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good afternoon and welcome to prime interests i'm perry and boring than i am bob english and let's get to today's headlines with. patting himself on the back right now at least with respect to consumer price inflation which came and i precisely the two percent official target but for those of us who don't eat food or drive a car and the number was a bit smaller one point seven percent the previous labor making tower the self in front of the set and having a one of the best inflation records. any chairman and daughter and shouting he did

unfortunately some other economic data was released today specifically regarding manufacturing and that has sent the stock market tumbling to bed surveys one by the new york fed the other in philadelphia disappointed greatly seen producers of quote stuff are shipping less of it orders are going on fulfilled and inventories are being drawn down so that means less stuff is in production in other words the markets are not going to like this september tenth tapering by the threat. and yesterday marked a new to development and the debit interchange by remember free checking well that's a perk most banks can't afford it sent the fed a cap to retail swipe fee but two weeks ago a federal judge threw out the rule out there saying they were too high now the courts are saying that only do they have to lower debit fees further but banks may also have to reimburse the merchants for the deaf right so you can expect a further unintended consequences to your checking account and finally circling the

economic news where again it turns out china and japan aren't liking. that's right according to the u.s. treasury itself it's two largest creditor nations just forty two billion dollars of u.s. debt and this would be the most in years thank goodness for the fed q.e. backstop unless we take the tapering comments to heart don't worry bernanke is bluffing. just being over them behave unpaid n.p.r. and then just a minute then bob talked with alan brown about the web of debt we had and here is what's in your prime interest.

currently youth unemployment is above sixteen percent in the u.s. and recent graduates are clamoring to get work experience even if it means working for free however this trend of unpaid internships may have some unintended consequences for income inequality so prime interest producer justin underhill has more on a recent lawsuit it may just change the landscape of unpaid internships. i'm going to keep on making the case and fighting for the fact that we need to raise our minimum wage because right now. but for hundreds of thousands of students and young adults raising the minimum wage won't change their income because they are unpaid well i feel like i've been doing unpaid internships and before i can remember i mean it's really for experience especially on the hell you have to do unpaid internships to get a job that's just the way it goes here however a recent court case may have changed the future of unpaid internships at least in

the for profit sector eric lott was an intern for fox searchlight pictures but his unpaid work on the movie black swan was nothing like what he expected big county office the county department for black swan had four full time paid employees and me so as the clerk i was in charge of paperwork purchase order receipts by coincidence able to thousand and ten right when production was winding down. the u.s. department of labor issued a fact sheet fact sheet seventy was about unpaid internships that for profit employers the new york times picked it up and published an article and i read that article and immediately everything came into focus this wasn't a gray area this was crystal clear black and white a violation of labor law so we sued fox searchlight pictures and won the case the merits of the case rested on the fact that the work glatt did for fox did not meet the labor department's criteria for an unpaid internship the requirements include

the internship experience is for the benefit of the intern the intern does not displace regular employees and the employer that provides the training derive no immediate advantage from the activities of the intern this means that an intern can only for go a salary for the sake of professional training in no case should an internship merely provide free labor for the corporate employer people like aaron smith founder of a youth advocacy group stressed the need for oversight i also think there is an unfortunate side of this and obviously the department of labor the recent court decision maybe expands a little bit what the department of labor can and should do in enforcing some of these unpaid internships jessica fink was fortunate that her unpaid internship provided her with valuable training and my current intern sat i'm definitely learning a lot and getting experience writing cross releases and doing a lot of communications work that. i would get other places however even though this internship is legal it fuels

a bigger problem growing economic inequality after all those who take unpaid internships depend on financial support from their family they end up with a significant career advantage over those who can't afford to work for free when congressional internships become the standard way to get your foot in the door to working on the hill and then working on the hill becomes the way that you influence laws including those around labor. you end up with a system of lawmaking that doesn't reflect society as a whole instead it ends up reflecting the people who can afford to do those unpaid internships to begin with since glass keys more than twenty lawsuits challenging unpaid work have been filed against for profit companies such as n.b.c. universal mourning music and condé nast as recent graduates face unprecedented unemployment many are desperate to get even an unpaid menial job and if companies can profit margins by hiring unpaid interns rather than paid workers the threat of

lawsuits may be the only way to stop the cycle of abuse in washington just seen underhill. well on top of that young adults entering the job market may have seen their pay shrink over the past five years and that doesn't bode well as student loan debt has reached record highs and now this is saddled a generation with decades of usury is responsibility so joining me now to talk about the currency in the banking system is ellen brown author of debt and more recently the public bank solution allan thank you and thank you. for talking about debt let's talk about the largest purchaser of u.s. debt that would be the federal reserve and it's actually not so federal their website has a dot g.-o. v. address that would be dot gov but there are twelve reserve banks and they have dot org addresses so is the federal reserve public or private or both what's a bill. the federal reserve is composed of twelve branches all of which are one

