- Jan 2023
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docdrop.org docdrop.org
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michael hudson
Participant : Michael Hudson
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you you have to back politicians who are 00:52:41 willing to change this and unfortunately there's no party that's uh in favor of canceling student debt or any kind of debt in the united states because the political parties are subsidized by the banking in the financial sector so uh i don't see uh i don't see a way out
!- Michael Hudson : The realities of debt writedown of any kind - Not pragmatic because no political party will support it because all political parties are subsidized by banking and financial sector
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there's a landlord tax the the one percent in their day were the landlords you have to tax away the land rent and make that the public uh tax base not income not taxes on consumer goods not taxes on capital because you want good capital investment you want fortunes to 00:45:07 be made in a good way that add to the economy's productivity you don't want them to be made in a predatory bad way uh the whole fight to tax economic rent and to even recognize that most income is unearned when you talk about the uh income disparity almost all this disparity is unearned income it's economic rent it's not income that's made by increasing uh production 00:45:33 it's not income that's made by increasing living standards it's just predatory rent seeking from special privileges that the wealthy have gained from government and today it's not the landlord class anymore as it was in the 19th century it's the financial class and the raw materials class uh and uh without dealing uh with this uh cl structure i don't uh the system is going 00:45:57 to shrink and shrink and we've seen this before we saw it in rome the same kind of polarization and concentration of wealth in the roman empire well the last stage of that is feudalism so we're back to what rosa luxemburg said the choice is between socialism and barbarism basically and uh there's no other way to do it you can't solve the problems within the existing system 00:46:23 because it's controlled already by the one percent
Micheal Hudson : tax the rent seeking class or face barbarism like in Rome - The situation today is degrading in the same way Rome degraded into feudalism - rent seeking class today is not the landlord class, but the financial and raw materials class that are making large fortunes from rent seeking - that is the system level reform necessary today
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you see a lot of third world debts that uh if the third world better countries have to pay uh their foreign debts under as the world economy slows down they're going to be subject to austerity to the world banks and the imf's austerity programs 00:35:01 and they're going to be kept in poverty uh is it really right that they should be kept in poverty just to enrich the bondholders of the one percent the one percent will say yes that's why we're the one percent so that we can impoverish other people that's our liberty our liberty is the right to impoverish other people and reduce them to dependency uh that will happen if you do not write down the debts uh it's already happening in the united states to the student debt uh crisis 00:35:30 where students uh have to pay so much money uh as they fall behind on their student debts that they can't afford to take out mortgages to buy homes uh and you're having the home ownership rates plunge in the united states that's the result of leaving the debts in place uh the mortgage steps uh uh are causing shrinkage so there is no way to get out of this economic polarization without 00:35:54 a debt write down and that's something that is too radical and uh uh when we talked about when i was referring to what china's doing i'm referring to what it's doing today and tomorrow about uh the uh real estate company evergreen uh uh china has a choice is it going to leave evergreen's real estate debts in place and every grand uh as a real estate company is two to three 00:36:21 percent of the entire chinese economy if it pays the foreign creditors and the domestic one percent of china it's going to impoverish the uh the employees of evergrand it's going to make housing prices more and more expensive in china china has had a debt finance housing boom uh if you leave the debts in place then uh you're you're going to impoverish china and obviously 00:36:47 china is going to say i'm we're not going to put the creditors first we're not going to do what the west does and say the sanctity of debt service debts are uh that you owe or sacred uh it's worth sacrificing the economy it's worth plunging the economy into poverty just to preserve the wealth of the one percent i think china's uh is going to make the opposite decision and say we're not going 00:37:12 to commit political suicide we're going to operate for it's a socialist economy and when it comes to debt and credit thank god we have our banking in the public domain and since the public domain the people's bank of china is the creditor they can afford to write down the debt without having any political backlash because it's cancelling that so do itself uh which is a great advantage uh and 00:37:38 it's also uh as for the private bond holders uh it's going to say well sorry bondholders you made loans to a company that was way over leveraged uh already uh the american bond rating companies have reduced their bond rating to chunk so you knew what you were buying if you continued to hold bonds that uh fitch and other bond raiders moody's all say or junk and you lose your money well 00:38:03 you took the risk you got a high rate of interest now you're you're paying the price that's how markets work uh and uh that really uh is the argument and i think uh you have to uh obviously what i'm suggesting is a radical step just as you're suggesting of taxing wealth would require the radical step of closing down offshore banking centers of simply negating uh if 00:38:28 banks would simply erase all of the deposits they have from the offshore banking centers from the cayman islands from from panama from uh from liberia to all the places that began by to be set up by the mining companies the oil companies and then were set up beginning in the 1960s essentially by the cia to finance the vietnam war by making america like england the home for criminal capital for flight capital all this uh all this flight 00:38:57 capital and the kleptocracy that you mentioned in russia all this really should be wiped out and if you leave this capital if you leave this one percent in place the economy is going to be sacrificed and shrinking is it worth shrinking the economy just to leave the one percent in place and if you challenge them that's pretty radical that's really what i think marx would say today
