hello and welcome to cross talk where all things considered i'm peter lavelle the economic system known as competent as in has generated more wealth than any other system in history in many ways that is defined maternity itself hundreds of millions have been lifted out of poverty however competent lism has also witnessed growing income inequality plus the appeal of socialism currently on the rise in

capitalism work for all. across talking capitalism i'm joined by my guest geoffrey tucker in new york he is editorial director for the american institute for economic research in los angeles we have piii and he is an independent economic and geo political analyst former commodities trader and strategic planning advisor and in indianapolis we cross alexandra hudson she is an independent scholar writer consultant and speaker right across cycles in effect that means you can jump in anytime you want and i always appreciate go to pi 1st because i one of my rules on this program we always go to the person that got up early is that you got up really early for those programs i wrote very much appreciated by you know there's a lot of talk about how capitalism is. performing and for whom and we look at the generation x.

we look at the middle millennial as we see the attraction of socialism in the polls so my question is very broad and it's a very deep question at the same time he said is capitalism working if it is for whom go ahead. well it's a great question. kind of response question is whether capitalism whose capitalism i mean it's 201920 years ago we had the strongest economy known to man with you know everything technology and the promises of the internet and efficiency the lowest real rate of unemployment back then versus real unemployment right now being a multiple of what the government states that it is so why was capitalism working so splendidly back then versus the over indebted over leveraged version of it right now it really begs the question over if it's classical kind of adam smith and david ricardo joseph schumpeter capitalism as taught in college and grad school or if it's more of an i and randy and servile of the fittest at any and all costs by any

means necessary vulture market fundamentalism that is built on increasing amounts of financial leverage and speculation versus actual manufacturing productivity and this is stand ability of a middle class i don't think it's working in the same way that it had in decades past ok it's good alexander in indianapolis i mean i think that's the point here is that i had i'm actually for capitalism ok i don't want any misunderstanding but i'm i want to work for everyone or more people than it's working for now ok because we we see you know we hear you know depending on what side of the political aisle you are you know how well the economy is doing well it's doing really well for rich people and that is undeniable when it goes a little bit further down i think it's a lot more nuanced than the talking points that you hear on c.n.n. or fox go ahead alexandra. i think i think you're right peter it's always more

nuanced than that the talking points from here on fox but i mean adam smith himself wasn't naive and he recognized he wrote in his wealth of nations about the that that that free markets would produce inequality he wrote for everyone rich men there will be $500.00 poor and right but for him the universal opulence that free markets would produce was worth was worth it and we see that empirically objectively that that capitalism has has done a lot of good and reducing global poverty the number of individuals who live on a dollar a day has reduced by 80 percent in the last 3 and a half decades and so you can you can argue with with with facts like that ok jeffrey more or less the same question to you i mean there's a lot of things are you t. particularly in the united states in europe there's a lot of austerity there's not a lot of hope actually ok i mean it's treading water in europe in the united states again depending on how you want to interpret numbers i mean i'm glad the stock

market's doing really well but that doesn't really tell you how the average person is living i mean i think they're very much separated they have been for the last 40 years so i mean it is capitalism serving the interest of the majority and shouldn't be more than just a majority everyone go ahead jeffrey. there are very specific reasons i think why growth levels declined over the last 40 years and this is i think what we're really talking about here and you know people have expectations that every generations can be better off than the previous generation right there so that was the way we lived there was in support of post-war era and that's something happened you know in the early 19th seventies to read down the state of growth and i think that something is not capitalism it's over regulation everything's over the regulators very difficult to have for if you are of i.p.o.'s that we used to for example just because the stock market is heavily everywhere you regulate financial regulation is afflicted us in a grim way ever since $2800.00 when they tried to fix the system and actually made

everything worse worse it has produced too much leverage and. this is again i think we're using the wrong term it's like not capitalism i think it's really regulation and central banking and you know just a lack of access as wrap of the growth of i mean some some level in some way it's outrageous that actually that we've we've come to this expectation rolling out to grow what one or 2 percent a year this is crazy in the gilded age you know we had double double digit growth because the economy was much freer if we would free up the financial system get some sound money and get rid of the regulatory barriers and here's what's interesting about what's going on right now with the trumpet ministration in some ways there's a lot of deregulation and that's good in other ways there's even more i mean what trump has done to trade is is created a kind of chaos and it's increasing prices at eliminating export markets and