hundred percent owned by the banks in their district we the taxpayers do not own one single share of any federal reserve bank they have federal reserve board is considered a public private entity because they are appointed by their congress you know there's a congressional and presidential appointment and approved but once they're appointed they're pretty much on their own they're caught and independent central bank but they're not so they're independent of government but they're not independent of the big banks that on the twelve federal reserve branches and that the federal reserve actually considers their constituency. well we have a quote from an american entrepreneur and it's too bad people don't know more about the federal reserve this is from henry ford who said it is well that the people of the nation do not understand our banking and monetary system for if they did i believe there would be a revolution before tomorrow morning so why are people so in the dark about our

banking and monetary system. for one thing i think we've been brainwashed for at least one hundred years our people are pretty much plugged into t.v. these days they don't have time to read that that is part of our monetary system where you are you have to work two jobs or if families are just so busy that they don't really have time to read books they're lucky if they know about the alternative media nobody points into the alternative media you have to find yourself and so otherwise you just turn on the t.v. and what you see is mostly in the news it's all about murders and violence and but nobody gives you the big picture of what's really going on so the way you learn it in school you think that money is created by the government and you blame the government for anything that goes wrong with the money system but really it's all virtually all created by banks and our monetary problems are due to

fraud and mishandling by the banks well we're trying to give the big picture right now so let me ask you another question at one time the banks actually made most of their money by extending loans to entrepreneurs whether they be farmers or venue for tours so in other words they lent money to people who were doing productive things but now it seems most of their income derives from derivatives you know seven hundred trillion dollars and growing so how did that contribute to the previous financial crisis that we had in two thousand and eight are we going to see something similar again. i would predict we're going to see something worse than a lehman brothers it was lehman brothers investment bank that went down and took down them money market with that there was a run on the money markets and that made the banks insolvent because they couldn't fire from the money market. but lehman brothers was not a depository bank there we we had glass steagall had been repealed which meant that

investment banks and depository banks could to mingle their funds but lehman brothers that type of bank now what we have is the two biggest. banks the big wall street banks dealing in derivatives are bank of america which their merrill lynch branch they're investing and j.p. morgan chase and both of them have over seventy trillion dollars in derivatives and over one trillion dollars in deposits and they are allowed to commingle derivatives in their deposits so are the derivatives i mean they're there at that casino and the deposits are one big system so when when they have another big gambling bust the derivatives claimants actually get to go first before everybody else before they depositors because bankruptcy reform act or two thousand and five which was pushed through by the banks which gives super priority to derivative claims which

makes no sense at all because they are sheer gambling where is the deposit that depositors' think that that's actually their savings in the bank if you know people know that when you deposit your money in the bank it becomes the property of the bank and you have an iou so you are just an unsecured creditors which puts you way down the line in the bankruptcy proceeding and unfortunately we have just about forty five seconds left but i want to get to that super priority in a second you mentioned the money market funds what kind of a would you say the federal reserve was instrumental itself in creating a run on the money markets. in two thousand for women. no not not in two thousand and eight that was the money market is the shadow banking system so it's not actually regulated it doesn't every survey a crime as it does an average kaplan requirement. and the money market there was a run on the money markets because after lehman brothers collapsed there the dollar

broke the back so money market is what your dollar supposed to be worth at least a dollar and it went down to ninety seven cents and so all the investors pull their money out and match their banks do not have the related a to cover their loans we're going to have we're going to get back to this in just a minute this is all when brown and coming up after ellen i finished hashing out the solution to all our financial woes that shouldn't take more than a few minutes i will do it thom hartmann of the big picture on the current financial crisis he promises to dish out some historical analogs that should be blue flight instructor. you know sometimes you see a story and it seems so you think you understand it and then you glimpse something else you hear or see some other part of it and realize that everything you. are

is a big. if it possible to navigate economy with all the details to just stick em for me and media hype will keep you up to date by decoding the mainstream. status it's in your .

