It ok because i hear more and more top read more and more about a cave recovery and that is that in michigan a defeat in my in my opinion because it means the if you have the k. Its the the leg of the k. Youve given up on ok because the other part. Of the economy its true because its that in their benefit here i really worry when people talk about new normals and when they talk about the economy youre my friend well who has become normal since 2008 has been completely different from the old normal people have the normal youre go back to a balance but really the economy hasnt grown at all since the 2008 crisis all of the growth in g. D. P. All of the growth in wealth has accrued to the Financial Sector to the real estate sector to the one percent for the 99 percent oh theyve gone down and down and down so the new normal is you cant get rich again by hanging out. And joining the middle class like you goes through the new normal has all of the year increase in wages in service in rents and in monopoly prices so that they mark the new normal is the market is going to shrink and shrink and so we look like greece looks up in the last 5 years the think of the normals looking way routes that if. Ok stephen im really glad that michael brought up the 2008 financial crisis as we have a reputation a reputation about it and it is this year where this was a artificially induced recession it benefited the one percent you cant not keep stressing that year when what 202020 in 2008 havent come in is that you have this massive transfer of well upward upward again ok and so again i mean my underlying theme in this whole program is that perhaps the country liberty speaking specifically about the United States that michaels reference to greece is a perfect one i think youre basically writing off tens of millions of people america hundreds of millions of people in the western more heads yeah i mean to do what were saying is a process where the wealthy have got will they go through debts and this is something which markland. Very very strong on and on a mathematical model. And one thing which came out of my modeling of whats called misuse financial instability cloth asus was it as a little of debt rose a even when i had the capitalists borrowing the money and paying the interest but the ones who actually fight for our level of debt with a work its a basic stories they have the residual link on the nose in a capitalist system so as the men of wealth. By the rich goes off servicing shot goes up and it came at the expense of what is incomes and that turned up in the system as well and then in the response to the crossness. Economists who know nothing about capitalism by now. Lot about a blackboard model that i call capitalism which is bears no resemblance to the real thing this solution was to boost consumption is what they call the wealth effect and the wealth effect was to make shares go off in value and have property go up in value and then people would feel wealthier and spend more of the trouble is they doing that people are not putting him down but people with a wealth of bill gates and bill gates might buy one soon of elements of the vincis coda but he doesnt go shopping it came out and thats what you need to get demand going up and its the poor youve got to direct the spending so so he had a capitalist process that he produced inequality and then the response of the managers made that inequality worse michael did and so point of program oh i dont like the word transfer of wealth the only kind of transfer of wealth that is spent is the 10000000 families that suffered for closures and there are obama the banks not the debtor its what theres been inflation not some bonds real estate under the stairs at the tears there was a trillion dollars so a save the economy a trillion was put into pushing up stop and are real estate prices and only 2 trillion was put into the socalled real economy namely in 1000000 of the corporate sector and a little bit in the labor so theres been just that asset Price Inflation not incorrect or the one percent 00 already own maybe 80 percent of the stocks and bonds in the country didnt trance through yet more they simply use the Federal Reserve to lower Interest Rates quantitative easing and vastly increase the price of housing in stockton by putting them further and further out of reach for the 99 percent of you know behind it where where is the real economy here i mean how relevant relevant and is it to that in the larger scheme of things because this is something i keep noticing too i mean. You know we can talk about mad numbers and you look at really going to do with whats going on particularly for average people going yeah i mean the average people who are completely excluded from this is michael says that average person doesnt. He will get a bit of i could use in a strange expression his study would be an ending with a. When you get this argument that you know they benefit through that Pension Funds is that your center with another percentage of the shares that a un by would because as a fraction of the overall ownership or shares would be well on the will ended with low single figures. The vast majority of inflation of asset process benefits the extremely wealthy not just the middle class but the extremely wealthy the one percent or even the point one percent and what quantitative easing did was boost stock prices by buying a trillion dollars worth of bonds for a year off the Financial Sector which meant they had a trillion dollars additional cash in turin that was less longs they couldnt buy bonds because the Federal Reserve was being the body of last resort so they borsch is that drives up the ship process and that trillion of course i think introduces us to process by maybe mole the net increase but the wealthy will sell and benefit from the silo and they might buy the occasional gamble gaining in somebody to wash it for them and the result of that is you get a trickle of that trillion dollars of on his head of easy money turning out in the real economy so did benefit to some extent but rather than a multiplier this was a fractional laws or effects you put in one trillion into the wealthy maybe you get 50 to 100000000000 for the poll. Ok but you know its a real quick here and the term capitalism is been brought up here i really dont want ease any more ok it a little slogan but what you just described here is that you had good reserve picking winners i thought thats what socialism is ok this is where theyre deciding whos succeeds and who doesnt succeed this is this is a team yeah its an easy because i actually rig out like this is theres a byproduct of it into