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Debt Deflation and the Neofeudal Empire
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Michael Hudson [intro/music] (00:02):

The money that you pay for debt service to a bank isn’t spent back into the economy. The bank bond holders are basically the 1% of the economy. They’re rich enough that they’re not going to take all this extra money they get to buy more goods and services. They’ll buy shitty trophy art, Andy Warhol junk.

Who is the dumbest economic Nobel Prize winner? [Paul Krugman?] Paul Krugman. That’s right. He was given a Nobel Prize for not understanding what money was. If he would have understood it, that would’ve excluded him from getting the Nobel Prize.

Geoff Ginter [intro/music] (01:26):

Now, let’s see if we can avoid the apocalypse altogether. Here’s another episode of Macro and Cheese with your host, Steve Grumbine.

Steve Grumbine (01:34):

All right. And this is Steve with Macro N Cheese. Today, we are bringing on none other than Michael Hudson. Michael Hudson is the president of the Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street financial analyst and distinguished research professor of economics at the University of Missouri-Kansas City, UMKC, and author of “J is for Junk Economics,” “Killing the Host,” “The Bubble and Beyond,” “Super Imperialism: The Economic Strategy of American Empire,” “Trade, Development and Foreign Debt,” and of “The Myth of Aid,” amongst many others. And without further ado, let me just say thank you so much for taking the time to be with us today, Michael.

Michael Hudson (02:18):

It’s good to be here. And I look forward to it.

Grumbine (02:21):

We’re in some very troubling times and one of the things that has jumped out at us, you’ve been a longterm proponent of having a debt jubilee, and as we’re watching the crushing economic conditions that are being brought around based on the pandemic and lots and lots and lots of malfeasance that has gone on forever, it seems like a debt jubilee might be the most important thing for regular people that we could even think of at this point. Can you tell us a little bit about what a debt jubilee is and your research behind that?

Hudson (03:00):

Well, what my research basically is about is that the debt has grown so rapidly for the private sector, that if you don’t write down the debt, if you insist that all the mortgage debt and credit card debt and student loan debt be paid, then you’re going to have almost a constant depression. It’s called debt deflation. And I described that in “The Bubble and Beyond” and “J is for Junk Economics.”

The problem is that as people owe more and more debt service, they have less and less to spend on goods and services and so they’re not able to buy what they produce, and so employment shrinks and the economy shrinks. And part of the problem is not simply the growth of debt, but what the debt is for, and in the textbooks debt is supposed to be for productive purposes. The myth is that it’s for building factories and means of production and increases everybody’s prosperity, but that’s not what debt’s about. That’s what maybe stock issues are about, but it’s not what debt is about.

80% of debt is issued in the form of mortgages and they’re lent to real estate and the effect of real estate debt – making credit, loosening the credit terms more and more, lending more and more against properties, higher proportions, lower down payment, lower amortization rates – is that property prices are inflated. Housing prices are inflated. Commercial real estate prices are inflated.

So debt is being created for all the wrong things. It’s been decoupled from the economy at large, and it’s being taken on for things that really used to be considered public services like education. Used to be that all economies provided schooling free as a public service because they realized that education is how you increase productivity. But now, more and more, education is just to get a job sort of like a union card.

By getting a degree is a kind of criteria, has to be gotten. And even worse, getting an education is sort of like buying a house, just like a house is worth whatever a bank is going to lend against it. And as banks lend more and more money to people to buy houses, they’re lending more and more money to finance education as education has been privatized. So what you have is that in order to get a job, you have to get an educational degree. It’s a criterion.

And that means you have to go into very heavy debt and you have to go so deeply into debt that you don’t have any income left to pledge to the bank, to get a mortgage loan, to buy a home of your own. And the whole problem just crowds out all other forms of spending. The same thing occurs with medical debt because public health is not a social service here.

There is no public health because it’s been privatized and it’s been privatized on terms where if you get sick, there’s a high probability if you’re not wealthy that you’re going to have to declare bankruptcy. Especially when I think half of Americans reported to the Federal Reserve that they can’t raise $400 in an emergency. Well, $400 won’t even cover the cost of getting a COVID test here in New York these days.

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So you can imagine the problems that people have, especially when they lose the job. So people lose the job, if they’ve borrowed to buy a house, they’re falling into arrears. Already mortgage arrears have been rising in the last six months. If you’re a renter and you can’t pay the rent, you’re in danger of being evicted. And the problem of homelessness is looming for sometime in December or January.

So what I’ve discussed about a jubilee is that if you don’t write down the personal debts, I’m not talking about mortgage debts or business debts. The jubilee left all of the commercial business debts in place. They were only the personal debts. And the logic for that was if you don’t write down the personal debts, way back in antiquity and Judaic times, and even before in Mesopotamia, if you didn’t write down the debts of cultivators who couldn’t pay because of a flood or disease or whatever problems were caused during the planting season, then they’d fall into bondage to their creditors.

And if they fell into bondage, they couldn’t pay their taxes anymore. They’d owe their labor to the creditors, and they couldn’t work on corvee work to build basic public infrastructure, and they couldn’t serve in the army. So almost all the rulers of antiquity realized that if they didn’t write down the debt, number one, they’d create an oligarchy that would use its power to overthrow them, as occurred in Rome, or they’d find the population falling into bondage and next time they were attacked by another city, the population would go over to the side of the attackers who would promise to cancel the debts.

So that was the original jubilee. The jubilee today is basically writing down debts that can’t be paid without imposing bankruptcy and poverty on the population. Most of the attention has been paid to third world debt. And there’s a basic principle I think that should be written into international law: if a country cannot pay its foreign exchange debt without causing unemployment, without changing its society, without selling off its infrastructure, forfeiting it to creditors to pay the debt, then the debt’s considered a bad loan.

So a jubilee basically is based on writing off the bad loans and making the lender responsible for lending money that cannot be paid. Such loans are basically fraudulent. In the case of third world debt, I can guarantee you, having worked for years at Chase Manhattan Bank as their balance of payments analyst, I saw that countries could not afford to pay the debt except by either borrowing the money to pay, which they did either from the banks or from the government, or privatizing and selling off their national infrastructure. And that is basically a violation of national sovereignty.

But the debt system has been transforming the politics of international trade and international investment. And it’s transformed democracies into oligarchies throughout the world. And if there’s a debt deflation in the United States, which looks pretty much in the cards right now, it’s going to leave our economy looking like that of Greece.

And in Greece, maybe 10% of the population had to emigrate and neoliberal countries like Latvia over 25% of the population have had to emigrate to find work. And they’re the younger people and the economy’s left aging very rapidly, and the society is being torn apart by creditors’ demand for payments under conditions where this demand for debt service destroys the domestic market, destroys employment, and drives the population either to emigrate, or to get sick and die, or to commit suicide.

Grumbine (10:39):

Let me ask you a question. I’ve watched a lot of your older stuff, especially knowing that you’re one of the early MMT stars. I’ve seen so much of you from UMKC and so forth. What would be an MMT answer to a debt deflation scenario here? How might MMT step in and adjudicate this or inform us if you will, of solutioning? How could we maybe message that?

Hudson (11:08):

There are good ways and there are bad ways of doing it through MMT. To me, the bad way would be the way that Donald Trump just did it over the summer. He gave grants to… the $1,200 grant that he gave to all the Americans. The pretense was that this $1,200 was going to be used to buy goods and services and to help keep them afloat and to revive the economy. But most families used it to pay down the debt.

In fact, the credits were put into their bank account. And if they had an overdraft, whether for a credit card where the rates go up to 29% or whether they were just overdrawn in the bank account with overdraft fees, the money that was given – created by the government, simply by printing it electronically – it all ended up with the bank. So the wage earners that received this money simply were intermediaries to give the money ultimately to the banks, the same effect you could have done simply by wiping out $1,200 from everybody’s debt who owns the debt.

Of course, that would have penalized the banks and the government basically is run by the banks. So what you’ve seen under Donald Trump is nightmare MMT. You have MMT being created, not to spend into the economy, not to create new infrastructure, creating jobs, not to support labor, but to buy stocks and bonds to support the 1%. This is a perversion of MMT, the assumption and advocacy of Randy Wray and Stephanie and her whole gang has been, “Well, the government can run a budget deficit to spend money into the economy.”

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But finance is not the economy, the stock market, the bond market, and the wealth market. Basically you can think of it as the finance insurance and real estate sector. The FIRE sector is external to the economy. It’s something else. It’s the economy of the 1%. And most of the MMTers come from a background where we’re for the 99%. But Donald Trump is probably the leading MMTer in the country, in a far more powerful position than Stephanie Kelton or myself, and he said: “I’m all for MMT. You’ve convinced me. We can create all the money we want. I’m going to give it to my campaign contributors, the 1%.” That’s nightmare MMT.

Grumbine (13:40):

Wow. Yeah, that is. My goodness. I love the way you put that too. So can you describe what debt deflation actually means?

Hudson (13:50):

Well, it used to be that when you would buy a house – when I bought a house in the 1960s – banks would lend you enough money and you had to put down 20 or 30% of the down payment yourself, and they would calculate the mortgage so it would absorb no more than 25% of your income. So they would say, Well, you’ll have to live within your means. Find a house that you can afford to buy and we will give you a mortgage, up to the point where – the debt service and mortgage rates were about 6% back then – it absorbed 25% of your income.

So it was sort of a standard idea that at least if you were a white person… Black persons were not allowed to buy. They were not allowed to get loans. They were red-lined. But if you were not a Black person, you were able to borrow enough to buy a house with 25% of your income. Well, by the time that Obama sort of oversaw the bank bailout by 2008, the Federal Housing Agency would permit banks to lend up to 43% of your income.

Well, just imagine if instead of paying 25% of your income, you had to pay 43% of the income. Then that leaves much less money available to pay taxes, buy food, buy goods and services, and pay your credit card debt and your student debt, and pay for other things. So the idea is that the more you pay in debt service and the more you pay for a mortgage or for your rent, the less you have to pay in goods and services. And the money that you pay for debt service to a bank isn’t spent back into the economy.

The bank bond-holders are basically the 1% of the economy. They’re rich enough so they’re not going to take all this extra money they get – this interest and fees – to buy more goods and services. They’ll buy maybe trophy art and Andy Warhol junk, but they won’t spend it into the economy. And so all this money is sucked out of the production and consumption economy and siphoned off into the wealth economy, into the financial market economy and to finance and real estate.

Grumbine (16:06):

How would we as a nation be able to address, if you will, this situation of debt deflation… And most people truly have no idea what’s going on in the macro economy. It doesn’t ring true to them. They just think as a household budget and they think, Hey, I don’t have enough money in my bank, better get a loan, or whatever. How do we message something like this?

Because I think that this is catastrophic because each time there’s a hiccup in the economy, we realize just exactly how frail we are. Just exactly how exposed to ruthlessness we are. You think we’ve substituted, not necessarily truths about the economy to explain away things that we don’t fully understand. How do you think messaging this needs to happen?

Hudson (16:57):

Well, that’s the big problem because what we’ve been discussing is what classical economics used to be all about in the 19th century, Adam Smith and John Stuart Mill and [Alfred] Marshall and Thorstein Veblen were all talking about – at that time the problem wasn’t so much debt, it was landlords – and David Ricardo pointed out that if you keep making the laws favoring the landlords, then all the money that the economy makes is going to be charged by the landlord as rent: as agricultural rent, as housing rent.

And he said, this is like the Wagnerian Ragnarök. It’s the end of the economy. It’ll grind to a halt when all the money ends up in the landlord class. And so Smith and Ricardo and Mill and Marx, and the others all discuss the concept of economic rent as unearned income. And they realized that the aim of what they thought that industrial capitalism was going to do was to get rid of the whole legacy of feudalism.

