And all the International Stage should now for cross full coming up next kevin ill be here with you in the studio next hour to give you the latest news updates from around the world will see about that. Alone we welcome to cross talk were all things are considered im Peter Lavelle as the culture war d rages on and they did the billionaire class is only getting well you know their well iraq percent 184 1000000000. 00 since the start of the pandemic splash how will this back shape the coming recovery and is a permanent underclass the new normal. To discuss this and more im joined by my guest Richard Wolffe in new york hes 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 is 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. Doesnt do much better the industrialized world is more or less in the same position 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 thats not going to go away any time soon so whats really happening with the the economy or its a recession deep recession for many and its a goldilocks time for some. Well i think when you look at the overall picture and i mean this is if you are back of the origination of the Federal Reserve i think this is kind of their plan all along this is part of the Worlds Largest legalized. They can do has allowed the rich to get richer as times get tougher you know for years theyve had access to this cash and capital to borrow its only recently that the average guy can actually browse for my to get in so they threw a fright and bad conditions and actually of all hes built well under the toughest conditions because they have the access to capital and others dont they have the. Yes they get the money others dont 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 cattle doing all the things that normal people dont get to do so the class divide will continue and its mostly because we dont 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 thats 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 Concierge Service and you know the states not supposed to keep winners because thats against the markets but thats exactly what theyre doing theyre 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 whats going wrong i dont 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 capitalisms instability its Business Cycles if you like every 47 years we have a downturn thats 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 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 to offset the inequality and instability of capitalism hasnt 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 its 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 missy had to do so for me this is capitalism running out of ways to keep its. Lead time thats the point of the program jumping and i got my Biggest Issue here is that they dont 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 is it stinks but i mean doesnt others are not necessary harbors and better read think theres a better blend and i dont 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 theyve really done isnt played 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 thats yet they keep the flame my dollars basically are his secondary that i carry in my pocket of cash and now what theyve done is they said ok we sure do enough now lets make everybody go on the stock market because were not give you any other alternative that the investor money so its got to go in the stock market because you get the posit money theres nowhere to go up some banks want to charge you but your money and there there is no other investment yet. Because were not going to be looking at a very small segment of society meaning in the 19 seventies and eighties middle class people did invest in the stock market in my memory in doing ok on my my parents you know but you have to i dont think thats that and even richard i dont think thats really the norm today i mean people. I mean look at how in after 2008 obama it had a chance to save people from losing their homes but of course he didnt do it because he had he had he was in the service of best yes an interesting bailed out the banks but he wouldnt bail out Middle America and we have the same thing happening all over again you know if the thing isnt with the business ahmar richard for me it seems that it is a real moment i mean i mean how is it 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 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 lets 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 stark way that capitalism brings them these plagues and im not talking about a virus the plague of inequality and the plague. Of instability of cyclical instability and you have to assure a later confront 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 weve never had in the abstract thats has as a huge token an image as thinking we would defend socialism or communism its only if we had the pure form of money. But i mean i think that hang on im going to conduct there are obviously differences there but i can just say answered richard in the end the elites dont have to worry about ok because congress has already been bought ok theyre never going to do anything like you know time 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 isnt 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 isnt enough to help with. Payrolls ok i mean then that is this really drives me up the wall ok and i come from this from im a conservative ok but i think sometimes that emergency the government when it has the tools it should extend them if youre going to bail out the super rich then you can bail out main street and you cant tell me there isnt 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 youre issuing new money because not only does a fetish and the money but the banks also wish no 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 time to one of their always because its free money to that well now they cant reserve them as off theyre only making that capital available to the for the wealthy theyre not making it available so then dana white why because. Mr obama or what some other president will come to their aid and bail him out again why should they be bailed out when the average guy and history is never bailed out you or i would be in jail or Bankruptcy Court under the same circumstances versus being taking extra big bonuses because of that and this is where the problem again goes 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 hes trying to a limit a matter that is bad deals which is part of the reason is that whats going on in china and would you sing going on with that nafta deal because those are bad deals that were made loud and a top time you know fairness in all fairness you know you know the republican held senate is going on vacation it will come back when theres an emergency when there are 40000000 emergencies going on right now i mean this is this is just a abdication of responsibility and Everybody Knows who say ok down here were you know gated community gave up their security and theyre all just on ok i mean its so once again it actually is a complete insult to the democratic process what do you need if you when youre in hell when you desperately need help for the sake of the country they go on vacation i can im going to jump in here you go to a short break and after that short break well continue our discussion when you say. Thats right we talk about problems all year and then that summertime we come up with all submissions that say were being joined by a banker her calling from your simon. Bank. Long term friend this. Been the troubled 19 seventies a group of killers rampage through parts of Northern Ireland that was coordinated loyalist attacks a population of tens of thousands are forced to flee their homes a mobile strike can put these attacks was a p. R. You see the Police Actually took part in the attacks so instead of preventing it they were active participants in the burning of full streets in belfast at the time more than a 100 innocent civilians were. As the review can seniors and we found out more i was surprised about the extent and integrates which the collusion was involved in some of those cases the killers would lead to be named. And getting i think it went to the very very top i think it is. The water where all the taishan so you know on the go ahead. Welcome back to crossed out where all things were considered im hearing about your mind we were discussing what kind of recovery can you expect. Ok richard lets go to you ok out i would like to explain one of the reasons why you see the big a. V. R. 