Hello and welcome to cross talk were all things are considered im Peter Lavelle as a culture 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 they speak of a u. Of the end of now but is the reality a k a recovery a permanent underclass. To discuss this and more im 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 crosswalk rules in effect that means you can jump in anytime you want and i always appreciate it ok lets 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 its 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 dont i dont really think its that you are an l. Im really quite taken with this k. A recovery the rich got richer and the poor guy. Or is that an oversimplification richard go ahead not at all i think weve already seen that now folks light some time that at least 2 more 3 or 4 decades of growing inequality both of wealth and income and instead of that being understood as having contributed to this combination pandemic and crash were 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 standing out of control in terms of extremes of wells inequality and income inequality and theres nothing on the horizon that suggests that thats going to change and so i think that is becoming a permanent quality of this economy and is 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 dont 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 a lot down their consumption went down Something Like 15 percent but the class that serves them their income went down more than 30 percent thats according to some reports here so i mean and we do know they just pays those stories in the billionaire stories how theyve really done well out of all of this year is that is that akin to a k. Recovery because we do have this growing and maybe permanent underclass go ahead youre well you know i dont even care what letter you want to try to use to describe it my problem is with the word recovery because i dont think weve recovered. 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 these this recession that were currently in began with a very substantial collapse and yes theres been a bit of a bounce off of that collapse but were still in a recession and so i dont know if recovering to being in a less severe recession then we were in at one point really qualifies as a recovery and i dont think weve seen the lows i think were going to relapse i think were actually going to go down and theres 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 streets pain has actually been wall street again its precisely because the economy remains so weak and whats really at the root cause of the weakness is not capitalism its the failure to have capitalism its the Federal Reserve that is monetizing masts of government debts that are only inflating asset bubbles but at the same time it is depriving the real economy of the resources that it actually needs to grow and build a Real Recovery that would in fact lift all boats instead were settling for a fake recovery because thats the easiest one to create because in order to have a Real Recovery were 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 were compound ing all of the states. That we made before the pandemic if you remember we were already slipping along before anybody heard of covert 19 and 4th quarter 2018 thats when the wheels started coming off the bus thats when the fed did the about face and started cutting rates thats when they really started to move from quite a tame tightening back a quantitative easing now in march of 2020 right dose 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 and at the same time theyre depriving the real economy of the air that it needs to grow if it if i go back to reagan all of these mistakes and i think centrally agree with much much what peter spent but much of those mistakes have benefited the same people the richest people that weve ever known in the history of humanity those mistakes ok yes i agree no no no i have assets were aware of where greed were agreeing but im going 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 made out i mean theres no executive let me go to richard theres no one getting there these mistakes. Yes i think the use of the word mistakes here it always amazes me its 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 the mistakes were made we would have some nice sanctioning capitalism that would look again lift all boats it seems to me that the people at the top end 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 of. Its the bulk of farewells depends this is a this statement so often repeated that the word mistake starts to lose its meaning this is the way capitalism slayers out it might be nice to imagine that it would function some other way but thats the utopian imagery of that stateless capitalism that probably never existed but in the last 100 years 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 so now you see i read it i mean the middle im 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 here were going to go to the other theater here what you used the word countless methinketh that i think its very problematic because it doesnt seem to be benefiting the whole lot of people because they know none the less here i would agree with peter our guest here in the sense that im tired of socialism for the very very rich and then everybody else gets the crumbs in the comp was the economy go ahead well 1st of all dont confuse what america has now with capitalism i mean whats left of capitalism have been destroyed by socialism so its 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 its not these asset bubbles are temporary a lot of this wealth only exists on paper people are not actually spending that money its just on an on a brokerage account statement what is coming is a major collapse in the value of the dollar inflate. It is ultimately going to result in the cost of living writing 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 its not just of course the middle class theyre 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 own money and independent fed that no longer artificially manipulates insta 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 or 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 on more dollars than anybody else play they have the most to lose when the value of the dollars theyre holding completely implodes ok im certain i think we have one day all 3 of us have been coming to a crisis that is on her right but richard how can how can you save money how can you invest money if you dont have a job i mean its very simple here. I mean im mazed a little bit by this and were going to have an i Interest Rates were going to really crunch down on the economy you mention in passing that consumers will have to save more than anything lasts to save from thats why this level of savings of the great mass of americans is virtually 0 or negative already they didnt suffer in for so long businesses. Unless you crunch down on them which is already happening now it is a recipe for much more trouble more oil and a us in this society then were already then were already seeing i agree with peter that this is going to end very badly and its going to be slaves the bubble at the stock market alongside of Everything Else but for me this is the end of an empire for the 1st time in my adult life i dont see a way out i dont see a solution emerging i used to it my ear that way capitalism over change the Great Depression and all the others of selections that it has imposed on the people around it but they dont hassle israel in a host those inflexions government did not listen honestly out of it wait a minute it struck me as one remarkable thing he says so blames socialism for the ills of capitalism is an extraordinary move at a time like this when the socialist movement is coming back from a period of his story weakness precisely at the times that the growth and equality what went well into that as unesco socialism has been a large and well then he has a service undermining and you tell your structural bill that it was not me youre talking about is law is that social mores or not i have to jump in here were going to go to a heart breaking out with our break well continue our discussion with a recovery stay with our. Best guys are financial survival they say money to develop. Thirtys if this is a central perk support dying a Government Funded Program right now say stop the. Time. The time corporations repeat the same mantra sustainability very important to accelerate the transition to sustainable transport sustainability stay in her manner more equitable and sustainable world. They claim their production is completely harmless. Little. Companies want us to feel good about buying their products while the damage is being done in far away this is something this must keep going to. Be doing dont even. Understand it look at who is a woman and. Welcome back to crossfire for all things are considered im Peter Lavelle tree mind you were 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 Business and at the time indias economy was doing quite well again usually using these macro be a Macro Economic indicators ok g. D. P. Growth. Income number of people employed but at the same time theres like 200000000 people that live in stark covered in india and i said to him i said is your indian model just to accept that youve got it how 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 its going to have an underclass so im asking you is this whats happening to america where you were going to have been under. Class permanent under cattle class and if. 