fitters a local Central Banks stopped almost exclusively bought on the strength in the well they call the new possible school of thought and the new Classical School of thought fundamentally god is that capitalism is inherently stable so the government should get out of the why but they are in is the last 30 years theyve built models which ah good you can ensure troll the right of inflation by moving the right of interest washes fos effectively is the inflation rate is changing and that is stuff which is controlled by the Federal Reserve so in them models actually have the Federal Reserve as part of the system is supposedly a controller now its a control it leaves out the most important parts of the economy and market and i have this all the time they leave banks and it and money out of the novels and then a close thats not the real world its the real world behaves in a way that for a while looks like its their model then it goes completely gaga and they go gaga as well as i what can we do we can continue boosting share process because the wonder a conduit they have is from themselves to the Financial Sector so its easy for them to pump money into the Financial Sector if there was a conduit to the to the people through for example everybody having an account of the central bank and then not have been able to use that make an ism but they havent even set that up so its physically again ill use one of the models to see if theyre giving food to the parasite and saying please share it with the house. Go ahead michael definitely vote your to use the word real economy the real economy that your return. It was what we used to call Industrial Capitalism but what steve and i esteem has just been talking about is finance capital ism and finance capitalism is completely different from Industrial Capitalism Industrial Capitalism in the 19th century seem to be moving to socialism because its more efficient to have the government provide Public Health and Public Education at a low price because then the capitalists dont have to pay their labor so much if the Government Supports their cost of living but finance capitalism wants to increase the price it wants to privatized education raise the price of the private housing it wants to not have access land rent then once theyre really support the finance insurance real estate sector the Financial Sector and so who takes over the state theyre libertarianism in neoclassical economics is a you know some throw planning but they shift Central Planning away from the government and elected officials into wall street and the Financial Sectors so were in a state of Central Planning that would have shot adam smith and all of the classical icon of us were Central Planning by banks and their interest is not that of industrial effort but this is the one bad news on what the upside goes only to a small say to a group of people in all the downside goes to well People Like Us we get i dont know when things go really well i believe transfer well it mean its an amazing mechanism we saw and it is this year Concierge Service you know and you know in the banks call up and they say this is what we want this is not going to take ok but main street they dont even have a number to call go ahead you know thats the problem we are completely locked out from the Economic System of the whole rationale for Central Banks taking over Economic Management fundamentally which is what theyve done and the people like Thomas Sargent and and rather lucas unwrapping all the mainstream economists who push these models of capitalism is an inherent. Stable system theyve completely focused on the Financial Sector and ignored the real economy the real economy just you know trips along and librium well thats a middle of what it was control the interest right so they have but the end product of this is fundamentally as you say its a weird form of socialism for the rich the close they are the ones who are being elevated by tactics like quantitative easing and now you could say the same thing happening again the in going this money going in to the Financial Sector which is driving up the stock market thats where the up out of the coming strong and fundamentally that the problem here is that mainstream economists have not understood money creation if youre running a central bank you know that you can put as many elements on the billions are true that those on the assets sawed and by would if you lock on the liability side so they have simply said were going to buy 10 trillion dollars worth of shares a while and so if you those 10 trillion become our estimates the chantry becomes a law ability theyve got an infinite capacity to do that they can continue pumping the stock market up and its actually funny to watch trump crowing about how well hes drawing it its actually the Federal Reserve the striving it up were going to examine your gentlemen were going to break now lets break well continue our discussion on the economy stay with our. Nuclear power plants have become a battleground in the u. S. In vermont people have demanding the shut down of a local plant for my yankee is right now my focus because its a very Dangerous Nuclear power plant the owner is attempting to run the reactor beyond its operational limits this case just sort of puts a magnifying glass wheres the power in this country where is it going is it moving more towards corporate interests who or is it more in the idea of a traditional participatory to. Our lie with the people this case demonstrates that struggle very real ways. Kind of financial for the. Very 1st to visit this 3 different. Maybe something new something in america something over the Cayman Islands or do we do all these banks are complicit in the. Need to do some serious Money Laundering ok lets see how we did. Jewelry. For you know what Money Laundering is highly illegal. Watch guys record. Welcome back to crossfire where all things are considered im Peter Lavelle to remind you were discussing the state of the economy. Ok let me go back to michael in new york weve weve heard twice through the classical economist the lead they claim that capitalism is inherently stable or you know you guys are economists i mean whats stable about 282020 explain that to our viewers well for for 2 centuries 18th and the 19th century almost all economists agree that a cut economies are not stable because the Financial Sector is not part of the economy the Financial Sector grows purely of mathematical laws exponential interests and the amount of debt is stephen i traced mathematically grows much faster than the economy now debt grows much faster than the economy then youre going to have more and more of the economies and a spend on pain banks for debt service and paying the you know monopolies that the banks support and less and less the spend on goods and services and theres a creche thats what 0. 