Courtesy of Steve Keen and other via his blog DebtWatch.
I have read Michael Hudson's writings, but never seen him speak. His presentation is lucid and alarming. He starts by describing the stripping away of economic history and all other tools in academic economics that could serve to provide a context for understanding the effect of the current ongoing economic policy of deregulation, the intent of which is to concentrate all regulatory policy in one body, The Fed, to the head of which can be appointed a Greenspan, Bernanke or another in that mold who will refuse on principle to regulate.
That was the goal of Bush 43 and remains the goal of Obama. He describes Obama as being the front man for the dismantling of public housing in Chicago and the sale of the property to developers, including the Crown and Pritzker families, supporters of Obama, for redevelopment, gentrification and profit.
Hudson asserts that the end goal is rolling back all of the gains made since the end of feudalism, undoing all of the work of the Enlightenment, of the Physiocrats, Adam Smith, John Stuart Mill and of the Progressives in the first half of the 20th century so as to accomplish through financialization essentially the re-feudalization of the world with the financiers as the new nobility with individuals bound to their homes by underwater mortgages from which they cannot walk away.
He asserts that this is the case in much of Europe and in Iceland, where the homeowner is personally responsible for the debt and cannot wall away as they can in the USA and Australia. In the USA it would seem that the financiers have gotten around this by the expedient of putting the "full faith and credit" of the US taxpayer underneath the gambling debts of the financiers. In Australia the situation appears to be similar to that in the USA in 2006.
If Australia is the USA circa 2006, the smart move would be to sell your real estate before the crash and rent or move elsewhere until real estate prices decline by half or more. And do not let the banks stampede the government into bailing them out.
When governments guarantee the bad speculative bets of the financial class what they are guaranteeing is that their taxpayers will make the wealthy speculators whole.
That is the first five minutes of an approximately one hour speech. WOW! Listen to the speech. Just click on the link at the top of this comment. As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
Hell, if this guy started to call people CATTLE it could be ME talking.
Michael Hudson writes some good stuff, but if he really believes the above he's a nut.
Who's doing this? Why would they bother with rolling back centuries of history to return to "feudalism"? Why do they need "feudalism"?
This bloated historical reference conjures up images of evil genius megalomaniacs huddling in underground hideaways plotting to become masters of the universe.
Or, worse still, it reminds one of the Da Vinci Code.
individuals bound to their homes by underwater mortgages from which they cannot walk away
santiago:bankruptcy almost always protects homeowners' right to retain the propertyMaybe in the US it does.
bankruptcy almost always protects homeowners' right to retain the property
As to the...
..images of evil genius megalomaniacs huddling in underground hideaways plotting to become masters of the universe...
Hudson DOES make the point that all of the individual liberties that have been gained for the many at the expense of the few since John Locke are and have been under sustained assault in the second half of the 20th century and that the effect of that assault has been to turn on its head the intent of the work from Adam Smith to John Stuart Mill to make the economy work for the benefit of society rather than for the feudal elite, as was formerly the case. He asserts that this has been accomplished by the redefinition of freedom as the freedom of business and financial leaders to pillage what is left of the assets of those weaker than them and to systematically seek to repeal such safeguards as remain through bankruptcy law "reform", tort law "reform" (malpractice and product liability), and the repeal of Glass-Steagall. (Some of these examples may not have been offered by Hudson.)
I had not realized that real estate mortgage debt cannot be abandoned in Iceland or much of Europe. To those pinned with underwater mortgages that stay with them until death this must seem like a new serfdom. But I agree that this is not terribly advantageous to the debt holders. The situation in the USA where those who inflated the bubble get their counterfeit profits guaranteed by the "full faith and credit" of generations yet unborn seems better. Perhaps an improved and updated feudalism that brings the advantages of three hundred years of improving economic flexibility into the service of an elite now possessing wealth and power with respect to the society as a whole comparable to that possessed by the nobles over the commoners under feudalism. To paraphrase Churchill, perhaps we are entering an new dark age made more sinister by the lights of perverted economics.
Successful business people have long bought titles of nobility as an insignia of success. The end point of that process is that they (collectively) have bought the governments that control those who grant those titles.
