hello and welcome the crossed off for all things are considered i'm peter lavelle as a cult the war consumes american politics during this election cycle the economy remains in a big area state millions of people live on the margins the only constant for them is insecurity economists debate and eventually recovery based biko a u. of the end of now but is the reality a k a recovery a permanent underclass. to discuss this and more i'm joined by my guest richard wolffe in new york he is professor emeritus of economics at the university of massachusetts amherst as well

as author of the recent books understanding socialism and understanding marxism and in westport we cross to peter schiff he is chief global strategist at europe a civic asset management right gentlemen crossed up rules in effect that means you can jump in anytime you want and i always appreciate it ok let's go to new york richard you know looking at the news about the economy looking at a lot of macro numbers and sometimes i think it's very quite confusing and where the economy is going particularly when we look at unemployment permanent unemployment and jobs that are permanently lost here but the more i look at it and you gentlemen are preeminent experts here i don't i don't really think it's that you are an l. i'm really quite taken with this k. a recovery the rich got richer and the poor got or is that an oversimplification richard go ahead not at all i think we've already seen that now quote quite some time that. east to north 3 on 4 decades of growing inequality both of wealth and

income and instead of that being understood as having contributed to the combination pandemic and crash we're living through instead of that being understood we see the crash having made it worse the growth of the wealthy at the very top having outstripped everything we could have imagined at the same time that now over 60000000 americans have had to file for one or another kind of state or federal unemployment compensation assistance this is a system that is spinning out of control in terms of extremes of wealth inequality and income inequality and there's nothing on the horizon that suggests that that's going to change and so i think that is becoming a permanent quality of this economy and in a society that used to in the 20th century pretend that it was

a vast middle class that capitalism was a tide that lifted all boats i don't think this is politically already a logically sustainable. peter the same question to you because if we look at the consumption patterns of the top 10 percent during the worst of the pen demick the lock down their consumption went down something like 15 percent but the class that serves them their income went down more than 30 percent that's according to some reports here so i mea and we do know that the job base those stories in the billionaire stories how they've really done well out of all of this year it is that it can to a cable company because we do have this growing and maybe permanent underclass go ahead you are well you know i don't even care what letter you want to try to use to describe it my problem is with the word recovery because i don't think we've recovered at all sure there has been a recovery in the stock market in that the market recovered what it lost in the early days of coded and yes i mean this recession that we're currently in

began with a very substantial collapse and yes there's been a bit of a bounce off of that collapse but we're still in a recession and so i don't know if recovering to being in a less severe recession then we were in at one point really qualifies as a recovery and i don't think we've seen the lows i think we're going to relapsed i think we're actually going to go down and there's a good chance that the stock market might make new lows as well but regardless of what happens with that bubble in the short run the reality is that main street's pain has actually been wall street again it's precisely because the economy remains so weak and what's really at the root cause of the weakness is not capitalism it's the failure to have capitalism it's the federal reserve that is monetizing massive

government debts that are only inflating asset bubbles but at the same time it is depriving the real economy of the reason. or so that it actually needs to grow and build a real recovery that would in fact lift all boats instead we're settling for a fake recovery because that's the easiest one to create because in order to have a real recovery we're going to have to have some short term pain in order to make that possible because what has to recover is not consumption but production we need more savings we need more capital investment and to and to enable lat we actually need higher interest rates not lower interest rates and we need a smaller government not a larger government so everything that we have done since the pandemic began is actually weakening the economy and we're compound ing all of the stakes that we made before the pandemic if you remember we were already slipping along before anybody heard of covert 19 and 4th quarter 2018 that's when the wheels started

coming off the bus that's when the fed did the about face and started cutting rates that's when they really started to move from quantitative tightening back a quantitative easing now in march of 2020 right those trends excel aerated we went right back to 0 and we went we skipped q.e. 4 and went right to q e infinity but all these policies are simply blowing more air into a big bubble analysts same time they're depriving the real economy of the air that it needs to grow if it if i go back to it when all of these mistakes and i think centrally agree with much much when you present but much of those mistakes have benefited the same people the richest people that we've ever known in the history of humanity those mistakes ok yes i agree you know what a lot of assets we agree we agree but i'm to focus you know richard here is that but because these mistakes have benefited these people why should they do anything about it i mean they made out i mean there's no and let me go to richard there's no

