who dares think me, we dare to ask me. ah, i am kaiser. this is the cause report summer solutions. that's right. we don't look at the problems or look at the solutions. and today we've got the one on the marshall. our bark is the mark. an analyst, a levy institute researcher and tragic follower of the toronto maple is, but maybe this is they are they want to stanley cup stacy? right marshall. we have some questions for the summer solutions. it's good to talk to you because of course we interview due for front running in front mounting. we presented many of the issues that the democrats were arguing in their debates as they were determining who their candidate would be. and as the interesting thing is,

like a lot of it was pie in the sky at the time, but it's all coming true now post pandemic. but i want to start with a recent article in an american affairs journal titled the brazilian explication of the world comparison nations like america to brazil. and i say quote, hollowed out stake passerby is political confusion, cronyism conspiratorial thinking. and trust deficits have exposed the crumbling legitimacy that now makes rich and powerful states look like banana republics. are we a banana republic? and before us i want to mention that to the audience. there are some like interference from your like old school sort of like interference on television screens or to look on your yeah, i apologize about that. actually. blame bill gates. cc'd probably too preoccupied with other things right now, but yeah, i think that's, that's

a problem. and it's not unique to the united states, but the united states is in front of it. i think it's been a problem for years about 12 years ago. i think jamie galbreath wrote a piece, a book called the credit say, which outlined this brazilian a vacation. and i think it's continued it accelerated under trump, but i'm, i'm not sure it will change fundamentally under bide because i just think that there are too many jobs for the boys in constant positions of power and institution. it's very, very hard to change that we're going to have a few questions along this line, but it seems like the structural situation on the united states is that no matter what you try to do, no matter how good you try to do the trillions, whether it's like all the bail out in 2008, everything has to go through the bangs even the, you know, the p, p. p loans all went through the banks and they scooped up billions and billions of

the p. p. p loans. the forgivable p, p, p. bones, it seems like structurally that there are way too many oligarchs, and all of the police between the government and the people, and they take the vast majority of the funds. yeah, i mean, this is, this is nothing new. i mean, eisenhower warned about the influence of the military industrial complex and it's the final state of the union address, 1961. and what i think has happened is that the, the playbook that was adopted by the pentagon to effectively make sure that they've got a control or substantial amount of fiscal resources has now being replicated by other large sectors of the economy. whether that be big pharma, wall street, silicon valley, and i think everybody uses that model right now. so they're all competing for a chunk of that pie. there's no restraint, but there's no real accountability or transparency as to how it's being spent.

right? so all this money print thing that you'd associate with the banana republic and the brazil, the case of an economy, has been masked to some degree for few years because policymakers simply say, while there's no inflation, in fact there's deflation. but it looks like in place and has come back. why has a suddenly come back and is it transitory like the central bank is saying, or is this more structural marshall? yeah, that's the, that's the $1000000.00 question. or i guess, given more inflation is that maybe the tell you know, the question right now, but, you know, i think that's, that the data people are, are predicated on, on analysis of the data, which i would say has a lot of problems in it right now. who a lot of the bill distorted by the shut downs and the fact that we were an uncharted territory really, but a lot of parts of the economy that were literally shut down for over a year. so we, i think it's very hard to make sense of a lot of it to, there's a, there's

a big divergence for example, between the b l. s. statistical labor market and continuing claims, which would suggest a much higher level of unemployment. and you don't know how much of that is, is real, how much of the economy is functioning under the table, if you like, where, where people are getting cash payments on the table. you know, so like you might call the pavilion case and you may also called the italian italian implication of the economy. and we will, i think we will start getting a better sense of the real extent of those in place, no pressures when you start seeing more of the wage data. for example, back in april, the 11th, we saw that wage gains for the leisure industry were up 5.2 percent year over year, which is pretty significant. and that's just for me, the data from, you know, march, we haven't even seen what happened in may or june right now that starts to accelerate further than i think the inflation will be the dog that finally barks or, you know,

the, the inflationary will, will finally be right for once know, right. you know this money printing and quantitative a thing and as contribution via the can telling effect to create wealth gaps while the income gaps in credit stand talking mallor said he had the best year ever last year. his direct beneficiary of this was the policy makers all come back to denying that money printing causes this type of dislocation. and instead they all come back with fiscal policy. right, right now the bite administration saying, well we need some more taxes. we need retroactive taxes. we need taxes on unrealized capital gains, but they never mentioned the money printing impact. is this, why do they miss the obvious and go with the 2? because in the tax game i now as a stock broker for many years as far as the tax rate. it's the adjusted tax rate and you know, dealing with a lot of wealthy people here just the tax rate never rises above 15 percent,