It was going to get rid of the landlord class either by taxing away the rent or by simply nationalizing the land and charging whatever the rent was worth. And most governments were taking over education and providing it freely or on a subsidized basis. They were taking over public health. And this is the conservatives that were doing this in England. It was the conservative prime minister, Benjamin Disraeli, that said health is everything; you have to have that. So there was an idea that you didn’t want to create health monopolies to be privatized. You didn’t want a landlord monopoly.

You didn’t want pharmaceutical monopolies or all of the other monopolies. You didn’t want monopoly rent or land rent. And they also saw credit as being basically a public utility. And the idea was that if credit and banking was a public utility, then banks would lend for socially worthwhile purposes like China lends money to create factories and to put in place the whole last 30, 40 years, takeoff that has enabled it to catch up and overtake the United States.

But World War I changed all of that. And after World War I, instead of banking being industrialized industry was really financialized. Banking followed the Anglo-American practice of lending only against collateral. It lends to buy stock, it’ll lend corporate raiders money to take over a company and then pay the creditor by emptying out the company pension fund, squeezing labor, downsizing, and breaking up the company. It’ll lend people to buy real estate at higher and higher prices.

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So today, unlike in Ricardo’s day, instead of the landlords getting all the money from people paying for housing, rent is for paying interest. And the banks get all the money for housing that landlords used to get. So we’ve democratized property, and home ownership, and even commercial building ownership, but we’ve democratized it on credit. And so today’s creditors play the role that landlords played in the 19th century.

In the entire 19th century, all of classical economics fought to get rid of landlord rent, and fought to get rid of monopoly rent, and fought to make credit productive, not unproductive. And all of that failed and was replaced by a very predator-oriented economics curriculum, where they don’t discuss debt or money at all. When we were at Kansas City, I think we were the only university, maybe Colorado also was teaching Modern Monetary Theory.

And when I had to go to get my PhD at NYU, they said, no, no, it’s completely impossible for banks to create credit. And there was a wonderfully famous interview that I bet your listeners have heard. It’s a debate between Steve Keen and, uh, the Nobel Prize winner… blocking it out… Who is the dumbest Economic Nobel Prize winner?

Grumbine (21:10):

Paul Krugman?

Hudson (21:10):

Paul Krugman. That’s right. He was given a Nobel Prize for not understanding what money was. If he would have understood it, that would have excluded him from getting the Nobel Prize. But he insisted that the banks could not create credit. And Steve said, “Wait a minute, when you go into a bank and you take out a loan, the banker will add something to your account and you’ll give the bank an IOU. So the bank’s balance sheet will balance, but the bank didn’t have this money before. It just created credit.”

And Paul Krugman said he never heard of any such thing. Well, obviously he inherited so much money that he didn’t have to ever go into a bank, just lived off whatever he had. But the whole interview just shows the ignorance that was being taught in most universities. And it was just the most wonderful debate… It was like Bambi meets Goliath. And so students can’t really go to a university and find out what the role of debt is in the economy.

And even when we’re trying to do statistics. I had a group that is doing a statistical study of debt and rent and the health service in the economy, and the figures from the Federal Reserve don’t make any sense at all. The statistics for the US and the Federal Reserve say that for poor people, the middle class, the upper class, nobody pays any more of their income today for rent than they did in 1980.

These figures are fake and they’re fake because real estate lobbyists and the bank lobbyists behind them have gotten in charge of perverting the national income accounts – the GDP accounts – to conceal how much debt service there really is. It’s almost impossible to get accurate debt service figures. And they’re misrepresented.

For instance, if you pay money to a credit card and, you know, they’d normally charge maybe 17%, but if you fall behind, even if you fall behind in your electric bill and you’re downgraded, your interest rate goes up to 29%, but this is not reflected in the interest figures published by the Federal Reserve and the GDP account. They’re called “financial services.”

So when banks charge you a late fee, that’s considered providing a service and that’s added to the GDP. The GDP is growing by the banks providing you a service of having to pay them 11%. And that’s maybe 4 or 5% of GDP growth. And it gets even worse. 8% of the GDP is implicit homeowners’ rents. In other words, if you bought a home, you’re asked by various government agencies, well, if you had to pay rent for your house, how much would you have to pay rent?

Well, needless to say, as housing prices have gone up, so have rents. And people have said, “Well, yeah, it used to be, I would have had to pay maybe a thousand dollars a month for this house, but now I’d have to pay $3,000 a month in this market.” Well, all that is added to GDP. No money has changed hands. So there’s a lot of fake GDP in almost all of the growth.

I can say all of the growth, and more, of US GDP in the last 10 years has been fictitious growth. It’s financial returns, it’s capital gains treated as rent. It’s monopoly rent. When you’re charged more for your cable service, they say, well, okay, GDP goes up: the cable service is charging you more for their monopoly and their monopoly’s worth more.

All of these changes to make it appear as if the economy is growing. And so people are asked, well, who are you going to believe the statistics or your eyes? And they say, Oh, I’m a scientist. I believe the statistics, not my eyes. They’re just big fools. Gotta believe the statistics. They’re professionals. They have Nobel Prize winners saying that they’re all professionals.

Intermission (25:13):

You are listening to Macro N Cheese, a podcast brought to you by Real Progressives, a nonprofit organization dedicated to teaching the masses about MMT or Modern Monetary Theory. Please help our efforts and become a monthly donor at PayPal or Patreon. Like and follow our pages on Facebook and YouTube, and follow us on Periscope, Twitter and Instagram.

Grumbine (26:02):

We had Bill Black and Patrick Lovell and Eric Vaughan come on here to discuss the documentary series that they created called “The Con,” that talked about the liars’ loans and the incredible amount of corruption that is in the banking industry, it’s in the mortgage industry, that really is these JP Morgan’s and the Jamie Dimon’s and all the rest of them. “Too big to fail.”

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And just listening to it and watching the death and destruction that it causes, the suicides and so forth, it is so repulsive and revolting to me that this is not like number one, that we’re going after in general. Obama prosecuted absolutely no one. Bill Clinton actually went ahead and got rid of Glass-Steagall. And we have not had any champions – in forever – that have actually stood on this, short of people like Bill Black, and yourself, of course, and all the rest of the folks that got their eye on the prize here.

I guess my question to you is this: in talking with Georgists and others, the concept of a land value tax seems to be the type of thing that would do away with this rent-seeking behavior to begin with. I know that this is probably one of those things that there’s just not an appetite for, but it seems like a solution, at least part of it anyway, to this problem. What are your thoughts on a land value tax?

Hudson (27:24):

Well, that is exactly what Adam Smith was for. It was what John Stuart Mill was for. Every classical economist was for a land value tax because they said the natural form of taxation should be the rise in real estate prices. And if you do not tax it away, then this rent is going to be available to pay the banks. And who should get the benefit of land prices going up?

Like when New York City built a new subway system on Second Avenue, rents went up by maybe $5 billion all along the upper East side. The values of land went up so much that the city could have built the entire subway system just by taxing the increased land value that it costs. So all of classical economics was a justification of taxing away land rent, along with other economic rent. So what happened about a century ago, 1890s?

When I went to school, they were still teaching the history of economic thought, but now the history of economic thought has been excluded from the curriculum. So people have no idea of what Adam Smith said. People are told, you know, by the New York Times, and the Wall Street Journal, and the press, that Adam Smith and the classical economists were for free markets.

But what they were for was for a market free from economic rent, free from monopoly rent, and free from usury and predatory finance. So the whole history of economic thought has been rewritten and turned upside down to make it appear as if it’s the exact opposite. And the idea now for the last hundred years, taught in every university that’s financed by the 1%, is that there’s no such thing as economic rent; that everybody earns whatever they get.

And so the people who make the national income statistics don’t have a category there for economic rent. We’re talking about, for instance, the late fees from the monopoly of credit creation that credit card companies have. That’s considered GDP. If landlords raise the rents and people have to pay more for housing, that’s called an increase in gross national product because the increase in product is equal to the increase in rent. But classical economics said rent is a free lunch.

It’s not production. It doesn’t help the economy. It is simply a transfer payment from wage earners and renters to property owners and employers. And what they’ve done is essentially the whole fight against classical economics has been to prevent the logical conclusion of classical economics that led right into Marx. And most of the founders of MMT all came out of the Marxist tradition because that was the classical economic tradition.

That was the tradition of Adam Smith and John Stuart Mill and the other critics of rent. And of course, Marx pointed out that employer exploitation of workers was a form of rent exploitation, too. And the fight against Marxism was also a fight against all of classical economics. So, it’s like it’s all expurgated. And people are given a false idea of the history of economic thought and therefore a false idea of economic history.

And they’re not given a statistical accounting format that describes how the real world operates and how the economy is shrinking for more than 90% of the population, and it’s only growing for about 10% of the population. The 10% is getting richer so fast. And the value of Andy Warhol junk is considered to be so great that it compensates for all of the decline of living standards of the 90%.

If you can imagine, the 90% knows that they’re in trouble, that’s why they take tranquilizers. They know that they’re being squeezed. They know that it’s harder and harder to pay the rent. They know that their debts and arrears are mounting up, but they blame themselves, and they don’t blame the system. And so what you need is a reality-based economics that shows them that the problem is in the system, not in themselves,

Grumbine (31:41):

I really appreciate that. I look down at Puerto Rico and I look at Detroit, even Harrisburg, Pennsylvania, where I’m at, and you’ve seen vultures come through. They’ve basically allowed these places to become feudal states and there are vultures ripping them apart and tearing them up for any value that they have. And you talked about a new feudalism in one of your recent writings. And I’m curious, what does that mean right now? Can you describe feudalism and how it’s kind of like a modern version of that right now?

Hudson (32:13):

Well, it basically means “your money or your life.” It means that in order to get the means of self-support, in order to make a living, you have to give the entire economic surplus to the landlord or the money lord or to the employer. And there are a number of ways of locking people in. It used to be that under feudalism, you were literally a serf tied to the land. You couldn’t move.

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And when the land was sold the cultivators living on the land, the serfs, were sold with it. Well, once they got rid of feudalism, really by the 18th and 19th century… In today’s world, people can afford to live wherever they want, but wherever they live, they have to go into such deep debt to the banks to buy a home of their own or to the landlords to pay the rent, that they don’t have any money left over for subsistence.

So feudalism is where all of the growth in the economy accrues just to the small 1% layer at the top, not for the economy at large. It’s an economy run by the elites. And there are various ways of locking it in. In addition to land ownership and credit creation monopoly, now you have the public health system locking it in. And the reason right now that there’s such a fight by the Democrats and by Biden against public medicine and socialized medicine, or single payer, is because they need for privatized medical insurance locks workers into dependence on the employer.

If they complain about their job or they make a union, they’re fired on the spot. And if they’re fired, they lose their health insurance. And if they lose the health insurance, not only do they have to pay a fee, which I think in America, it’s about $6,000 to $12,000 a year for health insurance, but they are subject to being wiped out if they get sick.

And they cannot afford to complain about the job. If they’re fired or complain about the job and lose it, then all of a sudden they can’t pay their monthly credit card bill, and their credit card rates go up from 19% to 29%. So they’re completely at the mercy of the creditor class and the privatized monopolies such as healthcare. It plays the role today that the landlord class played in England and Europe in the Middle Ages.

Grumbine (34:34):

You know, I was a fervent Bernie Sanders supporter. I worked my tail off to do anything I could to educate about his platform. And I see that he had the most votes in Iowa. He won New Hampshire, handily. Crushed Nevada. And then all of a sudden you saw the Chris Matthews of the world losing their mind and talking about Brownshirts and crazy assassinations and stuff in New York City’s Times Square, whatever.

