets back to the state of our economy unfortunately a lot of this as we say her prime interest every day has to do with the choices of the federal reserve and their monetary policy propping up these big zombie banks at the expense of the new everybody else saving them their balance sheets on a nominal basis but really leaving everybody else in the dust i think that's interesting i think that it's more than zombie banks who who are to blame for that is there are ways to but i always have to emphasize the monetary side that you do. rachel thank you so much for joining me if you want to weigh in on today's show be sure to like us on facebook at facebook dot com slash private interests and don't forget you can follow rachel on twitter right here curious underscore rachel you can follow me that includes p.-i rachel thank you again for joining me on today's

daily duel. and it was a dialectical day here on. one prime interest to explore the candidates the use of yellen and summers as potential bad chairpersons not to get too socratic of what is seen as the presentation of a false choice of a mainstay and our great and inspired republic and as far as measures that economic prosperity are concerned well let's just say you be or william de jesus does so to stick it looking increasingly that we have already been value of a leadership and

a visual as a model with john whilst in salt leaving the logos and potatoes and those to you know you are finally we had to abandon our neutrality when baba taught poverty and amazon with great oh please forgive us of our day cartesian rationalism thanks for watching i'll be back tomorrow from everyone at prime interest i'm here and boring have a great. there's immediately those who leave the media. or the scene motions to the play you call the musical. their shoes that no one is there still with the guess that you deserve

answers from the on politics. but i will only react to situations as i have read the reports to the players i know i will leave them to the state department to comment on your letter play like the muslims say its if lizard a car is on the docket. no more weasel words when you have a direct question prepared for a chase when you run should be ready for a bad little print on a speech and down the street into costs.

a little. bit . and. little. live . lives.

good. morning news today violence is once again flared up. and these are the images the world has been seeing from the streets of canada. operations or the day.

whistleblower bradley manning will discover in a few hours whether or blowing the lid off american military wrongdoing will see him spend the rest of his days behind bars. israeli and palestinian diplomats me to washington to revive negotiations after years of failed peace efforts while in the palestinian city of hebron we report from where the roots of the deadlock are most keenly felt. and as forecasts of a chinese slowdown cast a shadow over the global economic outlook we ask whether the numbers back up the past mr.