Money is not a factor of production. But in order to have access to credit, in order to get money, in order to get an education, you have to pay the banks.
MICHAEL HUDSONI 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.
More Michael Hudson Quotes
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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.
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Somehow most people believed they could get rich by going into debt to borrow assets that were going to rise in price. But you can’t get rich, ultimately, by going into debt. In the end the creditors always win.
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When I say the economy is shrinking, it’s the economy of the 99%, the people who have to work for a living and depend on earning money for what they can spend.
MICHAEL HUDSON -
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.
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Normally, if someone goes bankrupt, you wipe out the debt and get a fresh start. But that’s not permitted with student loans. So the effect is to impoverish many graduates with very high debts.
MICHAEL HUDSON -
Today, people are having to spend so much of their money, to acquire a house and to get an education that they don’t have enough to spend on goods and services, except by running into yet more debt on their credit cards and other borrowings.
MICHAEL HUDSON -
While escalating war in Afghanistan and maintaining over 850 military bases around the world, the administration has run up the national debt that Smith decried.
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Since 2008 you’ve had the largest bond market rally in history, as the Federal Reserve flooded the economy with quantitative easing to drive down interest rates.
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The problems of 2008 were never cured. The Federal Reserve’s solution to the crisis was to lend the economy enough money to borrow its way out of debt.
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.
MICHAEL HUDSON -
We’ve turned the post-war economy that made America prosperous and rich inside out.
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you’ll load the company you take over with debt. But you don’t have to pay taxes on the profits that you pay out in this way. You can deduct the interest from your tax liability.
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The financial time frame always has been short-term. Projects with long-term paybacks are cut back, because CEOs and financial managers simply want to take their money and run. That is the financial mentality.
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I don’t think that governments should permit speculation in raw materials, because they’re what the economy basically needs.
MICHAEL HUDSON -
We’re still in the collapse that began after 2008. There’s not a new collapse, there hasn’t been a recovery.
MICHAEL HUDSON