Michael Hudson Discusses Debt, Financial Surveillance, the Fed and More With Ralph Nader

Yves here. Yet another meaty Michael Hudson talk! Get a cup of coffee!

By Ralph Nader, David Feldman, Steve Skrovan and Tom Morello. Originally published at Ralph Nader Radio Hour

Tom Morello: I’m Tom Morello and you’re listening to the Ralph Nader Radio Hour.

Steve Skrovan: Welcome to the Ralph Nader Radio Hour. My name is Steve Skrovan, along with my co-host, David Feldman. Hello, David.

David Feldman: Hello, Steve.

Steve Skrovan: And of course, it’s not a show without the man of the hour, Ralph Nader. Hello, Ralph.

Ralph Nader: Hi everybody.

Steve Skrovan: Our featured guest today will be economist Michael Hudson. Many of you have been clamoring to have him on the show and we’ve taken heed. He’s a progressive economist who will join us to talk about the Federal Reserve, how American laws are pro-creditor and anti- debtor, stock buybacks, gambling, Wall Street transaction taxes and much more. It will be a view of the economy you normally don’t get in the establishment press. We’re also going to welcome back our resident constitutional scholar, Bruce Fein, to get his take on how a New Mexico elected official got removed from office because of his role in the January 6th insurrection. And we’re also going to talk about a letter from retired military leaders about rejecting Trumpism.

As always, somewhere in the middle, we’ll check in with our corporate crime reporter Russell Mokhiber, but first, the Fed is tightening our belt. Who among us is going to have to lose a few pounds? David?

David Feldman: Michael Hudson is President of The Institute for the Study of Long-Term Economic Trends, a Wall Street financial analyst, as well as the author of several books including: Super-Imperialism: The Economic Strategy of American Empire and forgive them their debts Lending, Foreclosure and Redemption from Bronze Age Finance to the Jubilee Year, and Finance Capitalism and its Discontents. Welcome to the Ralph Nader Radio Hour, Michael Hudson.

Michael Hudson: Well, it’s good to be here. Thanks for inviting me.

Ralph Nader: Thank you indeed, Michael. It’s long overdue. Let me start with debt, which you’ve written a lot about. There’s over $1.7 trillion outstanding student debt. There’s almost that much in terms of mortgage debt. There’s almost that much in terms of auto loan debt. And that doesn’t even begin to talk about the payday loan racket debt, so we’re talking trillions of dollars, as Senator Everett Dirksen said once, in another context, using billions, “a trillion here, a trillion there, and pretty soon it adds up to real money.” The drive is to get people not to use cash, check, or money order, and to do everything by credit card, debit card, and other multiplying payment systems. It impresses me as being a major controlling process. Once they suck you into the credit card gulag, they can penalize you, overcharge you, ruin your credit score, fine-prints you to huge disadvantage in the fine-print contracts. In effect, they strip you of control over your own money to the extent you had it years ago when everything was cash, check, or money order. What’s your view of this drive to get rid of cash and checks and it’s driven by both banks, other corporations, and by the US Treasury, which doesn’t want you to receive an actual Social Security check. For example, they push you into a bank account or a Direct Express [prepaid debit card] system. So, give us the power strategy behind all this. And you think we’re going to go into an era, as 65% of the American people in the Gallup poll just said, where there’s no more cash or checks?

Michael Hudson: Well, I think you’ve asked two questions there. You begin by talking about the debt question, which is what I’ve written on much more than the electronic payment question. I want to begin with the debt question. The problem is, why do people have to go into debt so much in the first place? The problem, in my mind, isn’t simply that they use credit cards, except for the very high fees that are charged for the credit cards. The problem is their inability to keep current and have to run up increasing credit card debt. And right now, if you’re late on a credit card payment, or you’re downgraded because you haven’t paid your electric bill, your interest rate jumps from 19% all the way up to 29%. And the funny thing is, one of the things that I do is go over the National Income and Product Accounts and the GDP accounts. And when credit card companies raise their interest rates to 29% per year, the government records this as an increase in GDP. They say this is an increase in financial services, so the service of increasing the money on the interest that you have to pay and the penalties is adding to GDP instead of subtracting from your ability to spend your income on goods and services. And despite the fact that the newspapers and the Fed says we’re in inflation, right now, we’re actually still in a debt deflation for by far the bulk of American people. More and more of the American people have to pay a debt service for what you’ve mentioned before–the credit card debt, the auto loans, the student loans, and the mortgage loans. And they have much less to spend on goods and services. And now that you have energy prices and food prices rising, they’re going to have even less. So that’s one of the reasons that the economy seems to move into an accelerated Obama depression. The economy never really recovered from Obama’s bailout of the banks in 2008. And the government and the Federal Reserve have been keeping the financial markets afloat by quantitative easing, but they really haven’t helped the population at large.

The second point you made is what about making all of these payments electronically? What that means is simply everybody can know exactly what you’re spending money on. They can get a marketing profile for you. Most of the drug sales and other sales are either done in cash or in Bitcoin. When the government says it wants to make sure that everyone is honest, it’s still letting all of the drug dealers use Bitcoin and all of these other cryptocurrencies to conceal what they’re doing. So really, the government is obliging people to pay 4% of anything they buy, which goes to the banks that own the credit card companies. So that right here where I live in Queens, if you go to a restaurant, they will actually charge more if you have to use a credit card, to reimburse themselves for the fees they have to pay. And if I’m in Europe, in Germany, restaurants said they didn’t want to accept anybody’s Visa card. They wanted a debit card because they say that there’s one group that’s even a worse payer than indebted consumers, and that’s the credit card companies. They poke around in reimbursing the restaurants and other people. So you pointed to a real problem. Basically, if money should be a public utility, just like the dollar bills in your pocket, probably the credit cards and the electronic payments should be a public utility. But instead, it’s privatized. It’s turned into a monopoly, and it’s a source of monopoly rents for the

banks that really is unnecessary. There’s no cost really associated with raising the credit card rates. It’s just part of the privatization of activities that really should be public and not private.

Ralph Nader: Well, years ago Consumer Reports started an effort to put placards in retail stores on Main Street, U.S.A. saying we give discounts to cash buyers. It never really got off the ground because there’s so much propaganda, advertising/promotion by the creditors to get people in debt even when they don’t even have to be. But especially since there’s such low income, so much poverty, they get people in debt. There’s roofing companies in Washington, D.C. now saying, buy our services, no money down for four years. No money down for four years. Imagine what the fine print is like. Tell us about this conflict between creditors and debtors. It used to be a different kind of conflict than it is today. Illuminate that.

Michael Hudson: Well, the question is, why do people go into debt? And there are two kinds of credit. And this goes all the way back to the church theologians in the 14th century. Ancient societies didn’t have any different word for interest and usury. All that was developed to overcome the church’s banning of interest for a 1,000 years, certainly among the clergy. And then the European takeoff began. And after the Crusades it was obvious that some kind of credit was necessary to finance foreign trade. And some people benefited from credit, so the church said, all right, if you’re making a loan, the debtor gains from it, then it’s interest, then its mutual gain. And usury is when the borrower doesn’t really receive a gain but has to pay the interest out of income that they earned elsewhere.

According to that definition, almost all of the consumer debt in today’s world is usury. It’s not interest because the consumers don’t gain. The banking system’s product is debt. What it’s selling is debt. And how do you get people more and more in debt? Well, you make life more and more expensive essentially by privatizing it. And part of the problem is the shift in money and credit from a public utility into a private bank. Banks don’t make money to finance economic growth. They don’t make loans for factories to be built. They create almost all of their money as mortgage debt or corporate takeover debt or a financial debt against collateral, against real estate or stocks and bonds. So none of that credit actually helps the economy grow. It just adds and adds up to the cost of doing business.

Compare the US system of privatized banking with what the Chinese system is. In China, the government controls the money supply. The government creates the money and steers the credit and if it does not the Bank of China is not going to make a corporate takeover loan. It’s not going to have an interest in loading real estate down with more and more debt. And in fact, in China, if an industrial company or real estate companies we’re seeing today can’t pay its debt, the government can write down debt because it’s not hurting any private creditor interest. It can write down debt that’s owed to itself.

