Here are three by financial economist and historian Michael Hudson to help guide you through the economic meltdown currently underway. Best taken with a stiff drink.
1. “The new road to serfdom: An illustrated guide to the coming real estate collapse.” Harper’s Magazine, May 2006.
2. Michael Hudson and Nomi Prins on the AIG bailout. Democracy Now, Sept. 17, 2008.
The bailout is “the worst possible move, and it puts the class war back in business with a vengeance. Wall Street has been preparing for this for years, because every financial analyst knows that the debts can’t be paid. And the question that Wall Street has, if you’re going to take a gamble on bad debts that can’t be paid, how are you going to come out a winner? And there’s only one way of coming out a winner, and that’s to make the government bail you out.”
3.”The insanity of the $700 billion give-away.” CounterPunch, Sept. 29, 2008.
“No economy can keep up with the burden of debts growing at exponential rates faster than the economy itself is growing. No economy can grow at steady exponential rates; only debts can multiply in this way. That is why Mr. Paulson’s $700 billion giveaway to his Wall Street colleagues cannot work.
“What it can do is provide a one-time transfer of wealth to insiders who already have been playing the debt-credit system and siphoning off its predatory financial proceeds to themselves.”
The gist: today’s failed bail-out bill was a really, really bad idea that wouldn’t have worked anyway. The biggest danger now? That they’ll come up with something even worse.
The only workable solution is to write-down or forgive the bad debts and let the banks and investors eat it. That’s the only way “Main Street” is going to recover. But don’t hold your breath for Paulson to propose that.