!- Micheal Hudson : debt writedown - At a certain point, Governments of 3rd world countries who are so debt trapped may simply decide to write down the debts and start over - They may reach a point where instead of servicing the debt of the 1%, they decide its not worth it and save their own economies, freeing themselves from World Bank and IMF debt conditions - It's just as radical a move as your suggestion to stop tax evasion by closing down all offshore banks
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it's what i write about and that is why what is it that has created this uh uh disparity and why is it widened so much since 1980. well the most obvious reason is uh interest rates reached a peak of 20 in uh 1980 and they've gone down ever since well in the late 1970s uh my old 00:16:50 boss's boss at chase manhattan paul volcker said let's raise interest rates to very high because the 99 are getting too much income their wages are going up let's uh raise interest to slow the economy and that will prevent wages from going up and he did and that was a large uh reason why carter lost the the election to ronald reagan interest rates then went down from 20 to almost 0 00:17:20 today the result was the largest bond market boom in history bonds went way up in price the economy was flooded with bank credit and most of this credit uh apart from going into the bond market went into real estate and there is a uh symbiosis between finance and real estate and also between finance and raw materials and also like oil and gas and minerals uh extraction natural resource 00:17:48 rent land rent and also monopoly rent and most of the monopoly rent has come from the privatization that you had from ronald reagan margaret thatcher and the whole neoliberalism uh if you look at how did this one percent get most of its wealth well if you look at the forbes list of the billionaires in almost every country they got wealth in the old-fashioned way from taking it from 00:18:13 the public domain in other words privatization you have the largest privatization and transfer of wealth from the public sector to uh the private sector and specifically to the financial sector uh in in history uh sell-offs and all of a sudden instead of uh infrastructure uh public health uh other uh basic needs being provided at subsidized rates to the population you have uh privatized 00:18:41 owners uh financed by the banks raising the rates to whatever rate they can get without any market firing power uh in the united states the government is not even allowed to bargain with the pharmaceutical companies for the drug prices so there's been a huge monopolization a huge privatization a huge flooding of the economy with credit and one person's credit is somebody else's 00:19:11 uh debt so you you've described the one percent's wealth in the form of uh savings but uh i focus on the other side of the balance sheet this one percent finds its counterpart in the debts of the 99 so the one percent has got wealthy by indebting the 99 uh for housing that is soared in price 20 00:19:37 uh just in the last year in the united states uh for medical care for uh utilities for education uh the economy is being forced increasingly into debt and how how can one uh solve this taxation will not be enough the only way that you can uh actually reverse this uh concentration of wealth is to begin wiping out uh the debt if you leave the debt in place of the 99 00:20:10 uh then uh you're going to leave the one percent savings all in place uh and these savings are largely tax exempt uh so basically i think you you uh left out the government's role in this wealth creation of the one percent so your finance has indeed grown faster than economy absorbed real estate into the finance insurance and real estate sector the fire sector finances 00:20:39 absorb the oil industry the mining industry and it's absorbed most of the government so the financial wealth has spilled over to become essentially the economy's central planner it's not planned in washington or paris or london it's planned in wall street the city of london and the paris ports the economy is being managed financially and the object of financial management 00:21:04 isn't really to make money it's capital gains and again as your statistics point out capital gains are really what explains the increase in wealth you don't get rich by saving the income rent is for paying interest income is for paying interest you get rich off the government basically subsidizing an enormous increase in the value of stocks the value of bonds by the central 00:21:31 banks which have been privatized and uh the reason that this is occurring is that uh the largest public utility of all money creation and banking is left in private hands and private banking in the west is very different from what government banking is in say china
!- Michael Hudson : Wealth is created in the 1% through privatization and loss of the 99% - Largest transfer of wealth in history from the public sector to the private sector, especially through financial sector - govt fire sale of public infrastructure - credit was created and invested in the biggest bon market boom in history - many of Forbes billionaires got rich through such privatization - the 1% got wealthy by indebting the 99% through privatization all around the globe - this was the effect of Ronald Reagan and Margaret Thatcher's neoliberal policies - taxation alone is not sufficient to reverse this wealth concentration, the debt has to be completely wiped out
!- key statement : the elite get rich off the government subsidizing an enormous increase in the value of stocks the value of bonds by the central bank which have been privatized. The reason THAT is happening is because the largest public utility of all, money creation and central banking has been privatized.
