Renegade Economist: Michael Hudson

Heh. This may possibly make you mad. If one accepts the unconventional premise, conclusions and prescriptions being advanced by Hudson, it should at least be cause for some considerable agitation.

I inadvertently stumbled across Hudson a little while back in his role as a panelist on Max Keiser’s quirky BBC program The Oracle making some very astute observations about the phony “class war” and populist uprising sparked by the now infamous “Santelli rant” on the floor of the CME. On Keiser’s program he maintained that this was simply part of “a well-orchestrated campaign to try to blame the victim” — in other words, a deliberate incitement by the financial establishment initiated to deflect the pent-up anger of solvent taxpayers away from institutional lenders and instead re-direct it at hapless (and yes, sometimes reckless) borrowers who presently find themselves “underwater” and facing foreclosure on properties they couldn’t possibly afford in the first place (“somebody getting something more than them,” as Hudson described these folks, otherwise more generically referred to as the “toxic assets” that collectively have poisoned the pool of global credit).

Rob Harvie, a lawyer and libertarian-conservative blogger behind the site “Searching for Liberty” has brought Hudson to our attention again. This time, Hudson employs precedents from the Ancient World to float the concept of widespread debt forgiveness in order to just “wipe the slate clean” and goes on to briefly explain his cynical take on the bail-outs that willfully contradicts the muddled narrative being pedaled by the Obama administration and the corporate media. In Hudson’s view, the politicians are bailing out their real constituents — the creditors, who just happen to be the largest contributors to their political campaigns — leaving witless taxpayers holding the bag and ruining the economy in the process.

It’s food for thought, but for now, I’ve got more real food on my mind… off for some homemade Irish stew and Guinness at da wife’s place.

12 Replies to “Renegade Economist: Michael Hudson”

  1. Hudson is making a lot of sense here. Don’t expect the media to ask politicians any questions along these lines or to get an answer on the off chance they do.

  2. The big question that all has to be front and centre is this: who is ending up paying for all of this? Most of the public haven’t defaulted on anything and are either losing their jobs and/or getting stuck with increased public debt.

  3. Fuck me. The guy’s actually advocating for the global application of the ancient Sumerian jubilee. And I thought I was an atavistic reactionary.

    Coincidentally, Sir Francis Bond Head did face a banking crisis in Upper Canada, in response to which he forced the banks to loosen their control of the currency and issue specie payments to those in need (making him very unpopular with the province’s money-changers).

    Good ideas–both of them.

  4. ..thanks for the plug.. and it sort of raises a concern that I’ve been a little consumed with lately – the idea that politicians in general, regardless of ideology, have been playing a little shell-game, saying “look over there” while they feather the nests of their real constituents.. their financial backers.

  5. I’d rather follow one of the other practices of the ancient world in these matters…

    We should start selling people into debt bondage. Har-har.

  6. My point was cancelling all the debt is a pretty dumb idea. Perhaps that would mean cancelling out the debt obligations to which an insolvent bank has with anyone who hold’s money with them.

    There’s a reason we don’t all mostly live in mud huts anymore.

  7. And there’s a reason why we may be doing so again before too long.

    Is debt cancellation any more of a “dumb idea” than bailing out lenders that overextended themselves into ventures that were doomed to certain failure? Or for that matter, not only striving to make those lenders solvent again, but covering their “losses” once again — this time in the form of the bogus “insurance” policies that backed up their fraudulent derivatives?

  8. I’m with Hudson and Redtory. Debt cancellation is not a primitive or outdated concept.

    Deposits are generally insured anyway, and if you’re squeamish about livelihoods dependent on managed investments including bonds etc then “jubilee bailout insurance” could extend to those as well, to a modest total for all of an individual’s “low risk” investments.

    All real and productive personal and commercial assets remain in place, everyone keeps their job, and the economy gets up and walks like there was never a problem, which there WASN’T, except for debt overload and associated asset bubbles.

    Debt is a bunch of abstract numbers that usefully coordinate activity, or when a tipping point is passed, merely constitute a tangled impediment to any activity whatsoever.

    Depressions are necessary and inevitable for one reason only: To get the chain-reaction of debt defaults to reach the point where debt is no longer systemically excessive.

    You could do all that instantaneously with a Jubilee.

    With the mentioned insurance it would moreover be painless even to retirees etc. and only midly inflationary, since few people have hefty net cash or bond assets anyway.

    Those that do are sitting on abstract gold piles of no real material necessity to themselves or anyone else.

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