Sunday, July 20, 2008

Wish I'd Said That, but Michael Hudson Said It First

The last issue of Black Agenda Report featured a KPFA interview with Dr. Michael Hudson on the subject of the fictitious economy. If you want to understand junk bonds, endangered pension funds, Chicago School corrupt politics, why Democrats are as bad as Republicans or how CEOs pay themselves, you must listen to this eye opening interview. Hudson drops quite a few incredible quotes. He is an economics professor and a former advisor to former presidential candidate Dennis Kucinich. It figures. Smart birds of a feather do flock together. Here are some of the Hudson statements that made me sit up and take notice and created a series of " a ha" moments.

"Classical economics defined a free market as one that is free of overhead charges, free of unnecessary charges of production, free of watered stock. Today a free market means that predators are free to extort any price from the public, they are free to deregulate, free to lie to consumers, free to exploit, free to load any company they want down with debt, and basically lead (us) to a world of debt peonage... So the whole concept of freedom has been turned upside down by the Chicago school and by the Bush administration."

"Because hundreds of millions of dollars have been spent to mislead people and to endow business schools and universities to stop teaching the history of economic thought, to stop teaching the classical economists, and essentially to brainwash students, so that those with a sense of realism simply drop out of the field of economics and go into some other field."

"Now the companies were in such financial stress, having to pay the bondholders so much money that they were facing bankruptcy. So they went to their workers, as General Motors did a year ago, and as one company after another has gone to their labor force and said, 'Look, we're gonna go bankrupt, and if we go bankrupt that's gonna wipe out your entire pension fund,' because the law says you're at the end of the line, as far as collecting from us. The basic rule in America is that the rich get paid first and normal people get paid last... the richer you are, you're at the head of the line, the poorer you are you're at the back of the line. We owe so much money to our bondholders and bankers who lent us the money that there's not enough money to pay them and to to pay you workers.

The labor unions said wait a minute, we agreed to lower our current wages (in years past) so you could pay these pensions later. The bosses replied 'Well, we don't care about that, the law is on our side, we've bought the congress, we've bought the courts, our lobbyists give congressmen and the lawmakers a lot more money than yours do, so you lose.' "

"Foreign countries essential will have to isolate the United States and go their own way. There is no sign of that happening yet. When countries do go their own way, such Iran, Iraq and Venezuela, the United States threatens to go to war with them."

"There is a naive view that somehow everything will be different if the Democrats get back into power. The last time the Democrats were in power they were to the right of the Republicans. Clinton basically was a right wing Republican and did more antilabor, prowealth policies than essentially the Republicans could have done.That is basically what the Democratic party is for. The Republicans are viewed as the anti labor party, so if you are going to double cross labor, if you are going to really hurt the economy it has to be a Democratic that does it, not a Republican. And so it looks to me like Wall Street is all for the Democrats coming in, hoping that Oboma will turn out to be another Clinton. . ."

"The crisis we're going into may be so severe that people will be willing to back new politicians. It may be that the Democratic party will finally be split and most of the Democratic politicians will join the Republicans where they belong and a new party will essentially come out. I don't see much of a recovery until that occurs because the two parties are so similar right now." (We can hope).

"[depression] Certainly inevitable for the U.S., not inevitable world wide. All the other countries have to do is cut themselves lose from the dollar. In this country America has no way of paying for its trade deficit and no way of paying for its military spending abroad. So if something has to give America would prefer to impose a very deep depression than give up one penny of military spending. So I expect a very sharp increase in unemployment, people are talking that real prices have another 30% to fall at least and that is only as far as the eye can see, and large scale foreclosures, bankruptcies while military spending will increase."

I could go on and on. Just listen to the entire interview. Hudson answers questions you haven't even asked yet.