distribute supply chains and it's really massively reduced investment business investment in particular in the manufacturing sector sector in the u.s. and that's only going to reduce grows more and guess what people are going to blame not protectionism by regulation once again near a budget where. capitalism oh it's not working it's not working so i think we just have the wrong name for the problem well i don't think i think yeah i think it's actually the right goal to find regulatory and i think it is the right name because that's what people are saying ok as a juxtaposition to socialism so i think that's important here in a pie let me go back to you i mean one of the most important things but not here we had to move in here you know the consumption is the most important part to be economic growth right now but if that is under strain it is under strain i mean the number of people that have low paying jobs now is extraordinary and the savings level is negligible a shock can really hurt tens of millions if not hundreds of millions of people and

it seems to me that if you're not concerned about people's consumption because that is the golden goose that lays the egg here that drives the economy shouldn't we be looking more at families and keeping families together that is speaking as a conservative it seems to me that makes much more more sense because this whole financial ization of the economy it just makes the rich super super rich which is just fine with me but i worry about the middle class go ahead guy. i mean what middle class kind of. you know what i was saying earlier as far as you know the post-war war phase of a middle class a building has been dissipated over the past 20 years. you know people in suburbia and rural parts are wondering why the number of homeless have skyrocketed they attributed to laziness or and or drug abuse. in part because dad dad a proper dad

a real transparent dad is not plentiful from the government and hence it causes confusion so that people blame citizens especially after the 08 crisis which tweaked the economy it was already an over leverage system the government came in to leverage to do even further amount of debt in the system that's announced is a multiple of grave multiple what it had been before the real rate of debt including for instance derivatives notional value of derivatives contracts globally is in the hundreds of trillions of dollars not even a number at that point we face catastrophe in a 2nd great depression in less than 90 years and yet people are calling it a great recession they're evading it the other thing earlier you were mentioning. capitalism versus socialism i mean the confusion is over there is a socialism existing within america in the u.k. it's a socialism essentially for the rich oh yeah oh for fox and it's basically take if

it was genuine capitalism which involves competition comparative advantages as written about. then what as recorded written about what you'd have as is failure of going concerns that are not going anymore instead you had a socialism come in and bail out banks calling other banks in very back back of the curtain political decisions that were made over lehman brothers and bear stearns specifically and you're about to have a reprise of it because there's so much leverage in the system collaterals not being trusted in between banks and counterparty insurance firms and yet the fad and very counter democratic and counter a capitalistic practices is keeping its mouth sealed over who's in trouble how they're in trouble why they're in trouble how many further tens of billions of dollars per night is being put into the overnight lending reposed market in order

to bail out already bankrupted firms because they know better nobody else in the in the in the that's all it is is that evil of understanding their lucid ation that's what they said in prior to the 2008 crisis here alexandria hi kind of got ahead of me here and what i wanted to ask is that there is a common criticism and i think it's an interesting characterization is that there is socialism in america and it's for the rich and it's the it's the really everybody else has to go through the rigors of capitalism there is something to that go ahead and indianapolis. yeah it's it's interesting i think the most effective way of defending capitalism today is through the words of the father of capitalism himself out of smith who is an intellectual hero of mine and smith said over and over again in his famous book the book that made him famous ms day the theory of moral sentiments that any system any odd economic system free markets or otherwise would only be as effective as good as the people who as the virtue of the

more ality of the people who who lived under the system and i think that's that's true today in theory of moral sentiments miss talks about the of the need for human embassy the need for compassion the need for and the need for sympathy and i think that that is one problem with the rise of inequality today where it's increasingly of that there that that the case that there are 2 americas where people in upper echelons of society have no idea how people and the irish ones live in the struggle they have so so. well can i think that's one reason why we see socialism on the rise ok i want to go to a short break here you know one thing i want to say here the one good thing about having your own program we get to talk about adam smith another really smart people i like that ok after a short break we'll continue our discussion on capitalism today with our take.

time after time corporations repeat the same mantra sustainability it's very important to accelerate the transition to sustainable transport sustainability stay in her manner more equitable and sustainable well. they claim their production is completely harmless. because. it does not the companies want us to feel good about buying products while the damage is being done far away and this is something i'll just keep going to anyone and i mean look. you missed me didn't anyone and i'm stunned. understood so when. is your media a reflection of reality. in

a world transformed. what will make you feel safe. isolation community. are you going the right way or are you being that. way. what is true what is faith. in the world corrupted you need to descend. to join us in the depths. or a maybe in the shallowness. but i. just let's see i guess. i was on the floor some days in my bathroom you know trying praying. it was just me when i went to. my. first

time for west to die worms and i was having children fever i didn't have any sense of say so smell from the most you know the words world would you. recently she was under the old you tube. time on simon he was on the mound for the purpose sir. i have heard and. push myself to do for me in the 58 i'm going to. go. welcome back to crossfire where all things considered i'm peter lavelle you were discussing capitalism.