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as long as you leave banking and credit in private hands you're going to have banks trading their product debt and the more debt they create the more debt service that the borrowers the 99 have to pay the banks in order to obtain a house 00:22:54 or an education or medical care or just to break even and the more money they pay to the financial sector the less they have to pay for goods and services so as the economy polarizes between the 1 and the 99 the economy as a whole shrinks because more and more of its income is spent not on production uh and consumption it's spent just on bit service
!- Michael Hudson : private banks maximizing debt is the goal - creating lots of loans to create lots of debt is the best way for the private banks to make money - it means the 99% spend all their efforts servicing the debt
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to get rid of monopoly rent you have to return basic key uh infrastructure to the public domain where it was before 1980 so that uh basic needs can be supplied at low prices not uh creating monopoly for uh the one percent uh and i guess i'm saying you have to realize that finance has used as well 00:25:12 to take over the economy and this has to be reversed uh because uh once you have uh wealth taking the form of uh claims uh loans and claims on other people's debt we'll count you up compound interest any rate of interest is a doubling time and compound interest is always going to grow faster than the economy's real growth and the only way to prevent this isn't 00:25:37 simply to lower the interest rate which you've done today 0.1 uh the only solution is to wipe out the overall debts that are stopping economic growth and these debts are the savings of the one percent the good thing about cancelling debts is you cancel the savings of the one percent and as long as you leave these savings in place there's not going to be a solution
!- Michael Hudson : reverse privatization and wipe out debt - returning the public infrastructure sold off to companies after 1980 back to the public to get rid of monopolies who gouge the public - cancel all debt so that the savings of the 1% cannot continue compound growth trajectory
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i think the reason your book was praised so much uh in the west is you didn't come up with a threatening political solution uh and uh when they said this was the mark book is the marks for modern time that meant don't read marx read this book and i suspect that after you put all of this enormous good work into the uh statistics that you did on wealth 00:15:30 and income i think the publisher probably said well what are what are your solutions well you just came up with uh the solution that you uh said in the book and that's to tax income and wealth uh this is not a threatening solution because there's no way that you're going to tax wealth as long as you have offshore banking centers to conceal wealth as long as you have what the oil 00:15:54 industry put in place a hundred years ago the flags of convenience pretending to make their uh income abroad the fact is uh the one percent don't really make much income they're ideal if you're a billionaire you want to do what uh half of american corporations do you don't make a penny of taxable income uh that that's uh the whole problem
!- Michael Hudson : critique of Thomas Piketty's books - Hudson comments that Piketty's books were not politically threatening to the elites - Piketty's solution is to tax the elites but this is no threat to the elites because they have wealth concealed in offshore accounts - billionaires strategy: don't make one penny of TAXABLE income
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he regards 00:01:35 the idea of isolated individual as a myth what interested david much more was a dialogue he believed that it is only in dialogue in the class of opinions where answers are formed and how human consciousness is born we humans according to david are the product of our social relationship that's why it was so important for him to be involved in a situation in which 00:02:03 people think and act collectively and david grabber foundation will follow the same path
!- David Grabber Foundation : hosts Fight Club - this talk is on Debt with guests Michael Hudson and Thomas Piketty - David regarded isolated individual as a myth - human consciousness is a product of social relationship
!- isolated individual mythology : comment - Deep Humanity praxis is aligned, seeing the deep entanglement between the individual and the collective(s) the individual is embedded within
Tags
- debt creation favors private banks
- system level reform
- cancel all debt to eliminate savings of the 1%
- neoliberalism
- closing offshore banking
- Debt forgiveness
- Offshore banking protects elites
- Deep Humanity
- Ronald Reagan
- Debt writedown
- banking industry subsidizes political parties
- DH
- Margaret Thatcher
- David Grabber
- no politician will support debt writedown
- reverse privatization to eliminate monopolies
- privatizing money creation
- tax the rent seeking class
- privatization
- offshore banking
- Michael Hudson
- Thomas Piketty
- largest bond market boom in history
- David Grabber Foundation
- public to private sector wealth transfer
Annotators
URL
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- Sep 2021
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docdrop.org docdrop.org
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<small><cite class='h-cite via'>ᔥ <span class='p-author h-card'>Cory Doctorow </span> in Pluralistic: 29 Sep 2021 – Pluralistic: Daily links from Cory Doctorow (<time class='dt-published'>09/30/2021 10:07:35</time>)</cite></small>
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pluralistic.net pluralistic.net
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He reminds us that the original meaning of "free market" was "a market free from rents," where unproductive creditors were not allowed to lay a private tax on productive manufacturers. https://locusmag.com/2021/03/cory-doctorow-free-markets/
The original meaning of free market was a "market free from rents," in which unproductive credtors are not allowed to place a private tax on productive manufacturers. (ie, it's harder to be a leech on the productive sector.)
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Without some way to escape debt's gravity, all productive labor becomes oriented toward debt-service, and the economy grinds to a halt.
Michael Hudson's thesis, apparently with nods to Babylonian history of the jubilee, is that without a way to escape the burden of debt, all productive labor becomes captured by servicing debt and causes economies to grind to a halt.
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Hudson, meanwhile, is the debt-historian and economist whose haunting phrase "Debts that can't be paid, won't be paid," is a perfect and irrefutable summation of the inevitable downfall of any system that relies on household debt to drive consumption.
With this description, I want to read Michael Hudson's work.
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