And you look at the rabid anti-public purpose media, anti-public purpose servants. I cannot process it that this could possibly be: they just don’t know any better. They’re just ignorant. This seems like a coordinated, intentional suppression of the people. And I ask myself daily, is there a way of even voting ourselves out of this mess? Because Biden was what, fifth in Iowa? I don’t even think he placed. He did terrible in New Hampshire and then Clyburn and the gang all consolidated, wrapped themselves together, put the thumb on the scale, and all of a sudden Bernie was out and we’re stuck with Biden and Kamala Harris, quite frankly, who didn’t even get a single delegate the entire time she ran.

Nobody wanted her. But here we are staring down the barrel of a neoliberal, actually right-of-Reagan candidate on the Democrat side in Joe Biden, and the lady who literally laughed about arresting poor parents for truancy. And to see the video is so gruesome, it’s so depressing. Is there any way we, the people, can vote our way out of this or do we really need to look at sustained nonelectoral direct action? I know you’re an economist and I know this may not be your area of specialty, but I am curious, what do you think our course of action is here?

Hudson (36:25):

Well, actually it is my area of specialty. I was an advisor to Dennis Kucinich.

Grumbine (36:29):

I love it.

Hudson (36:29):

Here’s the problem. The reason you cannot vote your way out under the current system is that there’s a two party system in the United States, and it’s basically the same party with a little ethnic difference between them, but economically it’s the same party and there cannot be any alternative to this monolithic – we’ll call it the Republican Party with Democratic cheerleaders – there cannot be any progress made until you break up the Democratic Party.

That became apparent not only when they cheated Bernie Sanders out of the nomination four years ago, but this time, when Obama came up and stacked the deck and did everything he could to organize a stab in the back against Sanders. And Bernie Sanders showed himself to be a social democrat. And he said, “Well, I’d rather help my own career by helping the Democratic Party. It’s a gang, but I’d rather be a gang member than take on the gang.”

And so he’s dropped all of his support for public healthcare. He’s dropped all the social views and he’s joined the Democratic gang. What I would have liked to have seen him do, would be to say, “I will not support the Democratic nominee. I realize that it is awful to have to elect a Republican again, especially a Republican like Donald Trump, but no progress can be made until we remove the current Democratic Party leadership and take it over and make it a labor party. And we cannot do that until they realize that they will lose every single election until they give up and join the rest of the Republican Party.”

If America were like Europe, we would have a parliamentary system and new parties could get on the ballot, and the Democrats would be very much like the Social Democrats in Germany with maybe 6 or 7% of the vote, or like the Tony Blair Labourites, all sort of shrinking into nothing. But as long as the political system is controlled by only two parties, then the job of the Democrats is to make sure that the Republicans always get in or, as Obama put it, work across the aisle.

ORDER IT NOW

And that’s just what Biden has said. He said, “I’m going to work with Republicans. We’re going to have harmony. I’m going to work across the aisle.” Meaning he basically should be seen as the right wing of the Republican Party as is Harris. And they can call themselves Democrats, but it’s basically Republican. Without replacing the Democratic Party… Bernie Sanders realized there’s no way he could really start a third party and win.

And I think he was correct in that. I assume that he made the correct political decision because of the way you can see how the Green Party has been kept off the ballot in many States, by the Republicans and Democrats together. They’ve gimmicked the system so that a third party can not even get on the ballot significantly. And until you change the electoral system and either make it a parliamentary system, or you break the two-party, which is really a one-party monopoly, you’re not going to be able to have an alternative to Wall Street running the economy.

And the whole idea of government now – basically Wall Street has taken over the government. I know that Bill Black has talked about bank crime and financial crime, but the new motto is if the banks do it, it’s not a crime. It’s like President Nixon saying, “when a president does it, it’s not a crime.” Well, now the banks say, “if we do it, it’s not a crime.”

When Obama invited his campaign contributors to the white house, he said, I’m the only guy standing between you and the mob with pitchforks. He said, when you do it, it’s not a crime. And that’s what you’re faced with. And it’s becoming, really, a kleptocracy. Maybe I should use kleptocracy instead of feudalism. But then most wealth under feudalism was all made by grabbing the public domain, and the big prize in grabbing the public domain is to grab the banking system and the right to create credit.

Grumbine (40:33):

That is a great analysis. I was listening to hear whether my heart could get in line with that, and it’s right there with you. I watch people that I know and love and care about, and they really do believe that the only way to do this is within the Democratic Party. They assure me that the old guard is dying out and we’re going to take over and you know what? Maybe that’s true. All I know is…

Hudson (40:57):

It’s not true, because I’m 81 years old. I was sitting in meetings in the 1950s when people were saying that. And some of the labor leaders would say, why is it that they think we should automatically vote Democratic? There must be an alternative. And people were saying, “No, there are only two parties. It’s one or the other.” And so you’re in the situation you are today. It’s the same argument that I’ve heard for 60 years.

Grumbine (41:24):

So there’s nothing new under the sun. And really at the end of the day, you know, I sit there and I think nothing feels right. It’s all gaslighting. It’s all false hope. And it’s all false perspectives from the banking industry. And when the banking industry has literally captured government and you see that Wall Street has captured our elected leaders and you see that everyone that goes out there is captured.

Hudson (41:46):

Not really captured. They were front men from the beginning. They were brought up as front men. I mean, Obama had a long history of being a front man. If you’re looking at what he did in Chicago, tearing down the Black neighborhoods, essentially gentrifying for the wealthy real estate families that introduced him to Robert Rubin, who said, “That’s our guy. He can fight against his voters and they’ll still vote for him. He’s the guy we want.”

So they sort of nurtured him: “Let’s put him in the Senate right away. Let’s give him a speech at the convention. He’s a good speaker.” And so they sort of nurtured him. They didn’t have to capture him. He wanted to be captured. He was that way at Harvard.

Grumbine (42:24):

Wow. The hole gets deeper and deeper. I watched recently Movement for a People’s Party had a convention. They had Chris Hedges and you had Cornell West and Nina Turner and a few others – the former Bernie folks. But they all in unison basically said, “we’re voting for Joe Biden.”

And it left this weird feeling like: wow, that’s not exactly how I envision a third party working. And then on the flip side is I’m interviewing Margaret Kimberley, I’m interviewing Ajamu Baraka, I’m interviewing Glen Ford, all these folks from Black Agenda Report.

Hudson (43:01):

Yeah, Glen Ford’s wonderful. He gets it straight.

Grumbine (43:03):

Absolutely. And you listen to this and how can we live in such a bizarre world where very smart people are still thinking, somehow or another… Is it the Democratic Party itself, or is it the system in the United States that allows for this duopoly to exist?

Hudson (43:21):

It’s very largely the system. You have to be very smart to make a very big mistake. You have to be so smart that you can rationalize away reality before your eyes and create a huge complex system where reality just sort of shrinks into a little corner on the left. Dumb people can’t reason that way. And they can just say, Hey, the economy is in trouble.

And I think most people who have to work for a paycheck realize that they’re being squeezed, but that’s not what the politicians say. You know, “hope and change.” We’re going to change. And of course their real job is to prevent change and to smash hope. But of course, we’re in an Orwellian rhetoric period, where “hope and change” means no hope and no change.

Grumbine (44:02):

ORDER IT NOW

I talked to Steven Keen not long ago, and we talked about the climate crisis. And of course he’s been going after Nordhaus here recently with all the propaganda and the gaslighting his work has pushed forward. And you’re watching as coastal communities are dissipating and we’re watching drought and fires in California and hurricanes in the East and all kinds of disruption everywhere. And you think about what…

Hudson (44:27):

You’re talking about an increase in GDP, you realize?

Grumbine (44:31):

Exactly.

Hudson (44:31):

When people get sick, this is a huge increase in GDP this year in medical services. The economy’s becoming more profitable. And all the fix up of the fires, that’s all added to GDP.

Grumbine (44:43):

Wow. It’s just amazing. There’s a guy named Phil Lawn, who’s in Australia. I’m not sure if you know Phil, but he’s got this Genuine Progress Indicator…

Hudson (44:52):

Oh yes.

Grumbine (44:52):

…that he’s trying to use as a means of evaluating the real benefit of economies. And he’s somebody who actually believes in negative growth as opposed to growing. I’m just curious, what are your thoughts on what a fair way of measuring real economic output and its benefit?

I know Steve Keen talks frequently about the soil, basically, and all the extract from the environment, and everything that goes into the economy. It’s far more than just the dollars and numbers on a balance sheet. It’s the energy consumption. What do you think is the right way of measuring?

Hudson (45:26):

All of this was done in the 1840s in the United States. And in my book, “America’s Protectionist Takeoff,” I have at the appendix, the origins of the Department of Agriculture. And it was formed by Northern protectionists to show the degree of soil depletion resulting from plantation agriculture in the South, the degree to which cotton and tobacco planting depleted the soil, forcing an abandonment of the soil, and moving constantly westward, grabbing Indian lands and essentially Andrew Jackson genocide.

And they wanted to include soil the depletion in the GDP. And they were going to do it under Harrison who, in 1848, unfortunately died rather quickly. So the Patent Office report came out with an idea saying if you’re going to measure national output, you have to measure the cleanup costs, the costs of replenishing the soil, the cost of replenishing the environment for all this. And the whole idea of environmentalism and ecology was developed by the Americans in the 19th century.

It’s not in the textbooks now. Literally, all of this has been expurgated. But obviously if you included in the national statistics, disease and destruction and the costs of oil pollution, you’d see that to make just a few million dollars for an oil company, they’ll cause a billion dollars worth of environmental pollution, global warming, rising sea levels, and all of this. If you took into account what economists call externalities, you’d find that indeed the world’s getting worse.

But economists call that externality. And of course it’s not really an externality, because it’s real. It should be internal. It should be part of the model. But economists say, if it doesn’t show that the 1% are saving society, it’s external to the analysis. We’re only looking at what the rich people do that helps society. We’re not looking at what the rich people do that hurts society because that wouldn’t be economics anymore.

Grumbine (47:29):

I want to finish with this thought and get your take on it. Stephanie Kelton oftentimes will say, it’s not a matter of, can we afford it? Of course we can afford it. The question is, can we resource it? And this is a resource issue as well, even though there’s political constraints in terms of whether we can resource these great programs. The reality is is that beyond whether or not the government says it’s okay or not, there is an ecology there. There is a resource constraint there.

And it sounds to me like this should very much be included in the national or the international discourse, because we all live on one planet. What would you say to a public that is just trying to get by and eat right now, in terms of how to measure prosperity through understanding the resource constraints and so forth? How would you message that?

Hudson (48:21):

There have to be a number of economic measures. There’s no one measure of growth. On the one hand, you can measure the economy’s flow of income. On the other hand, you can measure the economy’s growth in personal wealth. And on the other hand, you can have a separate set of accounts for – here are the externalities of growth. Here’s how much wealth we’re going to lose, and what it will cost us to clean up, or to build dykes like they have in Holland, to prevent the water level rising and just flooding the cities.

You have to have a number of different accounts for different purposes. And if you keep trying to make one-size-fits-all, then it’s not going to work. But the 19th century, basically the classical economists, had it right. They divided income into productive and unproductive income, socially necessary income – wages and profits – and what was unnecessary – rent and interest. And essentially, that approach led them to promote democratic reform in order to get rid of the House of Lords and other Upper Houses of Parliament that were blocking land taxation and were blocking progressive reform.

All of that was what economics is all about. The classical economists were reformers. They were revolutionists because they said industrial capitalism is revolutionary. Industrial capitalism is going to get rid of feudalism. And instead feudalism has made an upsurge, but the landlords sold out, put their money into finance, and now they’re the financial class, not the landlord class. So you have to teach people to look at the economy as a system, not as this sort of tunnel vision idea that they teach in economics courses today. You really need a new discipline.

Grumbine (50:02):

Inputs, outputs, tools, and techniques. I mean, it’s all right there ITTO’s are a great way of, for me… I’m a project manager by trade and all the people that know me will laugh at me afterwards that I found a way to slip that into the interview. But this to me is a really important thing. It is a system and I love what you said there.

