by So what pretends to be a coronavirus bill is going to say, “You think the virus hit you? Wait till we hit you with the financial bill.” The financial bailout aims to enable the financial sector to extract so much money from the economy and drive so many small businesses under that the big venture capital firms and private equity can pick them up at low all prices. You could call it the “Monopolization of the US economy” bill or the “Contributors to Washington politicians” bill.... Everybody has books documenting inequality. But what they don’t want is a discussion of what’s creating it. Does the world have to be this way? What policies are needed to reverse it?If you discuss that, and find that the root of inequality is the financial system indebting the economy and financializing real
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So what pretends to be a coronavirus bill is going to say, “You think the virus hit you? Wait till we hit you with the financial bill.” The financial bailout aims to enable the financial sector to extract so much money from the economy and drive so many small businesses under that the big venture capital firms and private equity can pick them up at low all prices. You could call it the “Monopolization of the US economy” bill or the “Contributors to Washington politicians” bill....
Everybody has books documenting inequality. But what they don’t want is a discussion of what’s creating it. Does the world have to be this way? What policies are needed to reverse it?
If you discuss that, and find that the root of inequality is the financial system indebting the economy and financializing real estate instead of making it the tax base, then you realize that you have to change the system. Today’s wealth is mainly financial and rent-extracting, taking the form of indebtedness for 90% of the population....
If the problem is financialization, then the solution to the economy has to be to de-financialize. That cannot be done as a slow process. It can only be done in a single stroke, a quantum leap. I don’t see a constituency for wiping out the debt as long as people believe that you have to help the banks save the economy and help the 1% trickle down their wealth.
The 1% has no intention of letting its wealth trickle down. Its intention is to take even more wealth from the 99%....
Economists call these problems externalities. In other words, they’re external to the economic model. Just as global warming and pollution are external to the model. This is at the root of “free market” theory rationalizing the status quo as natural, as if There Is No Alternative. The problems and costs to society created by financialization and living in the short run are considered external to the model, because the models themselves are short-term. and really focus on how the 1% can make more money. How can the financial sector make more money from the real economy? Debt and credit is see as the solution, not as the problem....
There is no academic discipline that is focusing the debt problem that we’re discussing. Any “discipline” is narrow. You need a pan-disciplinary approach – a broad approach that looks at society as an overall economic system, not as separating one economic organ from suicide rates or public health, as if none have any relationship with each other. It’s a desegregated system. There’s nothing like the kind of discussion you had in ancient Greece, Rome or Babylonia in ancient times when people treated the social problems as including personal character, the environment and everything else....
What do you do when society has lost its balance? You have to think about structural reform. That’s radical by definition. Structural reform is called an externality – exogenous, extraneous to what economists talk about. If you’re talking about where the economy should go, mainstream economists are talking in a narrow policy tunnel that means “Be passive and do nothing, be quiet like a frog boiling in water.”Systems approach needed.
The conventional economic approach could be compared with pursuing architecture based on form only, regardless of function. So the approach would be to build elegant buildings but not necessarily suited to purpose, in fact, form would supervene over function. Le Corbusier popularized the slogan,"Form follows function," which was coined by John Sullivan. There is a long tradition in economics that emphasizes this, from Marx and Veblen to the present day. But it has not caught on yet, largely owing to powerful opposition from those gaining advantage from the current system design that dismisses alternatives as "naïve," if it doesn't demonize them as dangerous to liberty and the American way.
Michael Hudson — On Finance, Real Estate And The Powers Of Neoliberalism
Trump’s “Bank and Landlord Relief” bill
Michael Hudson | President of The Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street Financial Analyst, Distinguished Research Professor of Economics at the University of Missouri, Kansas City, and Guest Professor at Peking University