Michael Hudson on Junk Economics

and Debt Cancellation, Apr 2017 “How a society defines economic terms

and relationships will determine who controls it.” I’ve been spending much of my effort for the last 30 years trying to see how the ancient near east and classical antiquity and medieval Europe all solved their debt crises, basically writing a history of debt crisis showing that every economy has had to cancel the debt. So you could say all my work in economics since the 1960s, more than 50 years, is spent on seeing how society handles its debt crisis. The industrial economy in America is essentially being emptied out in order to pay the stockowners and about 75 percent of stocks are owned by the richest 5 percent of the population. So if you look at who owns the stock, it’s not the working class, it’s not the middle class, it’s the super rich. The super rich are saying, We’re willing to use all the corporate income to run it down. Basically, the 5 percent have decided that industrial capitalism is over and it’s time to take the money and run. And you take the money and run by just paying out all the income, just to yourselves, leaving the corporation an empty shell. That’s how the Chicago Boys introduced free markets into Chile after 1974 when Pinochet took over from Allende. It’s the neoliberal model. It’s what happened in Russia after the neoliberals convinced Russia to go along. It’s what’s happening in Greece when you’re just emptying out the economy to pay the bond holders. It’s economic shrinkage. The trick is to get the middle class and the working class to think the stock market is them when the stock market isn’t themselves at all. It’s the five percent. Greece is the future of where America is going now under the policies of Clinton and Obama and Trump. Either you’re going to have barbarism or you’re going to have a renovation of the economy which means the debt write-down, anti-monopoly legislation, and prosecution of crooks. I wanted to see how the economy worked [so in the 1960s] I went to work for banks on Wall Street as a statistician. I became Chase Manhattan’s balance of payments economist. I wanted to find out what is the deficit stemming from? The entire balance of payments deficit in the 1960s when I was working there came from the military spending abroad. So I found out it was really the Vietnam War and allied military spending.I’ve been spending much of my effort for the last 30 years trying to see how the ancient near east and classical antiquity and medieval Europe all solved their debt crises, basically writing a history of debt crisis showing that every economy has had to cancel the debt. So you could say all my work in economics since the 1960s, more than 50 years, is spent on seeing how society handles its debt crisis.The industrial economy in America is essentially being emptied out in order to pay the stockowners and about 75 percent of stocks are owned by the richest 5 percent of the population. So if you look at who owns the stock, it’s not the working class, it’s not the middle class, it’s the super rich. The super rich are saying, We’re willing to use all the corporate income to run it down. Basically, the 5 percent have decided that industrial capitalism is over and it’s time to take the money and run. And you take the money and run by just paying out all the income, just to yourselves, leaving the corporation an empty shell.That’s how the Chicago Boys introduced free markets into Chile after 1974 when Pinochet took over from Allende. It’s the neoliberal model. It’s what happened in Russia after the neoliberals convinced Russia to go along. It’s what’s happening in Greece when you’re just emptying out the economy to pay the bond holders. It’s economic shrinkage. The trick is to get the middle class and the working class to think the stock market is them when the stock market isn’t themselves at all. It’s the five percent.Greece is the future of where America is going now under the policies of Clinton and Obama and Trump. Either you’re going to have barbarism or you’re going to have a renovation of the economy which means the debt write-down, anti-monopoly legislation, and prosecution of crooks.