Michael Hudson: The Oligarc's Escape Plan

[The Amerikkkan Idol]

 

[Cruise]

This is a great article.

I don't agree with the conclusion (if I understand it correctly) but it really gives an insightful breakdown of how deep this crap goes.

Good post.

 

[Spectrum]

gonna check this one tomorrow..thanks

 

[Cruise]

After spending some time going through the article, here are my impressions...

Economies emerged from World War II relatively free of debt, but the 60-year global run-up has run its course.

It starts off on the wrong foot because its first assertion is wrong, unless he is using another definition for national debt.

Just about every manufacturing country in the world was overwhelmed with debt by the end of World War II (Germany, Japan, Britain, Russia, United States).

The United States got the benefits of a post-war rebuilding because it was the only country whose manufacturing base had not been bombed into the ground after years of military action.

Basically, the US had a monopoly on production for the first 15 years after WW 2 (1945-1960) and supplied the world with its goods. As other nations rebuilt their economies, demand for US goods plummeted.

Mr. Obama’s “recovery” plan, based on infrastructure spending, will make real estate fortunes for well-situated properties along the new public transport routes, but there is no sign of cities levying a windfall property tax to save their finances.

I agree the President and state/city government is unequipped to deal with the new economic reality facing the US.

So the government tries to recover the happy Bubble Economy years by getting debt growing again, hoping to re-inflate real estate and stock market prices.

After a shaky start, the middle of the article is littered with all kinds of gems.

For me, this was where the biggest value was, especially about the IMF, World Bank, Clinton's Rubin, and Obama's Summers.

I love the way he equates the US economy with a third-world dictatorship or a former Soviet state.

Clinton/Bush/Obama sets the path toward long-term debt servitude for the majority of Americans and a continually reducing standard of living.

Is America a Failed Economy?
It may be time to ask whether neoliberal pro-rentier economics has turned America and the West into a Failed Economy. Is there really no alternative?

Here, I think the analysis falls apart again. A bunch of new terms are introduced without providing reference nor clear explanation of their meaning in context.

"neoliberal"
"pro-rentier"
“foundation myth”
"Industrial capitalism"

rent and interest are extractive, not productive.

I agree with this.

Governments were to create their own credit, not leave this function to wealthy elites via a bank monopoly on credit creation.

But, I hate this. Governments always abuse the credit creation process to create larger bureaucracies. Of course, wealthy elites are no better, so why not let everyone create credit in a competitive marketplace?

They were markets free of economic rent and interest (and taxes to support an aristocracy or oligarchy).

Yep.

This was a great read and a good mental exercise.