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The price decline is a result of having to pay debts. That drains income from the circular flow between production and consumption – that is, between what people are paid when they go to work, and the things that they buy.

Michael Hudson

Elites play the role today that landlords played under feudalism. They levy interest and financial fees that are like a tax, to support what the classical economists called “unproductive activity.”
MICHAEL HUDSON

Financial Support Today
What do the 5%, or the 1% actually use their money for? They lend it back to the economy at large, they load it down with debt. They make their money by lending to the bottom 95%, or the bottom 99%.
MICHAEL HUDSON

Giving Government Income
Seventy-eight percent of millennials are worried about not having enough good paying job opportunity to pay off their student loans. Seventy-four percent can’t pay the health care if they get sick.
MICHAEL HUDSON

Eight Jobs Opportunity
If you’re a wealthy heir with a trust fund, and you sell stocks, make your 10% gains since Donald Trump, and then you buy other stocks, you can avoid paying taxes. And if your accountant registers your wealth offshore in a Panamanian fund, like Russian kleptocrats do – and as more and more Americans do.
MICHAEL HUDSON

Heirs Income Paying Taxes
The seeming irony is that it’s so bad that it enables the Democratic Party to think, “A-ha, all we have to do is be the lesser evil.
MICHAEL HUDSON

Enable Evil Lesser
Small banks that lend to consumers are fine.
MICHAEL HUDSON

Banks Consumers Fine Small
Economists often define their discipline as “the allocation of scarce resources among competing ends.” But when resources or money really become scarce, economists call it a crisis and say that it’s a question for politicians, not their own department.
MICHAEL HUDSON

Crisis Discipline Politician
Paying debt service to banks leaves less income to buy goods and services.
MICHAEL HUDSON

Debts Goods Income Paying Services
I think we’re in the take-the-money-and-run stage of the economy. So the banks may go under, but the bankers, who make the policy, clean up.
MICHAEL HUDSON

Bankers Running Thinking
The one sure mark of a con, though, is the promise of free money.
MICHAEL HUDSON

Free Mark Money Promise
It thought that if it could subsidize banks lending homeowners enough money to buy houses from people who are defaulting, then the bank balance sheets would end up okay.
MICHAEL HUDSON

Homeowner Money Okay People Sheets
New investment and employment fall off, and the economy is falls into a downward spiral.
MICHAEL HUDSON

Downward Economic Employment New Spiral
Driving down the interest rates creates a boom in the stock market, and also the real estate market. The resulting capital gains not treated as income.
MICHAEL HUDSON

Driving Estate Income Rates Real
There are two definitions of deflation. Most people think of it simply as prices going down. But debt deflation is what happens when people have to spend more and more of their income to carry the debts that they’ve run up – to pay their mortgage debt, to pay the credit card debt, to pay student loans.
MICHAEL HUDSON

Running Thinking Two
Most people think of the economy as producing goods and services and paying labor to buy what it produces.
MICHAEL HUDSON

Country Real Thinking
What’s the best gamble in the world, right now? Its betting that Deutsche Bank stock is going to go down. Short sellers borrowed money from their banks to place bets that Deutsche Bank stock is going to go down.
MICHAEL HUDSON

Credit Gamble Hands World

The price decline is a result of having to pay debts. That drains income from the circular flow between production and consumption – that is, between what people are paid when they go to work, and the things that they buy.

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The price decline is a result of having to pay debts. That drains income from the circular flow between production and consumption – that is, between what people are paid when they go to work, and the things that they buy.

Related Topics

Popular Authors

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