Michael Hudson is a research professor of economics.
Michael Hudson (born 1939) is research professor of economics at University of Missouri, Kansas City (UMKC) and a research associate at the Levy Economics Institute of Bard College.
He is a former Wall Street analyst and consultant as well as president of the Institute for the Study of Long-term Economic Trends (ISLET) and a founding member of International Scholars Conference on Ancient Near Eastern Economies (ISCANEE).
ISLET engages in research regarding domestic and international finance, national income and balance-sheet accounting with regard to real estate, and the economic history of the ancient Near East.
Michael acts as an economic advisor to governments worldwide including Iceland, Latvia and China on finance and tax law.
Michael Hudson is “the only economist in the world” and [consequently] he is also “the best economist in the world” according to Paul Craig Roberts.
Michael Hudson is the best economist in the world.
Indeed, I could almost say that he is the only economist in the world.
Almost all of the rest are neoliberals, who are not economists but shills for financial interests.
If you have not heard of Michael Hudson it merely shows the power of the Matrix.
Hudson should have won several Nobel prizes in economics, but he will never get one.
The West Is Traveling The Road To Economic Ruin
Paul Craig Roberts – 1 Feb 2016
Michael Hudson understands “rentier capitalism”, “parasitic financing” and the “magic of compounding interest”.
Hudson argues that even if higher labor-productivity has reduced the value of commodities produced, higher prices can nevertheless be charged when a few large corporations control most of the supply chain for those commodities.
And when accumulated savings are used by investors to buy up assets for the purpose of capital gain, companies can “bid up” asset prices, with the end result that price-levels rise regardless of real production costs.
In that case, the final prices charged for goods and services include an “economic rent” component, i.e. an “unearnt income” or rental which is appropriated by those who own the property rights of a resource, and which is quite unrelated to the real production costs.
The extraction of property rent is often not clearly visible, because it is disguised as the cost of a “service”.
When the interest and rent component in the cost structure of products becomes large, Hudson thinks one can validly speak of a “rentier capitalism”.
On parasitic financing
Hudson states finance has been key to guiding politics into reducing the productive capacity of the U.S. and Europe, even as the U.S. and Europe benefit from finance methods using similar and expanded techniques to harm Chile, Russia, Latvia, and Hungary.
He states parasitic finance looks at industry and labor to determine how much wealth it can extract by fees, interest, and tax breaks, rather than providing needed capital to increase production and efficiency.
He states the “magic of compounding interest” results in increasing debt that eventually extracts more wealth than production and labor are able to pay.
Rather than extracting taxes from the “rentiers” to reduce the cost of labor and assets and use the tax revenue to improve infrastructure to increase production efficiency, he states the U.S. tax system, bank bailouts, and quantitative easing sacrifice labor and industry for the benefit of the finance sector.
He states the Washington Consensus has encouraged the IMF and World Bank to impose austerity that the U.S. itself is not exposed to (thanks to dollar dominance) which leads to subjecting other countries to unfair trade that depletes natural resources and privatizing infrastructure that is sold at distressed prices that uses parasitic finance techniques (including western-style tax breaks) to extract the maximum amount of the country’s surplus rather than providing a price-competitive service.
KILLING THE HOST by Michael Hudson (Author)
How financial parasites and debt destroy the global economy. Professor Hudson continues the discussion on the financialization of capital and its global effects.
KILLING THE HOST exposes how finance, insurance, and real estate (the FIRE sector) have gained control of the global economy at the expense of industrial capitalism and governments.
The FIRE sector is responsible for today’s economic polarization (the 1% vs. the 99%) via favored tax status that inflates real estate prices while deflating the “real” economy of labor and production.
The Great 2008 Bailout saved the banks but not the economy, and plunged the U.S., Irish, Latvian and Greek economies into debt deflation and austerity.
This book describes how the phenomenon of debt deflation imposes austerity on the U.S. and European economies, siphoning wealth and income upward to the financial sector while impoverishing the middle class.
On the banking crisis
Hudson states that the mortgage crisis was caused by parasitic finance that used law and outright fraud, and that the government backing of toxic debt and quantitative easing are ways to keep real estate inflated while the banks shift the real losses to U.S. labor, taxpayers, and the international community.
Hudson states “quantitative easing” and “restoring stability” are euphemisms for the U.S. finance sector using the Federal Reserve and dollar dominance to engage in financial aggression to a degree that previously required military conquest.
He points out Joseph Stiglitz has similar views.
He states banks should have been allowed to fail with the government stepping in to protect savings and continue with qualified loans towards real productive capacity rather than financial loans that merely inflate asset prices.
He states the Federal Reserve needs to understand inflating asset prices with low interest rates does not increase the long term productive capacity of the economy.