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 theyre under enormous pressures and we have to face that or else we will misunderstand the situation had we let andy 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 worlds 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 did 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 and warmest competitive advantage to naani youll s. Banks that are global and that were 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 thats moral hazard ok thats blackmail or actually are the limits im sorry leverage youre going to help no matter who actually is there theyre going to grab salute lee it is blackmail youre absolutely right but that doesnt mean that it isnt correct you have to understand for me its a sign that capitalism not only just organizes 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 dont ever going to start about how did they decide to choose women brothers vs bears arent they both are in because of trouble but it does i got a flush lehman why is that. The connections between lehman and the policy makers were different than the connections between other banks and their wholly in policy a measure of would do the right thing and thought of always the manipulative thing and continued to play when we wouldnt have these problems that we see now because youve 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 thats a destroyer all the squall Regional Community bankers ok but then im 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 thats what this economy is about what about everybody else ok actually thats 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 undo that way the effect so much capital is 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 thats why im 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 thats where its happening in some of the stuff that ive read in the last few weeks is really quite fascinating is that you have. At the very very rich during this pandemics last lockdown they did consume less but the percentage less had a major impact on the people that are serving the very very rich so that im just going to pull some numbers out there and 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 theres going to be a competition for whos going to be in the Service Class now and that. Can even drive down wages so the question is in the 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 gave economy and this think about all the millennia as if they just graduated from High School Graduate from university and they have this this wasteland and go ahead i dont agree i think that we will be able to come out of this as we have come out of money i think in the past i think one of the Biggest Issues that were looking at today versus other periods in history is that theres 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 is moving into the tech age is a much different thing and our 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 im 63 if you take my group of people ive had to go retrain to get a job i could get a job anywhere i maybe i could push carts and walmart but you get past the age and because were 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 youre not saying and i dont want to get the platform here youre not saying learn code are you. Im not but ill never learn code but again im not from that era i think im like i can turn the computer right 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 dont prepare people for the future ok i mean its a lot of you know its virtues signaling and you feel good about yourself and everybody wants so shell 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 its so damaging i think we need to have a deeper meaningful conversation and i would probably agree with a lot of things but destroying thats not the way i find out of order to reach an underclass permanent underclass because the reason im saying its not as a result of the pandemic lockdown its just coming in to a greater release ok richer yes my short answer to your important question is yes we are developing a mass underclass look 42000000 people unemployed is an invitation to every employer in america to approach his or her employees with the usual proposal youre 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 theyre fought. Thereby producing an underclass and let leak make this topical i think that africanamericans and others have been in that underclass for a long time theyre 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 to you know its i think thats a fascinating point but then a time in a minute a little bit off topic from our our focus here but then it seems to mean that thats just dividing what were going to call the underclass here because they are calling everything you just like racism in meaning that is the state division of the underclass itself which is easier to control by the way and i find what i find really a point is that there is energy and that and i think people have hope its 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 lets 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 is is the the underclass if you want to call it that now they need to get off their ass and go vote they need to do things as that of taking things the same all the way you know what one of the problems this country is we are lazy americans people dont go to the polls and now they vote out the embassy i mean you know the time one of the things but one of the interesting things is you know if you look particularly in the lot in the last 8 years here anyway and it would be very clear anyone that is a populist leftist gets crushed ok and. And populous 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 they have their bend them for a progressive stopping the republicans because the democrats give trump everything he won everything with a challenge from the left thats 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 of 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 its even once finkel there are left in america has organized so that it has comparable influence and not like by the likes of show or a low c trump or anybody else well i hope the marks number of them ok maybe out of all the coming out 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. The oprah show here they have so being you. Know yet for all of that weve gotten yes yet so weve gotten. For all of them weve gotten pretty busy worked. For just you know pretty good work for you know yes or a soldier it is. Just they take you there are good words for it but. These are the stories of men who come to magic life without fashion without a sense of style without things that might be seen as weakness in this masculine world but they still demonstrate incredible strength of spirit to live as they choose. To hold them to learn to forgive the views of your skin. For the. The world is driven by a dreamer shaped by one person of those but. I am. No jerry thinks. We dare to ask