I do want to say on the air, our friend Tuan Nguyen had been a fan of yours, had oftentimes asked me to see if I can get you onto our show. We also have a another person, who goes by a pseudonym named “TheCanMan Can,” and he has been begging me to get you on. And I just want to say, after all this time, what a joy it’s been to have you on. You’ve been amazing, and I really appreciate the time you spent with me.

Hudson (50:46):

Well it’s been a fun discussion.

Grumbine (50:49):

So where can we find more of your work, Michael?

Hudson (50:55):

I have my own internet address, Michael hyphen Hudson dot com [michael-hudson.com] and I have all of my articles and interviews that I do, right there. So if you just google Michael Hudson, you’ll see my picture and it’ll put you pretty quickly into michael-hudson.com, and you can see all of my articles, going all the way back.

Grumbine (51:11):

Fantastic. I can’t tell you how much I appreciate this. I hope we can do it again real soon.

Hudson (51:18):

Good. I look forward to it.

Grumbine (51:18):

Awesome. Folks, this is Steve Grumbine with Michael Hudson from Macro N Cheese, telling y’all to have a great day. We’re out of here.

End credits [music] (51:31):

Macro N Cheese is produced by Andy Kennedy, descriptive writing by Virginia Cotts, and promotional artwork by Mindy Donham. Macro N Cheese is publicly funded by our Real Progressives Patreon account. If you would like to donate to Macro N Cheese, please visit patreon.com/realprogressives.

(Republished from Real Progressives by permission of author or representative)
 
• Category: Economics • Tags: Banking Industry, Consumer Debt, Rentier 
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  1. Hudson makes a lot of sense for a lefty. I think a debt jubilee is a good idea. Unfortunately, I don’t see a plan to keep it from being abused. Borrowers would come to expect it and lenders would adjust their rates accordingly. I suppose we could say, “forgiveness this one time only” and follow with some radical reforms. For example, break up the banks and institute a rule that no bank can have more than 5% of the national market. Also set an interest rate maximum, let’s put this at 5% too. If this leaves banking oligarchs such as Dimon and company broke and living under bridges, I would definitely support it.

  2. Leftist economists like Hudson are in a tough spot because they can’t talk about things like ending immigration. Basically: Racial politics has eclipsed class politics, so old school class-based leftists like Hudson get declawed by the movement of the overton window not allowing them to discuss certain topics.

    They claim to be concerned with rents, wages, and the environment, but they have to ignore the elephant in the room: mass immigration. In a glaring example, bernie himself changed his campaign platform from 2016 to 2020 re immigration.

    Why do these old leftists not see that they are being used and manipulated by the very 1% elite they claim to be fighting?

    The 1% have a winning play, and they aren’t going to stop running it as long as it keeps working: divide the population on racial issues and they’ll be too distracted to notice their economic dispossession. Work like a charm.

    By failing to take a stand against mass immigration, which you’ll notice hudson doesn’t bring up at all, because that has been declared racist, these old leftists are complicit in their own defenestration. The country is flooded with more people, wages are driven down and land costs driven up, and hudson has nothing to say about it.

  3. jsinton says:

    A sociologist will always blame the problems of the individual average Joe on the society or economic structure. Such is Hudson, blaming the advances of the 1% and the problems unwashed masses on usury or parasites of society. Rent or mortgages are “slavery”, etc. And need to be regulated in a socialist system. But we’ve seen socialist systems repeatedly fail. They only work under some form of regulation as a capitalist system with social policies. Thus places like China or Sweden. But China has seen it’s economy slow down steadily over the years, and you can’t trust their economic data as it is. So the jury is still out on China.

    A psychologist will place the blame for the problems of the individual on the individual themselves. They get poor because they make bad decisions. They don’t do well in school, get good grades, and work dead end jobs. They buy expensive cars, drink too much, buy dope, etc. They don’t save for a rainy day. They don’t invest for the future. They fall for all the mind control advertising, etc.

    In my case, I never made much money, but as a kid I played a lot of “Monopoly”, so I had a strong saving ethic. I would buy investment houses to rent, pay off the mortgage quickly, buy another house, repeat ad nauseum. I made a pretty good retirement for myself. It wasn’t all easy money. Renters trash the place. There were taxes and regulations that made me flee some markets.

    Today, the COVID planned demic is threatening to totally destroy all the fruits of my labor. My one recourse with a delinquent or “bad” tenant is eviction. There is talk of a “jubilee”, of eviction bans becoming permanent. Of getting the government involved and forcing me to accept government money.

    These policies will force me to kick out my tenents and sell my houses. They will destroy me otherwise. So in the end, the policies that Hudson proposes will DESTROY the housing market, put more people out on the street, and produce the opposite of the intended effect.

    Much like anyplace they have imposed rent control, where the rents are sky high, the supply of housing shrinks, and everyone loses. Places like NYC and CA, where people are fleeing in droves and the housing market is crashing.

    The conclusion is if you want to really mess up a housing market, you start tinkering with social regulations. You want lots of people on the street, start imposing rent control. You want home mortgages to dry up and become expensive, impose more regulations. Plenty of examples in history.

  4. As usual Hudson is confused and contradictory.

    At one point he claims that it would have been better if the 1200 dollar stimulus check should have instead just have been somehow digitally directed to just reduce individual debt, while at the same time calling for a debt jubilee. Michael? if you’re going to have a debt jubilee, why would you want to direct a check intended to stimulate spending and job growth on the debt you want to be cancelled? I used my stimulus check to pay some debt and to buy some needed things, which is what you have stated is the true benefit of MMT. So why are you recommending something so stupid?

    Some mega government entity paying down some type of debt that the citizen cannot direct? Wow. That is nonsense and that is NOT MMT.

    Another weakness of Hudson’s interview was his insane and false claim that Trump was enriching his donors. What a fool. Ever hear of Mitch McConnell, Michael? Trump had like close to zero influence on that deal.

    Finally, I have no idea what he was talking about when he stated that the stimulus money was supposed to go to the people but instead the banks took it? Michael? I got my stimulus check and I spent it. The banks didn’t take it from me.

    You are 81, Michael. And you aren’t making much sense any more. Are you senile? Why are you talking this nonsense? It seems that all you can talk about authoritatively is ancient history and 18th and 19th century economics.

    But you are failing at what’s going on now. You have disabilities there. You seem insulated and isolated from real people. It’s tiring to hear you repeat the same things about the past over and over and over and over and over again, then couple that with an incoherent and contradictory set of recommendations and commentary about 2020.

    The stimulus check helped me directly and was the epitome of MMT. Why are you denigrating it?

    • Replies: @jadan
    , @Stonehands
  5. Emslander says:

    I didn’t think there could ever have been a worse economist than Paul Krugman, but this Hudson get the prize.

    If you write off everybody’s debt, all those morons who used debt to make themselves feel good with worthless educations and cracker box houses in the dying suburbs will just start over again on their debt train, because that’s their way of life.

  6. Quote

    The money that you pay for debt service to a bank isn’t spent back into the economy. The bank bond holders are basically the 1% of the economy. They’re rich enough that they’re not going to take all this extra money they get to buy more goods and services.

    End quote.

    Agree .. totally .. But that is not the problem .. The problem is in the incurring the debt in the first place .. Just like lending the degenerate gambler money to avoid two broken legs is not really solving the problem ..

    The solution is so simple and everybody knew it all along .. earn more and spend less .. But nobody wants to talk about that ..

    Meanwhile everybody can debate what is the smartest band-aid to deploy ..

  7. Wyatt says:

  8. Hudson is an economist – THE premier example of a ‘basket weaving’ degree.

    He spouts his opinions as though they were facts, as all economists do. These people have no concept of what a fact actually is. That’s why their degrees should be rescinded for fraud.

    Economists can and do produce any opinion the bankers and finance crooks demand. That’s their one and only talent – to take their bullshit discipline and use it to further the interests of organizations like central banks and profligate gov’ts.

    Economists are directly responsible for every economic downturn because they think they KNOW what the entire world should do with regard to money and economic activity. These are dangerous delusional individuals that we need to get rid of. However, that may already be too late as their machinations have led us to the current predicament where their currency regime is failing for the obvious reason that currency isn’t money. It’s really too bad they don’t know the difference.

    • Agree: TKK
    • Replies: @onebornfree
  9. @Jedi Night

    The 1% have a winning play, and they aren’t going to stop running it as long as it keeps working: divide the population on racial issues and they’ll be too distracted to notice their economic dispossession. Work like a charm.

    This would earn the gold box, back in the day.

    • Agree: Ugetit
  10. @jsinton

    To follow one theme from the article: what percentage of the net of property taxes rent yu have collected over the years have you paid in mortgage interest? At some point, you could buy new properties with rent saved. Are you at that point, or do you work to put money into mortgage banker pockets?

    • Replies: @jsinton
  11. If Hudson is honest, he will admit that feudalism would be an improvement over the current situation. At least the feudal lord had obligations downward to his serfs in return for extracting the value of their labor. I guess that’s the idea of neofeudalism, but better to use terms that relate it to the late Roman economy from which feudalism was an improvement: that was a slave economy, and the slaves had far fewer rights than the serfs.

  12. Anonymous[530] • Disclaimer says:

    You have failed to answer the real question: How do you get rid of the current system? What will it take to rid ourselves of the two party system? Can it be done or will the whole governmental apparatus of two centuries have to pass as well?

    Analysis of a problem must proceed a solution, but endless talk about analysis evades the grasping of a solution. The real failure here is that no program for correction is offered. Perhaps there is no possible solution?

    Tell us, even if the world were broken. Suppose a vast nuclear war, the coming of a new ice age, the total collapse of the current system–name it as you will. Would there be a real possibility of a new beginning among any survivors or would the same old types soon be back in business peddling the same old nostrums?

    Let’s hear it, please.

    • Replies: @jadan
    , @Justvisiting
  13. nsa says:

    Monetary Inflation is best thought of as a slow motion Jubilee, evaporating both debt and savings. As Keynes noted, deliberate Monetary Inflation is both sneaky and immoral, and to be utilized sparingly lest it destroy a society.

  14. Parrt II:

    Michael, just in case you are reading these comments, I wish you would explain why you just gave a double-interview to The Keiser Report and didn’t talk to the attacks and misstatements about MMT that have been expounded to Max by at least 5 of his recent guests, unchallenged by Max.

    Your double-interview was about 60 percent the same statements on ancient times that you repeat in every essay, book, interview, and speech, and that left just a bit for other things, but aside from saying ” MMT” once the misstatements about MMT seen over and over again on Keisere’s show, you just never addressed.

    Why, Michael?

  15. jsinton says:
    @TomSchmidt

    To follow one theme from the article: what percentage of the net of property taxes rent yu have collected over the years have you paid in mortgage interest? At some point, you could buy new properties with rent saved. Are you at that point, or do you work to put money into mortgage banker pockets?

    The answer is I long ago stopped getting mortgages and ONLY pay cash for rental property. I’m a true “parasite” now. I avoid credit much more than COVID. But I drive junk cars, and buy clothes at the thrift store for $3 a bag. And try to grow my own food with varying success. The thrift store clothes are high quality, however.

    • Thanks: TomSchmidt
    • Replies: @Stonehands
  16. anon[428] • Disclaimer says:

    Quite interesting.

    Debt deflation was a theory of the Great Depression espoused by Irving Fisher. A central tenant was that debt could not be liquidated during debt deflation because there market for collateral was broken. Right now, the solution hit upon by the central bank is to lower interest rates. Maintaining solvency by giving a discount to borrowers. And provide massive liquidity to prevent deflation. So, we are not having debt deflation.