no matter what the government does. so why don't they just address the rail problem? the real problem is, is the reason they don't address it, it's kind of hard to solve because you've got to take out a lot of powerful people. so that's, that's a short answer question. i mean, but if you, i mean, if you've got an economy, as you pointed out, which is increasingly geared to a smaller and smaller cohort than clearly you're going to have a less efficient economy and, and it's not going to grow as fast as it should grow because if you're directing most of the games to those with the high savings propensity and you're going to get less bang for your fiscal bus. and that's gonna push more more into detail doing more, more things. and that in turn, create the political situation where the potential bank say, we've got to offset this drag on the economy by increase monetary stimulus and nobody stops. and because they don't want to tackle structural problems which cause the difficult, the 1st place and, and of course, it's much easier to let j, powell take the he's, he's an elected official than having it, having congress being after. all right, so you know,

this can tell them the fact we find it very interesting and we've been reporting on as he says, multi billionaire, sandra miller says, and all those years since 1983 when he's never had a down here, this is the best year and he's had to do nothing. we haven't received any of these bite bucks ourselves, but we've done very well. the theoretically on paper, at least with our house price, constantly going up, right. this has been one of the it's not been since 2004, 2005. don't know how hard of the sub prime mortgage melted before the meltdown that we've seen us. but again, so with this m m t, the notion of m m t, and i think you know quite a bit about that like how, how do you stop that? like that? surely the, the house prices gaining somewhere between 14 and 20 percent. like surely that cost way more than the money that is being sent. and it has unemployment benefits

and stimulus packages like the house, probably rising so fast are probably disenfranchising way more than the stimulus is helping. yeah, that's just a well again, it's if you don't address the structural issues, then you don't get as much fiscal bang for your buck and therefore these distortions that were already there. they tend to get more they, they increase. and, you know, housing is one thing and the fact that we have a, an overlay financial life economy where the where effectively the real economy, the interest of somebody to those of finance. i mean, these are hard things to address and if you, but if you don't address and then you get these drags and major sectors to the economy and that is used as a bird by policy makers to do more and more and more. rather the thing, you know, the deficits are not being directed in the proper way and the people that really need to help on getting it to do that. we will have to attack the very people who

basically are political paymasters and, and that, and that's very, very hard to do. you. and especially in, you know, given that be the fact that you've got very, a very, very tight majoris, narrow majority of by the democrats on, in both the house and the senate. and so everything's to be up for play in 2022. so who's got an incentive to take on these people? right now marshall, i watch the twitter handle one of your politicians up in canada, pierre paula, they're from carlton who is constantly getting up and, and talking about money printing and how housing is becoming on affordable. and making some really good points, but he doesn't seem to get much traction up there. do you agree with the kind of point that he's making? he's kind of a well known celebrity politician at this point. and or is the missing? well, he's, he's not missing a lot. i mean, you know, it's kind of like,

but i say it's it's where the money is being spent. and i think that that is a fiscal area. it's political area, but how yeah, housing affordability can be a real, real problem in, in canada. but toronto real estate market where i'm from was, you know, it's been on fire for the last year or so where even longer and what he can do, i mean, do you start introducing night come cognitive taxes to call them the housing market that, that doesn't have a lot of play low political favor and remember that the current administration in canada, the government is a minority government. so it's still reliant on support from them. and some of the other parties like the new democrats, the same power. and i think trudeau himself has an economic incentive to

stimulate the economy as much as possible so that he can run on the strong economy . later on this year there's been lots of rumors that he wants to have an election later on the trying to return his majority company. all right, well we're going to take a break and come back after this with marshall our bach, with our summer solutions elucidating area day as usual, don't go away. the me rather driven by shaped by those with me in the me. there's things we dare to ask me

as a career professionals bought as much tougher on some than others year old myers by everybody. so why would somebody believe me? i was just a little girl. the price paid to, to, to achieve really was, was to read in the paper this morning, usa swimming coach, arrested, allegedly had sex with a 12 year old girl. this happens almost every week. we get calls at the office. i get informed about one of my greatest fears is someone's going to start linking all this together. there's going to be a 60 minute documentary about youth coaches in sports like gymnastics swimming. is that documentary? see it on the moon.

