lopez i've got lots of information that you're not going to find during these newscasts like pictures of my cats for now have a great night. hello hello i'm marinated this is boom bust and these are the stories that we're tracking for you today. first of big bank lobbyists have done it again this time they've managed to wiggle the interests of wall street into the one trillion dollar federal budget bill will tell you all about it coming right up then michael hudson professor of economics at the university of missouri along with gonzalo lira who joined me on today's show to talk about the history of debt and the old guard that they say is america today interesting stuff you won't want to miss that and in today's big deal ed harrison and i talked. and if you were to measure wall street

for you know what i'm talking about yet you do it all starts right now. as part of the one trillion dollar bipartisan bill to fund the u.s. government through september thirtieth republican negotiators have managed to rein in funding for wall street yet reduced spending on federal food stamp programs lobbyists for wall street have been pressing congress to curb the growing power of financial regulatory bodies like the f.c.c. now the spending bill has assigned forty four million dollars to an economic review of its rulemaking process and also includes cuts to become on of the futures trading commission now in response to dennis keller c.e.o.

of better markets which is a nonprofit organization that promotes public interest in the financial markets said quote the only reason to not fully fund the c f t c m e s e c is to protect wall street profits bonuses and reckless trading this rewards wall street lobbyist one danger in american families. now in other news home prices have been rising for months and with the federal government providing massive support to help boost the morgue. market you'd think that the system would be getting back to normal but that just isn't the case now even as the housing market improves new home loans are still rare in the fourth quarter the nation's biggest mortgage lender wells fargo extended fifty billion dollars in mortgages down sixty percent from last year now banks hit by big losses on subprime loans are now more weary of taking on risk and they're also uneasy about exposing themselves to litigation related to any questionable mortgages some bankers say the money out the door is

more challenging today as they now must navigate new mortgage rules set up in response to the crisis and while new mortgage rules very easy to make loans safer for borrowers that banks have deterred from making loans to those with less than perfect credit. and finally well the federal reserve has taken steps to restrict banking activities in the physical commodities markets such as aluminum and oil it is stopped short of actually introducing those new rules now the fed says it's been studying the issue for two years two full years and they want to examine all aspects of banks own commodity businesses including quote potential conflicts of interest now officials are now giving banks the chance to weigh in on how to regulate themselves pretty nice you get to weigh in on how to make your own rules banks have two months to submit their own input on to how they should be regulated before the fed proceeds and then before the fed even considers what they say quote

what further action is warranted it only seems fair no fair. well there you have it as always we'll be tracking these stories and keeping you posted on all the latest . our first guest today is michael hudson professor of economics at the university of missouri kansas city now dr hudson is all. so a sharp critic of what he considers is the rent seeking behavior which has become the dominant form of the world global financial markets now once upon a time governments regularly expunged debts to prevent the crisis and turmoil that over indebtedness ultimately causes but then came the romans and for them a debt was a debt was a debt no forgiveness there and since then it's become standard fare to enforce debt contracts even when they are totally and completely unpayable hudson now sees

a parasitic financial industry that looks only to determine how much wealth they can extract there is an old adage debts that can't be repaid won't be repaid i asked dr hudson to explain what historically happened when private debts were too large to be repaid. there are a large range of scenarios for what happened when dust can't be paid for the first two thousand years from about four thousand b.c. to zero b.c. you had normally most debts owed by cultivator is on the land most citizens had their own land and most steps were owed by individuals to tell us the electors for agricultural and puts it there for the land rent or for water or for shipping the crops or graft animals to and periodic late there would be failures of deaths as

a result crops failures and so the dust couldn't be paid so it was normal for every roller who came into office in the schumer in babylonia and their neighbors to start off the first full year on the throne by proclaiming an amnesty or guess what they say the idea is that they realized that debts really are unpaid bills most of them were unpaid bills to the government of what you now call tax bills. economies tended to run up more and more debts so that rulers would say ok we're going to do is declare a clean slate we're going to make things in equilibrium the way they were in the beginning and we're going to wipe out the consumer against the business debts of the commercial debts. people who are rich enough to invest in trade ventures that afford to lose the money but the debts of citizens the personal debts will all be wiped out and you'll have