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 pro the program is that you know i dont see a way out here go ahead richard yeah i think thats exactly whats happening i think were learning in a variety of ways to live with an enormous underclass i disagree with you that we didnt already have one i think pretty 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 didnt have anything like that impact in many many other countries the United States has 4 and a half percent of the worlds people it has 25 percent of the cold it cases and 25 percent of the deaths for a rich country thats a stupefying failure of management but its 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 da used. Cases of coal did and they are the frontline workers they are the ones that are suffering from hypertension diabetes obesity if you wanted a truth 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 overseas enclaves of wells new York San Francisco chicago and all of that and so rounded by s c e of the really desperate poverty they have accepted that in india and they have for 50 years if not more despite being independent from Great Britain they have accepted it in brazil another case and more weight you look at trump both sonora and moldy and you can see the kind of right wing government for which this is an acceptable range you know peter and obviously i want to follow politics very carefully and i watch 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 didnt see that from either party here and it goes back to my question to richard is there is this an exception acceptance that were just going to have a whole lot more poor people. Well you know were i disagree that weve even been having a growing economy i dont think we had any growth even before kovac 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 its not you know the reason that americans dont have any savings is because the economy has been growing theyve been able to keep it together through debt theyve used debt to replace their income but why is that its because we dont have a vibrant economy because we dont have real increases in productivity thanks to Big Government and banks the Federal Reserve so were 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 were 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 doesnt 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 and all that theres a real socialist in america because youre the winner in all of this ok i mean i think you know these terms calculus and socialism dont really mean anything for me is that both lose it whos Big Government promote that is the middle class is not the working class isnt the Big Tech Companies are. The banks are doing really well here are the banks that i do well look at the device or implode. 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 its going to destroy the value of our money and were going to blame all these problems im capitalism and were 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 were going to face are you good where if 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 theyre going to get it you cant really cant turn it into an area you know if i didnt government supposed to know about it and if you only look at stuff like problem by poland and ireland it means hes going to go ahead richard ive 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 cited it all off on the government create this utopian fantasy of a get out of let me an era king but out of capitalism without a government has never had an say you know governor all easing into government the governor there actually halles and i like things. They are ultimately has always been controlled by the people who have the big boxed theyve used it from 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 dont do that to you so do but im telling you youre wrong youve got to understand capitalism go away no idea which is not who you are declaring enabling itas an appliance alleles lens what to do keeping on talking doesnt solve the problem i go days you go what is your solution to the problem youre not directing this conversation by magic in your heart of it yeah well actually we are listen we have gotten it there is more money printing and that girl do listen you know that were did or you know her im just chilling up time doing this yeah ok peter asked a fair question what is the solution richard because well we have about 2 and a half minutes 3 minutes go here we got capitalism is a system that is organized in every enterprise by having a small minority of people the owner the shareholder the major shareholders the board of directors making all the decisions from the majority of people who are called to employees thats a very similar arrangement to the lords and the serfs of feudalism and to the ministers and the slaves of slavery we didnt 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 to price 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 out of produce where to put. Juice and what to do with the fruits of the labor weve all get you to follow me as your little sister the knowledge that youre talking about creating life you know me how to astral like environment i didnt care but if you think theres a war you know well yes in cuba youre in the soviet oh yeah youre going to liberia you have this in a fantasy world is not is not only erics it doesnt work it only works in your imagination it doesnt 2 work reality and your heater ology meter splitter it is very polished and i want to ask you 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 dont think they to think in terms of capital ism but a lot of them would say what is competent has been doing for me and i think thats 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 thats 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 dont 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 it will work if we try to socialize me because im going to end it and if theres some kind of socialist paradise a guy that only exists lamely i disagree man is like were going to take a bad situation lets make it much much worse 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 im putting it right it doesnt hurt because i want to make my case in westport and in. We are going to want to thank our viewers for watching us your r. T. C. Next time remember. Cas calendar is dying alfonzo among his die and theres changing pay change dard served our. Whose 1st words were had a lot of us here a challenging post youve got 2 years to live. I have no doubt that what happened was criminal. Offense concentrated market is a 1000000000. 00 industry these companies have huge financial motivations to solve these problems there are numerous stocks showing that dumped his work keen to test facts or a concentrate straight insights of its own that Patients Want gives them doctors the wrong stoplight long term system why they were keeping them secure those who stay. And people still die im always question or so i tried being hard to live when so many have. This is a military plane crash lands on a highway in Eastern Ukraine at least 22 people are dead critically injured. In the 50 attack near the former paris headquarters of the satirical magazine is now being treated as an era the incidents left 2 people injured and comes after the magazine recently published controversial cartoons featuring the prophet muhammad. Also in france a new covert infection 16000 cases were recorded in a single day on thursday but the latest restrictions on life designed to stop the virus are only spreading. Meanwhile across the channel ethical concerns are being raised over reports that volunteers in the u. K. Could soon be deliberately infected with in a