one yet you're hearing these mistakes. i think the use of the word mistake and it always amazes me. it's a mistake over and over again year after year peter is quite right i agree but these mistakes being systematic the repeated over and over again are not dealt with adequately by suggesting that if only those mistakes were made we would have some nice functioning capitalism that would look again lift all boats it seems to me that the people at the top have figured out that if and when they can they can make more money if that drowns the economy and in that downturn they can turn back to their advantage as well using monetary policy to insulate the stocks upon which the bulk of their wealth depends this is a mistake that so often repeated that the word mistake starts to lose its meaning

this is the way capitalism slayer's out it might be nice to imagine that it would function some other way but that's the utopian imagery of a stateless capitalism that probably never existed but in the last 100 years for sure has disappeared as this state has become a major lender so the gross and concentration of wealth with or without the merger is between the state and the biggest chap in the lists which is happening more and more as we see i think this is the real capitalism we have to live with and not the imaginary one that peter likes to suggest i read it i mean the middle i'm in the middle of a big bowl of between being and when you said you agree with peter i think you agree with both peter and you're going to go to the other theatre here my sony what you used the word count was nothing that you know i think it's very problematic because it doesn't seem to be benefiting the whole lot of people because they know

nonetheless here i would agree with peter our guest here in the sense that i'm tired of socialism. for the very very rich and then everybody else gets the crumbs in the countless the economy go ahead it will 1st of all don't confuse what america has now with capitalism i mean what's left of capitalism have been destroyed by socialism so it's the socialism that has crept into the system that is responsible for the problems in this mass disparity in wealth but also you assume that this is going to end well for the rich i assure you it's not these asset bubbles are temporary a lot of this wealth only exists on paper people are not actually spending that money it's just on an on a brokerage account statement what is coming is a major collapse in the value of the dollar the inflation is ultimately going to result in the cost of living rising much faster than the paper value of peoples assets so believe me the rich are going to get theirs too everybody in america is

going to be impoverished to a degree by these failed policies it's not just of course the middle class they're just going to suffer the most but in the end the rich are going to suffer too but the real solution for everybody is a return to capitalism what we need is sound and money and independent fed that no longer artificially manipulates interest interest rates to prop up asset prices and to subsidize government deficit spending we need much higher interest rates that will result in a big decline in spending from government and consumers will have more savings will have more capital capital investment we need a lot less regulation as well as cuts to government spending so we can have a more vibrant economy instead of the sick economy we have now that is on life support that is temporarily benefiting people who own the assets that benefit from the inflation that the fed is creating but ultimately that inflation is going to

rise result in an increase in the cost of living for everybody and we are headed for a dollar crisis and clearly the rich own more dollars in any. but i'll slightly have most to lose when the value of the dollars they're holding completely implodes ok i'm i think we have one day all 3 of us have been coming to a crisis that is on her rights but richard how can you how can you save money and how can you invest money if you don't have a job i mean it's very simple here. yeah i mean i'm mazed a little bit by this we're going to have high interest rates we're going to really crunch down on the economy you mention in passing that consumers will have to save more don't have anything left to save from that's why the level of savings of the great mass of americans is virtually 0 or negative already they didn't suffering for so long there's nothing left to crunch down on them which is already happening now is a recipe for much more try moyle as

a us in this society zend we're already then we're already seeing an extraordinary move at a time like this when the socialist movement is coming back from a period of historic weakness precisely at the times that the growth and equality what went way up to as unesco sure as an adventure all eyes are in well let me feel the surface undermining and to tell your structure available as ani you're talking about is law and that social niceties don't i have to jump in here we're going to go to a heart breaking out with our break and continue our discussion on whether a recovery stay with our. cash cow and during our farms or any longer he has darned has chosen paid change guard service for. his 1st words were added obviously you're a child the post you go to has to. i

have no doubt that watched the 1st preventive. that's causing trademark it is a $1000000000.00 industry these companies have a huge financial motivation to solve these problems there are numerous showing that doctors were keen to test facts or concentrate straight insights of its own that patients won't give them doctors the wrong stoplight. why they're keeping them secure procedures. people. i'm always question being allowed to live where so many have. time after time called her ration to repeat the same mantra sustainability it's very important. transition sustainable transport sustainability stay number may not

be more equitable and sustainable. they claim their production is complete the hamas. companies want us to feel good about buying their products while the damage is being done far away and this is something else just going to. look.