19 or economics is all about and thats why they wanted. Money creation to become productive but it hasnt been productive most almost 80 percent of bank loans are really state loans and the rest are for stocks and bonds banks one for Industrial Capital formation they dont lend a. White like dont they do explain how they can make money quickly the financial time frame is short term you can make money much quicker without taking all the effort of building a factory and making a good and developing a marketing plan for it all before couldnt make it much quicker just like pushing up using your. No to push obviously the tracks and pay dividends and pay everything out and so many percent of americas Corporate Income is used nonstop buybacks and dividends its not kloden to new Capital Formation thats why rhydian doesnt realize it now if you see american deindustrializing that is not stable thats an. Unstable and yet the industrialization pays for the one percent deindustrialization pays if you want to use all your money to make money in the stock market. And you really dont care about the real market that the that is making us look like recently doing us debt ridden and without much of her ability to grow you make money and youre the one percent and you make money by having the 99 percent in debt to yourself and owing money to yourself then theyre not going to have enough money to buy goods and services from the factories and so fight as capitalism is where very different from the kind of Industrial Capitalism but have a smith and martz and every 100 years ago was analyzing you know so you know i know im not the smartest guy in the world out there all on the show but you know what you guys are describing to me sounds like an elaborate on c scheme i mean that there has to be a reckoning sounds and im somewhere for someone or a group you know the ponzi schemes that did that is certainly a huge part of it i mean what would you have as unproductive investment which can only continue being service if you take up more debt to cover the hole thats created by the sally to make money out of the last amount of debt you took on and actually i recommend one of these days getting richard vague on your show because richard doesnt expand cov has read a brilliant history called a brief history of doom and he can show you from inside knowledge what the euphoric behavior of bankers is when they get caught up in one of these now growing ponzi schemes but one of the one i wanted to actually talk about is also whats so good about stability. Because when you think about it is the stability we want is you dont want a system to break down but stability as the near classical stuff on it is effectively the same as being frozen to absolute 0 and nothing is changing whereas the most important thing about capitalism which distinguishes it from any previous social system is the right of china so in that since instability when it means you get change technological change social change and so on is one of the strengths of capitalism is just by sheer innocence happens stance that the 19th century people who try to defend capitalism against mox focused on the concept of equilibrium as a modeling tool knowing that it wasnt relevant to capitalism was a shortcut for them but the 20th century economists had no knowledge of their own history let alone the broader history of economic thought made equilibrium it was supposedly the finding characteristic of capitalism at its is defining it character its christic of capitalism as as for snow is of the sun but i think what theyve done its a myth yet and in search of that i mean if they are torturing the biblical enemy mine will jump and so why did economists make this basic mistake stephen is a mathematician is found if you believe in equilibrium automatically in the market then you dont need government so this whole idea of equilibrium was designed to prevent government from doing what government supposed to do protect the economy from the rent seekers protect it from predatory bankers protect it from the real estate speculators that rich but. Raise the rents take it from the privatizers that want to turn Public Services into monopolies the idea of equilibrium is dont have government interfere let wells 3 allocate the resources and determine the policy not the government so all of this is is only. Advertisement refined capitalism and for the one percent. Well you know they theyve been definition of stupidity is believing doing the same thing over and over again will give you the same the same results ok with different results yeah i mean the bit is making the one percent rich of course its making because they like the results its going to bring it down to real life you write me one of the planes and we look at 2008 and look at 2020 you know theres a lot of young people you know it was you know in 2008 interesting be the work force you know these to be in now with a double whammy now when he 20 day havent recovered from 2000 it theyre not going to create families theyre not going to be buying homes and some of them can even buy current a lot of them are moving back in with their parents i mean what are the long term implications of this because thats where a you know introduction you know this is a model biggest zooms in how the country. People that work are irrelevant or a new news that at that ok i mean this is a new lease kerry and when you have people that have no future and they believe they have new future they will we do embrace of the right me as i knew that id be very afraid of personally. You know thats thats the thing i mean if you look at the level of profit lately emitted from mainstream economics if you go back to not in the end of the 2nd will wall that process of the dark bright depression the 2nd world will reduce American Private debt by 75 percent to win from about 130 percent to about 40 percent of g 8 a pe and then you had of course plenty of room for credit by stripping demand because there wasnt a great deal of debt Interest Rates are as low as they are now pretty much so the servicing calls for low so you could have growing Credit Demand your reach saturation to some extent with the business sector in the 87 crosses and then at that point the bank side has something to houses to try to. Sell more debt to them then theyve wiped out the housing sector another going for Student Loans car loans etc etc theyve got to the point where