Banking on Student Debt

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More at The Real News Student debt is the new growth zone for banking revenues. With no student bankruptcy permitted, this is akin to a low risk revenue stream for the financial industry, now second in size to mortgage debt. Solution to Student Debt is to Get the Banks Out of the Education Business Michael Hudson: Crippling student debt, which is also a drag on the whole economy, developed as governments pushed the burden of higher education costs onto students and pushed them into the arms of the banks - PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I'm Paul Jay in Baltimore. A recent New York ...

Government Debt and Deficits Are Not the Problem. Private Debt Is.

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There are two quite different perspectives in the set of speeches at this conference. Many on our morning panels – Steve Keen, William Greider, and earlier Yves Smith and Robert Kuttner – have warned about the economy being strapped by debt. The debt we are talking about is private-sector debt. But most officials this afternoon focus on government debt and budget deficits as the problem – especially social spending such as Social Security, not bailouts to the banks and Federal Reserve credit to re-inflate prices for real estate, stocks and bonds. To us this morning, government deficit spending into the economy is the solution. The problem is private debt. And in contrast to Federal Reserve and Treasury bailout policy, we view ...

Economic Policy Deception

Another in the series of interviews on the Renegade Economists radio show (Australia), a wide ranging analysis of the advantages to wealth that money printing and poor tax policy produce. Topics include land and housing policy, German gold repatriation, Occupy, Bradley Manning, Iran, Obama and Kruegar. Listen here Subscribe to the show (itunes) Transcription 06.03.2013: Karl Fitzgerald (KF): It’s seems that the most exciting things happening around the planet are not happening in a democracy, they’re happening in China. The new Premier there Xi Jinping has a real reformist agenda. Michael Hudson (MH): I think there’s a whole new generation coming in. I think they do things collectively in China, and then I was there a few years ago I was really happy to ...

The Delicious Irony of Morris Greenberg’s AIG Suit Against the US Treasury

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When the financial bubble burst in September 2008, U.S. and European governments responded by shifting bank losses onto their own balance sheets. The pretense is that real growth cannot resume until the banks and speculators are “made whole.” To cover the cost of bailing out the banks, governments now are trying to run budget surpluses. This adds fiscal deflation to the debt deflation left in the bubble’s wake, shrinking the economy at large. Governments are to raise taxes (or simply print new debt to swap for the financial sector’s bad loans and gambles) to reimburse financial institutions whose lending and outright gambling (not to mention the excursion into financial ...

Latvia’s Economic Disaster as a Neoliberal Success Story: A Model for Europe and the US?

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by Jeffrey Sommers and Michael Hudson A generation ago the Chicago Boys and their financial supporters applauded General Pinochet’s anti-labor Chile as a success story, thanks mainly to its transformation of their Social Security into Employee Stock Ownership Plans (ESOPs) that almost universally were looted by the employer grupos by the end of the 1970s. In the last decade, the Bush Administration, seeking a Trojan Horse to privatize Social Security in the United States, applauded Chile’s disastrous privatization of pension accounts (turning many over to US financial institutions) even as that nation’s voters rejected the Pinochetistas largely out of anger at the vast pension rip-off by high finance. ...

America’s Deceptive 2012 Fiscal Cliff

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How today’s fiscal austerity is reminiscent of World War I’s economic misunderstandings When World War I broke out in August 1914, economists on both sides forecast that hostilities could not last more than about six months. Wars had grown so expensive that governments quickly would run out of money. It seemed that if Germany could not defeat France by springtime, the Allied and Central Powers would run out of savings and reach what today is called a fiscal cliff and be forced to negotiate a peace agreement. But the Great War dragged on for four destructive years. European governments did what the United States had done after the Civil War broke out in 1861 when the Treasury printed greenbacks. They paid ...

Finance Capitalism and its Discontents

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NEW BOOK: This collection contains the most important interviews and speeches that Professor Michael Hudson, Distinguished Professor of Economics at the University of Missouri (Kansas City), and president of the Institute for the Study of Long-term Economic Trends (ISLET) has given over the past decade (2003-2012). They span the political spectrum from COUNTERPUNCH.COM and KPFK radio's GUNS AND BUTTER to iTULIP.COM and SANKT GEORGE in Berlin. It also includes his now-famous Rlmini, Italy, speeches that were given at a packed sports arena in early 2012 on the topic of how finance capitalism is pushing the world, starting with Europe, into austerity and neo-feudalism. Available in paperback or kindle from for $19.95

Reality economics

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A review of Norbert Häring and Niall Douglas, Economists and the Powerful (London: Anthem Press, 2012). “Whom the gods would destroy, they first make mad.” And if they would destroy economies, they first create a wealthy class on top, and let human nature do the rest. The acquisition of power soon leads to its abuse, to economic and social hubris. By seeking to protect its gains, perpetuate itself and make its wealth hereditary, power elites lock in their position in ways that exclude and injure those below. Turning government into an oligarchy, the wealthy indebt and shift the tax burden onto the less powerful. It is an ancient tale. The Greeks got matters right in seeing how ...

Austerity, Debt and Unelected Central Bankers

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Loans you shouldn't pay back, violent partners, and who triumphs when Germany Banks & Greece go toe to toe. Seek truth from facts with former Chase banker Prof. Michael Hudson, Stockholm Syndrome theorist Dr. Carlos Encinas, anti-EU party boss Peter Mach, Greek Correspondent Nicolas Mottas and Financial Times Associate Editor Wolfgang Munchau.