Hudson has worked at the upper levels of the financial world. He does not describe the leaders as huddling together into any conspiracy. That is both highly unlikely and unnecessary. First of all, these leaders of business enterprises are all competing against each other for relative power and influence, so they will only cooperate on common goals. These include the removal or neutering of laws and regulations that constrain them from unfettered "competition." And the fruits of that competition have somehow most disproportionately ended up in their hands--not as the result of a conspiracy but not as an accident either.
The actions that have brought about the current state of affairs have been the result of a shared understanding of a common interest amongst a relatively small group of businesspeople who understood the possibilities and opportunities. Individuals acted opportunistically but individually. Sandy Weil and Citi took the lead on the repeal of Glass-Steagall, acting in conjunction with Robert Rubin, formerly of Goldman Sachs but then Secretary of Treasure under Clinton. But probably all of the big financial corporations lobbied for the passage. Often this was done through Political Action Committees. See, that is not a conspiracy.
Hudson's talk is incendiary. But Hudson is NOT a nut. Hudson just has guts. And a position that does not require him to believe or speak nonsense. Would that there were more such as he. As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
The actions that have brought about the current state of affairs have been the result of a shared understanding of a common interest amongst a relatively small group of businesspeople who understood the possibilities and opportunities.
Right. So why talk about "the end goal" in terms of a multi-century historical scenario? That is what made me talk about the image of evil geniuses plotting. Who is nurturing thoughts of this "goal"? I don't think the guys that are coining it thanks to increasing financial dominance are thinking about history. They're just getting on with getting richer and strengthening their hold on their situation.
Secondly, I don't see much use in talking about feudalism. What is and has been developing is not feudalism, though one may wish to use it as a rough and ready metaphor, "it's like lords with serfs" -- but even then it would be too far removed from either the historical reality of feudalism or the reality of today.
But I'm beginning to realize there's a common misunderstanding regarding feudalism between Americans and Europeans. Before John Locke and Adam Smith, the feudal system was over and done with bar vestigial traces (and holdouts like Russia). The existence of a monarch, nobles, and commoners doesn't constitute a feudal system, when the commoners are no longer serfs and the nobles no longer vassal warlords who bring their private armies to support the suzerain. When I read "feudalism", I think of the Middle Ages, not the Early Modern period. Perhaps you don't mean quite the same thing by it.
I did begin by saying Michael Hudson writes good stuff. I was objecting to the historical overload with its conspiratorial undercurrent, that's all.
So why talk about "the end goal" in terms of a multi-century historical scenario?
The second subject to which Hudson referred was a more focused and specific secular reaction to the social effects of the Enlightenment Project as manifested in the political and economic structure of the USA and, subsequently, Europe. And we know who these people are: Milton Friedman and the "Chicago School", who provided valuable intellectual leadership; Richard Mellon Sciafe, grandson of Hoover's Treasury Secretary, Andrew Mellon and heir to much of that fortune who supported financially the Club for Growth, the American Enterprise Institute and numerous other conservative and libertarian groups, and a host of others who never accepted the social reforms of the New Deal, including Social Security and the New Deal restrictions and regulations on banking, who tirelessly wrote columns, commissioned "Think Tank" "white papers" and supported politicians, beginning with Barry Goldwater, all with the common message that Social Security and all of its corollaries was an unworkable fraud that would fail just when it was most needed and that the only legitimate function of government was national defense and the enforcement of laws protecting personal property and the personal safety, especially of the wealthy.
Nor was this "movement" homogenous, including, for example, in the early days, groups such as the John Birch Society as well as the Club for Growth. But they made themselves important to and a part of the Nixon Administration, where Friedman's Shock Doctrine finally got employed in Chile, and where Donald Rumsfield got his start in national politics. But those who went forward to the Reagan Administration did share common goals of deregulating finance and business in general and increasing the portion of the national product that went to the top.