In the United States, look at the problem with consumer debt and education debt that you’ve pointed out. The government can’t really write down that debt because that debt is owed to private creditors. And basically you have one to 10% of the creditors in the United States owning almost all of the stocks, all of the bonds. So the 10% hold the 90% in debt. And basically, that’s why the economy is polarizing. More and more money is being sucked up out of the consumer economy, out of the economy of production and consumption, and paid to the financial sector. And that basically has accelerated since 2008 with a quantitative easing. The role of the banks, especially of the central banks, is actually to promote inflation, but it’s the inflation of stock market and bond prices, the biggest bond rally in history, and real estate prices. And instead of what the Federal Reserve is supposed to do, supporting full employment, its job is to make sure that there isn’t full employment, that there is a reserve army of the unemployed so that wages don’t rise. And when you have the current Federal Reserve head say, well, we’ve got to bring on a depression because with oil prices rising and inflation happening, there’s a danger that wage labor may try to catch up with inflation and ask for wages. And how do we prevent labor from asking for wages to keep up with the cost of living? Well, you make sure that there is enough unemployment that it’s somehow going to force them into work, and labor will compete with each other and hold wages down so that corporate profits can remain high enough to support stock market prices and the owners of the stock market, the 10%, are not going to lose their money; the 90% of labor will lose its money, but not the financial sector.

Ralph Nader: Let’s examine that for a moment. It’s obvious to anybody who pauses to contemplate what the game of the Federal Reserve is. Its budget is paid for by the banks. It doesn’t get appropriations from Congress. It’s run by the banks. The sections of the Federal Reserve in Dallas and Philadelphia, all those boards or bankers or other financial executives, and chairman of the Federal Reserve keeps saying that he wanted to keep interest rates low until recently in order to stimulate the economy. And I’d write him a letter and say, what are you talking about? First of all, you’re paying over 150 million savers, who have money market accounts and mutual funds and saving accounts, nothing–one-tenth of 1%. So they’re not going to have much money to spend in the economy. And second, you don’t even speak out against the huge interest rates of payday loan rackets, rent-to-own rackets, student loans that can range from 6% to 50%, 100%, on the rollovers, 400%. You’re not talking about that. You’re just talking about the interest rates that make the banks richer. Well, he never answered. He never answers. Chairman Powell never answers. So then I tried to get the press to cover it. Well, the press has these full-time reporters, New York Times, Washington Post, and Wall Street Journal, that just do official-source journalism. They’re like dittoheads, with few exceptions, they just report what the Federal Reserve says, and they don’t really point out that whether by ignorance or indentured status, Federal Reserve has been pretty incompetent over the years in terms of its own statutory purposes, which is to maintain steady employment and stability.

So here’s what I think some of our listeners want to find out about. Chairman Powell in this latest cycle, unleashed $9 trillion of quantitative easing. That’s an abstruse phrase for saying, okay, we’re going to print this money, Wall Street, and we’re going to buy bonds, government bonds, even corporate bonds and juice the liquidity of the market, which means juice stock market prices. Now, why does the Fed pursue that? Could they use $9 trillion for public infrastructure or don’t they have the authority? Is there any curb on how much the Fed can spend and how much debt to itself it can go into? Is it a total Wild West here? Enlighten us.

Michael Hudson: Well, the problem is that the Fed is a central bank. And the problem that you describe – of course the Fed could finance infrastructure, but that’s the kind of thing the U.S. Treasury normally would do. The Fed was created in 1913. Before that, all of the things that the Fed has done since then were already being done by the Treasury. So after there was a crisis in 1907, JP Morgan tried to bail out largely with their own fees; he said, we’ve got to take the monetary control away from government. We’ve got to really shift control of the economy and make it a centrally planned economy, but it has to be planned by the banks. So the Federal

Reserve was created very explicitly. The National Monetary Commission published the volume by David Tinley on the US Treasury saying that the Treasury was doing everything, but the Federal Reserve was created to shift control away from Washington into the monetary centers, New York primarily, but also Boston and Philadelphia and the Chicago Mercantile Exchange. The Treasury officials were not even allowed on the board of the Federal Reserve. The idea was to say, the Federal Reserve is working for the banks. And to make sure that most of the money created in the American economy will be created by the banks to enrich the customers of the banks, the large corporations, especially the monopolies, the real estate sector, which most bank money is for, and the Federal Reserve, by monopolizing the creation of credit, will not create social spending that the Treasury had been doing since the country was formed. It was the Treasury that organized the internal improvements for America–the Erie Canal, the roads, all of the spending into the economy. And the Federal Reserve was created to stop social purpose spending by the government, by essentially cutting the Treasury out of the monetary management process. And that’s true, not only of the Federal Reserve in America, but of central banks all over the world. The role of central banks is to prevent the government from spending money on social programs and to support the commercial banks in lending money to inflate the asset markets–real estate primarily, also stocks and bonds to support private raids of corporations. And essentially, because the product is debt, to load the corporate sector down with debt, as in the junk bond take off. And the Federal Reserve has even been buying junk bonds so that owners of junk bonds will not lose. And that all began in 2008.

Sheila Bair, former chair of the (FDIC) Federal Deposit Insurance Corporation, said that the problem of the Federal Reserve’s support of the banks was you had the largest financial crime wave in history in the years leading up to 2008. And everybody knew that there was a crime wave. The newspapers reported the language had changed. You had new words in the English language, junk mortgage or NINA borrowers–no income, no jobs, no assets. And instead of writing down these junk mortgages to realistic market levels, which President Obama had promised to do and the Republicans were supporting, Obama left the debts in place and evicted almost nine million American families and supported the banks in this. And he did it by the quantitative easing to make sure that the real estate prices did not become more affordable to Americans.

Ralph Nader: We’re talking to Michael Hudson, a progressive economist of long standing. Michael, people hear this $9 trillion of juicing the stock market. They call it quantitative easing and the Federal Reserve prints it. And a thoughtful citizen would say 1) are there any limits? I mean, can the Federal Reserve print $100 trillion and give it to people around the country? And 2) when does the Federal Reserve ever get paid back? Can they just order the holders of Federal Reserve debt to pay off the debt; they can reverse the quantitative easing? I mean, what kind of monetary animal are we talking about here?

Michael Hudson: Well, first of all, when the Federal Reserve was given the right to engage in monetary support, it listed all the purposes for what the Federal Reserve could do. And then it added three words “and other purposes.” So when you say the Fed can do, we’re going to list all the things they can do, and then say, “and other purposes,” that means it can do whatever it wants without limit. And that indeed is what it’s done. The Federal Reserve doesn’t really create money. None of this $9 trillion appears as money creation. What it does is it’s been a swap agreement with the banks that lets the banks deposit their mortgages and their stocks and bonds, their

packaged mortgages, with the Fed and have a deposit with the Fed that it can then use to lend out into the economy. It’s sort of a travesty of the 100% Reserve plan that essentially the banks are not able to create credit, but the Federal Reserve enables the banks to create credit, saying whatever loan you make, you’ll just deposit it with us and ever since Obama, we’re going to pay you interest on this loan. We’ve never paid interest before, but now we will actually pay you interest so that you can make money on lending out, more money from us at the Fed than you’re going to make even on the loans that you make as long as you make the loans to buy stocks and bonds and real estate.

So if this doesn’t appear in the money supply itself; it’s all done technically in a swap agreement where the bank will make, let’s say, a takeover loan. And how does it get the money without reserve? Well, it’ll take its packaged mortgages, or its credit card loans or whatever, or its junk mortgage loans, and deposit them with the Federal Reserve, and it’ll use the Federal Reserve deposit and it will be as if a regular depositor walked into the bank and lent them enough money to make the loan. So it’s all done with a technicality that the Federal Reserve is very careful not to explain to people how the system works and it’s not really taught in the monetary textbooks. You really have to work in the field to follow it day by day.

There are some sites that follow it, like Wall Street On Parade (A Citizen Guide to Wall Street wallstreetonparade.com) goes into the nitty-gritty. And Randy Wray at the Levy Institute did a whole study of quantitative easing where he actually subpoenaed and got access to the $29 trillion worth of loans that the Fed kept making. And what the Fed did in 2008, as a result of the junk mortgages and of the wave of financial fraud, Citibank was broke. It was insolvent. And yet the Federal Reserve, through Tim Geithner, who was a protégé of the Citibank’s head, Robert Rubin, who had been Secretary of the Treasury under Clinton, made sure that the most crooked banks were kept in business by the Fed—Citibank, Bank of America, Countrywide—these were the worst offenders and the government could have taken them over, bailed out all of the insured depositors, and turned them into public banks that would have enabled Citibank and others to make loans for the kind of thing that you just mentioned, for public infrastructure.

Ralph Nader: At lower prices too.

Michael Hudson: Yeah, that’s the whole point.

Ralph Nader: I’m sure some of our listeners’ eyes are glazing over, so they’re going to like what I’m going to invite you to discuss next, which is the following: The Republicans have an economic agenda in electoral campaigns. It’s very simple to understand, Michael. It basically is 1. lower taxes 2. deregulate 3. let the free market reign 4. strengthen our military budgets and 5. confirm conservative judges. And that is very understandable to millions of voters.