the me welcome back to the kaiser report imac because are with stay here, but summer solutions as usual looking at solutions and sort of focusing on the problems we've got. marshall our back where this market analyst from 11 institute researcher tragic follower of the toronto maple leafs, but maybe not this year. ok. so marshall, we found an experiment last year or so with government transfers equalling about 17, our $17.00 an hour in payment across the land. and what happened is now we got millions of jobs unfilled because people just stayed home and said, why would i go to work and get less than what the government's paying in some way you could say this is a live experiment with universal basic income, which is which is something that i know you've talked about,

and we found other gas thomas show talk about like dr. michael hudson. is this a good test or a good experiment to see what you be? i would look like because it does have some interesting impacts and consequences or is it not in one year? what are your thoughts there? yeah, well, it is interesting. i mean, i've always says, you know, preferred the job guaranteed to universal basic income. because i a, i don't like the suffering of benefits to work. and i think also for you construct policy like universal base income, you want to find out how much actual involuntary unemployment there is. and with a job guarantee you can do that. and you can actually structurally improve the condition of the labor market at the same time because you'll have a pool of if you like some already labor in the private and public sector working in similar painlessly. whereas, you know, you be, i think as this current situation shows,

may actually provide disincentives to go to work and therefore you get a tighter labor market for the wrong reasons because people just are working. but in the same time, you're getting bottlenecks, appearing potentially in the economy because you're not able to come in for the, the labor to, to alleviate those bottlenecks. so that's a real worry. and that's the kind of thing that creates a really big hyper inflationary problem. i mean, i know i want to get told by barnes and stuff like that. but if you look at the instances of high high inflation or stay place, they are usually caused. not only because you've got people being paid a significant amount or, or being paid on an ongoing basis. but also because you have a productive capacity in the economy being impaired, whether through supply bottlenecks or just because you know, it's other reasons like for example, of a war that might have taken

a large chunk of the economy. so in that situation, if you're continued to offer support payments, then that create the conditions where you could get hyperinflation. and that's really my biggest objection to you be. right? so what you're describing there are sounds like during the depression f, d r introduced the programs for make work programs as they were called essentially u. b, i in the form of jobs, people had jobs and in america there the real need for things like infrastructure rebuilding road. yeah. thomas, right, bridges. but it's contrast greatly with what we hear from people like elizabeth warren and others in washington, dc. right now that seem to suggest a different type of b, b i, which is just send people checks. and so if i understand what you're saying there, that in that type of fiscal stimulus would result in runaway inflation. and it's not really something you would advocate, but you do like the idea of this make work program. is that correct?

well, i, i call it a job guarantee rather than make workers make worse megs and sounds like there's not essential work. whereas i think, as you pointed out, many of the things that are introduced during the new deal, it actually create a substantial amount of needed infrastructure in the country and provide an important more people that weren't getting any kind of support. so i think what i want to do is see people being put to work in ways that enhance the productive economy, potential the economy, so that you don't get these in place in their practice. i just don't believe that you should have come out and check for essentially doing nothing. i do believe that there should be a basic minimum standard of living that to which we should aspire that we should provide. but i think we can do that while providing a well paying job with benefits. i don't think she has a here. if you're you be, i do whatever the hell you want, you want to write a novel. that's great. or if you just want to look after the kids, that's great too. and that's not diminishing point to things like family childcare

. i think that should be considered as an important component of an help helping to enhance the productive it potentially economy. but i do think that, you know, you do want people to be paid to work and not simply given money with no conditionality attached to it. right. of course that all came about during the depression after a major financial crash. right. and, and the policies were put in place as a reaction to that crash. and lot of people complain because the president was acting and somewhat of an authoritarian manner. and a lot of people thought, oh no, no, the free market can solve all of this. and he said, no, we need to make government very much involved and all of this. but my question is that right now you don't really have, by all intents and purposes, a huge market problem. you've got stock that all time wise bonds all time highs. you've got billionaires increasing like rabbits. so how did you even sell the need for any kind of a program? when the mainstream media and the country in many waters have never been richer and

the aggregate wealth of america has never ever been higher? so how can you even talk about feeling with a crisis, if that's the stuff that's the backdrop of what you're talking about, the, all the problems are completely masked. yeah, no, i agree with you. well, i mean, look in the great depression, we were looking at close to 30 percent unemployment weren't even if we can dispute the actual unemployment rate now. but it's certainly not even in double digits. and we do already have a preexisting social welfare net in place. me remember when f t r came to, we didn't have social security, just give you one illustration. now we've got social security, we've got medicare. i'd like to see that expanded somewhat but, but again, those are the types of things that would be very helpful. but as you say, what seems to be happening now is that every politician that has his particular hobby horse, whether it be the green new deal, or infrastructure or something else,