    Further, bankruptcy is a rather harsh version of Jubilee. People with the highest student loans have professional degrees and shouldn’t be taking advantage of standard bankruptcy protections. The truly worthless loans are generally lower and everyone knows they won’t be repaid. But, Hudson needs to get a bit more contemporary and discuss reform in a modern context.

    Meanwhile, as others have noted, Hudson is out of touch regarding immigration. I’m surprised he doesn’t recognize the “climate” grift. It is heavily promoted by the same 1% that he claims to oppose.

    And his illustration from 19th century economists are suggestive, but they come from an era where land, labor, and capital were the factors of production. Agriculture is not an important component of GDP. And on and on.

    Banks have been systematically dis-intermediated by shadow banking. And a version of MMT has emerged with the Fed as the hedge fund of last resort.

    • Replies: @Alfred
  17. With all due respect for Dr. Hudson, Professor Emeritus Karl Marx called for violent social revolution and not yet another brokered shitty deal with the cocksucking Plutocrats.

    Respectfully, I want the indentured into Feudalist servitude to hang the 1% plutocracy from their rich wealth extracting ankles just like Benito Mussolini.

    As a Grumpy Marxist I, for one, am calling all to violent revolution where as a collective we can destroy and violently murder the one per cent as they have amply demonstrated that they are too-big-to-jail, or nail to a cross.

    P.S. I went to both college and university and obtained a two year diploma in Mechanical Engineering as a Mechanical Engineering Technician, and an Honours B.A. in the Social Sciences discipline of Experimental Psychology from an accredited APA sanctioned school only to end up completely bankrupt and broke for the remainder of my life. I spent 48 years in my parents’ basement until they both died from old age and the stress of having unsuccessful progeny like moi.

    My father was a civil servant Chartered Accountant that worked three decades in Senior Rulings National Revenue CANADA in the Oil, Mines, and Resource Taxation sector.

    I live in abject poverty and always have.

    No to MMT and Hell YES to violent Marxian revolution against the one per cent and their greedy progeny.

    Sincerely, Robert [if you have a job for me [email protected]]

  18. jadan says:
    @restless94110

    You got your stimulus check and you used it to pay down some debt and buy some things. Whatever you used to pay some debt was not used to stimulate economic activity. When I pay credit card debt or mortgage debt this money I earned through labor goes to enrich a small number of people who do not engage in productive labor. The banks take it. You’re a tool.

    • Replies: @restless94110
    , @gT
  19. jadan says:
    @Anonymous

    There are proposals for changing the financial system that never see the light of day in congress. For example, there is HR2990, a piece of legislation drawn up by Dennis Kucinich and his people in 2011. This bill would have deprivatized the “money power”, as it used to be called. The two party political structure is another issue. A parliamentary system would be preferable, ie, more democratic.

  20. @jadan

    So because I paid down some debt that was bothering me and making my life difficult, in other words, I took my stimulus check and used it for what I decided that I needed it for, I am a tool?

    In other words, if I did not use my stimulus check in ways you approve of, I am a tool?

    Well, I am my own tool. I use myself to better myself.

    While I am my own tool, you are quite obviously your own fool.

  21. anon[454] • Disclaimer says:
    @jsinton

    Oh you mean like the Fed buying up some $26 trillion of worthless paper from the banks in the home mortgage scam.Your logic excapes me well if there was any logic there except self interest, those who bought rentals at inflated prices only have themselves to blame, for they are as bad as wall street alway thinking uncle sam will roar in to save them, be a blessing if they just let them learn a lesson.!!!

  22. simp says:
    @Emslander

    “Without debt slaves where will I source my schadenfreude?”

  23. Fester went to teh bank and got a mortgage for 800,000 but has not worked in 25 years–he claims we owe him a living and to make matters worse—Fester will enjoy negative interest at 20%.

  24. @jsinton

    ‘But we’ve seen socialist systems repeatedly fail. ‘ In so far as they have been tried. But then you have to define by what you’ve called ‘socialism’. And BTW capitalist systems also fail – time after time. Like in 2001, 2008 2020. Not exactly a stellar performance is it.

  25. @Emslander

    See Steve Keen on this. He argues, quite rightly that debtors should have their debts written off , BUT, savers should also receive equal debt repayment monies even if they were not debt-strapped, since it would otherwise be unfair to blame them for their frugality. lIke if you have a debt of $10000.00 which is to be written off. Then I have no debt, but also should be debited with $10.000 even if I have no debt.

    That seems a fair policy.

    • Agree: RadicalCenter
    • Replies: @Majority of One
  26. a_german [AKA "a__german__"] says:

    the dumbest Nobel price winner? There is no Nobel price for economy. It’s an metoo fake from the “sale your mother buy another” industry

  27. gT says:
    @jadan

    As others have said, its amazing how some are happy with peanuts (stimulus checks), while right next door others walk away with the entire bank (QE). Different strokes for different folks I guess.

  28. onebornfree says: • Website
    @RoatanBill

    “Economists can and do produce any opinion the bankers and finance crooks demand. That’s their one and only talent – to take their bullshit discipline and use it to further the interests of organizations like central banks and profligate gov’ts.”

    I’m surprised that you paint with such broad brush- strokes; although your statements and denigrations might be true in general, there are some notable exceptions that you appear to be unfamiliar with – that is, economists who did not wish to “further the interests of organizations like central banks and profligate gov’ts.”, amongst them, the great Frederic Bastiat :

    “When plunder becomes a way of life, men create for themselves a legal system that authorizes it and a moral code that glorifies it.”, https://en.m.wikipedia.org/wiki/Frédéric_Bastiat

    and the great Murray Rothbard :”

    “The State is, and always has been, the great single enemy of the human race, its liberty, happiness, and progress.” https://en.m.wikipedia.org/wiki/Murray_Rothbard

    Regards, onebornfree

    • Replies: @RoatanBill
  29. @onebornfree

    All economists, and I do mean all, think they actually KNOW something that the rest of us don’t. They are wrong. They have no special knowledge past common sense, just like the rest of us.

    The mere fact that they are economists is telling. They believe in the fraud of economics and studied it to become a member of that religion. People became Phrenologists, people believe in god, in gov’t, in all manner of stupidity, but it doesn’t make any of it the truth.

    Economics is an opinion based discipline that can’t prove anything of significance. I wouldn’t trust an Austrian economist any more than I’d trust Keynes himself.

    If you can’t prove something, you hold an opinion. To turn that into a fact is what has generally screwed up the world because now people believe in lies.

    • Agree: Ralph B. Seymour
  30. There are more practical steps.

    First, charging 24% or more for credit card debt is criminal for banks that borrow from the Fed at 1%. Limit it to 12% or perhaps have it float based on the prime rate. Who would object? Only greedy bankers, and this costs the US Govt nothing.

    Second, fee gouging is a big profit center for banks. Late charges of $35 per payment exploit the elderly and stupid. Cut that to a reasonable $5 fee. Over 99% of Americans would agree, and the fact this is not discussed only shows the corruption of our Congress. This costs the US govt nothing.

    Third, don’t cancel student loan debt, but recalculate money owed at a 1% rate from the time it was borrowed. Nothing is forgiven, but the fed window rate is allowed. This program was not created to generate profits! Many borrowers would see the money they owe cut in half.

    Imagine if Trump or Biden proposed these steps! They would easily win the election.

    • Agree: Montefrío
  31. Neoconned says:

    I read an article earlier this year that said that Biden had the largest comeback EVER in any federal political primary.

    After Buttplug pulled out Bernie was heir apparent. Then some billionaire went on CNBC & said “Wall Street wouldn’t even open” if Bernie won.

    Then magically a week later Biden over ran Bernie and became the nominee over night

    How much of that was black church ladies making Biden the nominee and how mich was it the spooks and the zillionaires rigging in the corporate candidate?

    Had Bernie won our debts ESPECIALLY studenr loan obligations would have already been forgiven and paid off…..the current political climate is a billionaire divide and conquer strategy …

  32. Ugetit says:

    …generally screwed up the world because now people believe in lies.

    I’m with you, sir, and I must emphasize that people have always believed in lies as far as I can tell. And that’s a fact!

    For me an important corollary is that anyone who believes they have the cure is a quack, and anyone who believes them is a dreamer.

    But hey, one should never fear, cuz God luvs ‘im! 😉

  33. One of the problems with Hudson’s argument is the fact that more than just the 1% are “parasites”. Lots of retirees get the bulk of their income from rents and dividends.

  34. @restless94110

    “Finally, I have no idea what he was talking about when he stated that the stimulus money was supposed to go to the people but instead the banks took it? Michael? I got my stimulus check and I spent it. The banks didn’t take it from me…”

    You know that the 3 trillion for small business payroll relief was gobbled up by hedge funds- because it was administered by their commercial bank pals. So why do you think anyone is referring to your pissant $1200 check?

    • Replies: @Carlton Meyer
  35. Biff says:
    @Carlton Meyer

    Imagine if Trump or Biden proposed these steps! They would easily win the election.

    Populism is verboten.

  36. @Jedi Night

    No one is immigrating to the US right now.

    • Replies: @Anonymous
  37. @jsinton

    Hallelujah, that’s the answer. Everyone else is a reactionary, constantly on the back- foot, endlessly analyzing and rationalizing this pathetic economic situation that Wall St and their swamp benefactors have eviscerated the middle class with..

    Here are some Solutions

    1. Save money pay cash for your house. This is where you can afford to live, screw status. NO MORTGAGE
    2. Home school. That’s right- before you take the plunge, make sure that your future wife is a nurturer and educator.
    3. Screw college. What an awful rat-trap. Learn a trade. Work for yourself. Learn the cash game.
    4. Good second-hand Honda for 10000 cash NO LOANS. Lasts forever.

    The borrower is the slave to the lender;
    The lender wields the whip- hand.

    • Agree: Ugetit, TheTrumanShow
  38. @Neoconned

    “Had Bernie won our debts ESPECIALLY studenr loan obligations would have already been forgiven and paid off…..”

    Do you really believe that? Presidents generally do what they’re “told” to do and very little else — even the “best of them.” And Bernie would have been far from among the best.

  39. @Stonehands

    “Finally, I have no idea what he was talking about when he stated that the stimulus money was supposed to go to the people but instead the banks took it?

    Studies show that half the stimulus money went to pay down bank debt, which helps people, but did not stimulate the economy.

  40. The analysis is worthless because it does not take into consideration the most important factor.
    The factor of the rate of growth of the population.

  41. Drew says:
    @Fidelios Automata

    One thing to keep in mind is that those whose debts are forgiven wouldn’t really need to borrow for a while. They’d keep their house, car and everything else, so they could buy with cash without worry. It’s true that lenders would tighten their standards, but they’d mostly liquidate their assets for pennies on the dollar, leading to pretty equitable redistribution with little need for state interference, aside from mandating the jubilee.

  42. @jsinton

    The conclusion is if you want to really mess up a housing market, you start tinkering with social regulations. You want lots of people on the street, start imposing rent control.

    The housing and rental markets are messed up by mass immigration. If you call government policy that encourages mass legal immigration and ignores mass illegal immigration “social regulations” then I agree with you.

  43. Drew says:
    @Jedi Night

    Imagine if the 1965 immigration act were instead a debt jubilee coupled with a ban on usury, so that from ’65 to the present there was no immigration, little private debt, and no cost for servicing what little debt there was. What would the population of the US be compared to where it is today? I’d expect it would be slightly less.

    Now imagine that the fed increased rates to 20%. Would housing prices drop it stay steady? I’d imagine they’d drop precipitously. While immigration does jack up prices for housing and kill prices of labor (ceteris parabis), ceteris has not been parabis in America for the last 60 years. A lot of immigrants are merely replacing American children that weren’t born, just to maintain expected labor market growth. In the meantime, housing prices tend to (laggedly) track with interest rates because the higher the interest the more expensive principal becomes.