welcome back to crossfire or offerings are considered on peter lavelle tree mind you we're discussing whether there will be a k. recovery. ok richard let me go back to you in new york. a few years ago i met an indian businessmen very successful indian businessman and at the time india's economy was doing quite well again usually using these macro macro economic indicators ok g.d.p. growth. income number of people employed but at the same time there's like 200000000

people that live in stark property in india and i said to him i said is your indian model just to accept that you're going to have 200000000 people in stark poverty because you see your economy is growing and as an investment target people are pouring money into it i mean is it it has the indian economy sense except that it's going to have an underclass so i'm asking you is this what's happening to america where you were going to have an underclass permanent under cattle class and it in and it will the perception is that the will be enough political stability to maintain the status quo because it seems to me i agree with the last remarks you made in the 1st part of the the program is that you know i don't see a way out here go ahead richard. yeah i think that's exactly what's happening i think we're learning in a variety of ways to live with an enormous underclass i disagree with you that we didn't already have one i think are good but i think it we are now learning to live

with a much larger one and you can see that in a variety of ways except in space flight what people claim of 200000 people dead from a pandemic that didn't have anything like that impact in many many other countries the united states has 4 and a half percent of the world's people it has 25 percent of the cold the cases and 25 percent of the deaths for a rich country that's a stupefying failure of management but it's also the acceptance of guns the couple suffering in its population as if it were normal and ditto for the level of poverty divil ditto for the level of discrimination dr antony funnell chief yesterday at the bloomberg equality senate explained how people of color in america have the lowest wealth the lowest income dalia's. cases of coldish and they are the frontline workers they are the ones that are suffering from hypertension diabetes

obesity if you wanted a proof of everything the black lives matter movement wanted to suggest about systemic racism you could just listen to dr found chief in 15 minutes and you would get it and it is being accepted mainly by the government right now as official policy so instead doing absolutely nothing to undercut it i think we are becoming the society we used to see over seats on claims of wealth new york san francisco chicago and all of that and so rounded by a sea of really desperate poverty they have accepted that in india and they have. for 50 years if not more despite the independence from great britain they had accepted it in brazil another case and more weight you looked at trump bolsa not our old and moldy and you can see the kind of right wing government for which this

is an acceptable range you know peter and he say i follow politics very carefully and i watched snippets of the the republican and democratic conventions and i was appalled absolutely appalled that neither party had a proactive economic agenda presumed to propose to pursue in light of the. high unemployment. and the in the structural changes that are going through the economy i didn't see that from either party here and it goes back to my question to richard is there is this an exception acceptance that we're just going to have a whole lot more poor people. well you know we're i disagree that we've even been having a growing economy i don't think we had any growth even before coding and i think the g.d.p. numbers were manufactured based on understating the true rate of inflation and so by understating inflation you can make it appear that

a stagnating or shrinking economy is is actually growing it's not you know the reason that americans don't have any savings is because the economy has been growing they've been able to keep it together through debt they've used debt to replace their income but why is that it's because we don't have a vibrant economy because we don't have real increases in productivity thanks to big government and banks the federal reserve so we're in this gigantic hall because we have banded capitalism and embraced a socialist form of government we have government central planning we have central planning on interest rates we have price fixing and market manipulation and we have an economy where we're trying to generate growth by printing money and giving it to people to spend and that is not going to work well i said the only way to get really good amik growth is to shrink government so that we can have a stronger more vibrant economy because we need more productivity to consume more we have to produce more and the government doesn't produce anything all it does is

interfere with the productive efforts of the private sector you know the problem is though but peter did the government it particularly in the last 2 years that particularly during this economic turndown they chose winners i mean the you know so jeff bezos announced goal in 08 there's a real socialist in america because you're the winner in all of this ok i mean i think you know these terms calculus and socialism don't really mean anything for me is that both lose it who's been out of it promote that is the middle class is not the working class isn't the big tech companies are. the banks are doing really well here are the banks it ought to be well look at the divider imploding. look at the look at their sarah prices look the banking sector is in a lot of trouble but look none of the bailouts should have happened there should have been a p.p.p. the whole thing was a disaster nobody should be getting a check from the government these extended unemployment benefits were a mistake what we need is less government not more government government has to cut