Michael Hudson: Yep.

Ralph Nader: What isn’t understandable is what they mean by that, namely 1) lower taxes for the rich and the multinational corporations, not so much for the rest of us. 2) deregulating corporate crime, fraud, and abuse. 3) it’s not a free market; there’s no such thing as a free market in this country other than maybe a tween-run lemonade stand, because free markets can’t exist with monopolies, with small business franchise one-way agreements with corporate crime, with

corporate welfare subsidies, with deceptive and lying advertisements. Those destroy free markets and many more that I’ve put out in a paper called “Rebutting Free Market Fundamentalism”.

Strengthening the military budget? We know what that’s all about. That’s the military industrial complex and the constant weapons sales on empire abroad that you’ve written about. Conservative judges? Not really. They’re corporate judges. That’s the main criteria, that they support corporate power over human individual rights as consumers, labor, environmental, health, etcetera. Now, I’ve read interviews of you, Michael Hudson. Let me tell you, I’m a patient reader. You believe in massive sequential reasoning lathered by facts. And the more sequential, the more you lose the audience and they can’t follow you. So I’m going to put a question to you that probably no one has put to you. Drop the use of the word neoliberalism, which progressives always use, including Chris Hedges. And I say, Chris, do you know anybody around the country who works with their hands or their computers, who know what neoliberalism means? In one of your interviews, you gave numerous definitions, which were hard to remember. What you really mean by neoliberalism is corporate domination of our political economy from A to Z. I know you can spell it out. How are you going to overcome the communication problem? Progressive economists don’t use simple statements as what they’re for. They don’t say, “We’re for taxing the rich and the corporations.” They say, “We’re for fair taxation.” They use the word providers for the drug companies and health insurance companies, as if they’re philanthropic organizations instead of sellers, not to mention gougers. They use the words white-collar crime instead of corporate crime. How do you overcome this? This is a tough question for you to ask. If you were to counteract the Republican agenda that I just mentioned and compress it the way they do and make it understandable and motivational for the workers, how would you do it?

Michael Hudson: Well, I think you’ve caught me. I’m a hopeless academic. And the fact that I talk largely to other academics or to people who are working in the field. So you’re right, it’s corporate. I’m not sure why you call this Republican. It’s bipartisan. It’s the Democrats. What you’ve described as the Republican program is everything President Biden believes in. If the Democratic…

Ralph Nader: But the Republicans hijack better than the Democrats. They hijacked free trade, went against corporate—they’ve hijacked patriotism. They’ve hijacked the Bible. They hijacked the flag. They hijack everything. And so they blur that distinction.

Michael Hudson: Well, blurring is part of why I use a jargon word. And jargon is used because it is technical. There’s one reason that I hesitate to use the word corporate, because there are two kinds of corporations, because there are two kinds of economies. If you say corporate, most people at least think of corporations that manufacture things. They may be monopolies, but they still manufacture. But the neoliberalism means the financial corporations. And I want to focus really on the fact that, where the financial line, which America has been following since the 1980s, the Reagan and Thatcher line, has been not an industrial corporate line. We deindustrialized. It is corporate, but it’s corporate financial that is shrinking the economy. At least the idea of industrial corporations was when they make a profit, they reinvest it in making even more companies and selling even more, and at least you get an expanding economy. I’m trying to explain why the American economy is shrinking and not expanding.

Ralph Nader: Because it’s making money from money from money? Is that what you call financialization? It doesn’t produce anything real?

Michael Hudson: Well, not only making money from money, it’s making money by loading the economy down with debt. All money is a form of debt on the other side of the balance sheet. And I know you’re going to say, once I say balance sheets, people’s eyes glaze over, because thinking in terms of balance sheets, one person’s saving is another person’s debt. And that means one person’s debt is another person’s saving. I’m trying to deal with how can the American economy cope with the fact that there’s so much money from debt, as you began this show by mentioning, the only way you can write down the debt is to write down somebody else’s savings, and those savings are the savings of the 10%. Maybe we can figure out a new vocabulary to use for this, because you’re right, the vocabulary shapes how people think about problems, and I haven’t invented new terms, but maybe we can figure out something to distinguish the really predatory financial sector from the equally predatory corporate sector, but they’re predatory in different ways.

Ralph Nader: There’s another wrinkle, too, Michael, to engaging in massive sequential thinking. You don’t get on the mass media because you’re talking in paragraphs. You’re talking long tracks of argument and analysis. So you never get on TV or radio. You’ve got to learn how to talk in short pitches. Now, I’ll give you an example. $7 trillion has been, in effect, blown away from any productive use in stock buybacks in the last 10 years. Stock buybacks used to be considered by the Securities Exchange Commission, as you know, as stock manipulation and prohibited, except on certain circumstances. But Reagan opened the floodgates in 1982. Now stock buybacks mean that all the surplus profits from consumer buying of these corporations, like Apple, Intel, and General Electric and so on, the management doesn’t have any productive use for it. They want to enrich themselves by buying back their stock, increasing the metrics for their executive compensation, and laughing all the way to the bank. They’re not putting this money into productive enterprise. They’re not putting it into bolstering the pension plans of their workers or increasing wages. They’re not putting in research and development. Apple is not putting in recycling this horrific contaminating waste from its discarded computers and iPhones. I don’t think Marx would ever have anticipated that the pile of cash would be so massive that the capitalists wouldn’t know what to do with it other than to buy back their stock. What is your take on this unbelievable stock buyback? I mean, in one year recently, Apple bought back $90 billion of their stock, which was more than the combined budgets of the Department of Labor, the FDA, the Auto Safety Agency, on and on, $90 billion with a B, just one company. That, by the way, would have more than paid for all the tuition of college students that year at public universities, and they would have had a lot leftover. And that decision was not made by the shareholders of Apple. That decision was made by Tim Cook, who is now paying himself with a rubber stamp board of directors $833 a minute. A minute, Michael, $833 a minute on a 40-hour week. What’s your analysis of stock buybacks, which are bleeding the economy? That’s the consumers’ dollar there.

Michael Hudson: It’s not only bleeding the economy, it’s bleeding Apple and the other stock market. Look at what’s happened. The stock market has plunged by about 10% this year. Think of all these companies that have bought their stock at high prices, and now the stocks have lost 10% of their value–huge losses. So when they pushed up the stock, stocks were pushed up for a moment for the year that they were spending all of this money just buying stock instead of

actually investing in tangible, productive means of production. This money that they put into the stock is not the same thing as an investment in factories or equipment or research and development, because if Apple would have put this money in research and development and factories, those factories and research would still be there. But the stock that Apple bought at high prices has all been erased because stocks go down as well as go up, and all that money has just poof! gone absolutely nowhere. So the whole system that you’re describing only makes very short-run gains, not long-term. That’s really the problem with the financial sector. Financial managers are short-term managers. They’re not long-term managers. They’re paid by how much they increase stock prices in a given year. They’re using their earnings to buy back the stocks. And many companies, during the run up in recent years, have actually borrowed from banks to buy their own stock. They said, wait a minute, our stocks are paying 3%, we can borrow at less than 1% and buy our stock and make money on it. So now that the stock prices have fallen, the debts still remain in place. And now these companies that have done exactly what you’ve described, and bought back their stock instead of building, are stuck with the debts for money that’s gone poof.

Ralph Nader: What’s your take on gambling? We now bet on the future instead of build the future. It’s involving low-income people. It’s a regressive tax. You don’t have to go to Las Vegas or Atlantic City, you can do it right out of your iPhone. Sports gambling is moving big now to corrupt the sports industry even more. What’s the analytic take on the massive expansion of gambling, which was usually stalled by organized religion until they started organized bingo games in church basements? It is now a major factor in capitalist economy.

Michael Hudson: Well, the important thing about gambling is the casino always wins, and the second important thing is that there’s always a loser for every winner. And if you’re gambling on the stock market or on derivatives, the insiders–especially the crooks–always end up the winners. And the honest people who think they understand what’s happening, because their worldview doesn’t acknowledge how cynical the economy really is, end up the losers. Take the big gamble on junk mortgages and Goldman Sachs by Mr. Paulson in 2008; he gambled that the junk mortgages weren’t going to be paid, and so this was what you call the derivatives market. The derivatives market is, I think, quadrillion dollars. Right now there’s so many…it’s a huge superstructure of gambles over which way are interest rates going to go, which way are stock prices going to go. Well, most of the counterparties on the other side of Goldman Sachs were German savings banks, local banks that really idealized what was happening in America. They were cheated.

