The other dynamic keeping the stock market up – both for technology stocks and others – is that companies are using a lot of their income for stock buybacks and to pay out higher dividends, not make new investment,.
MICHAEL HUDSONThe reason is that every recovery since 1945 has begun with a higher, and higher level of debt. The debt is so high now, that since 2008 we’ve been in what I call, debt deflation.
More Michael Hudson Quotes
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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 -
Debt deflation is when there’s less money that people have to spend out of their paychecks on goods and services, because they’re paying the FIRE sector. Oil going down is a function of the supply and demand of oil in the market. It’s a separate phenomenon.
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Either you can save the economy, or you can save the One Percent from losing a single penny.
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If the economy is growing, people want to employ more workers. If you hire more labor, wages go up.
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One basic myth is that rich people get wealthy by earning income. But that’s not how most get rich. Most of the gains of the rich people since 1945 have been “capital gains”.
MICHAEL HUDSON -
You could say that the vote to withdraw from Europe is, it’s really a vote of the British middle class, the working class, to withdraw from the U.S. neoliberalism that has been running Europe for the last ten years.
MICHAEL HUDSON -
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.
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We’re still in the collapse that began after 2008. There’s not a new collapse, there hasn’t been a recovery.
MICHAEL HUDSON -
New investment and employment fall off, and the economy is falls into a downward spiral.
MICHAEL HUDSON -
Russia was under the impression that the neoliberal advisors were going to make Russia as rich as the United States. What they really did was create a kleptocracy that was virtually tax-free.
MICHAEL HUDSON -
When people are running up more and more debt for housing, they call that “real wealth.” It exposes what’s wrong in the mainstream economics and why most of the economics that justifies austerity programs and economic shrinkage is in the textbooks is not scientific.
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Small banks that lend to consumers are fine.
MICHAEL HUDSON -
Much higher cost for all the infrastructure that he’s proposing. You could call Trump’s plan “public investment to create private profit”. That’s really his plan in a summary.
MICHAEL HUDSON -
The reason is that every recovery since 1945 has begun with a higher, and higher level of debt. The debt is so high now, that since 2008 we’ve been in what I call, debt deflation.
MICHAEL HUDSON -
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