They did not have to publicly or privately endorse specific plans for us to so conclude. It is merely necessary to consider if many of them could not have understood that what they were doing would have that effect, when they could see the yearly progress in that direction that their policy efforts were having. They saw and they called it good. They did not plan on producing financial crises, but Greenspan did assert that they could not really be foreseen and that the cost of cleaning up was lower than the cost of prevention. (Who believes he really believed this?) Their attitude was more one of reckless, if not contemptuous, disregard. But the goal of rolling back regulations, undermining the accomplishments of the New Deal, subverting the accomplishments of the Progressive Era and discrediting the potential of government to act in the common good were broadly shared among those in the Republican party from the center to the right fringe.
The more activist and militant they were the more explicit were these goals. This is especially true with those who were involved in lobbying under Gingrich including Jack Abramoff, Ralph E. Reed, Jr., Grover Norquist and Michael Scanlon. Recent revelations about The Family and the Republican legislators who live in a Family residence in D.C., including Sen. John Ensign, Sen. Tom Coburn, Gov. Mark Stanford, etc. are definitely "conspiracy" material, given the secrecy of their operations, the fact that they live together when in D.C., all go to each other for personal support and appear to share a common political agenda.
In a society in which an enormous number of people are convicted each year under conspiracy law, calling someone a "conspiracy theorist" for suggesting that large groups of people work together and coordinate for common goals, some of which are arguably illegal or in subversion of basic constitutional principles is a bit ridiculous. Even if IOKIYAR.
In face of the facts of the matter it is pathetic that progressives accept publicly getting beaten up for indulging in "conspiracy theories". My own sense it that, especially in academia, this is a convenient excuse for avoiding potentially career damaging subjects at the cost of a functional understanding of the nature of social reality. Just another failure due to continued acceptance of failed parts of Enlightenment thought, especially about how human thought and perception operates. As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
I agree with all you say, as such.
But I don't accept that one can talk about history in this second-guessing way. There was never any such thing as an "Enlightenment Project". Even the term Enlightenment is one of those convenient labels, like Renaissance or Industrial Revolution, that are added with hindsight to organize history into an onward roll moving somewhere with a kind of diffuse but discernible direction. I don't agree about the long-term community of goals on the Enlightenment "side", or about the intentions of the conservatives you cite. Yes, there are theorists among them who offer intellectual pretexts, but essentially what they're about is vicious defence of wealth and nothing more. Even among the theorists, there are those who take Enlightenment thinkers like Smith as their godfathers in neo-liberal/classical economics. Was the supposed Enlightenment Project leading to the New Deal, or to the Chicago School? It's not an idle question.
This is not so much about history, but historiography. I don't object to what you (or Hudson) are saying as to facts. I'm not denying that there are individuals who plot with others, that they have powerful and wealthy backers -- and above all I'm not denying the convergence of powerful interests. But how do we place them in history, what language do we choose, what story do we tell? An historical movement to counter and destroy the "Enlightenment Project" and return to "feudalism" is pretty crude history, but above all it's a teleological fallacy. History doesn't have such long-term aims. And using such language does tend to give a conspiratorial slant to the discourse, that I mocked by mentioning the Da Vinci Code.
I just don't think it's a fruitful way of describing what's going on.
re-feudalization of the world with the financiers as the new nobility with individuals bound to their homes by underwater mortgages from which they cannot walk away. He asserts that this is the case in much of Europe and in Iceland, where the homeowner is personally responsible for the debt and cannot wall away as they can in the USA and Australia.
re-feudalization of the world with the financiers as the new nobility with individuals bound to their homes by underwater mortgages from which they cannot walk away.
He asserts that this is the case in much of Europe and in Iceland, where the homeowner is personally responsible for the debt and cannot wall away as they can in the USA and Australia.
[Europe.Is.Doomed™ Alert] En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
To those pinned with underwater mortgages that stay with them until death this must seem like a new serfdom. But I agree that this is not terribly advantageous to the debt holders. The situation in the USA where those who inflated the bubble get their counterfeit profits guaranteed by the "full faith and credit" of generations yet unborn seems better. Perhaps an improved and updated feudalism that brings the advantages of three hundred years of improving economic flexibility into the service of an elite now possessing wealth and power with respect to the society as a whole comparable to that possessed by the nobles over the commoners under feudalism. To paraphrase Churchill, perhaps we are entering an new dark age made more sinister by the lights of perverted economics.