Most gambling is a process of cheating by the casinos or by the big players of the casinos who know what they’re doing against people who don’t know what they’re doing. So it’s not really like gambling on a sports game unless you’re fixing the sports game, like the Black Sox or gambling on fixing a football game for points, or a basketball game. So if you try to make money by gambling, first of all, that doesn’t really produce any goods and services. Secondly, it’s always meant to be a tax on the poor people. And already in the 17th and 18th century, governments began to issue… it was the governments did the lotteries as a means of raising money from the lower classes instead of taxing the wealthy people who either were on the winning side of insiders or stayed away from gambling altogether. You think of the WC Fields movie, when somebody is playing poker and somebody said, “Is this game honest?” And I think Fields said, “Not the way we play it, no. “Well, that’s the gambling. So basically, it’s a cost on the lower

classes. And in Kansas City, where I was lecturing at UMKC, as you pointed out, one of the students there did a study of who is it that’s going bankrupt in the housing market? And it turns out that almost all the bankruptcies in the Kansas City housing market were people who had gone to the local gambling boat that was right in the river there. And they were so desperate, they said, I know the odds are against me. I know I probably won’t win, but there is no way that I can break even now. I’m not earning enough money to pay the mortgage. The only way that I can possibly pay is a one in a million chance of winning something. And if there is a God and God loves me, He’s going to help me up pay the mortgage.

Ralph Nader: A very important and unrecognized point. Then there’s the other gambling called Wall Street. Back in the 1930s, John Maynard Keynes warned presciently that more and more Wall Street activity is going to speculation rather than productive investment. You can imagine what it’s like now. And if you’re an individual and you win something in the casino, you got to pay taxes on it. Wall Street doesn’t have a tax on Wall Street transactions. What’s your view on that? There’s been an effort by groups to raise $300 billion with a B with a two-tenths of 1% tax on stocks, bonds and derivatives. And the Democrats and the Republicans opposed it. It was proposed in the New York State legislature and it was proposed in Congress; it never went anywhere. What’s your view on taxing stock transactions?

Michael Hudson: They should be taxed at the highest rate, of course, not the lowest rate. But this is exactly what you call by the eyes glaze over word, “carried interest”, meaning gambling profits or arbitrage; we’re dealing with eyes glaze over words again. This was all in Biden’s originally proposed program that was just planned. But the Democrats are always careful to have at least four or five Republicans running on the Democratic ticket and they know that they can depend on Senator Sinema and Senator Manchin to act as good Republicans and make sure that the Democrats cannot really tax this gambling money, but at least they can get public relations credit for pretending to try.

Ralph Nader: Has your analysis extended to the legal handcuffs called the fine-print contracts? If you look at a lot of the abuses of power, they’re all rooted in fine-print contracts that people do not consent to. They sign on a dotted line or they click on; even teenagers and tweens are required to do that on the internet. And I’ve seen very little progressive economists pay attention to contract peonage, contract servitude, which is worse than it’s ever been in American legal history. Underneath all these rackets are the contracts that say, oh, you agreed to this, you consented to this. And it has destroyed the pillar called freedom of contract in our country. What’s your view of that? And why haven’t there been more economists concentrating on that?

Michael Hudson: Well, I’m so glad you brought that up. That really is important. Probably the worst abusers that I can think of are the credit card companies and the financial companies that say that if they cheat you and you protest against this, you’re not allowed to sue them in court. You have to go to arbitration. Well, who are the arbitrators? They are people who are elected whose electoral campaigns or appointment is financed by the financial sector itself or the real estate sector itself. And they know that if a real estate company or a credit card company or a health insurance company is cheating somebody, that if they rule on the side of the victim, they’re not going to be reassigned to this very lucrative position they have. So the arbitrator is in a conflict of interest, always siding with the abuser, not with the victim. This is really very important, but people think, well, how do they think about this problem that you described? Then

once you describe it, they know what it is, and what category does that fall into? Somehow they don’t have a category to put things in, and we’re back into the language problem and the semantic problem. But you’re right, this is an absolutely important point and you’re probably the best person of all in a position to popularize it and to try to do something about it. But it is such a stranglehold and such a lucrative stranglehold.

Ralph Nader: It’s such an embedded lever of commercial power.

Michael Hudson: It legitimizes fraud.

Ralph Nader: Consumers and workers that the lawmakers don’t want to touch it. We tried to do this in the legislature in Illinois, and nobody wants to touch it, in part because people have grown up accepting it. They just take it as a natural order of things. When someone tells me they bounced the check and we’re charged $35 for something that costs a few pennies to the bank, I ask if the person agreed to that. And the response is invariably is, They said I did. It’s almost a kind of peonage, a kind of feudalism that has been sanctioned by the law schools as well and the law professors. The law professors never defended their own law students who are embedded in these contracts with up to 9% interest–the student loan contracts. I tried to get the law professors mobilized and got a few, but most of them just went along as if was the natural order of things. But there can never be a free-market economy without contractual freedom. Never mind all the other corrosions of free markets that I mentioned earlier. Without freedom of contract, without the ability to have a free meeting of the minds, no fine-print chains, there’s no such thing as a free market. If you ever get into a debate with a conservative on the free market, you hit the ball out of the ballpark and it’s over if they do not denounce contractual peonage, which now affects labor, consumers, tenants, children, and of course, it spills over into government procurement as well.

I want to turn this over to Steve and David, I’m sure you’re eager to ask Michael Hudson some questions here. I’ll leave you with this thought, Michael. You need to lead a plain language movement among progressive economists. Go ahead, Steve.

Michael Hudson: And you can say I’m not the person to lead it. Ralph Nader: Find somebody who is. Steve?

Steve Skrovan: Yeah, Professor Hudson, do we need the Federal Reserve? Is there anything good about it?

Michael Hudson: We don’t need it at all. Everything the Federal Reserve did used to be done by the Treasury. An article I published is on my website published in India summarizing David Kinley’s book on the US Treasury. There’s no Federal Reserve in China. The Treasury does everything. The Federal Reserve’s job is to prevent the Treasury from spending on social purposes and to keep monetary control and centralized planning in Wall Street and the financial centers to benefit the financial sector and its major clients, not the economy. So I don’t think there should be central banks at all. Every country should have money creation and credit as a public utility and therefore under the Treasury, not the Central Bank. They are the opponents of democracy.

Ralph Nader: I take you’re for the public banking movement and postal banking? Michael Hudson: Yes. Yes, Ellen Brown has been done very good work on that. Ralph Nader: Ellen Brown was on this program earlier. Go ahead, David.

David Feldman: We’re trying to figure out whether or not this is a recession. And at the top of the show you were saying that interest that banks charge factors into our GDP. These yardsticks seem arbitrary. How should we measure growth and how should we measure inflation?

Michael Hudson: There’s nothing arbitrary about them. There’s an enormous lobbying effort that has been going on for all 50 years that I’ve been working as an economist to shape GDP, to include more and more financial fraud and monopoly rent, and to say that there’s no such thing as unearned income, that everybody earns whatever they make. And if you’re a billionaire, it’s that you provided a productive service that has increased GDP. Well, to do that, they’ve had to distort the idea of GDP so it really means gross national cost. It doesn’t distinguish between productive and unproductive consumption or between wealth and overhead. So more and more overhead, and all of the money that people pay for debt, is counted as an increase in GDP.

The COVID crisis has been wonderful for GDP because it’s caused more and more payment for medical insurance and getting sick. If you get sick and go to the doctor, you’re adding to GDP. If there is a depression on and your apartment is burgled and robbed, you’re fixing things up, that’s in addition to GDP.

Ralph Nader: If you pollute the air, you contribute to the GDP.
Michael Hudson: The cleanup costs, of course, are contribute. There’s no distinction between

production and overhead.

Ralph Nader: Let me ask you this question. It occurred to me reading your materials, Michael Hudson. What is your message or messages to your economists who are your peers? The professors who are teaching economics and the business economists? You might have separate messages for both.

Michael Hudson: No, I have no message for economists. I don’t talk to economists. I talk to thinking people. I talk to foreign government people. I talked to politicians, I talk to many people, but I’ve stopped talking to economists.

Ralph Nader: What if you were invited to an auditorium full of economists and you had to address them, what would you say?

Michael Hudson: I’d say there’s a COVID epidemic, I’m afraid I really can’t come. What’s the point of talking to them? I stopped teaching economics basically because there was no way that I could fit what I’m talking about—the financial sector, and debt, and economic history—into the curriculum. And when all the things that you’ve been talking about, quite correctly about the contracts and the other, there’s nowhere to fit this into the curriculum that is part of the economic curriculum. Now that they’ve excluded economic history, they don’t talk about the history of economic thought anymore, so you don’t even have the concept of economic rent and

unproductive labor and unproductive credit. So basically, I talk to governments and foreign journalists quite a bit.