is pinning it onto some sort of program. in some respect that tries to tied to pandemic mitigation and to the, the, the, the crisis created by cobra. one thing, but as you point out, the conditions are very, very different than they were in the 1900 thirty's. and to already a lot has been done and we haven't really interest the structural problems that you highlighted so eloquently today. that's a big problem. ok, so we have compared the situation to the great depression and what f d r did, but you also mentioned that playstation where it talk, you mentioned hyperinflation. we have supply issues. so it reminds me a lot of the sixties and seventies leading into, you know, as the u. s. had to abandon the gold standard. we had the vietnam war. we had a lot of civil unrest in america. you know, people act like there's a lot right now there was a lot of sixties and seventies. we had the oil embargoes and iranian revolution and

all sorts of stuff like that. but what did you feel like we're kind of part of the problem of getting a finding a solution. it feels like we're in a kind of similar situation of civil strife. a partisanship for sure, between the red team, a blue team and the fact that the victims of you know, that terrific dilemma of having to spend all our manufacturing overseas. especially once we got off the gold standard, it feels like you know, that vast way, like tens of millions of americans are called on international news by our own international media like cnn that they're white supremacist, deplorable. right? so it feels like you're not going to want to find a solution for white supremacy. sorry, you don't, you want them to just like take the opioid overdose and die because that's, that's the thing. the feels like there is a political, a political problem that there is this strife, no question. it's, it's,

i mean it's, it's great to see that a lot of the, a long standing racial problems are being addressed. although, again, you should be addressing these ideally by creating broader coalitions mean martin luther king wanted to create a broader coalition as jesse jackson, when he ran for the president's. he talked to a building a rainbow coalition, and you can't do that. if you atomize every single individual group and divide them on the basis, they're necessity, their gender, how they self identify. it just creates much more division and struggle stripe, and it will create a backlash. at some point, you're starting to see that, you know, i've been watching with great interest the democratic primary from air in new new york. because i think that's going to be an interesting bellwether because in cities like new york and also chicago, for example. crime is,

is becoming an increase in the big issue. and i think a lot of whites don't want to conceive that to the pollsters because they procure being called racist or white supremacist as you say. but there is this guy running in new york. eric adam, c, brooklyn pregnancy, the former copies black. he's running on a straw law and order platform, and he's in favor of stopping chris, go, you get a guy like that. it almost liberates white people to vote for someone like that. and he is leaning on some of the poles i've seen. granted, it's a fairly narrow sample, but i wonder whether that is going to start to illustrate a change and suggest that we've, we've reached a political limits as to how far we can take things in the, in the social direction you've been discussing. that's going to be an important indicated to me, i think. and, and i said to someone earlier that i thought in many respects the situation is kind

of like 968 again, you know, we had mixed and was running on the law and order from graduate. we had to be at them war at that time. that was a war against kobe. so, but the republican because they stopped embracing this, you know, acting like a political, desco personality comes embrace and trump, they actually would have a pretty strong and compelling case to get back in power given all these cross currents and you've got them and them but, but again, if you keep spending all your time obsessing about 2020 election whenever it's fraudulent enough and you're losing a great opportunity, much as i think the democrats blew a chance for self replacing and renewing themselves when they focus on russia gate . for example, in 2016, right, i know we talked about f d r, and the fact that he tuck extraordinary measures some might say unconstitutional to write the ship that had been horribly crushed during the depression and the clean

up of wall street that took place that was necessary due to the excesses of wall street and were at a similar juncture now. and it, we, but i believe you know that it's right for something of an ideologue to become president in the united states. more so than what some perceived to have been the leanings of a trump. but somebody is actually more the more autocratic in nature. but that could take 2 forms. it could be someone like an f d r, who ultimately was successful and rebuilding the country. and in a way that did build broad coalitions, or it could be somebody who's an outright, you know, autocratic, ideal i career make charismatic. nightmare. right? i mean, isn't it? my question is, by focusing on the atomization of the culture, as you pointed by not for many as coalitions,

is the country rolling the dice and taking a gamble unnecessarily that could end up tragically. yes, we could have a real threat as we can have a real autocrat. that was a possibility with trump, but trump himself with too lazy and incompetent. the risk is that next time you get one who embraces his populace platform, but actually has experience and knows how to govern and knows how to use machinery of government. but use that to take the country in a much more autocratic direction. and there are candidates like that out there right now. like florida governor ron defense system example. all right. very good. marshall are back. thanks, spring. i cause a report. my pleasure. good to see you guys again. all righty and i was going to do it for this edition of kaiser report with me max kaiser and stacy herbert want to thank our gas marshall or back until next time by the me.

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