well. ada has the day off there are two interesting stories on our radar today the first phoenix housing the second hoover let's start with phoenix now phoenix is a key distressed housing market to follow a canary in the coal mine four former bubble markets and data from the month of may clearly show the housing market there topping out again. three major elements point

to weakness going number one overall sales in may were down twenty one percent year over year that's the lowest since two thousand and eight two past sales were down forty percent so investor looks like it's meanwhile. were down to about nine percent year over year and three active inventory is increasing rapidly up forty seven percent year over year that's the highest level since before may two thousand and eleven so what's the takeaway expect price increases in phoenix to flatten out in two thousand and fourteen while housing prices may have increased in two thousand and twelve and two thousand and thirteen those large increases were likely due to low inventory investor buying and a bounce back from the steep price declines from two thousand and seven to two thousand and ten ok we're pretty big. turn now. and next

american express card members can now earn reward points by taking. its members in rolled in rewards programs can earn two times points if they use their amex card to pay for the ride or they can use their points from four overrides after an amex card member downloads the latest version of the uber app the member will have the option of paying for the ride by either a choosing to earn two points or clicking be choosing to use points if a card member doesn't have enough points to use for the ride then that the card will be charged the full fare and the member will earn two times the point for that transaction either way the ride's arrive. at their destination. by way of amex goober which just closed a new round of funding incredible eighteen billion dollar valuation and operates in

thirty seven countries around the world has substantial reach so it's easy to see why am ex wanted to team up with this particular integration is unlike anything amex has ever done before however leslie berlin the senior v.p. of digital partnerships and development at american express quote we are creating a living and breathing loyalty program unlike anything that exists today the advantage for all of this is the potential for additional users additional riders and while this may be a first remix it isn't frugal just last year we were integrated pay pal as a payment option for its. i. would snowden's revolution may have make you a bit more skeptical about government and whether it probably properly uses its

authority but our next guest takes issue with the whole idea of government from taxes to laws and even citizenship. doug casey is a prominent libertarian who views government with a big dose of suspicion skepticism he's a staunch free market advocate a bestselling author the chairman of casey research we wanted to bring you his view on sistership rather citizenship taxes and government surveillance erin first asked what he thought about the mass collection of private data by u.s. companies and the u.s. government's piggybacking on that data collection by private companies in order to have its spying operations here's what he had to say. you know any sufficiently advanced technology is indistinguishable from magic and where is it headed i i would agree with. ray kurzweil believes that generation we might see what he

calls the singularity where computer power biotech power all of these things will converge and actually change the nature of life so we're really just in a transition toward something much bigger but most of the things that you're referring to right now and i think that would be a good thing but the things that you're referring to right now are. at least for the moment dangerous and inconvenient i don't worry about commercial enterprises doing these things because you don't have to deal with them you can simply have to delete button i worry worry about state enterprises like the cia and the n.s.a. doing that because these people have legal power and they're backed up by guns so i think we've got to differentiate between what the state does and what commercial enterprises do although unfortunately they're all booked up today right i think

that that's the big concern because even though these are private companies that i guess the question is do you find it acceptable for private companies to keep all this data because you mention just press delete nothing is truly deleted in the era of internet databases. well in the past if you some somebody a letter people could keep that letter for iraq forever i have to give you another quote but it just occurs to me it's like what cardinal richelieu said he said. never put anything into writing and never throw away anything anybody else puts in writing so you have to be more careful today but like i said the big problem is the involvement of the state and all of this because it's only the state of the can use a gun against you that can put you in jail if you while it one of their thousands of arbitrary laws and i'm very sorry the commercial enterprises are so cooked up with the government but that's the unfortunate world we live in right now ok now

what is on many guests i speak to on our program they worry that us democracy is becoming increasingly corrupted by the nexus of government business like you were talking about acting together for a common cause is this something you're concerned about and i think the answer is yes but if you want to expand upon it. it's very concerning look there's a conflict sept that's getting a little bit of traction out there it's called the deep state and what that's all about is the state is not the congress and supreme court the presidency acting like in a civic spoke what it is is that these giant administrative agencies these praetorian agency is that have immense power and millions of employees and. inserted their kendrell zx throughout society and their capillaries and veins are throughout society so that it's almost like a government within