the target maka is completely saturated with debt and contact on any mall so the engine is a minute so. Mentioned but dont go for the Pension Funds yeah but you know it didnt nobody can afford to handle anymore debt right now but actually the corporate sector now has the last little of it compared to g. D. P. In the history of american capitalism the housing sector is slightly below the 2008 fake but theyre trying to get the house as a consumer borrowing but its needles not going anywhere because we simply dont have the capacity to carry more parasites against selling monfils fries and thats where weve got to you richard end where you simply consequently more blood out of the real economy but you continue trying to do it parasites themselves if they hate the host as much or whoever mochel the key thing about parasites is an order to eat those you have to take over the hosts brain you have to make the host think that the parasite is are those to be protected like a baby and that some of the Financial Sector is it says you have if youre going to save the economy you have to give more money to the one percent the Financial Sector and the local down while theyre doing everything that and to prevent it from tripoli theyve taken over the brain and steve and i are not part of it weve somehow gotten immunity and you know were were on your show where you go around the world the other saying the same. The world doesnt seem to change to make a long story short. You know when that when we looked at the reacts in the resume us or it is bailouts whatever you want to call it to me obviously i mean they the politicians out there are a list there is a can care right away i mean what is the naacp what is the stage of the county roads all the digs by the one percent i mean these create new knowledge stations or assembly you know representatives i mean thats what they were or ok i mean well i think i think actually not that small and not i understood that but then again i get a lot of bankers that are very smart ok only trying to get to the top of a system lack of morals gets. Of the top of the system out of your market my uncle and i have too much in the way of morals to get to the top well you know it is greed that out of true. Lives theyve all swallowed a fish or economics textbook or my favorite answer this is actually the previous president obama because if you read his speech in 2009 when he came to power it was under bushs watch that of course the process began back in september of 2008 before the election but it went about a power in february he gave a speech which said that you people lost its pickle obama speaks people ask wheres my bailout and he says the truth is its the dollars given to banks can create an extra 10. 00 in loans to the private sector a Multiplier Effect that is straight out of New York School textbooks and he didnt know any better he only has a degree and lol he didnt have he done economics might even have swallowed the ip is critical enough not to have done so dont look nobody nobody forced them to drink the koolaid its b. S. Yeah and the koolaid isnt a classical economics textbooks are often they dont even know theyre doing something so stupid some of them a venal enough to know thats the case with most of them have swallowed the audiology and theyre promoting the audiology which if it matched the system would actually be productive because its got nothing to do with the system it actually destroys it well if you have 3 houses in the hamptons that why should you care ok you have the last minutes it will go well i think obama know did exactly what he was doing when he invited the bankers and Goldman Sachs nobodies to the white house and said im the only guy standing between you and the mob with pitchforks the mob with a pitchfork for the voters who voted for the job on addition today is the deliver his voters to his him contributors and thats what he did he didnt necessarily believe the neoclassical economics they use it is a demo effect is and it is a pretense that is a campaign slogan. And they know what. They know who supported their loyalty is still there and tributaries and just as many private. Weve privatized all attack certainly in america i turn it over so. Im really sick and tired of servants and the g. O. P. In america talking about socialism because you know what everyone is going to end up getting in ok i want to thank my guests in new york and in bangkok and i want to make our viewers for watching as you are to see you next time remember. This class. American citizen they didnt want to talk thats. An attack on the other. Guy and i think. I would vote for a republican i would vote for anyone who thought he was and has half a brain. Because if you get. My 2nd wife. She can handle. She and i divorce because our trouble is what the president and i floated for her and she can. Win the most important election. In our history list of the months to go before the next president ial election how is the atmosphere in the u. S. Now. What are the highest priority problems how will they vote should they do next now that just some of the questions we put to you. Is you. Media a reflection of reality. In a world transformed. What will make you feel safe. Isolation or community. Are you going the right way or are you being led. By. What is true what is faith. In the world corrupted you need to descend. To join us in the depths. Or remain in the shallows. As the u. S. Economy was booming growing numbers of people were made homeless. You can work 40 hours in a week and still not have enough to get housing everybody believes america still has the lead up to the reality of it is that were not financially equality and the lack of Affordable Housing for a living minimum wage gave many people no choice. Theres been a problem with the city knows turn a return call the stay way only. Its worth it if there is no answer because yes that requires resources the most vulnerable are abandoned on the streets to become the invisible cops. Nothing but an excuse for sanctions russia reacts to the Global Chemical weapons watchdog confirming germanys findings that a prominent kremlin critic alexina felony was poisoned with novacek its purpose is obvious to denigrate russia. Unsubstantiated accusations and thereby create a far fetched reason for introducing another tranche of sanctions against our country. Speaking at the u. N. Security council about a controversial probe into an alleged chemical attack in syria 2 years ago. With britain talking of europes highest death toll on the country seeing a new surge of Infections Health ministers praise for the governments handling of the crisis