  44. My gripe with Hudson, is that he continually turns to Marx as his “socialist” source for economics. The reality is, that a lot of Marx’s economic theory was standard fare for his contemporaries, from whom he stole ideas. However, most of his contemporaries opposed his centralist ideology. Proudhon called Marx “the tapeworm in socialism”. Bakunin noted that his form of “socialism” was harmonious with a bank. It is now known that Marx was, in fact, a relative of the Rothschilds, and likely in their employ.
    https://theirishsentinel.com/2020/06/01/historians-confirm-karl-marx-was-employed-by-the-rothschilds/

    Cliff Douglas understood perfectly what money was, and developed Social Credit. He noted that interest was the law of diminishing returns. In order to reverse that, “credit” had to be returned to the economy. https://www.douglassocialcredit.com/ This is the main reason his economic theory is ignored.
    While not a socialist, Douglas worked with the Guild Socialists in the UK, and understood their goal was to remove finance capital from production, and operate in a sort of contractual basis with the public with strong links to the local economy. https://www.plough.com/en/topics/justice/social-justice/economic-justice/restore-the-guilds

    Unfortunately, the overwhelming majority of people in the US see Marx as a “socialist”. He wasn’t. Marxism and finance capitalism are the two sides of the same coin. It’s all about defining the commune.

    • Replies: @Mefobills
  45. @Anonymous

    The problem is human beings.

    A small percentage of us are sociopaths, and they will always rise to the top.

    The sociopaths are best at “playing the game”, using language to lie, reading people and telling them what they want to hear, and being ruthless at achieving their goal of power over others.

    Tech could actually get us out of this mess–by figuring out a way to identify the sociopaths and not permit them to gain any kind of power over others in any institution of any kind.

    The question is whether we will destroy ourselves first.

    • Agree: Kratoklastes
    • Replies: @Sollipsist
    , @sally
  46. @Emslander

    If you write off everybody’s debt, all those morons who used debt to make themselves feel good with worthless educations and cracker box houses in the dying suburbs will just start over again on their debt train, because that’s their way of life.

    Did you really read the article?

    He isn’t saying to only write off the debts, he is saying:

    1) Declare a condition under which they are bad debts, i.e.: the creditors should have known the debtors cannot pay off the debts

    2) >>> then <<< write off the debts

    3) AND … restructure the economic system so that debts are productive by removing rent-seeking, which is only consistent with such small minds as Smith, Ricardo, Mills and Veblen

    • Replies: @Emslander
  47. Fred777 says:

    This “debt jubilee” sounds a lot like savers and those living within their means taking it up the butt again.

  48. All “solutions” are in denial of one central reality, which is that Nature demands failure. Everybody and their uncle thinks they can devise some system where everyone gets their fair share.

    No matter how many “parasites” or “exploiters” you kill, nature will re-assert itself. It will not bother me to watch the mobs hang a few bankers, but do not doubt that then the mob will simply meet the new boss.

    The world’s God is treacherous and full of
    unreason; a torturer, but also
    The only foundation and the only fountain.
    Who fights him eats his own flesh and perishes
    of hunger;

  49. sally says:
    @Fidelios Automata

    seems to me the assumption implicit in the article is that the USA will continue as the governing body over America..? There is great doubt about that.. from a lot of potential sources.. about 60% of those sources are the governed.. they are all looking for something different. Then there is the foreign effort to deprive the USA of its dollar hegemony, if that happens the USA will experience a Russian collapse.. Then there is Israel trying to steal everything that still remains in America and move it to Israel.

    If collapse occurs, none of the governed are likely to allow the existing government to continue, so fascism will likely fail. I agree without a debt jubilee the 60% are coming to understand the only way is a rebellion, and if that happens, I plan to invest in French Guillotines cause I think every person in government, every leader of either political party and every person in media, every officer in the multinational global corporations that can be found, and many military leaders will be placed in a comfortable position over the basket.

    everyone is angry.. the leader that will bring them to their feet has not yet appeared.

    • Thanks: TheTrumanShow
  50. To understand Michael Hudson, answer the question: Why do nations and empires collapse?
    He writes from a historical perspective – it’s not just accounting and finances!
    His reference to Old Testament jubilee and debt forgiveness is a practical application of reality.
    I have archived a whole series on this in DaLimbraw Library – http://crushlimbraw.blogspot.com/search?q=Forgive+us+our+debts&updated-max=2020-02-04T09:58:00-08:00&max-results=20&by-date=false – these are headnotes (on mobile phone format) to articles on this subject.
    Here’s the reality – history shows that debt erasure is a default setting in societal conduct when that society collapses from its lack of previous debt forgiveness.
    Pay me now or pay me later? It’s unavoidable!

    • Replies: @Ugetit
    , @Mefobills
  51. @Donald Duck

    A man after my own heart. Common Sense thinking.

    Over the past 50 years I incurred indebtedness exactly once. As an over the road antiques dealer in ’89 I needed a reasonably new, large van with a powerful engine. With a fair chunk of the downpayment, I went to my local rural bank, where I had long established through my business a regular flow of check-based income. They readily agreed to the loan and when shows were good, it was possible to pay ahead on the loan. Within a couple of years it was fully amortized.

    With that single exception, I have never incurred indebtedness to the usurious system and neither have I so much as taken out a credit-card. Never in my life have I enjoyed a net income exceeding $9 thousand per YEAR. Living frugally, but efficiently and engaged in a recycling business, my contributions to the consumer economy were minimal. Directly, though, I paid a lot for gasoline, repairs, etc. along with motel bills, restaurant tabs and set-up fees at the shows.

    As an individual who never surrendered to consumerist insanity, it was possible to maintain my own sanity and some level of personal dignity. Breeding and raising children would have made for a whole different scenario, but not entirely different.

    People are easily conned into taking the easy way out and following the herd and the bell-cow minions of the financial elite. Though I do not expect a Jubilee, should such an improbability come about, those of us who have managed to protect even a small portion of our earthly environment should receive some form of compensation for our services–at least freedom from taxation.

    • Agree: TheTrumanShow
  52. Che Guava says:

    I can see the point, but a debt ‘jubilee’ seems cruel
    to me.

    I have avoided debt throughout my life.

    So, upon this debt jubilee, do you have any plan to balance those who will have greatly profited from it (debt) to pay it back to us?

    No, I do not think so.

  53. Che Guava says:

    So, the greeidier a person, and the more he or she has exploited debt (a.k.a. credit) , the more he or she gains.

  54. Ugetit says:
    @Crush Limbraw

    Thanks for the link.

    I like this.:

    There was consequently, on the part of the creditor class, a most pressing and practical reason to have Jesus put to death: He was demanding that they restore the property they had rapaciously taken from their debtors. And after His death there was likewise a most pressing and practical reason to have His Jubilee proclamation of a Clean Slate Amnesty made toothless, that is to say, made merely theological: So the rich could continue to oppress the poor, forever and ever. Amen.

    • Replies: @Crush Limbraw
  55. @Justvisiting

    Tech is probably the number one field for sociopaths, who we’re now encouraged to refer to as “high functioning autists.”

    • Replies: @Kratoklastes
  56. Agent76 says:

    Oct 28, 2020 China’s Giant Ponzi Scheme

    China promises stability in the China economy, that the Chinese Communist Party will step in if anything goes wrong in the Chinese economy.

    January 14, 2020 The world is drowning in debt

    In fact, it broke that record in the first nine months of last year. Global debt, which comprises borrowings from households, governments and companies, grew by $9 trillion to nearly $253 trillion during that period, according to the Institute of International Finance.

    https://www.cnn.com/2020/01/13/economy/global-debt-record/index.html

  57. @Fred777

    You might want to look into “quantitative easing”.
    Super cool thing about it – if you write a predatory loan that you can’t collect, they poof money out of nowhere, take the loan off your hands and make you whole – and if you borrowed money, the same loan gets issued to a state-subsidized private company that can survive bad loans forever – so you will pay every penny.

    This is at best ambivalent for savers: if the state will produce limitless money to issue loans, not much of a need for savings eh?

    But it’s awesome for capital holders and bond issuers – you can issue bond after bond after bond, collect some interest and then sell the bonds to the Fed and get your principle back in fiat money. Savers aren’t bond holders BTW – different group of people.

    Do you understand that banks do not loan money to borrowers from savings?

    The issue is between bond-issuers (again: not savers) and borrowers. Savers have been edged out of this mostly – they really don’t factor in how it works. Arguably both borrowers and savers are screwed by the current system, only bond-holders get a good deal, and they get a sweetheart deal.

    • LOL: TheTrumanShow
    • Replies: @John Fisher
  58. Alfred says:
    @anon

    he doesn’t recognize the “climate” grift. It is heavily promoted by the same 1% that he claims to oppose.

    I was also surprised by him going along with this climate change nonsense. Climate has always changed and it has absolutely nothing to do with human activity except on a very local level.

    Sea levels have not risen so his nonsense about building seawalls is rubbish. There are plenty of ancient harbours that are now miles away from the seas. 🙂

    The fires in California are due to forest mismanagement – and the introduction of Australian gum trees.

    The number and intensity of hurricanes in the USA are less than was the case previously.

    Other than that, I agree with his main points. Soil is degrading almost everywhere and that is a cost of producing so much food.

    • Agree: Agent76
  59. Mefobills says:
    @Curmudgeon

    Cliff Douglas understood perfectly what money was, and developed Social Credit. He noted that interest was the law of diminishing returns.

    That’s some pretty advanced thinking there Curmudgeon.

    Douglas was the first I ever noticed that actually calculated how bank credit is created. I’m looking at my original Douglas manual, page 27, “Banks create and destroy money.”

    In a beautiful proof Douglas nailed it. Even today people still argue over what Douglas figured out so long ago.

    Hudson has mentioned that Marx was disingenuous in “Capital,” where Marx adjusted the math, probably to please his finance (((paymasters))). Marx did continue the Classical tradition in “Capital” and that is what Hudson always refers to, and Hudson has corrected Marx’s errors. (Yet Hudson continues to refer to Marx?)

    IMHO you are absolutely right, Douglas is more correct than Marx. We need social credit, not socialism. Gap theory is real.

    Communism as socialism was not mixed economy; communism is command economy.

    Any sort of mixed economy has socialism of a sort. Police, libraries, the military, fire departments spending on the public commons… all of that is socialism.

    The founding fathers were socialists, especially if you read Hamilton’s report on manufacturers. For the most part, it was state credit funneling into manufacturing and infrastructure. The first bank was 50% Treasury owned, and 50% privateers.

    https://founders.archives.gov/documents/Hamilton/01-10-02-0001-0007

    The right kind of mixed economy lowers prices, making the population healthier and more competitive.

    • Replies: @Curmudgeon
  60. sally says:
    @Justvisiting

    How to fix everything in a few minutes

    I don’t think the problem is human, I think it is criminal humans which are very few indeed. I think the problem that is about to bring the entire world to its knees is the global nation state system. The Global nation state system is the problem. States (nation states) have not been around for long, they began to develop with what has been labelled the 1st industrial revolution ending about 1880 and then the 2nd industrial revolution really pushed the state as a platform which could enhance trade and deal with rising instances of labor unions and the rising instances or non governmental international organizations(telegraph, railroad, and shipping, labor and so forth (can’t do global business if the rules are different at every border.
    Today 8 billion people (the population of the entire world) is divided up among 256 nation states. The nation states are like herds of sheep, at the top in charge is the Shepherd, when the Shepherd takes his Sheep to the market, the Shepherd gets rich, and the sheep get sheered and murdered.