Ralph Nader: Let’s ask you the question in another way. What do you think of the way students in the United States are taught economics in undergraduate and business schools?

Michael Hudson: I don’t think it helps them at all. I didn’t learn really anything in my getting a PhD in economics because I was working in Wall Street. And I got, I think a C+ in money and banking because the professor didn’t understand how money and banking worked. And when I tried to explain it to him, he said, but that’s not what’s in the textbook. What do you mean money is debt! And my basic theme is you can’t… that America is moving into a depression because of the debt–that people owe so much debt–that is growing faster than the economy. And if you don’t write down the debt, people are going to be squeezed more and more and more. Well, there’s nowhere to fit that in because economists talk about the real economy. They say debt doesn’t matter because we owe it to ourselves. But who’s the we, and who are ourselves?

The we, who owe the debt are the 90%. The ourselves are the 10%. Distribution of wealth and income doesn’t really come into the economic models that are taught either at the undergraduate or even in the graduate economics courses, except it was at the University of Missouri at Kansas City where we were teaching modern monetary theory. But everybody sort of dispersed stuff from there.

Ralph Nader: What about the University of Massachusetts Economics Department, Amherst?

Michael Hudson: Well, for a long time they did have a course in Marxist economics. So yes, they were teaching Marxist economics there. But most people who study Marx don’t really get much beyond Volume 1. And their idea of capitalism is corporations hiring labor to produce goods that you sell at a profit. But Volumes 2 and 3 of Capital (Das Kapital) that Marx wrote really was saying, well, one thing that capitalism did is revolutionary. It’s going to get rid of the financial sector and it’s going to get rid of the landlord sector because that’s overhead. That’s the cost that we don’t need. And Marx is very optimistic. He thought that finance was going to be industrialized. And instead, you have industry being financialized. Things have gone exactly the opposite, but in a way that Marx described in Volume. 3 of Capital, where he said “The financial sector and debt grows by purely mathematical laws, exponentially much faster than the economy can grow. Thank heavens that the industrial capitalists are going to end all of this.” And that seemed to be happening in Germany of his day. But World War I changed the whole trajectory, and I don’t think there’s any economics department in the country that really focuses on this. In the courses that I teach in China at the global university and others, we talk about this, but not in the American universities.

Ralph Nader: In conclusion, Michael Hudson, what are the top three of your books that you’d like your listeners to read of your many books and publications?

Michael Hudson: Well, the classic was Super-Imperialism:The Economic Strategy of American Empire, which I’ve just issued in a third edition, which explains American foreign policy and why other countries are de-dollarizing. The sequel to that is the most recent book that just came out a few months ago, The Destiny of Civilization, where it’s a review—it’s really a

history of economic thought showing how if civilization has a choice, and it’s really between socialism and barbarism; it’s really between letting the financial sector do essentially what happened in Rome and lead to a new dark ages. Or you’re going to prevent the financial oligarchy from developing by taking money as a public utility in credit into the public domain. So that book, and then …and forgive them their debts is how for 3,000 years, society was able to have resilience by wiping out the consumer debts when they grew. Every Bronze Age ruler, when they took the throne, in Mesopotamia and Egypt, would cancel the debts. And that was the original core of Christianity. Jesus’s first sermon, He had come back to defend the Jubilee year against the wealthy, the Pharisees and the rabbinical group that said no, no, we can’t cancel the debts, that would hurt the creditors. So essentially, it’s how religion originally was all in favor of writing down debts, not of sanctifying debts, which occurred once Christianity was sort of founded in the 4th century when it became the Roman state religion and supported the Roman creditor and landowning class.

Ralph Nader: The value of historical context, most people don’t know we had usury laws that were abolished by corporate lobbyists in the 1970s, state after state after state. We’re out of time, unfortunately. How would people reach you if they wanted to, Michael?

Michael Hudson: Well, I have a website, michael-hudson.com, and I have all of my articles and interviews, including this one, that will be on the website and they can reach right through on the website, and I have a Patreon group.

Ralph Nader: Can you repeat that again slowly?
Michael Hudson: The website is michael-hudson.com. And on that site, I also have a Patreon

group, and all of my articles and interviews are on that site.
Ralph Nader: Thank you very much again, Michael.
Michael Hudson: Thank you so much for inviting me. I really appreciate it. Ralph Nader: You’re welcome.

Steve Skrovan: We’ve been speaking with Michael Hudson. We have a link to his work at ralphnaderradiohour.com. Up next, Bruce Fein on the state of our precarious democracy. But first, let’s check in with our corporate crime reporter, Russell Mokhiber.

Russell Mokhiber: From the National Press Building in Washington, D.C., this is your Corporate Crime Reporter “Morning Minute” for Friday, September 16, 2022. I’m Russell Mokhiber.

It has been fifteen years since the United Kingdom passed its Corporate Manslaughter and Corporate Homicide Act. In 2007, the year the law was passed, 247 workers died on the job in the UK – a worker death rate of 0.84 per 100,000. This past year, 123 workers died – a rate of 0.38 per 100,000 workers. Over those fifteen years since the law was passed, the worker death rate has been cut in half. Is the law deterring corporate wrongdoing in the workplace?

“There has been a lot of publicity about corporate manslaughter because of the introduction of the act and the prosecutions,” said Northumbria Law Professor Victoria Roper. In general, companies are fearful of the stigma that comes with the possibility of a corporate manslaughter prosecution in a way they might not necessarily be of a health and safety prosecution alone.

For the Corporate Crime Reporter, I’m Russell Mokhiber.

Steve Skrovan: Thank you, Russell. Welcome back to the Ralph Nader Radio Hour. I’m Steve Skrovan, along with David Feldman and Ralph. And also probably our most frequent guest, Bruce Fein, who has got a couple of news items he wants to elaborate on.

Ralph Nader: Bruce Fein, you’ve focused on something very contemporary that was pretty encouraging. A state judge in New Mexico issued a decision. Tell us about it.

Bruce Fein: Yes, Ralph. It concerned Section 3 of the 14th Amendment, which disqualifies from public office any official who, having sworn to uphold and defend the Constitution, engages or provides material assistance to insurrection against it. And the judge here found that a member of a county board in New Mexico had provided material assistance, participated without actually using violence himself, in the mob insurrection on January 6th, and was thus forced to leave his county commissioner office. And what was important about the case was the reasoning. First, it found that Section 3 needed no implementing legislation. It worked on its own. That it’s a civil disqualification, not a crime. So you didn’t need proof beyond a reasonable doubt, didn’t need a jury trial. And that insurrection clearly included, as understood by the framers of the amendment and by those who are contemporaneous in passing the first insurrection laws, providing through a mob or mass following force or efforts to frustrate enforcement of the laws of the United States.

Ralph Nader: Was the county commissioner convicted of anything what he did in January 6th on Capitol Hill?

Bruce Fein: Yes, but not of insurrection. He was convicted of occupying restricted areas without permission.

Ralph Nader: How does this apply to Donald Trump?

Bruce Fein: Well, how it applies to Donald Trump is first of all, it demonstrates that when he, if he does try to run for office again for the presidency in 2024, that he will confront a hurdle of having provided material assistance to the insurrection of January 6th irrespective of whether he has committed a crime or not; it’s a civil disability here. The material assistance standard seems clearly to have been far surpassed by Mr. Trump—the exhortations and the speech that antedated the storming, his nonfeasance and seeing the violence unfold and doing nothing to execute his duty to call out law enforcement to suppress the rebellion, his refusal to condemn, to urge even to this very day a complete renunciation of force and violence to prevent it…

Ralph Nader: Okay, does this require a court verdict before Section 3 of the 14th Amendment can disqualify Trump from running for elective office?

Bruce Fein: It does not require a court verdict. It could have, for example, in many states, Ralph, as you would know having run for president, there could be electoral boards who could make the decision. Obviously there has to be a hearing where a defendant has an opportunity to defend. But the key element is that it’s a civil proceeding. Any civil process that satisfies due process is good enough to trigger the disqualification of Section 3 of the 14th Amendment. And I believe that measured against the facts that justified an insurrection finding in this case, Mr. Trump is clearly vulnerable to being excluded from every state ballot for presidency in 2024.

Ralph Nader: Interesting development out of New Mexico State Court judge, a very reasoned, you say 28-page…

Bruce Fein: No, it was 48 pages; 24 were legal analysis; 24 were the facts. But this is very meticulous. It’s not a slipshod, two pages…we believe that he did something bad and therefore he’s going to be excluded from the county commission.

