I drink your milkshake! a metaphor for capitalism
- Thread starter rickyb
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the US health insurance system restricts liberty. ppl have to factor in health insurance when choosing their jobs. its one more thing to worry about. if u got it then it can stop u from leaving for a job you'd otherwise be interested in.
u know what else restricts liberty? money.
for example lawyers need to work for corporations, instead of fighting for human rights because they are indebted after graduation. or because corporate firms pay more.
come up with a system where people arent in student debt, and control costs of things like housing, and people will have more liberty to choose what kind of job they want regardless of what it pays.
u know what else restricts liberty? money.
for example lawyers need to work for corporations, instead of fighting for human rights because they are indebted after graduation. or because corporate firms pay more.
come up with a system where people arent in student debt, and control costs of things like housing, and people will have more liberty to choose what kind of job they want regardless of what it pays.
@zubenelgenubi william k black has a good definition of how markets actually work when people cheat, he says they become corrupted and the cheaters get rid of the honest players.
watched enron smartest guys i the room while my internet was out.
they cooked the books. it wasnt just enron, it was banks too, lawyers, other guys outside the company.
the rich
s cashed out but employees couldnt and lost their stock value.
the founder of enron was found guilty. bush senior attended the funeral. the crooks keep close company.
they encouraged deregulation in california, captured the federal regulators, and caused cali power outages so they could price gouge. the documentary was critical of free market fundamentalism and financialization of enron which has affected many economies generally.
they cooked the books. it wasnt just enron, it was banks too, lawyers, other guys outside the company.
the rich
s cashed out but employees couldnt and lost their stock value.the founder of enron was found guilty. bush senior attended the funeral. the crooks keep close company.
they encouraged deregulation in california, captured the federal regulators, and caused cali power outages so they could price gouge. the documentary was critical of free market fundamentalism and financialization of enron which has affected many economies generally.
spoiler alert, i rewatched truman show last night. truman's life is largely under control to profit off of him. there is prevalent commercialism in it and it makes it artificial. there are clues for him that his world is BS just like in our world. as he approaches the end of his journey it becomes increasingly clear his world is BS. the director of the show tries to kill truman with an artificial storm, but the director's employees become increasingly uncomfortable with his orders. this is similar to what happens in revolutoins and why non violent civil disobedience works because the military stops following the ruler's orders. the horizon is not endless but a painted wall which he crashes into. he walks next to the painted wall seemingly on water. there are stairs in the wall which lead to an exit door.
the matrix trilogy ended similarily as well as it became clear the matrix was fake as it only consisted of smiths, and the matrix was breaking down as the computer screen was glitching.
these 2 movies give the western world's citizens a glimpse into our own predicament. we are controlled by their lies, so they can profit off of us. if we resist in many cases they will try and kill us.
the matrix trilogy ended similarily as well as it became clear the matrix was fake as it only consisted of smiths, and the matrix was breaking down as the computer screen was glitching.
these 2 movies give the western world's citizens a glimpse into our own predicament. we are controlled by their lies, so they can profit off of us. if we resist in many cases they will try and kill us.
Hudson (11:08):
There are good ways and there are bad ways of doing it through MMT. To me, the bad way would be the way that Donald Trump just did it over the summer. He gave grants to… the $1,200 grant that he gave to all the Americans. The pretense was that this $1,200 was going to be used to buy goods and services and to help keep them afloat and to revive the economy. But most families used it to pay down the debt.
In fact, the credits were put into their bank account. And if they had an overdraft, whether for a credit card where the rates go up to 29% or whether they were just overdrawn in the bank account with overdraft fees, the money that was given – created by the government, simply by printing it electronically – it all ended up with the bank. So the wage earners that received this money simply were intermediaries to give the money ultimately to the banks, the same effect you could have done simply by wiping out $1,200 from everybody’s debt who owns the debt.
Of course, that would have penalized the banks and the government basically is run by the banks. So what you’ve seen under Donald Trump is nightmare MMT. You have MMT being created, not to spend into the economy, not to create new infrastructure, creating jobs, not to support labor, but to buy stocks and bonds to support the 1%. This is a perversion of MMT, the assumption and advocacy of Randy Wray and Stephanie and her whole gang has been, “Well, the government can run a budget deficit to spend money into the economy.”
But finance is not the economy, the stock market, the bond market, and the wealth market. Basically you can think of it as the finance insurance and real estate sector. The FIRE sector is external to the economy. It’s something else. It’s the economy of the 1%. And most of the MMTers come from a background where we’re for the 99%. But Donald Trump is probably the leading MMTer in the country, in a far more powerful position than Stephanie Kelton or myself, and he said: “I’m all for MMT. You’ve convinced me. We can create all the money we want. I’m going to give it to my campaign contributors, the 1%.” That’s nightmare MMT.
Grumbine (13:40):
Wow. Yeah, that is. My goodness. I love the way you put that too. So can you describe what debt deflation actually means?
Hudson (13:50):
Well, it used to be that when you would buy a house – when I bought a house in the 1960s – banks would lend you enough money and you had to put down 20 or 30% of the down payment yourself, and they would calculate the mortgage so it would absorb no more than 25% of your income. So they would say, Well, you’ll have to live within your means. Find a house that you can afford to buy and we will give you a mortgage, up to the point where – the debt service and mortgage rates were about 6% back then – it absorbed 25% of your income.