ok let's go back to jeffrey in new york and in my introduction we to i mentioned the important issue of inequality and any society all societies through history when you have a ratio of inequality gets so high you have political instability and it's something everyone should look at and i think that really accounts for a lot of discontent around the globe is because that ratio was hit at a certain critical mass how do we deal with that inequality here i mean i said in the 1st part of the program you know i don't have this the whole you know elizabeth warren mantra you know bernie sanders mantra against billionaires i don't i'm not against billionaires i guess i really want more equality and i'm coming from a conservative perspective here because i'm looking at the health of society the health the health of the middle class is ok because i believe in the middle classes the rich i'm not so i don't care about them they're rich go ahead jeffrey. you know

there's 2 ways you can bring about more equality in society one is by lifting up the poor in the middle class to be richer and i think that's what that what's happened the data actually show this with the other way is just to just to abolish billionaires a buyer's lender and i believe american people to know levelling is not going to work at the best catastrophic so i'm actually i actually worry about the term equality here because of for so it's a term derived from math so it's very contingent on proper data my colleague phil magnus said has been running the numbers now for the last 5 or 10 years and he's got completely revised that and showing that there's been no rise in inequality is such in the united states it's about this since the 1960 s. a lot of that is being manipulated for political reasons i would caution you to just you know except. the prattle of that you get mainstream press about this whole time and look around to even question about this idea that somehow the the poor are

suffering in this to america the last of it you know the poor have to do it have a so much access to good services like there's never been before that wal-mart so ubiquitous prices are falling for clothing and food americans just spend 3040 percent of the budgets of food now it's less than 10 percent you know the basic access has been almost universal laws that i really sometimes i think a lot of this talk about inequality is just a bunch of convention about but nothing is done so this is perfect right but i think what we're really interested is not more equality bit more opportunity looking for ave been ok and i think that's going to come about through for the for the for the do very well for the deregulation so i think we should be a little more precise in our terminology what we want is is equal access and opportunity for everybody and for everybody to get richer right that's that that's what i think we should seek i was talking to a socialist by the way the on a on a train in new york. she said i'm a socialist and i'm like ok this is going to be

a long train trip and i thought out i asked her. about this isn't the thing that we want everybody to be universally rich she said no we do not because the rich always get rich at the expense of everybody else so and there so i think she is wrong and in a true capitalistic society every trade that takes place should be mutually advantageous advantageously can all make wealth together and a cooperative yeah good way that live our latest perspective on why i lived in communist eastern europe in the 1980 s. nobody has to tell me about communism in marxist theory i lived through it ok and it is a dead end full stop ok ok pie a lot of inequality to write a lot of and there was an enormous amount of inequality and communism ok i absolutely had to be good see i want to keep the inequality going let me go to pile here but there's the perception i agree with ok jump in go ahead that's

a point of program go ahead in a way yeah i i agree with i agree with geoffrey were guarding the earlier statement that he had made a couple of things involving the issue of sound money that he had referenced as well as what he just said as far as opportunity if you're lazy and you know you just don't want to work then there's really kind of no need to kind of apply the ball of equality to you however if you want to be socially immobile and you're willing to work you should be able to have some advantage within a genuinely capitalistic society agreed on them as we don't live right now currently in a genuinely capitalistic society jeffrey should really really evaluate what we're genuinely living in the federal reserve is this socialistic of an institution by definition i mean marx was very pro central bank i agree with as ken exists and is being socialistic again as we had referenced earlier towards a very. a very small percentage of people that have purse on pressin and levels of

insider information yeah and shared amongst each other and have managed to gain aggressively over the past certainly over the past decade let alone really since the dot com bubble burst or as you know your average joe that what she wishes to work harder have his or her kids. do better than his or her generation did have it that much more difficult why because jeffrey was mentioning that inflation and and other data is not as bad as it seems it is ok if you be picky and choosey with regard to inflation you're not listing insurance premiums you're not listing education costs you're not listing medical costs that tend to put people into bankruptcy and and outright homelessness fairly rapidly and then you know you're not you're not you're not you're being you're being totalitarian and i use that word tactically you're being totalitarian with regard to information dissemination