a government at this point and you can't expert an expert extirpate of it because people say well it's suppose we elected some good guy and he could cut out the bad parts of government quote unquote like like a cancer but you can't cut out this cancer because it's in. simulated itself throughout society right now so this is one reason to be very bearish about the near term future my opinion you mention that in one hundred years from now we might not be having this conversation but here's the question do you think that the advent of the internet and things like that it's become a more global world it's easier to get from one place the other or transfer information from one place the other and in a second mere seconds do you think that that is only going to help and increase the anti nationalistic rhetoric you're talking about no question about it because you'll find that your real country among the people that you really want to be loyal to are those that you share interests and philosophies weapon of a hundred different types it's not just the people that buy an accident of birth

you're born in the same artificial bailiwick with them so that my opinion the internet is perhaps the grandest single invention since goodman birth created movable type and allows people to find their real soulmates their real countrymen no matter where in the world they are no matter you know what language or religion or race or whatever they have people they can find people that they actually share about the use whether it's a fantastic thing i mean the internet and i think it's very very dangerous that the government is sticking its its climate fingers all over it these days you're in argentina right now where the government seems to be far more authoritarian than the u.s. government and i take it that you like it down there you've been there the past couple times and spoken to so why should americans complain all things considered. well look you have to pay as in the us you have to separate the government from the

society now here in argentina under cristina. fernandez i mean the government down here is criminally insane i mean it's actually comical the stupid things they do as regularly as the u.s. government but governments one thing but the society is something else and the society down here is fantastic and i and i like that the other thing about the government here is they're terribly incompetent so they actually leave you alone and if you're a foreigner who's living here just six months of the year as a tourist. you're treated as a welcome guest not treated as a milk cow which you would be if you were a citizen either of us or argentina so i think there's an argument to be made if you're in a position to do what i wish everybody was to be a. in effect a perpetual tourist to live six months of the year in one country when the season's

right six months than another. and not be obligated to to either government or taxes and to be treated like a welcome guest because i know you can pull up stakes and leave. that was free market advocate and chairman of casey research mr doug casey. tonnelle for a quick break but stick around because we're turned dr thomas paul is on the show and he's telling us about the not so minute differences between keynesian and new keynesian economics. then in today's big deal i'm going to be joined by the host of our tease the big picture tom pardon thomas sitting down with me to discuss the failure of economics you won't want to miss the other day of this but before we go here's a look at some of your closing numbers at the bell. would

you like me you want your comedy news with some t to comedy news to be a bear fisted no holds barred fight to the dad. like a vampire biting into the next in the corporate elite billionaire freaks while they're going. well that's what you get with my new show but jack to the night. well.

for steve going to sleep doesn't do too much for. the seventy six year old american the studio. is going to create this. do you think this is what's triggering a race for so long to stick but it's also the largest debtor nation. breaking the set is mostly about turning the status. on the working poor the american dream the next they were just trying to survive time for americans and lawmakers to wake up and start talking about the real cause of. this is going to be an interview because through his platform of the nobel prize winning economist paul krugman is one of the main intellectual proponents of

liberal policies in the american political sphere but many post keynesians argue that in fact his liberal policies belied neal classical economics at the heart of his new keynesian economics now here to explain his position is dr thomas. he is the author of from financial crisis to stagnation and economic policy adviser to the a.f.l.-cio and started the conversation by asking about the difference between keynesian. economics here's what he had to. the point i want to get across is that it makes a big difference in the stories you tell in a way economic theory is storytelling you can't tell any story. to be kind of consistent with what we observe out there but still it's a story and the type of stories you tell impact the type of policies you have and the political discussion you have and that's what serious about the new keynesians

because they occupy the space that should be a more vibrant real keynesianism which is a different story about how market economies work keynes basically said that capitalist economies work pretty well but they occasionally have big ups and that's when you need certain types of policies that will get you to full employment and they won't get the full employment by themselves and that's what we're seeing now a new tell a different story firstly say that the problem is to do with this rigidity issue and then they also say that we actually do eventually go back to full employment and if you'd asked him for five years ago i remember back in two thousand and seven having a discussion with brad belong in the u.k. and. in california at berkeley and he was very dismissive of the arguments right now instead of going back to full employment one to three it's one to five years so it will be one to seven years so there's something wrong with the theory and in the meantime. they are crowding out space for other discussions and you see that in

