i mean the faith to. follow and welcome to crossed off were all things considered i'm peter lavelle with good reason public discourse is focused on addressing and finally containing the covert 1000 pandemic now the focus is on devastated economies we're in a recession will it morph into a depression will the recovery be a u. . or an l. .

crosstalk economic recovery i'm joined by my guest benjamin cohen lubbock he is the director of the free market institute a professor of economics at texas tech university as well as a senior fellow with the independent institute and in los angeles we cross to he is an independent economic and geo political analyst as well as a former commodities trader all right gentlemen crossed up rules in effect that means you can jump in anytime you want and i was appreciating let's go to los angeles 1st here i said in my introduction i guess probably the most important question there is as we come out of this pandemic and it's all going to be about the economy and it's everything we're going to think about for the next few months if not years is about recovery so infer a very simple question will it be a v a you or in hell go here well we've been in an l. shape depression since the 2008 financial crisis i mean only that true economic

data on unemployment inflation g.d.p. and the like have been warped or hidden outright while the fed pumped up the stock market to give the appearance of a genuine economic recovery and. we've been in a structural downturn rather than a typically cyclical recession and those aren't easy to get out of all of us since february is essentially marking to market if you will of collective economic mattrick as the fake money pumping charade is being wrapped up in favor of a longer term plan monetary paradigm shift our right and i remember the last time we spoke we were talking about the turbulence in the oil market the oil price that that seems like a kindergarten play to consider considering what's going on now ben let me go to you the same question a you or 'd an l because that will really dictate what kind of policy is necessary to get out of this lump go ahead ben. well i think policy has

a lot to do with what type of shape it is so right now we're in a platinum mine and that's because we have shut down orders that are essentially telling people not to produce so the question is when shutdown orders are lifted what is normal economic activity and recovery look like and i don't think it looks like a b. because that wouldn't buy that we're going back to the economic role we all lived in at the start of the year but the virus is still going to be with us so opening back up means taking account of that and weighing that in our economic transactions so restaurants working at half capacity or a 3rd capacity whatever customers and entrepreneurs do you say airlines that much less than capacity all of these things going to abide by bouncing back to where we were now i think what's important is that we don't have dumb government policies preventing entrepreneurial solutions that let us make our recovery as quick as we can and that stick us in how so it's somewhere more like

a you somewhere in between but that's really got to be for the market process to sort out you know the name them that seeing that stock about the market here you know plight we have now as we speak and i think it was as of today 26000000 people over the past 5 weeks have gone on unemployment and the this is massive i mean if someone would have told me this is a scenario what it does i would have been in comprehensible to me a month and a half ago and now. what needs to be done because that these are the people that consume in the get out of a slump you need a lot of consumption and you know i know that there's been a potential aid being sent directly to individuals but it seems to be a pittance because most people will use that allowance from the government to pay off debts more than anything else than consume and ben is absolutely right i mean just because you open up. economy doesn't mean this pandemic has been completely

nailed down and vanquished and i still think people will be very very hesitant to go out in public and consume even if they have the money and having the money is a big if right now go ahead by having the money and money i say increasingly in quotes i may have certain banks in the south and southeast outright revolting wanting to get back to work and trying to dilly dallying and flip flopping between supporting them versus not or as the northeast the northwest the west where i am. diligently by the book falling whatever the government mandates i mean i think there's a wider plan afoot because the mega banking and white or corporate conglomerates stablish ones who want to need them all of these smaller companies for instance to fail small businesses will soon be vacuumed up by banks their own debt to already merged into a larger corporations under forced. right monopolies in each industry it's

a repeat essential of the consolidations which took place 12 years ago only on a larger scale so these banks these mega banks for instance j.p. morgan wells fargo b. of a they're being sued in class action tellingly for funding large or small businesses then smaller businesses with this paycheck protection program p.p.p. before that $350000000000.00 in federal funds ran out why has the smallest small businesses don't pay these banks as much in fees as the large or small businesses quote unquote this is yet another unsustainable contradiction in the modern economic system where clear socialistic government handouts are nonetheless being prioritized through private institutions foremost by their profit motives i mean all this stuff begs deeper questions yeah it's a man and you know i hear only a lot about. democratic socialism and all that and i lived in eastern europe during

communism and i know what that's about ok so i don't really want to go that direction you know but the interesting thing is here banks are picking winners ok i mean it is very socialistic in that way because it's not the it's not the market picking winners it's individuals with their very specific interests in mind in the course that is profit here and being the big supporter of entrepreneurship in small and medium sized businesses because as a conservative that is the very raw base of a civil society and i'm terrified to see these unemployment numbers and i'm terrified to see these small businesses go out of go out when fail and this consolidation here more inequality and we don't need to go in this direction what policy would you suggest to avoid that because it may be even too late for so many of these businesses go ahead. so let's bring it back i don't think we have a consumption problem what we have is a supply problem where people have been ordered to stop supplying things to the

