Posts Tagged ‘Michael Hudson’
Mad as hell

mad as hell

Michael Hudson puts it well:

We’re at a turning point in history. If we don’t solve the problem of economic polarization, which is caused mainly by debt, we’re going to go into another dark age. We’re going to have neo-feudalism. We’re going to have neo-serfdom, except that you’re not going to be tied to the land like serfs were. You can live wherever you want, but wherever you are, you’re going to have to pay about 40% of your income just for housing. And you’re going to have to pay for water, and you’re going to have to pay for the other needs. This is the new kind of serfdom. You have to re-frame what the economy is about in a way that people can understand.”

Good Christians may ask what would Jesus do? For them “Forgive us our debts, as we also have forgiven our debtors” may ring a bell. Michael makes a good case that the debts referred to are financial debts. Read the linked post for more information in this. Michael also outlines how the forgiveness of all private individual debts, as opposed to debts between businesses, was a regular practice in ancient civilization. He even makes what was, to me, a new case for what caused the fall of the Roman empire:

The choice was: either you’re going to have economic renewal and restore people’s ability to support themselves; or you’re going to have feudalism.

That basically is how the Roman historians described Rome as falling. The debtors were enslaved, not only the debtors but just about everybody was enslaved, put in barracks on the land. Finally, you needed to have a population, so you let people marry and you gave them land rights – and you had slavery develop into serfdom. Well we’re going into a similar situation today, where I think we’re going into a kind of neo-feudalism. The strain of today’s society is as much a debt strain as it was back then.

It’s very funny: If you go into Congress – I was the economic advisor to Dennis Kucinich – you go into Congress and there’s a big mural with Moses in the center and Hammurabi on his right. Well, you know what Moses did? He gave the law. Leviticus, right in the center of Mosaic law, canceled the debt. What did Hammurabi do? Debt cancellation as well. You’re not going to see Congress canceling the debts like that”

The potential for mass debt servitude and serfdom is real enough. Hardly a day goes by without an article somewhere on housing affordability. Productivity improvements and of the entry of women into the workforce has done more for house prices than living standards. Retirement ages are being pushed out. Government services are becoming increasingly expensive or hard to get. New roads are increasingly toll roads. Formerly free university educations are increasingly being paid for amid increasing student debt. Formerly universal entitlements are becoming restricted and means tested. Yet taxes go up.

Economic activity and government revenue is increasingly being drained to service debt. Debt which grows at an ever expanding rate. How many more nations have to follow in the footsteps of Greece and Cyprus before we take a different path? How many more lives and businesses have to be blighted. How many people will never fulfill their potential, crushed by debt?

There is a flowing of new political parties. Western voters are crying “no more, this cannot continue”. Unless the new Parties address the fundamental debt cause, they will quickly go the way of the current establishment. People are voting for change. They are crying out for it. Blind Freddie can see it is overdue. Give it to them.


Splendid links

A mixed bag of material I’ve wanted to write on, but have not had time:

GAO: Almost Half of Bailed Banks Repaid the Government With Money “From Other Federal Programs”:  The Government Accountability Office continues its subtle war on the talking point used by Treasury that “TARP made money”. Here’s the GAO, with a report out today.

As of January 31, 2012, 341 institutions had exited CPP, almost half by repaying CPP with funds from other federal programs. Institutions continue to exit CPP, but the number of institutions missing scheduled dividend or interest payments has increased.

A bit of humor from which the chart at the top of the post was taken:

Meeting Of Central Bankers, “Godfather” Style: One of the best scenes in the original Godfather movie was the meeting of the heads of the Five Families when Don Corleone attempts to settle the war… right before the scene starts, the camera pans the front of a large, stone building. That building was the Federal Reserve Bank of New York (h/t Dan)… reconstruct the scene and substitute the heads of the Five Families with the heads of some central banks and finance ministries.

Not sure why this its not front page news:

9/11 Commissioner and Co-Chair of Congressional Inquiry into 9/11 Say in Sworn Declarations that Saudi Government Linked to 9/11 Attacks:  Two Senators with Access to Classified Information Say Saudi Government Backed 9/11 Attack

Two former senators – one a 9/11 Commissioner, the other the co-chair of the joint Congressional inquiry into 9/11 – state in sworn declarations that the Saudi government backed the 9/11 attack.

Another profound post by John Robb:

 Are You Robust or Resilient? To make this easier, let’s start with a fun example. In the second installment of the excellent Terminator movie series, Arnold Schwarzenegger was cast as a robot called a Terminator. This robot was what we could call a robust system. A robust system is able to absorb a terrific amount of damage before it fails.

In the movie, the Terminator faced off against a new superior series of robot, the liquid metal T-1000. In contrast to Arnold’s robust robot, the liquid metal T-1000 was a resilient system. This meant that if the T-1000 was blown apart, the parts could and would quickly reassemble themselves back into a fully functional version of itself.

Roger Scruton hits the nail on the head:

 The nation state is the best guarantor of democracy, freedom and human rights: Recent attempts to transcend the nation state by creating some kind of transnational political order have ended up either as totalitarian dictatorships like the former Soviet Union, or as unaccountable bureaucracies, like the European Union. In spite of this, the idea of the nation is under attack—either despised as an atavistic form of social unity, or even condemned as a cause of war and conflict, to be broken down and replaced by more enlightened and more universal forms of jurisdiction

Europe’s been living in the bezzle and now reality is asserting itself:

 Wolf Richter: Deep Trouble at the Core of the Eurozone: In France, new vehicle registrations have been plunging. Already down 17.8% in December and 20.7% in January compared to prior year, they sank 20.2% in February. Year to date, the results were even worse than they appear. With 43 selling days in 2012, against 41 in 2011, sales per selling day were down 24.2%. French automakers suffered the most. In February, PSA Peugeot Citroën was down 29.2% and Renault 28.5%.

China is also wobbling:

World Bank warns: China is a ticking time bomb: The World Bank warns that China’s corrupt state-owned companies have created a Chinese Super Rich class aligning communist party bosses and corporate executives.

And neither has any interest in the World Bank’s call for reforming their incestuous economic system — which is exactly the same problem with America’s conspiracy between our Super Rich, Wall Street CEOs and Washington politicians.

The numbers may be dated, but explanation will still hold. Given the number of sovereign defaults we have coming up we probably should understand this stuff:

How gross and net CDS notionals really work: According to the DTCC, there is $75bn gross notional outstanding for CDS contracts referencing Greece. However, on a net basis this figure reduces substantially to $3.7bn.

Interesting video:

Michael Hudson: A Planned Economy for the 1%

Psychopaths will not be restricted to Wall Street:

One Out Of Every Ten Wall Street Employees Is A Psychopath, Say Researchers

It’s the proportion that counts. But this does not change the fact you are probably better off with psychopaths employed in the private sector than government. While wall street bankers may have done much damage, the likes of Stalin puts them into perspective.