a clean slate and to get all over again in equilibrium this actually means perfectly to my next question now the idea of cancelling debt it isn't revolutionary exactly as you just explained but why are banks cancelling private debt and conducting mass and credit write downs today because if you cancel somebodies debt you cancel somebody else. segments in today's economies ninety nine percent of the population odets to one percent of the population and the one percent is using this as a leverage in europe the one percent lends money to governments they don't want the government to pay they want the government to be like detroit or chicago and say you can't pay so if you're chicago or some of your your sidewalks and let us look parking lots there so off your wrote and let us privatized if you're greek priest you say so off some of your tourist lanched some of your oil reps to sell off your letter company so of your parts to us so debt has been used all throughout history is a means of foreclosing on property and transferring property from the debtor to the

creditor and there so on most all of the wealthy oligarchy in every country of the world in history have got rich by foreclosing making a loan and then foreclosing on the assets and impoverishing the other people and that's the business plan we have today right now does the fact that these debts are zero and two private agents banks instead of the state make any difference and whether the debts get cancelled it makes all the difference because if you're the government a government can cancel debts that are owed to ourselves and everybody is happy even in rome rome under the emperors one of the emperors issued a klein and the claim was the roman emperor burning the tax records it's easy to cancel bets that somebody owes the euro but once the debts are owed to an oligarchy to private individuals if you're the government and you cancel debts owed to the private individuals then the oligarchy is going to come and kill you and that's

what they did in rome when there was pressure to cancel debts in rome the debt at that gets for simply murdered just as they were and shelly when you had a socialist secondly people into power and justice and because of debt cancellation throughout history been killed by the creditors they've always. used violence to one force the collection of debt now you've said that private banks are in effect operating as oligarchies that you know they're not killing anyone right now but can you explain this further well hold most of the banks are own by by the one percent or agents of the one percent the job of the banks is that take that and i think in america more you have since ninety cents just. ninety five percent of all of the income growth in the united states is occurred of just one percent of the population according to the congressional research service show that all of this income growth of the one percent is put in the banks to lend out to the ninety

nine percent so the banks essentially are intermediaries making loans to in debt the ninety nine percent further to the one percent and that's the one percent gets rich now why have the germans realize that history is repeating itself with greece in the role of perpetual debt or that germany was after world war one and you know they they're in the position greece is in a position germany was why are they seeing this. this is really amazing you you put your finger on the point why on earth it's almost. you can't teach german history in germany without being fired the there is one of the group that i work with is the boxer foundation which is the labor union and people. try to talk about german reparations and the inability to pay and the whole theory of the ability to pay was developed by john maynard keynes harold martin and other is in

response to the german reparations problems all of a sudden but germans have been given a false this through if you look at their textbooks and the propaganda that the banks are pushing month after month and year after year they pretend the if banks went actually if the government would lend money and if a central bank would actually finance the government deficit instead of the government borrowing from the wealthy people in the banks then you'd have fighter inflation false memory in germany is just the hyperinflation thing from too much too much public spending will new euro break up. well the question is if it doesn't break up then you're going to have a continued immigration of labor from the countries that are imposing austerity let's say what happens if we get if the euro does not break up you're going to have

a situation in greece where one tenth of the population is already emigrated here in latvia which has just joined the year of this month you had ten percent of the population emigrate since two thousand and eight as a result and left the is considered the neoliberal miracle of europe in ireland almost ten percent of the population is emigrated since the break down in two thousand and eight so if country remain in the euro they're going to have to submit to austerity they're going to have to have their taxes. go up essentially to pay foreign creditors and just yesterday in britain of the conservative chancellor of the exchequer john of this form told a conference that the big their wrists to europe isn't people criticizing the financial austerity program but they're coming out the risk he said comes from the failure to reform and renegotiate and the conservative party not the left but the

conservative party of england are now the euro skeptics are saying look we're all in favor of european and integration nobody in europe wants war any. but what we don't want is the euro and if european integration doesn't mean it doesn't mean socialism it doesn't mean rising living standards it means austerity for labor it means falling wages it means falling living standards and it means that if your labor wants work you're going to have to emigrate. praying when a challenge we're going to empty out where you. need. estonia and you're going to be and to depopulate of desert that's what's in store for you if you're a man in europe yes so there's been a bait and switch they promised europe that it would be socially democratic raising living standards instead it's an iron fisted financial oligarchy that's wrecking

the country after country as you can see it in ireland greece and let it be and that was michael hudson an economics professor at the university of missouri kansas city. now coming up part two of my interview with guns all over the euro and then in today's big deal at harrison and i discuss the wall street practice of toilet napping yeah it's a thing but as we head to a quick break here's a look at some today's closing numbers stick around. i've got a quote for you. it's pretty tough. stay with substory. get this guy like me you're about done or working for the people motivations the