market sees work and that's where unemployment spike comes from and that's the heart of all of our problems including the small businesses because i agree completely it's a travesty what's being done to them right now but rather than government bailouts for businesses what we need is to be entrepreneurs including and especially small entrepreneurs to figure out how they can best serve consumers and we want to do that and then of course the banks if the banks are avoiding them letting them just . just fade away i mean how do we take the banks out of this because they're the ones that are calling the shots go ahead ben. but we stop borrowing government money through these banks to do it that instead of our banks. and losers based on profit and loss and the problem is when you socialize losses through or through the government it's ceased being a profit and loss estimate reallocates resources efficiently so government i think is going up that works in this process now we need to get back to business as usual

in order to go hard and that will mean some bankruptcies both the small and large firms the key is that you want to collect the labor and capital market to reallocate those assets to where they can best serve consumers as quickly as possible. but i but you know you know in looking at this entire saga over the last few weeks in i think it's absolutely shameful that congress goes on vacation you know will come back when there's an emergency that there's 26000000 emergencies out there right now ok i mean they were very quick to pad their own pockets and their friends and their special interests here and now they're still grieve thinking about how to continue dealing with the other parts of the economy but we're talking about small and medium sized businesses they don't to seem to feel the fire on their under their feet to deal with them they took care of their friends and themselves right off the bat like in 2008. yeah i mean it's 2008 and in a certain sense it was just kind of like a dry run of sorts for this multiple and all means and forms of what happened

then you have to consider since 2008 i mean the money that the fed i mean the fed drove something like 93 percent of the stock market run since the 2008 financial crisis meanwhile re-align employment was in double digits real inflation was much higher than what they stated that it was real g.d.p. which is much lower than it was you know it's lies damn lies and statistics as the trite phrase at this point goes by do you know just since february again you know flipping the switch off in the living room that's the equivalent of what the. what the powers that be have done essentially to. the economy so they're no more corporate stock buybacks as of this point after february lockdowns so expect further eventual hemorrhaging within the stock market this is all meant to further benefit the ruling transatlantic a late which thinks in terms of app extend plans accordingly it's aimed partly to

call a portion of the population while conditioning the yearning for or non means tested quasi universal basic and come via digital currencies for the millions of unemployed who fall into destitution. cashless society is planned which has been sought for for years if you think about it by transnational banks the i.m.f. that b.a.'s in switzerland is maggette institutions will be and should they'll be introducing a cashless society after the modern dollars reserve status and the currency collapses under aggressive inflation and mass treasury bond dumping globally which is already in procession i mean before this corona virus pandemic hit us private debt was over 150 percent of g.d.p. with corporate debt being like 73 percent and finance generally was like a 350 percent of g.d.p. completely brittle. a sustainable system we had were most dad at this point will be non serviceable under

a depression triggered by stay at home orders so homelessness will spike even further as well infrastructure decay plagues crime and public riots anarchy and small businesses again going away near entirely it may sound extreme but if if you were to say that there would be lockdown orders and nobody would be able to go to work let alone to their family members 3 months ago that would have sounded extreme well ok benjamin yeah i saw it made good news we're doing it on sky because i can see your expression go ahead and jump in reply go ahead yeah i mean that was a mouthful. i don't share these big pessimistic. assumptions about how things are going to go forward i mean i do think it's policy contingent and i agree with you completely that this this shutdown water was like a light switch shutting off the economy or a large chunks of it that's detrimental to all of us but i think turning the light switch back on doesn't throw the power back on the way it wasn't january but our trip earner is through this process of big and small banks big and small will

figure out the ways to serve consumers and bring supply to market as long as government doesn't get in the way the market process i think was recovering relatively well post i was the great recession i agree completely there was crony bailouts during the great recession for those political elites and those connected but that's largely washed out of the system now we're going to our other productive way and that's what i expect to happen if we go back to make up you know are going just if you have to go to a heartbreak and after that heartbreak will continue our discussion and economic recovery. the derivatives became so huge in size over a quadrillion a door this size of the actual stuff to the point where the stuff is meaningless and only did derivative matter and so the best on the derivatives now are

increasing so as to rivet as on top of derivatives and this is how you get to a place of negative prices on oil because when you trade oil derivatives you're not trading oil you're trading purely on the direction of a price based on a derivative that's based on another derivative or there is no underlying what. has changed american lives would pharmaceutical companies have a miraculous solution. based drugs the people who are chronic pain patients believe that their prescription is working for them in the remedy be certain to. price at the. close of dependency and addiction to opiates is the long term use that really isn't scientifically justified and i'll study actually suggest that. the long term effects might not just be the absence of benefit but actually that they might because we want to.