spending not increase said money printing is just going to make it worse it's going to destroy the value of our money and we're going to blame all these problems i'm capitalism and we're going to continue to build a bigger and bigger government that is going to suffocate the life out of this economy and the people who are going to suffer the most are going to be the middle class of the poor ok look you know the basis for your good there is you have got i agree with you how the dollar is being destroyed here but the people that are benefiting from this they turn their dollars into real assets like right yes yes well i always found value here but what about working people that lost their job you know they're going to get it you can't really can't turn it into an area you know if i didn't government supposedly got out of here and if you only look at stuff like problem by poland and ireland it going to go ahead richard i've always found it extraordinary that the way soaks like peter tried to exonerate

the capitalist system from each grotesque failures is by having a deus ex not going to the government drops into this story so that all the anger and bitterness and rage against the capitalism that produces all these problems including owning and controlling the government is exempted from that criticism you cyzon it all off on the government create this utopian santa c. of a get out of let me share a king without a jacket elizabeth without a government has no right in saying you know govern all easing into government the government actually had lisa nice lady. they are ultimately has always been controlled by the people who have the big boxed they've used it for their own advantage the imagination that we could have a capitalism with the employer with a minority of employers a control everything who are not going to try to control the government is a fantasy we have never let your ignorance of encouraging this relation is only

exceeded by your ignorance of history listen i don't do that to you so do but i'm telling you you're wrong you've got to understand capitalism go away no idea was not who you are declaring unable even to hide an appliance or lines like what to do keeping on talking doesn't solve the problem i go days you go what is your solution to the problem you're not directing this conversation by magic in your heart of it yeah well actually we are they said we have gotten it there is more money printing and i'm going to do this again that we did or you know the time we're just chilling up time doing this yeah ok peter asked a fair question what is the solution richard because we only have about 2 and a half minutes 3 minutes go here we go up capitalism is a system that is organized in every enterprise by having a small minority of people the owner the shareholders the major shareholders the board of directors making all the decisions from the majority of people who are called employees that's

a very similar arrangement to the lords and the serfs of feudalism and to the ministers and the slaves of slavery we didn't break out of that dichotomy of a few controlling the many until we developed a concept of democracy the solution to the problems of capitalism is to put capitalism where we put slavery in feudalism we have to substitute a democratically organized and surprised right to debase every factory every store every office organized in the way we organize our politics one person one vote we decide together what to produce how to produce where to put. loose and what to do with the fruits of the labor we've all get you to follow me as your little sister the knowledge that you're talking about creating life you know me how to handle like environment and i didn't care but if you think i was i well you're in cuba you're in the soviet oh yeah you're going to want to hear it you have this in

a fantasy world is not is not only eric's it doesn't work it only works in your imagination it doesn't 2 work reality and your heater ology that meter. is very polished and i want to ask is a substantial question here peter how do you how would you react to tens of millions of people that have lost their jobs have no future and i don't think they to think in terms of countless them but a lot of them would say what his company has been doing for me and i think that's a legitimate question if you because a recovery i agree with your 1st answer this program will get a recovery it depends on yourself where you are in life if that's a recovery or this solution. depends on embracing capitalism and rejecting socialism we need to restore free market capitalism to this country big government needs to get out of the way we need to have sound money and limited government again that is the only path back to prosperity there is real pain there

are real problems i don't deny that government and central banking cause those problems and government and central banks are not going to solve the how could a more government we have and it will work if we try to socialize economy and yarn and if there's some kind of socialist paradise a guy that only exists lending a hand this young man is like we're going to take a bad situation oh let's make it much and i'm the worst you know who controls the government just as well as i do blaming the government just likes of people who are pulling the puppet strings all of the criticism they do less or you know that i have to jump in here i'm putting it right it doesn't hurt because i want to make my case in westport and in new. you're going to want to think our viewers are watching this year arche see you next time remember.

we're segregated only by social class lower middle class people also in poverty 1st . if you're born into a poor family. born into a minority family if you're born into a family that only has a single parent that really constrains your life chances people die on average 15 years old if you're born into generational poverty. it's a it's a fight every day so you meet your needs and the needs of your family. is going to be hard to reclaim freedom and we're going to have to work at it but as people recognize from examples like. what repression digital

systems need to. i hope people will start fighting men saying we won't tolerate systems that are streets in our homes that can't possibly track what we're doing. a machete attack near the former paris headquarters of the satirical magazine charlie leaves to pay. people injured come shortly after republic controversial cartoons featuring the prophet mohammed. france meanwhile breaks a new code infection record with 16000 cases recorded in a single day but the latest restrictions on life designed to stop the virus in its

tracks are only spreading anger and ethical concerns raised amid reports u.k. volunteers could sing be deliberately affected with in a world 1st try.