how will his back shape the coming recovery and is a permanent underclass the new normal. to discuss this and more i'm joined by my guest richard wolffe in new york he's a professor emeritus of economics at the university of massachusetts amherst as well as an author of the recent books understanding socialism and understanding marxism and in chicago or which he has a chief marketing strategist bubba trading all right gentleman stop rules in effect that means you can jump in time you want and i was appreciate todd let me go to you as you just heard in my introduction you know that we have an ongoing deep recession i think as of this morning the i.m.f. came out with their global projections that under a contraction of about 5 percent locally the u.s. doesn't do much better the industrialized world is more or less in the same

position but at the same time as they say you know we how the wealthiest among us reaping in enormous revenues and profits here and the unemployment depending on who you want to look at it from 13 maybe 17 percent and that's not going to go away any time soon so what's really happening with the the economy or it's a recession deep recession for many and it's a goldilocks time for some. i think when you look at the overall picture and i mean this is if you go back of the origination of the federal reserve i think this is kind of their plan all along this is part of the rolls largest legalized. they can do has allowed the rich to get richer as times get tougher you know for years they've had access to this cash and capital to borrow it's only recently that the average guy can actually browse for my to get in so they threw a fry and bad conditions and actually. always built well under the toughest

conditions because they have the access to capital that others don't they have the ways they get the money others don't so their businesses are allowed to thrive well everybody else is out of business you come by where i am in chicago and almost every small business is going to be out of business i had time to selling is over not just wiped out 5 an entire class of people because you allowed the wealthy to go out and thrive through these tough times getting access to capital doing all the things that normal people don't get to do so the class divide will continue and it's mostly because we don't really allow the true free markets work anymore we allow the the upper echelon they have a better chance and better access going forward and i think that's one of the big problems that i see here well so many go to richard so many of the wealthy you know look at socialism as something up point but i mean this is exactly what they how they have to have socialism for the very very rich and concierge service and you

know the states not supposed to keep winners because that's against the markets but that's exactly what they're doing they're picking winners all of the time richard go ahead. yeah i think i agree that we are in a. zan state of capitalisms desperate effort to survive where perhaps i disagree a little bit is in looking at the government or the federal reserve or the treasury as somehow the place to start understanding what's going wrong i don't see it that way i see capitalism as a system that gets itself periodically into trouble lets remember the national bureau of economic research and many other institutions have traced through the rise and fall of capitalism's instability its business cycles if you like every 47 years we have a downturn that's the average and typically if it takes longer than 47 years which it did since the last crash in 2009 you pay for the longer upswing by either

a longer or a sharper downswing we are now in a longer deeper downswing we we would have been in any case the pandemic only makes it worse blaming the pandemic is a desperate effort to allay facing the instability that dream that capitalism has always brought with it adding said that the federal reserve like this u.s. central bank that preceded it was an attempt to manage the very same contradictions of capitalism its business cycles its inequality and so nobody should be surprised that an institution brought in top last sent the inequality and instability of capitalism hasn't done a really very good job of it because it has been captured like so many other government activity used by those supposedly

a subject to regulation it's called regulatory capture for a reason so yes i agree the federal reserve is making the problem worse. and the recent bombing of corporate ons in the secondary market is an extraordinary crutch for private capitalism provided by the government that should make any traditional conservative about free enterprise you know really roll over and is or earnest sleep this may have to be so for me this is capital of lead time that's the point of the program jumping and i got my biggest issue here is that they don't allow the free markets to work the federal reserve again what are they doing in the markets you know the whole chains in theory in my opinion. stinks but i'm innocent others are not 100 nestle hunters and better read think there's a better blend and i don't think you can always the stand against a recession i think you let them happen and they have they reverse up much faster as they are creating these

a longer more ridiculous cycles that now put us and really all they've really done is inflate capital to nothing so my dollars are worth so much less i mean you go back you know if i go back in 1905 my money i made probably 110th of what i make now but i love the heck of a lot better life i want to earn then that i earned today they keep telling me no inflation no that's yet they keep the flame my dollars basically are his secondary that i carry in my pocket of cash and now what they've done is they said ok we sure do enough now let's make everybody go into the stock market because we're not give you any other alternative that the investor money so it's got to go in the stock market because you get the posit money there's nowhere to go some banks want to charge you but your money and there there is no other investment yet. because we're not going to be looking at a very small segment of society and even in the 19 seventies and eighties middle class people did invest in the stock market in my memory in doing ok oh my my parents you know but you have to i don't think that's that and even richard i don't