Ralph Nader: Let’s go to the second item. Second item was a remarkable public letter by former secretaries of defense and other military people that you could take heart from. What did they say?

Bruce Fein: Okay, yeah, it’s former chiefs of staff of the armed services and secretary of defense. In the critical portion of their letter, it’s a public letter that you can find on the internet, Paragraph 8 says that “members of the military have a duty to respect every civilian order they receive. They are obligated to disobey…. this is paragraph eight of the letter…any illegal order.” It’s a little bit contradictory in the sense that virtually all of these signatories engaged in orders to fight or support wars that were clearly illegal, in violation of the Constitution requirement that only Congress can authorize the offensive use of the military. Unfortunately, in this day and age, given an imperial power the y declare war clause has kind of lost, its complete moorings, and is turned on its head. Whereas the framers insisted only Congress can be trusted with the war of power, now, by cultural consent, it’s thought that the president can act in cases of war, including nuclear weapons, on his own, whether it’s to defend Taiwan, whether it’s to use nuclear weapons against Iran or otherwise.

Ralph Nader: But you were heartened by the letter. Why?

Bruce Fein: Because at least it gives us a vehicle to quote the members, the former high-level officials, against themselves; the principle that the military should disobey illegal orders is a vital one that needs to be reaffirmed over and over again. All that’s now needed is to educate them on what’s illegal and not illegal. But the principle that they should disobey illegal orders now has been firmly established.

Ralph Nader: And who are some of the signers, very briefly?
Bruce Fein: Well, we have Ash Carter, William Cohen, Mark Esper, Robert Gates, Chuck

Hagel, Leon Panetta.
Ralph Nader: They were all Secretaries of Defense, right?

Bruce Fein: All Secretaries of Defense, absolutely, at the very top of the Department of Defense. So that’s an impressive list.

Ralph Nader: Who else?

Bruce Fein: And the Joint Chiefs of Staff: Martin Dempsey, Joe Dunford, Michael Mullen, Richard Myers, Peter Pace. So if you’re looking for an all-star roster of people in the national security complex, this is it.

Ralph Nader: Well, look at it, listeners, it’s probably online and it’s something that can be some sense of a bulwark against the Trumpsters’ attempt to take over the government in a fascistic manner. Thank you very much, Bruce Fein, for those two news items.

Bruce Fein: Thank you.

Steve Skrovan: I want to thank our guests again, Michael Hudson and Bruce Fein. For those of you listening on the radio, that’s our show. For you podcast listeners, stay tuned for some bonus material we call “The Wrap Up”. A transcript of this program will appear on the Ralph Nader Radio Hour website soon after the episode is posted.

David Feldman: Subscribe to us on our Ralph Nader Radio Hour YouTube channel. And for Ralph’s weekly column, it’s free, go to nader.org. For more from Russell Mokhiber, go to corporatecrimereporter.com.

Steve Skrovan: And the American Museum of Tort Law has gone virtual. Go to tortmuseum.org to explore the exhibits, take a virtual tour, and learn about iconic tort cases from history. And be sure to check out their online gift shop where you’ll find books, posters, and flaming pinto magnets and mugs for all the tort fans in your life. That’s at store.tortmuseum.org.

David Feldman: To order your copy of the Capitol Hill Citizen, “Democracy Dies in Broad Daylight,” go to capitolhillcitizen.com. The producers of the Ralph Nader Radio Hour are Jimmy Lee Wirt and Matthew Marran. Our executive producer is Alan Minsky.

Steve Skrovan: Our theme music “Stand Up, Rise Up” was written and performed by Kemp Harris. Our proofreader is Elisabeth Solomon. Our associate producer is Hannah Feldman. Our social media manager is Steven Wendt.

David Feldman: Join us next week on the Ralph Nader Radio Hour when our guest will be David Enrich to discuss his new book, Servants of the Damned: Giant Law Firms, Donald Trump, and the Corruption of Justice. Thank you Ralph.

Ralph Nader: Help us get more listeners and more stations in your local area, listeners.


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  1. JohnA

    “It has been fifteen years since the United Kingdom passed its Corporate Manslaughter and Corporate Homicide Act. In 2007, the year the law was passed, 247 workers died on the job in the UK – a worker death rate of 0.84 per 100,000. This past year, 123 workers died – a rate of 0.38 per 100,000 workers. Over those fifteen years since the law was passed, the worker death rate has been cut in half. Is the law deterring corporate wrongdoing in the workplace?”

    This is what the current Conservative Government call ‘red tape’ that they are determined to eliminate. To them, it is an unacceptable cost of ‘doing business’ and, post-Brexit, they are free to discard. Expect the number of workplace related deaths and injuries to go back up again.
    Having said that, the legislation is pretty weak tea. Since the law came into force on 6 April 2008 there have been fewer than 30 convictions, and between 2018 and 2021 those convictions only resulted from guilty pleas.

    1. JBird4049

      Merely reporting deaths is red tape? If it is, just what would not be so? Is this like those chicken processing plants that were hesitant in reporting cases of COVID?

      What bold prevaricators.

      1. JohnA

        The red tape as it were, is any additional costs to make the workplace safer and healthier for employees. Ensuring the availability and the wearing of PPE and similar.

        1. dandyandy

          And then enterpreneurial businessmen cut cost by cutting on safety. A guy from my street did not issue PPE to his employee when the employee was sent to dabble with deadly chemicals. The employee duly died of asphyxiation. My neighbour was protected from personal liability because he traded through a limited company. Neighbour first said it was an accident but the Health and Safety Executive thought differently, sued and obtained criminal negligence conviction. The neighbour shut the company down to avoid pay the £200k fine and costs.
          What’s not to like; kill a man and walk away free.

  2. The Rev Kev

    I think that the worse possible news that Michael Hudson gave us here is that he had to give up talking to economists as they had confined themselves into a narrow band of doctrine with no historical memory to underpin their theories. And as the students were being forced into the same mental chastity-belt, that it is unlikely that future economists may be worth much either. This article mentions that the good doctor is President of The Institute for the Study of Long-Term Economic Trends which made me think for a minute. Considering what economist are like mostly these days, what would be the title of his equivalent opponent? Perhaps the President of The Institute for the Study of This Financial Quarter?

    1. Michael Hudson

      In 1967 when I wrote my PhD dissertation on E. Peshine Smith (the great 19th-century American economist), I was struck by his letter to Henry Carey as to why he turned down an offer of the chair of political economy at Harvard. He said that he would prefer the pulpit of journalism to that of the classroom.
      I could hardly imagine why. (He wrote great editorials for the New York Tribune, as did Marx.) But now I see the reason. Most of my UMKC colleagues have scattered away to write — Randy Wray, etc. Some have gone to Levy at Bard, or just moved out West.
      There are many professional people I talk to, esp. government officials. But not academic economists except for friends like Steve Keen (who also got disgusted with teaching, at least in England), and of course my Chinese colleagues.

      1. aletheia33

        reminiscent of the great seminal sociologist w.e.b. du bois, who left the academy, which could not perceive or give due attention or room to what his brilliant mind was doing, and turned to journalism, where he had more freedom to convey his ideas, until he finally gave up any hope of changing the hatred of the “negro” in the US and turned to activity in movements outside his native country. leading to his being denied a US passport (in the 1950s as i recall) because USSR and state dept. felt he was too dangerous to be let out. or just wanted to teach him a lesson.

        different topic, i know. different discipline, different “issues”. but not unrelated or unconnected.
        thank you, michael hudson.

      2. mudshoes2

        Would you believe I went to Wikipedia to look up ‘Erasmus Peshine Smith’ from this comment & the entry doesn’t exist, as if the man had never existed at all. Google has some avenues I have not pursued but Wikipedia has essentially decided this man never existed. Please correct me if I’m mistaken.

        Ty to Dr Hudson. I discovered NC as a footnote on a certain page reading his amazing book, ‘Killing the Host’.

        Agree with Nader that it is incredibly difficult to boil down & describe higher concepts in a language that a 5 year old can understand & comprehend.

        1. Sue Wainess

          NYC Public Library has the International Herald Tribune archive which is where you will most likely find him. The archive is primarily sold to academic libraries (Duke, USC, Indiana has it) which are other options if you have access. NYC Public has literally everything; would love to be able to get a library card.