mainstream media for each of these are. the. our next guest a writer and blogger gonzalo lira believes ultra easy monetary policy will be the

demise of the u.s. dollar in part two of our conversation with gonzalo i asked him whether his views have changed since he wrote a widely read piece predicting hyperinflation in the united states. here's what he had to say. well i. my views haven't changed and it's very interesting because i suddenly go over and over all of the a little steps that have mapped out on it and it seems to me that there is no other escape and it seems to me that the federal reserve does not seem to know what it's doing and the political leadership in washington has not really helped matters much because they haven't really got out of their way to cut back on the deficit because ultimately it all goes back to the deficit and also comes back to the balance of trade issue and now the there is no political will in the united states to create any kind of a sane sustainable industrial policy whereby the united states is not a net detriment to the rest of the world in so far as trade is concerned and there

is no political will in washington to make a sustained concerted effort to cut the deficit to manageable levels it will say oh it's only six hundred fifty billion dollars a year yeah but that's still you know an incredibly high figure and the total that it's crossing one hundred ten percent of gross domestic product so you have a huge debt a huge deficit no matter how you look at it and essentially look at the federal reserve is printing enough money to cover that deficit that's debt mana and that's deficit monetization that is what third world by now republics do and the only reason that the united states has been able to skate away so far more or less from all of this is because the rest of the world depends on dollars for their trade now when the rest of the world starts getting into a you know something why are we getting dollars i'm china i'm trading with australia or the middle east why should i as china dollars why shouldn't i use

linin b. or australian dollars or some other currency or some other commodity as a medium of exchange in order to get the products that i need and that if they win . enough people enough countries outside united states start thinking that they can get to get by without the dollar and starts to grow change into some other mechanism exchange that it's the end of bretton woods two i think that that would be the point where you start to see it when i'm gone do you say the problems that you warned all of us about as being emblematic of a loss of trust in the american economic experiment or is american democracy safe and sound. well american democracy ultimately will rise on foot that rise or fall on the american people the issue as through whether foreign countries still trust the dollar or trust the american economy or have lost faith in it that's where leon american political leadership and the american consumer because the american

consumer has demanded to have cheap goods from overseas and the political leadership both with the federal government by creating debt deficit spending that it's basically running up the national credit car and on the other hand you have the federal reserve that is obligated i would consider it a responsible monetary policy whether the united states will fall out of democracy and become some other sort of. government i would venture to argue i'd say a lot of it would agree with me that the united states is no longer a democracy and hasn't been a democracy for you know at least a decade or so united states to me it seems is more i would call it a kleptocratic oligarchy where you have very rich people more or less control the political process especially after citizens united versus the. the. federal trade commission general election commission and where whereby

a company can spend literally unlimited amounts of money in order to get somebody elected on the one hand and on the other hand you have the clock the. cracking part of it where you have people who work in government and then they exit the government and use their government contacts to get themselves or really great contracts i mean my my bet you are in that particular case is michael chertoff. who used to be who used to run the department of homeland security who once you rotated out of that job and back into the private sector what do you start doing he started working for rapid scan which is the company that created that built all those scanners at the airports each one of those puppies one hundred thousand dollars and mr chertoff and his company got quite a bit of those hundred thousand dollars for how many hundreds of thousands of thousands of those machines that were built and put into place and you know everybody knows that those machines were present for the use the city were just you know terrorism theater security theater not real but yet he used his position to

enrich himself now you see on every level of the american government you see people all over the place no adding some sort of position and then going into the private sector and taking advantage of their position to enrich themselves not that that's a proper suit as far as i'm concerned it's subtle or it's within a legal framework but that's the make it any less it more now unfortunately the united states government and the american people are no longer interested in talking about the morality of particular issues they only care about the legal aspects where there is evil or not there are certainly many things that are legal that are immoral and i would venture to say that that kind of a talker see that and see that involving door between government and the private sector where people who serve the people the people who are supposed to help its country. leave the government and use their positions to make themselves rich that's the scene as far as i'm concerned and it's certainly not a democracy as far as i can see but you know formally it is