to quote your rough paraphrase your guest in the midwest you need you know the smithy and morality that was referenced earlier resides on a bedrock of proper transparent credible honest information and the worst the system the bigger the lies and we're suffering from systematically lying from the fed and the bureau of labor statistics and others on down to the point where people are unable to plan the currency itself is so graphic catastrophic lee debased that we didn't know what it means anymore and it's by design an order then replace this dollar that's essentially a used dish rag by something digital nontransparent auditable and turn off of will for lack of a better word visa via the block chain within the next several years because the powers that be know what they what they're doing. they've known that all of the

dollar per se is going to have a shelf life to it that's why we went off the gold standard back in $71.00 and that's not coincidentally the timing of that with regard to you know gradually dissipating. you know lifestyles and hollowing out of the middle class is because the currency itself is not ok alexandria one of the things that it's touched upon it already in this program but you know i think it's something we should be really worried about is the generation in their indebtedness and their prospects prospects for the future when you when you're laden with so much debt you ended up living with your parents in your early thirty's you're not getting a job in the field that you study which you know that happens a lot but when you study something with studies at the end of it well you should be as a head a heads up you're not going to do that ok and being after university and getting a degree a degree you're in low wage jobs jobs and that is again this appeal of socialism

because they see this it's so insurmountable they're not going to do better than their parents and that is vivid that's very real when you're living in the basement that's really real go ahead alexandra. i think you're right peter that this this issue of rising student debt and a dearth of well paying jobs has contributed to mistrust in free market system as being a system that works for everyone i absolutely agree but i mean as was mentioned by my fellow panelists just a few moments ago objective measures of standard of living are i mean we're living longer where we are we are more educated you know a litany of these touchstones for for general well physical well being and objective standards of living are up yet i think what's important keep in mind is that we are not just you know physical beings we're social beings we're spiritual beings we're emotional beings as well and we do have this sort of crisis of meaning where a few moments ago peter you talked about the family how do we support the family we

see the family breaking down the church breaking down communities breaking down all across the country and i think that people are displaced daily these are the traditional foundations of where people derive their meaning from and without those people are looking to to ideology in this describes the rise especially and tribalism and other radical ideologies as well and you also mentioned a little while ago peter eastern europe and your time there and i think that's a really powerful illustration there's a great book by a gentleman named ernst gellman called the conditions of liberty where he talks about this this struggle in the post soviet era where in the west we were well meaning and tried to airdrop these democratic and free market institutions on these post soviet countries and they didn't work because there was this lack of community this lack of social trust this lack of civic bonds between individual citizens that have been so corroded by years of mistrust under under communism and so i think

it's important for this missing in point that any system is only as strong as as individuals and individual communities as well you know it's kind of a twist on that great churchill line. i capitalize on the worst of all except for all the other ok but let's go to jeffery go back to jeffrey new york but the other one that's being touted so much is socialism and on this program we've made a number of programs on the appeal of it i mean i find it a poor and but it does get a lot of traction and we have presidential candidates speaking about it in the most positive way and i think that is a disastrous path i mean i think capitalism as it exists today calling some of the things that pie and say needs to be reformed in modified but don't throw it all out no way because i saw i saw the past and i saw the past and it failed we'll give the last minute to jeffrey go ahead. yeah it's been it's been unbelievable to see the rise of social side the ology in the last you know 10 years and that says i never i

was i remember when this all collapsed in 1009 i thought well you know we don't have to worry about that in wherever we are socialist and where well here we are and socialism is and all the academia young people are supporting made sure they know what it means maybe that means rule by social media or something i think out of the know but socialism is new is popular and i worry about it's an absolute cancer you know i do think it is 1st of all it's an academic yet sort of exercises coming out of the universities which are largely subsidized by government and by the brits terrible stew student loan problem which is a very serious issue which is the sells itself a socialistic constitution because kids are getting themselves massively in debt and 66 figures and barely giving their green is not new user degrees once they get out of out of college and then they get really bitter because they've got another 20 years of payments going to have in the cab the carberry bankruptcy if they don't pay him that as well and i will tell him that's all ignore that it's all the time

we have here our care fund it's all it's all the jobs are we run a time and i want to know my my bow no hear me and that educational system is a fraud and it should be ended and be for audit ok that's all the time we have many thanks and i guess the new york los angeles and in indianapolis and thanks to our viewers for watching us here at our d.c. unix time and remember crosstalk rules. the world is driven by.

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