think it's really the know him today i mean people i mean look at how in 2000 nato bombing it had a chance to save you. from losing their homes but of course he didn't do it because he had he had he was in the service of best it's an interesting bailed out the banks but he wouldn't bail out middle america and he had the same thing happening all over again you know you need a famous incident with a business ahmar richard for me it seems that it is real moment i mean i mean how is this possible you have these record gains when how the country is staring into the in bits rich or well i think i think what you can see here is an analog to what we saw in the 1930 s. the last time we had a crash of this magnitude there were many many pictures in those days of farmers pouring milk into the ground while other people were complaining that they could not get milk to feed their children their babies and the country marvel

at the eps certainty of an economic system that could have those 2 things happening often a few miles from one another in a country like ours i think the and the allen g. today is we are watching 40 plus millions of people struggle with unemployment another $40000000.00 with the danger of unemployment coming plus the impact of their friends and relatives who are already on employed and then on the other hand a booming stock market let's remember 10 percent of americans own 85 percent of the stocks so we are looking at another one of these milk in the ground versus desperate for milk families this is an impossible situation to sustain it teaches the mass of people in that kind of spark way that capitalism brings them these plagues and i'm not talking about

a virus the plague of inequality and the plague of instability of cyclical instability and you have to assure him. later comes from the reality which i think is coming that you must ask the question no matter how much trouble is attached to it is this the system we have to live under 10 we do better than the capitalist system without getting into the debate would a sure or a free market capitalism work better we've never had in the abstract that's a as a huge hope in an image as thinking we would defend socialism or communism if only we had the purest form of money. but i mean i think that hang on i'm going to conduct there are obviously differences there but i can just say answered richard smug in the end the elites don't have to worry about ok because congress has already been bought ok they're never going to do anything like thanks you know tom one of the thing one of the taboos that has been broken i think over the last few

months is that there is the claim there isn't any money ok of course is plenty of money apparently this endless amounts of money ok i mean even bailing out defense contractors with and bailing out consultants they consult congress ok but there isn't enough to help with. payrolls ok i mean that that is this really drives me up the wall ok and i come from this from i'm a conservative ok but i think sometimes that emergency the government when it has the tools it should extend them if you're going to bail out the super rich then you can bail out main street and you can't tell me there isn't any money go ahead. and 1st of all and in 2008 my opinion is shared a lot of banks said going to make it go under absolutely again this is the problem that they continue to bail out and the problem when you're issuing new money because not only there's a fetish in the money but the banks also wish the money when they use they have

a tender one on a reserve and we know that they never had enough in reserve or the government on the one of their always big. it's free money out of that well now they take the reserve limits off they're only making that capital available to them for the wealthy they're not making it available so then why why. mr obama or why some other president will come to their aid and bail him out again why should they be bailed out when the average guy on the street has never bailed out you or i would be in jail or bankruptcy court under the same circumstances versus big taking extra big bonuses because of that and this is where the problem again was back to the entire system of our way of living and it goes back to the government who made all these rotten deals which is why everybody hates president trump because he's trying to a lemon a matter that is bad the else would just partner is it was going on in china and we're just saying going out with m.f.

because those are bad deals that were made loud and a top time you know you know fairness in all fairness you know you know the republican held senate is going on vacation it will come back when there's an emergency when there are 40000000 emergencies going on right now i mean this is that this is just a abdication of responsibility and everybody knows who say ok they've done their work you know gated community gave up their security and they're all just fine ok i mean it's so and so i mean it actually is a complete insult to the democratic process when you need it if you when you're in hell when you desperately need help for the sake of the country they go on vacation are going to jump and you're going to go to a short break and after that short break we'll continue our discussion though you say.

you cannot be both with the yeah you like. listening to national the star you know when you've been imaging less and that's l.a. city it was a propagandist you also and it's kind of seen from the regular morgue you're more your partner do for the right. oh. ya bush or psych you all but us lucifer mistletoe is just that i'm like i don't have time to fail nobody it is not my achievement mr davies are 5 you have plans were conceived but indeed and carried out by the people themselves if how they would produce or even floor it with the idea of making

a film like this they'd probably be branded as crazy. how was the sentiment during the war the soviets were brave heroes resisting nazis that's going to change of course after the war but once the cold war begins. little people think that hollywood is a free place but only what is strictly defined by only one side of the business and the other side is idealist. how would i define hollywood is they call it the dream manufacture which i think's true but i think equally it's a problem and the fact. is you'll 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 led so. direct. what is true what is faith. in a world corrupted you need to descend. to join us in the depths. or remain in the shallows. welcome back to crossed up we are all things are considered i'm futile about your mind we're discussing what kind of recovery can we expect.