So it was sort of a standard idea that at least if you were a white person… Black persons were not allowed to buy. They were not allowed to get loans. They were red-lined. But if you were not a Black person, you were able to borrow enough to buy a house with 25% of your income. Well, by the time that Obama sort of oversaw the bank bailout by 2008, the Federal Housing Agency would permit banks to lend up to 43% of your income.
Well, just imagine if instead of paying 25% of your income, you had to pay 43% of the income. Then that leaves much less money available to pay taxes, buy food, buy goods and services, and pay your credit card debt and your student debt, and pay for other things. So the idea is that the more you pay in debt service and the more you pay for a mortgage or for your rent, the less you have to pay in goods and services. And the money that you pay for debt service to a bank isn’t spent back into the economy.
The bank bond-holders are basically the 1% of the economy. They’re rich enough so they’re not going to take all this extra money they get – this interest and fees – to buy more goods and services. They’ll buy maybe trophy art and Andy Warhol junk, but they won’t spend it into the economy. And so all this money is sucked out of the production and consumption economy and siphoned off into the wealth economy, into the financial market economy and to finance and real estate.
realprogressives.org
There are good ways and there are bad ways of doing it through MMT. To me, the bad way would be the way that Donald Trump just did it over the summer. He gave grants to… the $1,200 grant that he gave to all the Americans. The pretense was that this $1,200 was going to be used to buy goods and services and to help keep them afloat and to revive the economy. But most families used it to pay down the debt.
In fact, the credits were put into their bank account. And if they had an overdraft, whether for a credit card where the rates go up to 29% or whether they were just overdrawn in the bank account with overdraft fees, the money that was given – created by the government, simply by printing it electronically – it all ended up with the bank. So the wage earners that received this money simply were intermediaries to give the money ultimately to the banks, the same effect you could have done simply by wiping out $1,200 from everybody’s debt who owns the debt.
Of course, that would have penalized the banks and the government basically is run by the banks. So what you’ve seen under Donald Trump is nightmare MMT. You have MMT being created, not to spend into the economy, not to create new infrastructure, creating jobs, not to support labor, but to buy stocks and bonds to support the 1%. This is a perversion of MMT, the assumption and advocacy of Randy Wray and Stephanie and her whole gang has been, “Well, the government can run a budget deficit to spend money into the economy.”
But finance is not the economy, the stock market, the bond market, and the wealth market. Basically you can think of it as the finance insurance and real estate sector. The FIRE sector is external to the economy. It’s something else. It’s the economy of the 1%. And most of the MMTers come from a background where we’re for the 99%. But Donald Trump is probably the leading MMTer in the country, in a far more powerful position than Stephanie Kelton or myself, and he said: “I’m all for MMT. You’ve convinced me. We can create all the money we want. I’m going to give it to my campaign contributors, the 1%.” That’s nightmare MMT.
Grumbine (13:40):
Wow. Yeah, that is. My goodness. I love the way you put that too. So can you describe what debt deflation actually means?
Hudson (13:50):
Well, it used to be that when you would buy a house – when I bought a house in the 1960s – banks would lend you enough money and you had to put down 20 or 30% of the down payment yourself, and they would calculate the mortgage so it would absorb no more than 25% of your income. So they would say, Well, you’ll have to live within your means. Find a house that you can afford to buy and we will give you a mortgage, up to the point where – the debt service and mortgage rates were about 6% back then – it absorbed 25% of your income.
So it was sort of a standard idea that at least if you were a white person… Black persons were not allowed to buy. They were not allowed to get loans. They were red-lined. But if you were not a Black person, you were able to borrow enough to buy a house with 25% of your income. Well, by the time that Obama sort of oversaw the bank bailout by 2008, the Federal Housing Agency would permit banks to lend up to 43% of your income.
Well, just imagine if instead of paying 25% of your income, you had to pay 43% of the income. Then that leaves much less money available to pay taxes, buy food, buy goods and services, and pay your credit card debt and your student debt, and pay for other things. So the idea is that the more you pay in debt service and the more you pay for a mortgage or for your rent, the less you have to pay in goods and services. And the money that you pay for debt service to a bank isn’t spent back into the economy.
The bank bond-holders are basically the 1% of the economy. They’re rich enough so they’re not going to take all this extra money they get – this interest and fees – to buy more goods and services. They’ll buy maybe trophy art and Andy Warhol junk, but they won’t spend it into the economy. And so all this money is sucked out of the production and consumption economy and siphoned off into the wealth economy, into the financial market economy and to finance and real estate.
Episode 88 – Debt Deflation and the Neofeudal Empire with Michael Hudson
Renowned economist and author Michael Hudson joins us to discuss debt, the parasitic kleptocracy, and the remnants of feudalism. He and Steve look at the monolithic two-party system, where slogans like “hope and change” mean the death of hope and obstruction to change.
realprogressives.org
@zubenelgenubi this conversation isnt so much about capitalism as i think george likes capitalism but they do talk alot about power vs truth which we were talking about on the coronavirus thread. They both support democracy partly because its the moral choice.
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