politics we have a rather weak mainstream democratic party against a reactionary republican party and i understand why the public is confused because they don't get a very clear. description of the economy from the from the new good from the new keynesians now i know that you are i want to say fan but i have a lot of respect for paul kirk and may be a fan maybe not but he says you know the heterodox economists like yourself are out by name and you know i have a story line you guys you guys have the story line all wrong and i have a quote from krugman that i want to read now here it is here's the story they tell themselves the failure of economists to protect the global economic crisis and the poor policy response there are two plus the surgeon inequality so the. failure of conventional economic analysis so it's time to dethrone the whole thing basically the whole edifice dating back to the samuel since one thousand nine hundred forty eight textbook and give other schools of thought equal time now is that what you've

been banging on about all these years what would you say if he's absolutely right they did they did not predict the crisis the policy response was weak and they've been making adjustments since in fact then we've been running with this story now for thirty years. the way that i believe that i talk about it is we're stuck in a situation we have two schools of thought chicago and the new keynesians what he calls salt water and fresh water well i like to call them coke and pepsi that both colas but they have slight differences about them and so pull krugman is trapped in this dog it's called it's called the arrow model of general equilibrium and they all subscribe to it now the chicago guys sort of believe it's a rough approximation of the world that we can work with it the new keynesians come well know there are actually some some are good it isn't it some frictions and that's the difference that as a result they also this is this is where i am closer to a crew of men we do share some values in common we are probably for

a more egalitarian society both in terms of equality of opportunity and in terms of equality of outcome because without equality of outcome it's hard to have a quality of opportunity so you need to attend to that and that's where we are and we have a agreement but we have a very fundamental difference of analysis and that's what we need to surface having shared values is not the same as having shared analysis and koopman has been patching up his model the last four five years he's been making adjustments to the model which by the way. people like myself were writing about for a decade or two before and he's and he comes along and makes a few patches doesn't even recognize that there's been all this other stuff written for twenty years and puts it out there it is new as he's new contribution no this is this is wrong he got it wrong and it's time to own up court and by the way another. what we're seeing it suddenly this discussion was about thomas piketty because he has done a fantastic job about inequality putting the facts on the table but now from the

left from the right you get the financial times saying the data is wrong without that focus that product they're trying to reinhart and rogoff they could hear it's not going to work he's a damn good empirical economist but he's theoretical story is weak and that's because it's the new and that's where the new keynesians and don't want to take on a critique what's missing about it well when are they going to put power into the story when are they going to put unions where are they going to put minimum wages deeply into the story so that really explains how the economy works but i really like your take on that now. krugman wrote in a separate post about the whole flim flam thing me that you brought up the argument is this and i want to read you a quote a fairly desperate attempt to claim that the great recession and its aftermath somehow proved that john roberts and nicholas caldor were right in the cambridge controversies of nineteen of the one nine hundred sixty s. so what do you say to that again in layman's terms well the cambridge controversies were an attempt to critique the theory from within people who tried to critique it

from without and they just get no attention so the cambridge people went and said let's look at the logic of the model and they showed up some quite deep inconsistency in the model that the type of conclusions that the model that our degree model makes don't hold up and many more people have showed up those same conclusions and arrow himself said that you know when i put this thing together and analyzed it mathematically. my conclusion was that what was required to make it be was so implausible and so impossible that it can't be a description of the real world and therefore to use an alice in wonderland economy to guide your thinking which is what paul krugman does must get you in trouble and it has gotten us in trouble because that it has informed the policy debate since nine hundred eighty when ronald reagan came to office and that's been the new democrats bought into it they bought into it a bit more weakly bill clinton bought into it we're still living with that problem by the way even now our politics are struggling to shake off the clinton era in twenty sixteen what's going to be the election is it going to be an election

between a right wing republican and a return to bill clinton or is it going to be a election between a right wing republican and someone is offering shared prosperity and this is how these economic issues feed into our politics and this is how these economic issues block the electorate from understanding of the economy and therefore if they don't understand it they can't demand change and in fact their anger gets fed into cultural politics you know don't tread on me and all that sort of stuff and that's a problem for the country because our problem is economic right now now what the failure of mainstream economists to predict the crisis and it is that related to why you disagree with paul krugman what i think it's part of the story surely the folks who got it right should be the folks who go and then consult with and get advice from not only did we the group of economists i work with saying that look in advance of the trouble we said that the trouble is coming we said that this economy

suffers from structural shortage of demand we said that these debt burdens are unsustainable and all of that happened in my book that you kindly showed at the beginning of book it was written in it was published in february twenty fifth talked about stagnation i mean now lawrence summers a year later the book of course was written two years earlier it takes time to find a publisher the analysis of what it was when it was rich. back in two thousand and nine i put out a paper with the new american foundation the very last. paragraph which says our future is stagnation because that's the logical next step of the model we have come on michael i'm not there not to pump up myself many colleagues who work with me when making the same sort of arguments we got it right and those the experts you should go to but that's not what happened. there was dr thomas pilot and now time for today's big deal.