a democracy practically it's like as i said legally a credit all about the where if you're rich if you're a one percenter or frankly it's more like the one percent of the one percent of those people are the ones that really run the show and really control the country and it's unfortunate and short of our mission i don't see how that is going to change in the immediate future. that was going zollo american novelist filmmaker and economic blogger time now for today's big deal. and harrison joins me now to talk about banking you know a thing or two about it we'll get to that in a second but long hours and menial tasks are the norm for interns in the financial services industry who routinely put in thirteen fourteen hour work days however

following the death of a twenty one year old bank of america in turn last summer who pulled three consecutive all nighters at the office the custom of long hours for junior bankers have now come under intense scrutiny luckily for this year's internship class the job may prove to be far less ruling that in past years many investment bankers are now cutting back on the amount of hours their junior employees must work and one man who knows a thing or two about the lifestyle is former investment banker and boom bust has our very own can you tell us a little bit about what your experience is like as the life of an investment banker . is part of it is that basically you're there all day and if you need to cut some rest it's completely frowned upon to sleep for the day so you go to sleep somewhere and the question is where it's going to be where is a guarantee of a well summer internships on wall street they often lead to endless positions and with an entry level base salary of seventy k.

and your compensation worth of one hundred forty thousand dollars with bonus junior banking positions are among the best paying jobs for young people in the us ed would you say that these one hundred plus hour work weeks are worth the salary. i don't think it's worth it at all and you know what these guys are doing is basically they're like copying documents stapling things together you think that ok i got a first class degree now i'm going to go copy documents. for fifty hours a week and then actually do some work for the other fifty you know it's not really that it sounds like a high paid kind of administrative work and a lot of ways. nothing wrong with administrative work but when you're you know most ministers don't have to stay there for one hundred bucks a horse on a week here who hopefully but know several former wall street in turns told the wall street journal that after working one hundred plus hour weeks and being completely exhausted they simply had to look for a period during the day and some found that reprieve in the bathroom. several

parkways in turn stole the journal that they would take what quote toilet naps yup a nap in a toilet in the office bathroom and i got out of here i got to ask you during your wall street days did you not going to stall. in the toilets on occasion because as i was saying you know it's completely frowned upon to go in and i worked in a trading desk i was in capital markets so that meant it was sort of a hybrid sort of thing you were on the desk in the trading floor but you were doing sort of investment banking type of stuff so you would get in it and you would leave you sometimes you pull all nighters so the question is when do you. sometimes you know you've got to take a take and it's not like doctors you know there's cots or firemen or other professions where you're able to just kind of get twenty minutes a shot i have a discouraged that at all banking institutions you know what i heard actually is in japan the japanese they all like they have a communal and everyone sleeping for fifteen minutes at

a go together at the desk at the trade. the night is in your garden exactly that's a good one it's a good analogy now here's the thing you know how does one sleep in a toilet stall do you like the head forward to lean against the side out is a work you know exists of me don't you know living there that's exactly right and you just you sit there now can you think of any other line of work that actually you know is as demanding and requires as many hours of its employees as banking does journalism. but i believe the stories you have adrenaline pumping you're breaking news things like that i think that makes a difference no you know that's the big difference actually when you think about treating the sales and trading vs investment banking investment banking is slow and boring in there may tells you you're copying documents but on the bright reading floor it's a lot different now i want one final question why is the banking complex design this way i think it's designed this way because it's basically you know. you have

to earn your way through and that means you do the hard slog if you want to make the big bucks and you've got to you've got to take the hundred hour weeks that's incredible to me that's all we have for now but you can see all segments featured in today's show on you tube youtube dot com slash boom bust archie we also love love hearing from you so please check out our facebook page send us a message facebook dot com slash boom bust our teeth and please tweet us at erin eight and that edward our age from all of us here at boom bust thanks for watching see you next time.

i'm the best at it and i think a society that. big corporation kind of can. do and the banks try to get all that all about money and i think that's like that for a politician writing the laws and regulations that bankers. out. there just to plug isn't a guy. that. crosstalk

rules in effect that means you can jump in anytime you want. one of the wonderful strong arming of life in these communities face i decided i believe both. a pleasure to have you with us here on t.v. today i roll researcher.

today on larry king now he's played me the most famous adult film star in the world but she's also a new york times best selling author it's jenna jamison what makes a great point i think brains. what i did on film was all about building an industry building a company and being on the fortune five hundred blessed plus i like prints you know but it's a call me the creative part that i am a conservative you are eligible a little bit since you have signed a paradox that's all ahead on larry king now.