welcome back to crossfire all things are considered i'm peter lavelle we're discussing the recovery of the economy. ok i'm going to go back to you because i think you know done a number of programs on this particular topic just looking at it from different trajectories and i think one of the most probably the most common denominator in all of these programs i've been doing on this topic is that it is the government doing too little too. or is it doing too much ok the end it seems to me that everybody has a very strong opinion about that we can all use the same numbers and we can you know look at unemployment we can look at debt but then it's always not you know that tool box that the government has only doing enough are they doing too little go ahead. that's an excellent question

a really. points to other questions over the role of government and you know these these pillars ideological pillars over the past 200 years of communism socialism and corporate capitalism market fundamentalism what is the meaning there of you know the february shutdown. is just a rapid bringing up to pace of you know really these questions over the role of government because the government more or less hand in hand with the with private institutions like blackrock or pimco. you know married to the treasury and the fed are essentially dictating everything not just geo economics but politics domestically than geopolitics if you think about it but under the auspices of this of this pandemic of this massive crisis or as it's just you know really piecemealing of its role prior crisis not again and prior to the 2008 financial

crisis crisis the 2000 dot com burst you know and greenspan's role and hike you know dropping interest rates artificially and aggressively to you know void deflation it's like what is socialism versus a genuine market fundamentalism in genuine free market capitalism when you have this quote unquote free hand free hand in the market not being so free and basically dictating so much if anything february showed overtly the very you know socialistic direct involvement of central banking and hybrid public and private banking and dictating the mors of our existence to our i don't care how efficient you run your company you're only 20 people i mean you're literally being put to the back of the line versus she you know shake shack for instance which you know is still making money is still bringing in revenue whether takeout or otherwise and yet you know they get pushed to the front of the line because the

relationships column crony esther otherwise but it's like where's free market versus where it's not. you know it's all met to synthesize towards further hybridisation of what we would know classically as market fundamentalism versus just straight up you know giving $2000.00 a month to folks that are destitute and or sick and not putting in them into poverty traps where the same time questionably limiting them from all of a sudden wanting to become entrepreneurial wanting to become elon musk wanting to learn. and in advance these are bigger questions that are just being brushed to the sidelines because again you don't want to get sick and ill and die so those it's like there's purposeful confusion so that people aren't able to think lucidly and rely further and further emotionally and psychically on government which transcends issues involving classical ideological definitions yeah i mean in the me in set yes

it makes you kind of request question again so many assumptions here you know ben you know the thought of just sending out checks to individuals you know $1500.00 and you know $2500.00 to a family i mean if someone suggested that to me to with a 2 or 3 months ago my instinct would be in no i mean use the tax code ok giving money is something i don't really like doing now i've had a conversion because i see all of these people massive number of people a growing number of people they need cash in their pocket just to reboot even if it's a one time thing which i still think is very small here i mean i'm just trying to point out how i have changed during this crisis because something that i would have not would have been very not agreeable with now i'm thinking you need to do more of it because you know we if we were getting revoked when we had to get on the right foot instead of having an elbow him probably be

a you but it's certainly not going to be a v. it's certainly not going to be a be a people can't consume go ahead ben well it's certainly not going to be if they can't produce so this cash handouts you've got to remember it's the government has ordered people not to work so big sound something. new on this might be changing from before just giving a cash handout when the government's actually doing the harm to the people but of course the government has no money of its own it has to take it from somebody else somewhere else either through inflation taxing or borrowing and we're seeing what's happening with borrowing now i think your question is the government doing too much or too little. has been doing too much and for too long and in too many important sectors particularly as it relates to this crisis the health care sector is one of the least market oriented sectors in the us economy is heavily regulated and we have seen regulatory failures in that. whether it's the c.d.c. claiming a monopoly on having tests that botching the testing that puts the u.s.

a month or so he i'm worried should have been or what we are sitting is some government regulations being rolled back now to allow more market forces and health care and i think that's a good thing whether it's some relaxation he's an speedier the food and drug administration whether it is this regulations that are being rolled back on practicing tele medicine so not as many people have to go to emergency rooms whether it's relaxing of occupational license or laws medical licensing so doctors can practice across state lines i think these are things that make our house that these regulations that were in place make our health system less flexible and able to deal with something like this and that some of these temporary rollbacks need to be made permanent so that we can have a greater market forces and health care not meanwhile other policies going the exact opposite direction president trump is right now to looking at signing an executive order to cease all immigration for 60 days where you know almost

a 3rd of physicians in the united states are horrible warm and they are much smarter policy would be issue a lot more visas to any foreign born doctors or health care workers and waive our licensing laws so that their foreign credentials can allow them to practice things like this that and introduce markets into the sector where we need it most will reduce government's role expand markets i think would make us all a lot better off you know one i think the in the in the immigration ban was very poorly thought out i mean particularly good to what now 3 different versions that have come out since then again very very murky and it that i don't think it is lastly. your ship i have to say the truth is it's true. you know you we've already mentioned 200-2009 now we're here what are the structural inefficiencies that we have to deal with because when you just think about i mean we all remember 2000 in 2009 that was a pretty horrific experience and it was something we'd never seen before and that we're seeing a repeat in