        2. Jonathan Holland Becnel

          Tbh, I think Doc Hudson’s language couldn’t be more clear regarding Economics as a whole. What Nader calls Sequential I call downright plain and simple breadcrumbs to follow out of the woods. To reduce Hudsons brilliance to a few Frank Luntz style Neologisms, ie Death Panels, is gonna be tough. My gut instinct is to go the Debt Jubilee route. Everyone deserves forgiveness. Criminal justice, social, and especially financial! And fuck it, I say run on a free market platform. The real catch being a “free market” without all the legalese and bullshit fine print. Hold businesses accountable when they break the law. If you really wanted to get hard-core, then run on Law and Order where white collar criminals are put out of business for life and blue collar criminals get help! What we need more than 5 word Naderite slogans is a vision of the future where we all live in Peace and Harmony (I put that word here intentionally invoking the Chinese principle). The whole world. Hold businesses at the border. People can visit and move freely wherever they wanna go. We need the opposite of Deaths of Despair. We need films, tv, media all pumping out feel good stories of people living in our vision. Because people can live however they want! The whole concept of Politics is shoved into a small envelope when actually the possibilities are endless! Like the final scene in Raiders of the Lost Ark when the camera pulls out and u see just how big that government storage warehouse really is! We need all our humanities comrades to join the platform to come up with all the creative solutions to RePublicize Privatization. Where Privatization has been, these essential workers will assess the damage and not only make whole but also stronger and less impervious to times corrosion and corruption.

          Doc, you’re ideas are the light at the end of the tunnel. The Universal truths that humans have forgotten. The hope in Pandoras box. Promethean Fire. Thank you for having helped me to understand the Chains around my neck and for giving us the knowledge to break them and walk out of the cave!

          I hope the Cinese listen to you and enact your recommendations for all our sakes!


    2. podcastkid

      If you compare it to what colleges used to offer in, say, chemistry what’s available now to would-be students who don’t want the debt…or had to stop because of the debt…when they go looking for economic wisdom on the net I can imagine (to them) must be like anarchy! What everyone should have is a knowledge of economists that quoted one another, but who knew what they were talking about at the beginning…followed on through the years. Lucky for me I bumped into the Inst for Policy Studies. One guy referenced someone younger and he someone else, and there was sort of a succession.

      I can see here at Naked Capitalism, though, I think, that the net has accomplished something. So many right on reflections. It’s a little lonely though. You check on Thomas Piketty once in a while. You check on Thomas Palley once in a while. You hear Hazel Henderson on the Nader Radio Hr (and then in a few months sadly she’s left us). Mark Weisbrot, now there’s a good example. Loved hearing him, cause I knew he knew what was what. The thing I regretted about his rap, though, was that when he got into currency exchanges (I mean just stating the axiom: lower value/advantage in trade), it drew a big blank for me. I could never understand it. There is Laurie Wallach too (pretty lucid, though she doesn’t delve into the mRNA subject). I never gave up on any of these people, and I wish others also knew whom to listen to. Out of this whole gang perhaps something will emerge yet we can all understand and someday get behind. As bad as NewsGuard is making the net, perhaps there’s a groundswell already that cannot be stopped. Gotta give the net that. Maybe we’re moving into a new chapter where there won’t be one giant like Keynes [not that he was wrong at all], but more of a consortium. Sort of more democratic this time around. It’s the university system itself that promotes Nobel prizes for select scholars. Trouble is that few in number will become too puffed up to keep pulling in new information from enough other sources (Stiglitz keeps moving though, the exception IMO).

      I agree with Jonathan Holland Becnel on a debt jubilee, but still, everything that has come before has yet to be broken down in clear language. You have to know that to propose any idea of what people will be doing for a job of work over here when BRICS is king everywhere else (in between what they’re doing, tons of worker councils like the kind Michael Albert has written about?). As one guy said under the Radio Hr’s stream of the interview…the system [globalization] we have made will not just step aside because people have theories (how will we function if trade doesn’t move us at least a smigen away from the red and into the black?).

      More grist from 9/15 (it might not be as direct as Hudson) https://cepr.net/the-us-response-to-the-worlds-worst-humanitarian-crisis-seize-and-privatize/

  3. GramSci

    I was struck by how much Nadir was upset by being upstaged by Hudson. But it’s good that Nadir finally interviewed him. There are some people who still respect Nadir for having been a prophet on the small stage of corrupt Corvairs and exploding Pintos. A few of them will understand Prof. Hudson’s plain language, even if Nadir won’t.

    (Loved Hudson’s refusal to speak to economists!)

    1. britzklieg

      Nader, not nadir. If it was intentional it was hyperbole although I agree that Hudson clearly upstaged him.

    2. Oh

      Nader hit home with telling Dr. Hudson to simplify the language. I like and admire Dr. Hudson but he needs to do that.

      BTW Gramsci, isn’t called Ralph Nader Nadir a cheap shot?

        1. podcastkid

          Clarity, clarity, clarity. Claro.

          Which he? And do you mean the money they could have invested went poof when they bought back their own stock, or are you saying Hudson simplifies?

      1. podcastkid

        I agree. Geniuses in today’s world, try as they may, cannot always (when they want to) hear their own rap in an essential worker’s head [some billionaires work at it, though, like Browder…who I “tend” to doubt]. This paragraph below needs its own citation at Wikipedia. I didn’t get it at first. Hudson has honed a description of what happens that works for those in the field; actually it’s condensed. If someone came up with a verson for the man/woman in the street, then of course the hearers would have to have a motive to listen. Another problem. Don’t ask me how, but somehow the absurd elements in this dynamic need to be stretched out a little.

        So if this doesn’t appear in the money supply itself; it’s all done technically in a swap agreement where the bank will make, let’s say, a takeover loan. And how does it get the money without reserve? Well, it’ll take its packaged mortgages, or its credit card loans or whatever, or its junk mortgage loans, and deposit them with the Federal Reserve, and it’ll use the Federal Reserve deposit and it will be as if a regular depositor walked into the bank and lent them enough money to make the loan. So it’s all done with a technicality that the Federal Reserve is very careful not to explain to people how the system works and it’s not really taught in the monetary textbooks. You really have to work in the field to follow it day by day.

        I’d call that something like “double money creation.” A lot of our misunderstandings [we essential people] are on very basic concepts. For instance, to me the money supply should be equivalent to all assets in the overall economy + print some for loans to create things we can rationally assume will inject value into the overall economy. I’m struggling with
        money = debt.

        If you’re reading this Michael Hudson, thank you for teaching so many of us out here a ton! How bout “Reaganism” instead of the n-word? (there are Keynesians after all)

      2. podcastkid

        I could talk a lot more about this, because I listen to a fair number of podcasts. But for now I’ll cut it short.

        Interviewees who cannot put themselves in listeners’ heads (moccasins) are rife in Covid podcasts. To me, they’re the worst. It’s ironic, because, for instance, the working folks in those NY nursing homes’ll be the last to get what these dudes are saying (don’t they need to be informed, or what?). I’ll grant that those dealing with challenges at work beyond lousy bosses do not always, during 10 waking “off” hrs, keep the same thinking rhythm they have going at work. But it’s hard sometimes to slow it down [thinking & listening…same thing]. What you need to do is keep the rhythm going, but stretch out the points…use simple exact language when making the points. If you don’t keep the rhythm going you bore (Hudson does not bore), but, even if you do keep it going and your analogies are too arcane/abstract, you’ll also lose listeners. Some of B. Weinstein’s analogies, to me, are too arcane.

        When Yves talked to Harry Shearer sometimes I got lost. But the rhythm was too intriguing to give up. As Hudson has reached so many people already, I think what Ralph was basically talking about was just a bit finer tuning here and there. Why is it worth it for him to “improve”? Simply due to the fact he’s got such a large audience! They have to receive a version they can comfortably communicate to others.

  4. meadows

    Good discussion, Nader a bit punchy, yes? Professors do tend to drag out all the facts in a long, sustained manner to make their case…but Nader’s pointed questions Hudson took in good spirit. I do agree that neoliberalism is a term which has an eye-glazing effect on many peeps. But “financialized corporate monopolized economy” doesn’t really cut it either.

    I’m often struck by how many laws were in place, like stock buybacks being made illegal, that are poof! gone now, and usury laws, many others.

    So we don’t need either The Fed or economists… seems reasonable to me.

    1. Carolinian

      I used do listen to Nader’s podcast–actually run by some folks in Los Angeles who bring him in for the interviews. But the above illustrates why I mostly lost interest. Great guy that he is, Nader is stuck in a different era where government reform and greater regulation were the main objects whereas we are now in an era of crony capitalism where the entire system is structured–as Hudson says–to support the one percent and then the ten percent. So Nader is fully onboard with TDS and the notion that booting or even jailing Trump and the Repubs would make things better. Perhaps all that Nader hate from 2000 got to him since he used to say, correctly, not a dime’s worth of difference.