when richard let's go to you ok out i would like to explain one of the reasons why you see the behavior of the federal reserve and not the government of bailing out the banks. let me preface it by explaining i have no interest in protecting or defending what the banks do but i want to point out that the problem is a bit more severe than some policy choice of the federal government about to go either way they're under enormous pressures and we have to face that or else we will misunderstand the situation had we let and the a federal reserve let the big banks go under back in 2008 in those last 4 months of that year when literally that was on the table as an option they would have had the following consequence in a globalized economy which we are now and we were even more so that there is an

immense competition among the world's $25.00 biggest banks not all of which are american many of them are european some are japanese now the chinese are injury and so on how do you let the american banks collapse all out the lehmann brothers failure you would have not thought that was your intent but you would have given them an warmest competitive advantage to naani you'll s. banks that are global and that we're not at that time threatened with such an option in washington where the american big banks have a lot of influence you can be sure that argument was made over and over again in the not you know you said to be moral hazard or that's moral hazard ok that's blackmail or actually are the limits i'm sorry leverage you're going to have no matter who actually has a minister absolutely it is blackmail you're absolutely right but that doesn't mean

that it isn't correct you have to understand for me it's a sign that capitalism not only disorganized is the world into a minority of rich and a mass of. sure and all the other criticisms but that it creates this kind of competition among a handful of monster banks that then handcuffs every society every government into having to be the handmaid or else presided over the decline of their own economy in yet another way. and i have one good reason jim and i don't ever going to scores about how did they decide to choose women brothers vs bears aren't they both are in because of trouble but it does i got the flush why is that . the connections between lehman and the policy makers were different than the connections between other banks and they're the only policy maker of would do the

right thing and thought of always the manipulative thing and continued to play with this we wouldn't have these problems that we see now because you've got these guys that make decisions and they make regulations they do things that put certain banks better than others they put some out of business and that's a destroyer all the squall regional community bankers have to ok but then i'm going to agree with both of you so let me see if i understand this all right and you know speak slowly so i can understand so we have an economy that exists to support these banks that's what this economy is about what about everybody else ok actually that's the problem we have an economy that is now so structured so pyramid dies with the with the power at the top the wealth concentrated at the top that those people understand as all rich minorities have always understood in history before and during capitalism the more you concentrate wealth in the hands of

a relatively small number in a society that has universal suffrage that small number understands that the problem for them is that the majority when the vote can only do that way the effect so much capital is the economy that concentrate wealth at the top so they have to buy the political system otherwise they put their own achievements economically at risk and if that seems to dysfunctional for the mass of people i agree that's why i'm a critic of capitalism you know tom i mean one of the beings that i really worry so much about are we entering the a new normal of a permanent underclass is it seems to me that's where it's happening in some of the stuff that i've read in the last few weeks is really quite fascinating is that you have. at the very very rich during this pandemics last lock down they did consume less but the percentage less had

a major impact on the people that are serving the very very rich so that i'm just going to pull some numbers out of their their consumption goes down 3 percent the impact is like 25 percent for people that are in that it in the mode of servicing of the very very rich here and in this is just going to be perpetuated because you know the rich will be fine again but there's going to be a competition for who's going to be in the service class now and the excess itself can even drive down wages so the question is is the new normal that we have a permanent an underclass of people that will never really get ahead in time by working and they take economy and this think about all of the millennia as if they just graduated from high school graduate from university and they have this this wasteland and go ahead i don't agree i think that we will be able to come out of this as we have come out of many things in the past i think one of the biggest

issues that we're looking at today versus other periods in history is that it's going to the industrial age where it was easy to train people and take people that had no education no way of knowing what their internet moving into the tech age is a much different thing and are kids now are being taught and are brought up in the tech world so their ability to work jobs they get into these industries will be much easier like you i grew from 40 to 65 i'm 63 you take my group of people i've had to go retrain to get a job i could get a job anywhere i made i could push carts in wal-mart but you get past the age and because we're moving out of all the things that help the middle class back then survive which is industrial production factory like it would to a tight unit you're not saying and i don't want to get the platform to you're not saying learn code are you. i'm not but i'll never learn god but again i'm not from that era i think i'm like i can turn the computer ah ok. under 5 minutes they have