    [MORE]

    So the growing change from old wealth to new industrial wealth posed a question of how to do business in every little tribe, and every little hamlet were the rules were different and the people not very tolerant to strangers. The nation state solved that problem. It allowed the entire world to be controlled by rule of law, and rule of law allowed to implement of patent and copyright protection.. A guy in America producing zippers, could not have cheap labor in China make zippers in a plant to be relocated from America to China unless that guy had a patent that would prevent the Chinese from learning how to make Zippers and then be able to make them themselves. (no competition was essential)
    Copyright emerged because writings in books, pamphlets had to be approved by the King or Queen (can’t say anything bad about these two Oligarchs). Patents arose because the first beneficiaries of inventions that fueled the growth of the industrial revolution wanted to keep all of the profit for themselves, and did not want anyone to compete with them. It is these two laws (copyright and patent law and the private ownership of property) could not be created from thin air? Without an armed political power to both create the laws, and to maintain a recording system where owners could record their patent and copyright monopolies (like deeds in the court house). Also needed was an armed force and a court system to enforce the anticompetitive copyright and patent monopoly laws.

    Interesting enough it was the International labor unions that pushed for the patent and copyright laws, they did not want competition to put them out of business. It is these two laws that made giant, global corporations like Microsoft and Google. Imagine how small Microsoft would be if their were no patent law and no copyright law and no property law? Imagine instead of one person, using other people’s money, to make all that Microsoft money, by employing a few people, thousands, Bill Gates and a few wealthy people who invested in Microsoft would share in the profits made, because of the rule of law, only the one corporation could do that type of business, and because it was the only one that could, thousands of the best workers would be employed by that one, but if there were no copyright and no patent, millions of workers would have jobs instead of just a few hundred thousand employed by the one.

    If revolution were to take away the nation state there would be no authority to make public domain writings {things like research results, textbooks, etc. ) and no authority to turn ideas created from the mind of inventors into private property that the Oligarch industrialist could own. This is why it was necessary to form Israel, the oil and gas interest could not own the oil and gas under the Ottoman empire they had just defeated, there was no body around to make the law and no body around to enforce it, the Ottoman had no property law, no copyright law, and on patent law, though the Germans were trying to get them to.
    So concentration of industrial wealth in a very few persons depends on consolidating private ownership (consolidation is done by creating monopolies and denying competition <=patent and copyright law) . If one individual owns all of the means to produce money in the world and all treaties about copyright and patents honor that law, It is easy to transform local businesses into global empire monopolies putting millions of people out of work and depriving the world of the products that the genius invents to make advances in civilization. Now no matter what the silly serfdoms, tribes, city states or whatever wanted, they could not compete (they did not own the patent or the copyright), their only hope was to attract the plant that made the patented or copyrighted goods so the people in that serfdom, tribe, or city could have jobs? But there was only one plant and many serfdoms, tribes and cities.

    At its top is the banker IMF, the CFR, and a few other general partners.. then the next layer is 256 nation state franchises.. Each franchise has a bunch of people and a few wealthy owners who appoint leaders to use the authority of the nation to make the wealthy few rich and the masses into customers and workers.

    The problem could be resolved today, merely remove from the books any law or treaty about copyright or patent. Overnight trillions of new jobs would be created.

    • Agree: Agent76
  61. @Alfred

    Here is a great link on the “climate change” garbage:

    https://cei.org/blog/wrong-again-50-years-failed-eco-pocalyptic-predictions

    The con artists have come out of the woodwork to work the “climate” long con.

  62. @Fidelios Automata

    A debt Jubilee is an extraordinary method and should be reserved for extraordinary times. Well, right now is an extraordinary time. Should all debts should be forgiven? That’s to be worked out. Years ago, I’m talking of the 1970’s NY state had caps on auto loans, and credit cards. They were effective, and should be re-instated on a federal level.

  63. Mefobills says:
    @Crush Limbraw

    Nice job on your blogspot Crush .

    Thanks.

    I’ve archived it.

  64. @Mefobills

    Thanks for the link. I may be mistaken, but the part of what Hamilton refers – stock and ordinary profit, is unrecognizable today. While stock (share) is the same, how it is paid out is different. The share was paid a pre-agreed upon amount or percentage of the ordinary profit, which was material costs and labor subtracted from the receipts of the sale of the product. There were no middlemen.
    The closest Douglas’ Social Credit came to implementation was in the Canadian Province of Alberta. It worked very well in digging them out of the the 1930s depression, but couldn’t be fully implemented because of banking regulations. North Dakota, with its own bank would be a perfect place for a real trial run. As an aside, the Social Credit Party had seats in the Canadian Parliament until 1980. Both the provincial and federal parties were continually ridiculed by the media, until they collapsed.
    A competing political philosophy in Canada was the Co-operative Commonwealth Federation, which was “socialism” when it came to public interest like employment standards, old age pensions and health care. It like Social Credit, took a province deeply in debt during the depression and turned that into surpluses. They did that primarily through creating provincial insurance companies one for autos the other for homeowners, with much lower rates than private insurance companies. It formally joined forces with the unions in the 1950s and became the New Democratic Party. While still a political force, it has little in common with the CCF.

    The reason I linked the Guild Socialists was that Douglas worked with them while developing Social Credit. As best I am able to find out, the old guild system had little or no inflation, and was very closely linked to local economies, so prices charged for goods and services reflected the ability to pay of the vast majority of the population. The Guild Socialists understood there was no going back to pre-industrial revolution days, but wanted to be as “local” as possible, and weren’t opposed to competition. Their “contract’ with the public was kind of a social credit in the form of social responsibility.

  65. TKK says:

    We already had a Debt Jubilee in 2008. We just were not invited.

    Corporate debt was socialized- essentially forgiven- when the tax payers were forced to cover the Big Bank Bailout gambling tab under Obama’s directive.

    This was legalized gambling- betting on credit defaults. The CEO architects of this gambling: Countrywide, Chase, BoA, Goldman Sachs all got to sail away into the sunset with golden parachutes after losing billions.

    The lame excuse was these bonuses were already in their employment agreements. There’s nothing we can do!

    But, their Corporate profit is privatized.

    “To big to fail” does not translate to actual capitalism. You took the risk. Pay up.

    And these con men create no value in the economy. No tires, steel, milk, corn, aspirin. It’s all fairy dust. Numbers floating through cyberspace. Playing games with the peasants pensions.

    • Agree: Peripatetic Itch
  66. @Alfred

    Soil is degrading almost everywhere and that is a cost of producing so much food.

    As usual, I agree with pretty much everything you say. Climate change is a scam making huge profits for many billionaires. It is promoted through the use of computerized climate models that are tuned to past climate states and use unverified and faulty physical theory to project future states that defy common sense. Their cloud-cover predictions, for instance, are demonstrably in error by roughly 7% on average and when incorporated as parameters in their models they produce an uncertainty that is propagated cumulatively at every step in the calculation, making their projections completely useless for prediction.

    The climate-change disaster scenarios depend of course on the demonstrated rise in CO2 levels in the atmosphere over the past 70 years or so. These levels correlate rather poorly with global temperature changes and are still much too small to be able to produce much climate warming by themselves. At 400 parts per million in the atmosphere, each molecule of CO2 is immersed in an ocean of 2500 molecules of other molecules like Oxygen and Nitrogen. Suggesting such a small quantity can massively heat up the planet is like trying to heat up your house in the middle of winter with a candle. And so the warmists are reduced to suggesting that a bit of warming from CO2 also increases water vapor, another greenhouse gas, in the atmosphere enough to cause large positive feedbacks. There is no evidence of such an increase in water vapor, however.

    That increase in CO2 to 400 parts per million has, on the other hand, given a huge boost to photosynthesis over the entire planet. It also makes plants more resistant to drought. Estimates are that it has produced an entire extra continent’s worth of plant growth and food over the same 70 years. Deserts like the Sahel are now greening. Economists like Hudson, and warmists in general, seem to have slept through that segment of their elementary-school science classes.

    That brings me to your point about soils. During the Covid-19 lock-downs this year planetary energy use was reduced by roughly 8%. Climate scientists have been analyzing the CO2 concentration data from the Keeling Observatory on Mauna Loa for signs of an effect, but to no avail whatsoever. That suggests that industrial energy use and fossil-fuel combustion may be less important than thought. When soils degrade, however, they mostly do so by oxidation of their organic/carbon base and thereby produce large amounts of CO2. Exact quantities are in doubt, so it’s still hard to say how much of the overall rise in CO2 it accounts for. But it may well be that CO2 from soil is simply recycled into the planetary greening just noted. If so, soil degradation would need to be seen as both a cost and as an input.

  67. Anonymous[290] • Disclaimer says:
    @Supply and Demand

    No one is immigrating to the US right now.

    Right. The US base population elected Trump, the Left discredited themselves, the media, and the government establishment (all levels), then proceeded to eliminate the availability of jobs for pretty much everybody. Immigration stops. The Left has served the people who elected Trump by granting their fondest wish. Funny how things work out.

    Meanwhile Trump has eliminated “catch an release” and reduced H1B, laying the foundation for zero immigration should jobs become available once more.

    Should Trump not be elected on 2020/11/03, the incompetent but vicious and violent left (I mean, re-introducing 1930s street fighters to contemporary America. Dumb or idiotic?). will ensure that there job availability remains near zero, suppressing immigration that way. Funny how things work out. See: https://en.wikipedia.org/wiki/Zeitgeist and say hello to this year’s Casper.

  68. @Carlton Meyer

    Imagine if Trump or Biden proposed these steps! They would easily win the election.

    To expand on your points, I feel like Trump has been missing a lot of easy layups in his rhetoric. Maybe I’m not watching enough of his rallies, but…

    …I feel like he could be emphasizing the rolling blackouts and wildfires in California as a preview of what the Green New Deal would inflict on the country.

    Another sure winner is emphasizing the idea that Biden is coming for everyone’s pension, SS, and 401k. That would play big with Trump’s older voters, and deflect/reduce the Covid fear factor the Dems are using against Trump.

    No, that prior point wouldn’t do well with the youth, but they consistently vote at much lower rates than other demographics, so Trump can afford not playing to their every whim.

  69. @Neoconned

    Then some billionaire went on CNBC & said “Wall Street wouldn’t even open” if Bernie won.

    Based on Harris’ record in the Senate she may be even worse for Wall Street than Bernie would have been.

  70. @Sollipsist

    Tech is probably the number one field for sociopaths

    You are absolutely out of your mind.

    #1 is clearly politics and the bureaucracy;
    #2 is law (which is a quasi-bureaucracy anyhow).

    Perhaps you have a poor grasp of what sociopathy is: high intelligence is not a characteristic. Most sociopaths are midwits.

    Tech types just exploit the Ass-burger myth: pretending to be Ass-burger gives them carte blanche to be rude as fuck to people, because the schlubs have been conditioned to believe that zinger-heavy assholes are geniuses.

    It’s a schtick, in other words. They copied it from US Jews, who use the same tactic and did the initial marketing for the “Assholes are smart” campaign.

    Over the last 30 years I have dealt with politicians, senior bureaucrats and lawyers – of all stripe and political persuasion, both professionally and (with gritted teeth) socially. They’re not all that bright, and very sociopath-heavy.

    If they were wiped out to a man, it would get rid of almost all the sociopaths I have ever met (the stragglers I met in the military – over 30 years ago – would be taken care of, since the military is part of the bureaucracy).

    #TotallyWorthIt.

    • Replies: @Sollipsist
  71. Mefobills says:

    Keen has stepped around the moral hazard problem that commenters here are kvetching about.

    Really, a lot of whiney comments about how somebody else is getting more.

    There are ways to release debts so that nobody gets more pie than somebody else. You can distribute goodies evenly. Say you are not in debt, then you will HAVE TO buy shares in a company that is in debt. You get an asset, and the company gets debt relief.