      In other words Nader is a reformer and we may be well past that with it being time for the pitchforks indeed. Meanwhile great material from Hudson as always.

      1. Jonathan Holland Becnel

        Yup, agreed.

        I liked Naders questioning. I didn’t watch the interview so I barely picked up on any hostility? on Naders part. I think Nader is real good at digging deep and aligning what voters hear and what Hudson is saying. We need to hold up the good Doc to intense questioning to figure out how the hell to get out of this mess and avoid a Civil War AND World War. The American Elites especially will try and find that one wedge like Slavery/States Rights to get one half of the Americans to kill the other. This is deadly serious. Let’s get the foundation rock solid before we light the fires and kick the tires on America 2077!

  5. Bruno

    Why this respect for Mr. Hudson? His support of “industrial capital”–most prominently practised and advocated by the Chinese Stalinist regime–(in supposed distinction from the “financial capital” with which Stalinist China operates its urban economy through speculative conversion of land to giant construction projects “mortgaged” while barely started or partially-built to a defrauded public)–is a direct joining of the planetary ecocide campaign. When he proclaims “it’s corporate financial that is shrinking the economy. At least the idea of industrial corporations was when they make a profit, they reinvest it in making even more companies and selling even more, and at least you get an expanding economy” he is advocating industrialized growth and opposing the *degrowth* indispensably needed to have any hope of avoiding the first planetary catastrophe of our own making.

    1. ltr

      “Why this respect for Mr. Hudson? His support of ‘industrial capital’–most prominently practised and advocated by the Chinese Stalinist regime…”

      Michael Hudson is explaining the type of growth that has been necessary to lift tens of millions of Chinese from poverty, while continually increasing efforts to make China ecologically sound. China has been profoundly successful.

    2. aletheia33

      good point to raise about our planetary ecocide. but i’m not sure “degrowth” needs to mean the end of all “industry.” or that “expansion” of any kind of “economy” is inherently planet destroying. “industry” existed for aeons before the “industrial revolution.” i’d be curious to know how MH would respond to this point. the issues are all interconnected. few have the bandwidth to hold it all in mind and think it clearly.

      1. Jonathan Holland Becnel

        Exactly right. Holding it all in your head demands sacrifices and suffering. At least mental suffering while you learn how much of a joke your country’s elite really is and how such a simple thing as greed explains our current situation.

        That being said, finally understanding the true nature of the state of the world and how it works is an awesome power in and of itself. It’s redeeming in a way. I think that’s why we show so much respect for Hudson. He truly cares for mankind. We should pass it on!

  6. Oh

    Things I came away with after reading this long piece:

    We don’t need the federal reserve
    We don’t need economists
    We don’t need to measure GDP the way we do
    We need to rein in all the big corporations
    We need simpler language to help people understand the things that these banksters do

    Of course to accomplish any of the above, we MUST get money out of politics.

  7. Rolf

    I do like and admire Hudson’s long-legged view, and try to read everything he writes, particularly on the history of economic thought, which he argues are simply not taught at university at all. But I agree with Carolinian above, we are closer to the pitchforks stage. I was never a fan of Nader, not because I disagreed with him on his ideas, but I felt he was the wrong person to lead a reform movement, and too easily dismissed as a troublemaker mired in times (and opportunities) gone by. However, his attempt to get Michael Hudson to adopt a language accessible to “anybody around the country who works with their hands or their computers” was good, but Hudson’s response “I’m not sure why you call this Republican. It’s bipartisan. It’s the Democrats. What you’ve described as the Republican program is everything President Biden believes in …” is also bang on.

    Myself I think we have to abandon the GDP as a useful metric of anything, really, except perhaps the rate at which we approach collapse or even extinction. There was an interesting paper recently, in a journal called Energy Research & Social Science, by Tom Murphy, an astrophysics guy at UCSD, entitled “Modernity is incompatible with planetary limits: Developing a PLAN for the future”:

    Simply stated, people want (and are encouraged to want) goods and services beyond their base needs, and markets are happy to oblige. A common recipe for countries to achieve high standards of living has been the combination of democracy and capitalism. For the most part, people vote for policies that will improve their circumstances, and corporations make decisions aimed at maximizing profits/growth. Politicians and financiers celebrate strong growth numbers (grumbling only when an over-heated market might signal runaway inflation), while bemoaning weak quarters, and practically panicking at the prospect of a recessionary period. Today the financialized capitalist economic system dominating human activity is predicated on growth and the expectation of a bigger future, witnessed in interest rates, loans, investments, massive public and private debt, and the outsized role of the banking system. Growth is thought to be such an unarguable good that the UN’s 2015 Sustainable Development Goal #8 actually calls for growth rates of 7% in less developed countries [29]. While this rate is intended to address the inequitable distribution of wealth across nations, the goal is still based on a business-as-usual, fossil-fuel-based economy.

    Murphy makes a couple of points (no doubt familiar to NC readers) that I think are key:

    — use of our “inheritance of fossil sunlight” in the form of fossil fuels must fall back to the point from which it arose, and thus our future will not look like the past at all.
    — the resources of our planet are finite, and we are able to live here not in spite of, but because of supporting ecosystems that represent many, many millions of years of evolutionary development. The notion that we can make that “inhospitable brick named Mars” a place to live is pure fantasy. (And the fact that such a goal is actually pursued by some extremely wealthy people, to me is evidence that personal wealth is an indicator only of wealth, nothing more.) Because these resources are finite, economic and material growth simply cannot continue, as it has in the past, in an open-ended fashion. Improvements in efficiency are almost immediately eclipsed by growth in consumption or population.
    — energy use is intrinsic to all human activities, whether viewed through an economic lens or not.

    Murphy sets out these and other points in proposing PLAN (Planetary Limits Academic Network). I would call for this network to be extended well into the public sphere, because it is the common public that must be convinced in common language of these points in order to begin to take matters into their own hands. The entire notion that growth is always good should be abandoned: in capitalist terms, we are rapidly consuming our own capital, a practice no sane industrialist would pursue. Murphy has a shorter but denser and more technical paper in Nature Physics, which is also free to read (and worth your while to do so).

    1. rob

      part of the shame of ecological economics not being more in the zeitgeist these days/years is that 100 years ago , Frederick Soddy was already laying out the distinction of relationships between “what is real” and money. After several decisive books on the issues between what the “natural world” can bear, and how “imagined compound interest” cannot replace what is real////
      The “real world”… marches on to oblivion

  8. Gulag

    Maybe down the road a real debate can take place about the pros and cons of a decentralized vs state centralized banking economy.

    One possibility would be a political/economic vision based on small cooperative/commercial banks creating credit ( see empirical research of Richard A, Werner) rather than the more centralized/bureaucratic vision of only using central bank fiat money (or the direct injection of money via the U.S. Treasury)– after having eliminated the ability of small commercial/cooperative banks to create money via credit origination.

  9. Olde mayte

    Nader makes a good point that someone needs to dumb down Hudsonian thought for the hourly rate class – once you get the gist it totally changes the way you see the world, but it can be a slog to get there!!

  10. rob

    I still don’t get why everyone(even those who can see that our monetary system is enabling the artificial wealth of the billionaire class, which in turn has provided the endless sums of money to pervert the political system of everyone else; everywhere); there is not more of a discussion of monetary reform.
    Just like Dr Hudson has stated, the banks created the federal reserve. It serves them. Its funding is paid by them. It has “them” at the helm; perennially.It oversees an economic model, and a monetary system where the banks decide who gets a loan. where money will be created, and for whom. The unfairness, and wrong headedness are baked in, by design.

    What the monetary reformers have offered up as an option to this “banker’s “,private monetary system for the last 80 years; is still viable.
    The chicago plan of 1939, which was last attempted to be brought before congress by dennis kucinich in 2011/2012 the 112th congress HR 2990.”as the NEED act”…had already cleared all the legal hurdles and went through congressional legal review, and is in the form of a written bill, so all can read for themselves what the options are. There is even an updated version for today.
    The reality remains the same. We will never be able to do anything we are not doing right now, unless we change how we create money, and for whom.
    Other than all the losers on wall street who have had this goose that lays the golden eggs, and a free lunch for the last 100 years, who will of course say this is impossible. it will be deflationary, catastrophic,ignorant, etc…Why don’t “normal” people want to even discuss the possibility, and especially the reality of it being an option… especially when the world is on fire, from the system as it is.
    When whomever comes next, they should learn from present/past mistakes and not allow a monetary system such as we have now, which is our destruction.

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