On dollar dominance
Hudson views dollar hegemony as grossly unfair and gives various opinions as to why countries tolerate it: desire to prevent their currency from appreciating, limited options in purchasing alternative U.S. assets, fear of the U.S. military, wanting to be part of the U.S. “orbit”, and “lack of imagination”.
He states the dominance protects the U.S. from austerity that it has subjected other countries to through the IMF and World Bank.
He states the U.S. treasury debt is limited only by the net productive surplus of the world as measured by the balance of payments.
He states it will end only when countries decide to take political action in their own best interests and break dollar dependence.
He states that the world is dividing into two currency blocs as countries, led by China, try to get away from dollar dependence by creating non-dollar trade between the BRIC countries as well as most of Asia, Iran, Nigeria, and Turkey.
He says it’s happening now because “the United States is trying to rescue the real estate market from all the junk mortgages, all the crooked loans, all of the financial fraud, instead of just letting the fraud go and throwing the guys in jail like other economists have suggested.”
Hudson views foreign central banks buying treasuries as a legitimate effort to stabilize exchange rates rather than a currency “manipulation”.
Foreign central banks could sell the excess dollars on the exchange market which would appreciate their currency, but he calls this a dilemma because it decreases their ability to continue a trade surplus, even though it would also increase their purchasing power.
He believes “keyboard credit” and treasury outflows in exchange for foreign assets without a future means for the U.S. to repay the treasuries and a decreasing value of the dollar is akin to military conquest.
He believes balance of payments “surplus” countries have the right to stabilize exchange rates and expect repayment of the resulting loans even as industry shifts from the U.S. to creditor nations.
Hudson states that a balance of payments “deficit” is mostly the result of military spending and capital outflows rather than the trade deficit.
It “forces” foreign central banks to buy U.S. treasuries that are used to finance the federal deficit and thereby a large U.S. military.
The balance of payments deficit is also caused by quantitative easing that encourages purchases of foreign currencies and assets that results in even more treasury purchases.
In exchange for providing a net surplus of assets, commodities, debt financing, goods, and services, foreign countries are “forced” to hold an equal dollar amount of U.S. treasuries.
It drives U.S. interest rates down which enables a currency trade that causes a feedback process that exacerbates the problem, as long as foreign countries insist on off-loading the dollars by buying U.S. treasuries despite the risks of a dollar devaluation.
THE BUBBLE AND BEYOND by Michael Hudson
PROFESSOR MICHAEL HUDSON is one of the foremost critics of contemporary finance capitalism and the worldwide power “the 1%” weilds because of government tax breaks and other favorable legislation.
In THE BUBBLE AND BEYOND, he illuminates how the expansive and successful forces of 19th and 20th century industrial capitalism have been subverted by today’s predatory finance capitalism, putting the entire world in a financial mess – and what can be done about it.
A confusing labyrinth of geo-political issues impacts economic health and growth, and few are studied in the classroom or given space in the press.
There is a way out of the labyrinth, however, as Professor Hudson demonstrates across 20 readable topics.
PROFESSOR HUDSON’S most controversial claim is that “Debts that can’t be paid, won’t be,” leaving in question whether or not debt non-payment will lead to worldwide foreclosures – including sell-offs of public domain assets by debt-strapped local and national governments.
This is already happening locally and globally – exactly what some of the 1% would like – creating a newly-poor feudalistic society with the 1% collecting all the usage “fees.”
Alternatively, he suggests that the debts be written down in line with the ability to pay, as has been done by corporations via Chapter 11 bankruptcies and reorganizations throughout a more enlightened modern economic history as well as biblical record.
In Professor Hudson’s bold view, debt write-downs versus privatization and sell-offs of public domain assets are the economic issues that will dominate politics over the next generation.
THE BUBBLE AND BEYOND is a compendium and brief history of economic thought and why it matters not only to Americans, but to people all over the world.
You will find that you refer to it again and again as a fount of information, much of which has been out of favor for decades and/or suppressed by the financial interests.
Professor Hudson provides chapter and verse, names names, and explains the mistakes and outright fraud that have often been committed in the name of political ideology – by both the right and the left.
You will encounter all of the heroes and miscreants of economics, industry, and politics from the Bible and Babylon to present day banksters, misguided Fed policy-makers, and captains of the finance/insurance/real estate (FIRE) sector and the military-industrial complex.
In one chapter after another, Professor Hudson tells who did what to whom – as well as who wins and who loses.
Michael Hudson explains why the Political Economy I was taught is bullshit.
The following year I went to college to be schooled in the mysteries of Political Economy.
It was a hoot.
Sadly, the historians knew nothing about Russia but they knew they could bullshit.
The economists were busy trying [and failing] to rewrite the Settled Economics.
To buy time the economics lecturers focussed upon the mathematics of monetarism whilst studiously trying to avoid the problems of Keynesian, debt, fiat money, big government, the death throes of the free market and reality.
Clearly, the historians and economists were avoiding [at all costs] joining up the dots between Politics and Economics.