my camera right so i mean i got louder i mean richard i mean i i was in academia for a long time and one of the reasons why i left is that most of the things taught at the university are junk and don't prepare people for the future ok i mean it's a lot of you know it's virtues signaling and you feel good about yourself and everybody wants so she'll just listen and i guess and some of those people are employed right now all across the country ok and i find it really a foreign culture war i think it's so damaging i think we need to have a deeper meaningful conversation and i would probably agree with a lot of things but destroying that's not the way i find out of order to reach an underclass a permanent underclass because the reason i'm saying it's not as a result of the pandemic lockdown it's just coming in to a greater release ok richer yes my short answer to your important question is yes we are developing a manse underclass look 42000000 people unemployed is an invitation to

every employer in america to approach his or her employees with the usual proposal you're going to have to take a pay cut a benefit cut you have to come in a half an hour earlier your lunch is now going to be 40 minutes instead of 16 and on and on and everyone knows why because they can because no employed person is going to take the risk of fighting back those demands when there are 40000000 fellow citizens out there desperate for the job even under the reduced conditions that are being offered so you have literally created now the opportunity for those at the top to take the next step and ratchet down the crime and the wage that the consumption levels everything else they're fought. thereby producing an underclass and let leif make this topical i think that african-americans and

others have been in that underclass for a long time they're now being joined by a whole new population of white people being put in there and part of what you show off in the protests ever since. george floyd was still is the recognition by more and more white people that they are now part of what your question points you know it's i think that's a fascinating point but then a time in a maybe a little bit off topic from our our focus here but then it seems to mean that that's just dividing what we're going to call the underclass here because. coming everything you just like racism in me and that is the state division of the underclass of which is easier to control by the way and i find when i find really a point is that there is energy and that and i think people have hope it's been focused laser focus on the wrong things social justice yes more economic

opportunity yes ok i think they waste too much time on statues and i think that and many ways that in advance is the agenda of the super rich because let's face it the status quo is working great for them. i could not agree more with that statement and this is one of the issues is as is the the underclass if you want to call them that now they need to get off their ass and go vote and you do things as a taking things the same old way you know what one of the problems this country is we are lazy americans people don't go to the polls and now they vote out of it you know the time one of the things but one of the interesting things is you know if you look pretty clearly in the lot in the last 8 years here anyway and it will be very clear anyone that is a populist leftist gets crushed ok and. and populist conservatives they are disregarded is well ok you get the libertarians that end up running the g.o.p.

'd is the disastrous economic policies or might be and then you have chuck schumer and and nancy pelosi anyone their greatest enemy for those democrats are coming progressive i mean they have their bend them for progressive stopping the republicans because the democrats give trump everything he won everything with a challenge from the left that's what they hate most richard go ahead below 30 seconds. the basic argument for me is this. in germany just to give you that you say in germany unemployment went from 5 percent to 6 percent in the united states one from florida half percent to 1718 whatever the number see what we were able to throw the mass of working people white and black out of work and europe conservative leaders tend not to leave that because the political environment is organized in socialist parties labor unions block it so it's even once they go they're left in america has organized so that it has comparable influence and not

like by the likes of sure alosi trump or anybody else well i hope the pitchforks number of them ok maybe out of all that now who have young men i want to thank my guests in new york and in kabul and make our viewers are watching us here are the see you next remember. join me every thursday on the alex simon show and i'll be speaking to guest of the world of politics sports business i'm show business i'll see you then. thanks guys are financial survival. when customers go buy your display. didn't help well reduce our. that's undercutting but what's good for market is not good

for the global economy. nuclear power plants have become a battleground in the u.s. in vermont people are demanding the shut down of a local plant from mike yankee is right now my focus because it's a very dangerous oh no prayer power plant the owner is attempting to run the reactor beyond its operational limits. this case just sort of puts a magnifying glass where's the power in this country where's it going is it moving more towards corporate interests or is it more in the idea of a traditional the just a marker sees or power lie with the people this case demonstrates that struggle in very real ways a struggle. of

. your. headlines an r.t. an official poll shows at least 14 percent if you're a pains really has shown itself to be irrelevant during the pandemic as nations couldn't count on the help of their fellow studs also that the street party in london breaches antico beach rumors and ends in clashes with police we visit the area to find out why tension has fled. so when we feel as if we've been targets. for me i will retaliate you know i'm quite peaceful will all the people they will retaliate meanwhile new york city's its highest month of shootings in nearly a quarter of a century the grim record comes as 90 crime unit was disbanded following demands to defund the police by black.