big deal. in today's big deal tom hartman and i are sitting down and talk about the field of economics and if the post financial crisis economic world has left us with any better tools for understanding how to avoid financial crises you just heard dr thomas politan about how the same people who got it wrong before the crises continue to be the ones off we advise and commentary throughout the crisis and today no one on bloomberg writes the comfortable truth the reason we don't really know why recessions happen or how to fight is that we don't have the tools to study them properly this is the situation biologists were and when they were trying to fight disease before they had any microscopes not only did they have the right tools they didn't even have any way of knowing what the right tools would be

so. that's a very interesting and provocative way of looking at this kind of will use this as a jumping off point for thinking about economics do we have the right tools do we have the right framework for understanding the economy well and perhaps more important question is does it matter we were treating bacterial infections with mold. bred penicillin for a thousand years before eventually one hook was able to look through a microscope we may have imperfect tools to predict recessions or depressions but we know that from the george washington ministration until nine hundred thirty two united states never went more than fifteen years without a major national bank panic longest period we ever extended between panics was fifteen years typically it was thirteen years and from one nine hundred thirty two until basically two thousand and eight we had no major national bank panics why was

that because in thirty four thirty five thirty three glass steagall was passed and thirty four reforms of commodity trading were passed we set up the f.c.c. in thirty three and we regulated the banks we also know that capitalism periodic lee fails or periodic and spotters crashes and we know from looking at countries around the world where government says we will be the employer of last resort when capitalism fails that the impact of those cows those failures of capital system are minimized on the people so on we saw this in the thirty's in the united states we see it all you know all across europe right now what do you think about this ok when you talk about the thirty's and so forth the normal response is look but wait a minute nineteen twenty nine hundred twenty one we had a huge economic recession in the united states and we had a president in there harding who just let the whole thing happen that's all and he didn't have any government intervention and as a result we everything was fine we'll think about that. what harding did harding

campaigned on a platform of less government in business more business and government in the words outsourcing government functions and deregulated government which he did and he were enter enter in a campaign that he was going to drop the ninety one percent top income tax rate down to twenty five percent which he did those two things. bubble a nine year bubble harding the coolidge in the and the hoover administrations were just purely based on bubbles and whenever the top tax rate is below fifty percent what you see is cycles of boom bust boom bust in the in the american economy or any other counties around the world whenever and for income over about three million dollars a year when that top tax rate is over fifty percent for income over about three million dollars a year what you see is a steady economy like we you know during the period that it was over ninety one percent and thirty three again to nine hundred eighty seven in this case no crashes suz reagan drops a below fifty percent boom you get the crash of eighty seven so it's like you know

again we don't have to be able to predict this we just know there's a there's a there's a you know there's some kind of consequence here well let me ask you to give predictions we'll have about a minute but i want to think about twenty sixteen i know that you have a book that talks about what's going to happen in two thousand and sixteen the crash of twenty six to tell me about well what i'm what i'm suggesting the book is that we're already in the crash that we've been in the crash since two thousand and seven two thousand and six arguably and that you know obama's doing the exact same thing bush did which is trying to hold off until after the election and bush was unsuccessful in that which is one of the reasons why obama is president whether obama can hold it off until twenty six because they're not fixing the structural stuff and they're still listening to the same idiots who caused the problem apropos of your last guest well thank you very much for that that's all we have time for thank you from all of us here boom bust thanks for watching and listening next to.

the.

i am the president and i think a society that. big corporation kind of can do it can do i think the banks are trying to get all this all about the money and i'm a family that for politicians writing the laws and regulations. they're just too much. of a diet. that. let's face it you know. pleasure to have you with us here on our t.v. today i roll researcher.

coming up on r t a major city in iraq falls under the control of militants government security forces have fled model but the prime minister has called for a state of emergency the latest on that ahead on the most. and the f.a.a. grants its first permission for a commercial drone flight in the u.s. it will be used to patrol a pipeline we'll tell you where coming up. and in new york city occupy protesters will be paid a big settlement by the city this is meant to and a lawsuit over the n.y.p.d. wrongfully arresting activists more on this occupy victory later in the show.