a different way and all the job gains have been lost since 2009 it gone now it's that that's hard to conceive ok and i see one of the things i think very disturbing is that you know there's this glorification of the stock markets and indices and all that i mean i think it was 2 weeks ago when they had 20000000 unemployed and then but look how beautiful those markets are there is some weird disconnect there i mean particularly when people are looking at their own lines and there most of are not participating in any of these markets stock markets at all and you see i.d.c. corporate media you know they glorify the president company that was his you know signature thing look at the markets well he can't do that anymore i mean what is the disconnect there because what is the markets have to do with average people anymore go ahead. really quickly and address your other guests point you know everyone can throw regardless of state regardless of subculture region everyone

could abide by precisely what the c.d.c. the who the government is stating and could completely solve koren teen and yet you wonder if there will be a quote unquote 2nd phase of this illness out in the fall or winter practically being promised by the folks that are put in charge here the language that they're using really further. raise question marks over is this thing actually beatable is it in fact prescribe in certain senses to address your points. that you know agree for the most part there are over 5000 federally insured. banks and savings associations in the united states hit the 5 largest banks matter most obviously in terms of both the fed and treasuries policies as well as and how skyrocketing systemic risks are concerned and viewed there is vastly higher leverage now certainly than in 2008 and yet the government has tactically shut down the economy

seemingly because of a very aggressive newly concocted flu virus citi group j.p. morgan morgan stanley b. of a goldman sachs per the comptroller of the currency i want you to know this 8 years and 2019 each of these 5 mega banks held something else like at least 30 trillion of notional derivatives each representing 83 percent of all banking derivatives this is a fiscal powder keg i mean the owning power is behind these banks and that's essentially national central banks are pulling the plug now performing a controlled demolition if you will of unsalvageable debt and it fizzes and other structures in this wider economic system the fed already pumped over 9 trillion into this broken repo market since september 17th i think of 2009 big banks will get another 4 and a half trillion in bailouts due to this shutdowns of facts means main street meanwhile will get a farcical fraction of this the same as 12 years ago as far as patterns are

concerned i.e. a massive further wealth transfer taking place to a small elite in route to collapsing the system to erect a new post debt jubilee written and rewritten and wire meant with an entirely new monetary system but that that is not politically viable ok i mean that is completely divorced of the life of everyday people and i see a little bit who want it politics and it's got to let me go to bed and go ahead we're rapidly burning out of time go ahead ben. well peter then i'll make this wrap but there's a. simpler explanation for the phenomenon that you're pointing out of stock market and labor market looking different and that's the stock market's forward looking at who thinking about what the future stream of income is going to be from all of this business the current labor market the jobs haven't disappeared people have just been told you're not allowed to do that that's where the unemployment is so as soon as the government starts saying you're not allowed to do them a lot of these jobs reappear not all like i said we're not in to be going back to january

a lot of them reappear and that's why stock market looks better than labor market in response to shut down. but we'll wait and what did the months and look at i'm going and stay with been here we have i got another minute here what are the lessons learned i know that's a lot of a big question for a small amount of time but i mean what when we when we learned so far in approaching this recovery go ahead ben well i don't know if politicians have learned a heck of a lot but they know that we're starting to get really upset with the force shutdown and the lack of a normal everyday american and your mom and retailers to go out and earn a living hopefully they will learn that if they freak people out that these normal businesses will find their own creative solutions to go back to business and serve each other in this new environment i certainly hope so amen gentlemen that's all the time we have i want to thank my guests and let me end in los angeles and i want to thank our viewers for watching us here r.t.c. unix time remember.

so i mean this is to plan a change on the last one to continue at this point that's. going to desire to not. just. wish there was. a new prince not just one plots. so we.

had to. know. some interest in keeping its citizens locked up and sold a. new virus will go by this rules restrictions will remain i think it's kind of what's happening. here idea governments of the world very much interested in lifting this restrictions they are evidently was a lovely skeered of doing this in such a way as to provoke mother waypoints in fact i see we should why are we involved in calming the level of sports that will be faced might millions and millions of question citizens and people form.

max kaiser this is they are report you know we've entered into a new dimension it's car strength area believe there's 11 dimensions overall according to some quantum physicists we've been shamelessly exploiting the 3 to 4 dimensions here in this reality but we're now in 567 and 9 states yes we have gone through the looking glass you know we were telling you here years ago that it all really started not only with 979 when we went to the gold standard and there was nothing hooking our financial system or our economies to anything real.