all right we are back with more from ellen brown author of the public bank solution all right we just we were covering money market funds in the fed so i'd like to get to the fed again there's been a lot of talk about money printing and when the fed quote prints money actually a lot of that is just digital money not physical cash and it seems they simply trade their existing inventory of treasury and n.b.s. securities for cash so how does this benefit the banks what is the subsidy here. it well it does not benefit us it does not get out into the real money supply it just goes on to the reserve accounts of banks. it's not they can use that as collateral

for speculating in derivatives apparently that's a bit shady the whole shadow banking system is by definition in the shadows so really it helps the government because half of their quantitative easing currently is to buy government securities which means the fed rebates the interest to the government so they're basically borrowing interest free and it does allow it it means it doesn't matter who else is selling securities because the federal just buy up the difference and backed securities supposedly that lowers the interest rate for a long term like thirty year fixed rate mortgages spread it's not clear that it had that effect it was certainly we've seen a spike in interest rates recently due to the tapering talk i want to continue talking about the monetary base because there is a distinction to be made between the monetary base that is the actual cash that's printed or additional cash in the money supply you know when we're talking about

the money supply that includes or checking and savings accounts so how does the money supply itself expanded lead to price inflation. the money supply actually right now or in the flesh and it may look like we're inflate in inflationary times because due to interest and having to add. profits and cetera to their costs manufacturers have to raise their prices but it's not because there's too much money in the system in fact there is too little money in the system the money supply has shrunk by three three trillion dollars since two thousand and eight that's including the shadow banking system which is where about half the credit in the system comes from sorry forgot nearly that it was ok because i want to get into this a little bit more is a possible that we could get into a hyper inflationary scenario how could one be avoided while also liquidating the existing public. you know what about all these so-called unfunded liabilities. know

we're not going into hyper inflation where indeed as a nation we're quite like japan which isn't been in a deflationary spiral for the last twenty years even though they've been doing quantitative easing after quantitative easing it's the same deal where the money cannot jump that great divide between the reserve and the the reserve accounts of banks which are held at the central bank and there is the circulating money supply where the money really needs to go in order to get some demand out there to actually. get get the whole thing moving again sure and what i was talking about was kind of a crisis of confidence in the u.s. dollar and there's been a crisis of confidence unfortunately in detroit because it's going bankrupt and they filed for bankruptcy recently it looks like the pension funds are going to take a major haircut and this isn't dissimilar from what happened in cyprus so can you explain the concept of billions as they really to examine these examples and what

are we going to see in the future. well in a bail in the the little people bear bear the last that bank always wins the deal is that the too big to fail banks must survive at all costs so now we've had bailouts which is where the the taxpayers have bailed out the banks but governments are barking at bailing out banks anymore and we have cases like cyprus where where instead of in that case it would have been the e.c.b. and them it was that the troika the e.c.b. the european commission and the i.m.f. that when these two big banks in cyprus went bankrupt they said before you get a loan from us you're going to have to. bail in your creditors which they start with the shareholders and then they take. the unsecured or the uninsured creditors

. and the insured which means the depositors it turns out that people's deposits are. liabilities of the bank and that that the people and they have i.o.u.'s. to say for the u.s. we have about fifteen seconds can we see this in the u.s. so in the u.s. actually that's a template we thought it just happened in cyprus but it's actually a template started in two thousand and eleven it was set by the financial stability board of the bank for international settlements it's a requirement of all big banks now they have to come up with these living wills where they say what they would do in the event of a big collapse and things happening in detroit where they're there to be. sure but that was president thank you for joining me this is ellenborough an author of the public bank solution and web.

jesu it's tom hartman of the big picture with thom hartmann thank you for joining me i mean you've been talking a little bit of gloom and doom lately especially with respect to the united states and you've been making comparisons with the civil war and even the revolutionary war i believe can you can you comment on this. yeah. that's a bit he had because it is you know we had a great depression in the ninety's but it was a direct result of the monopolistic practices of the industrialists in the gilded age you know from the gilded age the beginning of the industrial revolution in the eighteenth seventy's until today most of american history we've had regulated capitalism but there have been these two little short periods where we had essentially monopoly capitalism one was the seventy's eighty's ninety's and the other has been from one nine hundred eighty five roughly until today is it possible

that monopolies can be i guess where i'm coming from is it possible to have a monopoly without the government sanctioned in other words if the land grants given to the big companies that they hadn't had the government support would they have been monopolies in the first place well. i'm not sure about the railroad because they require massive amounts of infrastructure and if you look at what rockefeller did he built monopolies just fine thank you very much for the oil and he did it through you through the predatory kind of practices that we've seen with wal-mart over the years you know going in underpricing competitors not because that's the actual cost of the product but because you can afford to bleed money longer than they can ok let's bring this to the modern era though how has the middle class suffered and what are we heading for well in the middle class has been wiped out because what's is there a little cloud. well of the i think that there's still a small middle class the united states but what has happened is all that money you know over and over from the washington and ministration till today productivity is going fairly steadily we're talking about george washington george washington the