    Basically, CHANNELING is used in a modern debt jubilee, where the new money CHANNELS to erase numbers on a double entry ledger.

    https://braveneweurope.com/rnz-steve-keen-the-case-for-a-modern-debt-jubilee

    When bank credit returns to the ledger, it disappears. When your loan came into being, new bank credit and new debt instrument came into being simultaneously.

    What comes from nothing returns to nothing. When you pay off your debt, the debt instrument is ripped up and tossed into the trash.

    There are ways to take exogenous treasury money, create it debt free, then channel it at private debts.

    Private bankster ledgers do two things: 1) Creditor bank brings the new money into his ledger, and then his asset column is erased by the amount of debt relief. 2) Creditor rips up the debt instrument as it no longer can make demands on debtor.

    (The debt free money disappears, or if it was in check form, the bank returns canceled check to Treasury)

    What happened is that the creditor (usually a bank) is denied future profits. Too bad so sad.

    The other thing that happens is that debtors are no longer diverting their income to pay debt, and can now buy and sell from other producers. Local economy begins to work again.

    Finance oligarchy is defunded.

  72. Capitalism = Socialism for the rich

    Good talk from Hudson, he may as well forget about any kind of debt jubilee or any kind of relief for anyone other than the poor oppressed billionaires. The ship already hit the iceberg and is sinking, now the entitled vultures are just running around the ship robbing the proles for what little they have while promising them a seat on their designated lifeboat. Not much the proles can do since the owner of the ship is giving protection to the vultures, and 60%+ of the dumb proles foolishly believe the vultures are decent guys and probably looking out for their best interests. In reality both teams of vultures have no intention of sharing their lifeboat with them.

    Meanwhile in my neck of da woods

    Trump and Biden supporters clash outside Biden rally in Warm Springs, GA today from PublicFreakout

    Don’t know how these alt-right guys and WN’s believe they’ll ever achieve their high IQ white ethnostate with this level of ignorance and stoopid. These fools still believe that voting Trump or Biden will fix any of their problems, after all these years of doing the same thing over and over again. Willing to hurt each other for “their” guy. What a wonderful system we have here. Many will even tell you the “Chicoms” are doing this…sad

    • Replies: @Biff
  73. dvorak says:

    to build dykes like they have in Holland

    This is a respectable website and I do not wish to stumble over Dutch dykes when I am reading about Georgism. Scandalous!

  74. @sally

    “At its top is the banker IMF, the CFR, and a few other general partners.. then the next layer is 256 nation state franchises.. Each franchise has a bunch of people and a few wealthy owners who appoint leaders to use the authority of the nation to make the wealthy few rich and the masses into customers and workers.”

    Your summary above is correct.

    “The problem could be resolved today, merely remove from the books any law or treaty about copyright or patent. Overnight trillions of new jobs would be created.”

    But your conclusion seems wrong. Because eliminating nation states would only result in eliminating the need for the “256 nation state franchises” and the “few wealthy owners who appoint leaders to use the authority of the nation to make the wealthy few rich”, leaving in their wake only the very few at the very top: the banker IMF, the CFR, and a few other general partners.”

  75. A.K.Patal says:
    @Jedi Night

    It is interesting how you changed the subject, for no apparent reason. Prof. Hudson advocated debt jubilee that would have benefited 99% of the American people. Instead of supporting that clearly beneficial idea, you inserted immigration into the debate and did exactly what you were accusing the Oligarchs or the 1% for doing: “dividing the population on racial issues and they will be distracted to notice their economic dispossession.”

    You do not appreciate beneficial, transformative ideas, you see only race issues! Are you sure you are not working with the 1% who are subjugating everyone one else? America’s biggest problems are the political and economic destruction of the country. And those who did the damage, the 1%, highlighted the issue of immigration for you as a way of distraction. And you just run with it. That is, unless you are a part of the cabal.

  76. Biff says:
    @redmudhooch

    You can only hope they go too far, and a 1989 Romanian style revolution takes place.

    Nicolae Ceaușescu and his wife often referred to the paroles as “worms” until the worms hauled them in front of a firing squad. Similar to Wall Street’s playbook it was austerity for the peons while they lavished in the opulence.

    Fixated on paying off foreign debts in the 1980s, Ceausescu set about a series of austerity measures that plunged the country and its people into economic hardship.
    The appalling economic situation was only exacerbated as Ceausescu splurged cash on megalomaniac projects such as the construction of the People’s Palace, even today one of the largest buildings in the world.

  77. Emslander says:
    @SimplePseudonymicHandle

    You wanted the money for a stupid reason. They gave you the money for the same stupid reason. You used the money. Now, unfortunately, you have to pay it back.

    Sorry, baby graduates. That’s how life works. The sooner you accept the reality of your stupid profligacy, the easier it will be for you eventually to grow up.

    • Replies: @glib
  78. @Kratoklastes

    That’s a plausible explanation. Leadership in general is a magnet for sociopaths.

    But high overall intelligence is not a universal characteristic of tech types either; many of the coders I’ve met are dumb as a stump when it comes to anything but coding (and whatever their specific extracurricular obessesions are).

    I can remember a few conversations with engineers who were eager to work on weapons projects. The issue of the death and suffering they’d be responsible for either never came up or was brushed off. So…

  79. @Ugetit

    Thank you, Ugetit – for pointing this out. It reminds me of a quote by Vox Day: “Theology is the deceptive art of explaining that the Bible doesn’t mean what it says!”
    Started in DaGarden of Eden and continued ever since, eh?

  80. glib says:
    @Emslander

    I see emslander is a member of the cult that believes that only a small group of ethnically homogeneous people are allowed to create money. What they create, at the click of a mouse, and only what they create, is money. Apostasy is punishable by death.

    • Replies: @Emslander
  81. Emslander says:
    @glib

    Wrong, again, baby college graduate with a degree in English. I’m just a guy who paid off every loan he’s ever taken out and some loans for others I didn’t take out.

    Like I say. Growing up is tough.

    BTW, Jews can’t print their own money either. Jews are just smart enough not to get caught up in that game. I’m not Jewish, but I played one on TV. LOL

    • Replies: @glib
  82. glib says:
    @Emslander

    Yes, they are magic. I too, was in debt once, my first apartment. Every house I had I paid cash. I do look down at americans (I am not one) who drank the kool aid of free money. But I also look down at those that give the money changers some godlike status, and you are one. That money you take so seriously, even to the point of flaunting your supposed virtue on the internet, is just a superstition, a figment of your imagination. In fact you consider submission to the money gods as virtue.

    • Replies: @Emslander
  83. Emslander says:
    @glib

    You must be talking to yourself, because there is no evidence in anything I’ve ever posted that would indicate some “submission to the money gods”.

    I don’t look down on anyone, not even on smarmy non-Americans like you. My only contention here is that people need to take responsibility for the actions that they’ve voluntarily taken. My experience is that, if you accept the consequences of even your stupid decisions and, as you grow up, try to align yourself with the Christian virtues of humility and prudence, you won’t ever have to expect to be bailed out.

    Just grow up and be a man.

    • Replies: @glib
  84. glib says:
    @Emslander

    I have appreciated your comments in the past and surely I will continue to enjoy them. I submit to you the idea that there is no virtue possible if the financial system is totally corrupt. Good virtue has a positive effect on the world. One can still be virtuous about community and faithfulness to one’s mate…

  85. @Carlton Meyer

    I think, like most commenters here, that the outsized influence of well-connected bankers on public policy is outrageous. I think, however, that we sometimes overlook fundamental elements of banking that are rooted in common sense. Prime, i.e. responsible, borrowers typically do not pay 24% on their credit cards, especially if they pay the balance off as soon as they make the charge. Since no collateral is pledged to the card issuer, and charge-offs are highest in credit cards (precisely because their is no collateral), interest rates will be higher. Not only that, credit card issuers largely fund their lending via Collateralized Debt Obligations; large hedge funds, investment banks and insurance companies buy bundles of debts of varying credit quality and some of those debts go unpaid. This was a major problem in 2008, but explains why credit card users pay more in interest – to compensate savers and investors for the inherent risk in lending to them. By the way, this is a game nobody is forced to play – your use of credit cards can be as much or as little as you desire.

    I think the student loan debt situation in the USA is appalling, primarily because ignorant youths (I was one) are borrowing huge sums of money and are often encouraged to do so by adults who themselves are ignorant of finance. Nevertheless, students pledge no collateral and are prone to default. Without the government subsidizing the interest, the rates would be much higher. The inability to discharge the debt in bankruptcy probably serves to put a de facto cap on the interest rates as well.

    Perhaps the solution to the student loan debt would be to allow for a yearly deduction for *both* paid interest and principal on one’s federal tax return over the term of the loan, thus offsetting the burden on the borrower, while preserving the returns to the lender. Say you pay $50,000 over a thirty year loan, then over thirty years you will have received $50,000 in deductions just for that one item.

  86. These Establishment outsiders give us “the poor oppressed negroes” line every time. Right, Hudson, you abhor racism. Tainted an informative delivery. Wait—where’s my salt? I need to flavor things like this.

  87. It’s interesting that Hudson has little to say about ad valorem house taxes. I own my house free n clear, but taxes have risen so much that I now pay 2000% compared what I used to pay in rent including all bills paid. The real siphoning off of economic rent, from my point of view, is not the banks, who are bad enough, but the predatory government unions that demand n get golden parachutes for doing n knowing squat. If there is a new feudal class, it’s local government workers n teachers unions. But like with immigration it’s not politically correct for 81 year old Boomer Kennedy liberals to talk about things like that. He only wants to talk about red lining, as if there was no good reason at all for that policy.

  88. @Sin City Milla

    Good comment, but the rent-siphoning problem is not either/or, it is both/and. Of course, the bankers figured out long ago that creating a permanent parasitic rentier class of government employees worked only to their advantage. Once this group was allowed to organize and collectively bargain, so much better for the rentier class that creates the capital needed to keep the national government running at deficits (while local governments must resort to slowly boiling the frog through confiscation). One of many well played master strokes we are forced to both endure and watch with incredulity.

  89. @sally

    I don’t think the problem is human

    I agree that the source (i.e., the primary cause) of the problem is not human. But the proximate cause sure is.

  90. @SimplePseudonymicHandle

    I agree especially with the perceptive paragraph that begins with “Super cool…”

    However, I think you mistakenly use the term “bond issuer” to describe the bond purchaser. Technically speaking, the issuer of the bond is the borrower and the buyer/holder of the bond is the lender. With that clarification, the rest of your comment makes sense and hits the mark.

  91. @Sin City Milla

    Correction: 3000% if you include bills. Most young people are entirely ignorant of the fact that 60 years ago there were no house taxes at all. As in Zero. once you paid for your home, you got to live there tax free for the rest of your life. Now one has to pay 200 x more in house taxes than what one used to pay in rent. And taxes will keep rising. Our wealth is being drained away by a huge class of unproductive burocrats who have made productive people their serfs.

  92. @Sin City Milla

    If there is a new feudal class, it’s local government workers n teachers unions.

    I agree, except that I see no need to qualify government workers as local. Local should be included, but they have ridden in on the coattails of the federal government.

    It used to be said that they worked for us, now we work for them. I’m old enough that I probably will not live to see their downfall, but I believe it will come. Unfortunately, as in Rome, it will come with the collapse of the entire edifice. If I should live to see it, I will not weep for them.

    • Replies: @Sin City Milla
  93. @another fred

    My future is mostly behind me also. I have no dog in the fight so I’m just an observer. It’s quite a spectacle watching young people happily throw away the Bill of Rights by voting for Biden. They are committing mass hari kari as if hypnotized.

    • Replies: @another fred
  94. @Sin City Milla

    They are committing mass hari kari as if hypnotized.

    Derb’s comparison to the Xhosa cattle-killing cult is appropriate. Humans do these things when they fear the future.

  95. The Dem Party is itself a Cult and a religion. Read the book ‘SJWs and the PC Cult’ for a good analysis.

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