first one where as and wages always track productivity but recently in the last thirty years wages have gone flat productivity has gone up productivity increases profits so does more profits they are the highest they have ever been in the history of planet earth but if they do just to corporatism itself i mean a lot of this liberations are deriving their profits because they're basically in bed with uncle sam you know you could talk about the military industrial complex how much of this is really due to private sector problems i just don't think it's a problem of free markets it's crony capitalism that markets always lead to monopoly that's why the game was invented to the each people how it works absolutely if you have eight and completely unregulated market was regulation the markets you know teddy roosevelt transposed in the sherman antitrust act that stopped monopoly capitalism of this until the eighty's while the sherman antitrust act was actually based on the model act in missouri it was a missouri state law and it was because farmers and hog producers were actually complaining because chicago had become such

a productive meet center so it was kind of ironic that they would the trust busters would end up you know ending the financial game for these guys but my point is you know if the government law is based on something that is used to discourage competition how can we blame this on free markets the lack of government laws encourages. encourages monopoly to the problem is that little fish get eaten by middle sized fish middle sized fish get eaten by big fish until eventually into enough you've got nothing one big fish right i mean there are natural regulators in an ecosystem like an ocean those natural regulators and capitalism with lives by the way yeah. ok let's move on to our second topic so i've heard you talk about the quote libertarian approach to capitalism yes. and i'd like to get your view on this because this is something you talk about a lot of your show well the libertarian perspective is that if we don't regulate products coming into the marketplace if we just let anybody throw anything in the

marketplace without knowing whether it's safe or not then people die and a libertarian approach to that is well yeah people die and then everybody figures out don't eat that but you know europe does the precautionary principle they said before you put in the marketplace yet to prove it's safe ok but i would say that's not necessarily free market because what we saw with b.p. and i just brought that up the deepwater horizon oil spill and this is something i like to talk about they had there was a seventy five million dollar liability cap and that only encourage them to take on more risk more risk than they would have encouraged been encouraged to take on otherwise and that was due precisely to the government i don't know how you call that a libertarian approach either it's you know you have free market capitalism or you don't it's like being well as a liability apple isn't really real i mean you know that there are to be on the hook for twenty billion dollars well there are a much greater cost beyond that but i think initially at least initially they were they were encouraged to take on additional risk because they saw that liability cap they didn't think that it would become a twenty billion dollar nightmare i don't think so i think that what you had was you had multiple companies collude you know everybody was trying to get fast buck

you know right let's you know so this man doesn't work we'll try to anyway that kind of thing. again this if you want to put b.p. in the frame of regulation. the regulators almost never got out of those facilities i mean it was one in ten thousand i summoned me easily low figure yeah it was definitely a problem but let me get back to the point of free market capitalism because i think the definition of libertarian is often come conflated unfortunately with free market capitalism and i don't see it i don't see anybody in congress right now as a libertarian do you probably rand paul but my point is that while he thinks he is my point is first of all nobody owns that name you know i mean charles koch maybe i wouldn't we don't he's known for i'm with me but he founded you know what is now the cato institute is. so i'm not sure where we're going to leave it on that thank you so much for joining me if you want to weigh them to be a show be sure to like this on facebook at facebook dot com slash prime interest and you can follow tom right here at tom underscore hartman course you can always

follow me on english p.r. i thank you for joining me on today's daily duel my pleasure. well it's been a statistically mixed bag on prime interest what you report to you what the ninety five percent confidence interval c.p.i. up manufacturing's down following bell curve formation are betting the big banks will start charging for checking accounts and response to the showdown over swipe fees but japan and china aren't wagering with uncle sam when it comes to his debt and if you're an enduring don't expect to get much support and then your future but if you're looking for a tangled web we look no further than allen browne's of debt thanks for watching

please come back tomorrow from everyone at prime interest i'm harry and boring have a great night. time has a new alert and a big secrets scared me a little. there is breaking news tonight and we are continuing to follow the breaking news. alexander's family cry tears and so will. great things out there that there had to be adequate regard and a court of law found online is a story made for the movies playing out in real life.

he was the libertarian party presidential candidate that ran against president obama and mitt romney former governor gary johnson has some harsh words for both the president and the republican party. also actor and political activist james duke mason who's calling for a united states boycott of the winter olympics in russia it's all next on politicking with larry king. welcome to this edition of politicking here with me is the phone in mexico governor gary johnson who ran as the two thousand and thirteen libertarian candidate and won nearly one point three million votes that's more than all the mine.