With Dennis Kucinich on the Financialized Economy, Collapse

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Dennis Kucinich & Michael Hudson Analyze the Banking Collapses: a lightly edited transcript

March 15, 2023

Overview: This was an impromptu conversation precipitated by former Congressman Dennis Kucinich to have a deep dive discussion with a former economic advisor, Michael Hudson, on the shockingly large recent bank collapses. As the former chair of the powerful Government Oversight Subcommittee, Kucinich had a ringside seat in unraveling the bank collapses after the housing bubble burst. He confronted the players in the field with withering questions in Congressional hearings. Now Kucinich wanted important feedback from a banking insider on how this crisis was different than the one in 2008.

Kucinich knew that Hudson was a former Wall Street banker/investment professional who worked for Chase Bank and then the Hudson Institute as well as managing the second most successful bond mutual fund one year. Hudson has often candidly admitted that everything he really learned about economics came on Wall Street and not in his Ph.D. classes. Hudson’s first assignment at Chase was to figure how much money South American debtor countries could pay without collapsing. His intense and ground-breaking research into the predatory balance of payments system led to his first (of many) books, Super Imperialism, now in its third printing. The meeting was moderated by a close friend to both: David Kelley.

The meeting was arranged the day before and, at the last minute, it was decided to record it. After the meeting the participants agreed that while the production quality was minimalist, the topics covered had been largely missed by the mainstream media and was worthy of being released. The transcript has been lightly edited to make it more readable and to keep all salient comments and vocabulary.

DAVID KELLEY: I was going to facetiously say that this is the first episode of the Real Gray Zone, when you look at the color of my hair rather than those “so-called journalists” Max Blumenthal and Aaron Mate. But I guess I won’t do that.

On a more serious note, this is a very difficult time right now, because all of a sudden we’re starting to see a different type of financial crisis.

And I wanted you two to talk because Dennis [Kucinich]— you were in Congress for sixteen years — did some of the most withering cross-examination I’d ever seen of bank and Federal Reserve-type individuals. Some of them were literally sweating because you asked probing, deep questions that your staff had prepared.

Because you don’t accept any corporate PAC money, you had no reluctance at all to get right to the nitty-gritty of what was happening in the first bank meltdown that Michael wrote about.

I have Michael [Hudson] here because he is a great economist — one of the eight economists of the world who predicted the housing crisis.

He did a cover story in Harper’s magazine that was stunning — with charts and grafts and explaining exactly why the housing bubble would collapse, as it did.

Michael became famous for first writing this book called Super Imperialism in 1972 which became a how-to-manual for the State Department and the rest of our government about literally monetary imperialism — how we would become the reserve currency.

And, of course, Michael has so many other books. His more recent one I love is … and forgive them their debts —taken from the Our Father [prayer]. And we’ll talk about that in a moment.

And my favorite, that every politician should read is The Bubble and Beyond because it breaks down exactly what the financial capitalist system is about today. We’re no longer industrial capitalists — it’s financial capitalism of skimming off money.

So I wanted to gather the two of you together because you bring these bookend ideas of what happens in the legislature –which is pretty corrupt purchased by big money, banking, and oil, and everyone else — and what are the economics behind [it].

I’d like to start with Michael, just asking you the question as sort of the ground rules — sort of laying the block work — why did these three banks collapse?

MICHAEL HUDSON: Because of the fact that the Federal Reserve (Fed) tried to finally end an era, and the era was the thirteen years of quantitative easing (QE) that followed from Obama’s decision to bail out the banks in 2009.

The idea — the banks had made so many bad loans, they were insolvent. And so the Federal Reserve began to flood the market with liquidity and spent $9 trillion pumping bank credit into the market so that they could raise housing prices for Americans and save the banks from losing money on their mortgages.

And they created a bond boom — the biggest bond market boom in history — by reducing interest rates from about 7%, way down to 0%.

And you had the stocks and bonds that the wealthiest 1% owned soaring in price. And that zero percent interest rate policy (ZIRP) — of flooding the market with credit for the banks — is why the economy was polarizing between the 1% or the 10% of the population that owns most of the stocks and bonds, and the rest of the population.

DENNIS KUCINICH: So Michael, hold on a minute. What you’re describing is an underlying structural issue that not only the Fed and the government are helping to pick winners and losers, but they’re also accelerating the wealth of the country upwards.

MICHAEL HUDSON: The wealth that’s held really by the financial and insurance and real estate (FIRE) sector.
And the wealth of the country really is made by who already owns this wealth. The wealth is the savings. The wealth of the creditor class is the debt of the 99%.

So when they talk about wealth, all this wealth takes the form of debt that’s owed by the 99%. So you could say that what’s been growing is debt as well as wealth. It depends what side of the balance sheet you’re going to look at and how you’re going to look at how it’s distributed.

DAVID KELLEY: As Dennis was just saying, though, the wealth is being redistributed upward — by turning everyone into a debtor — to a creditor class. They collect the rentier income as you described in all your books, Michael, and if they ever want to foreclose they can take everything [all the underlying assets such as homes.

I mean BlackRock today has, what, $10 trillion of assets and they’re buying up homes. So are we going to become basically a renter society, where we’re basically indentured servants?

MICHAEL HUDSON: Well, BlackRock began by buying up homes of the eight or nine million people that Obama evicted from their houses by breaking his promise to write down the junk mortgage loans to realistic market prices.

And instead of writing down the loans, he invited his bankers and campaign contributors to the White House and said, “I’m the only guy protecting you from the mob with the pitchforks” — mainly the Black and Hispanic populations that had voted for him.

And so he left the bad loans on the books, evicted families. Their properties were bought up largely by absentee landlords, private capital firms, and by BlackRock and companies like that.

DENNIS KUCINICH: Let’s back up a little bit on that, Michael. You know, as chairman of the Domestic Policy Subcommittee in the wake of the subprime meltdown, what we found out is that banks were going into neighborhoods in the African-American community, and with no doc, low doc loans that enabled people to get a better home — in some cases the home of their dreams — without giving people a fair chance to see if they could actually afford it.

And then of course they booked those loans and then they bundled them into collateralized debt obligations (CDOs). And then, furthermore, Wall Street turned that into derivatives, pyramided the market, the thing collapses, there’s a call on the loans, people can’t pay, defaults are going out all over the country — Cleveland was the epicenter of the subprime meltdown, especially in the Black community.

And all of a sudden the wealth that people had embedded in the homes — they lost them. Whole neighborhoods were laid waste. They were stripped of their value in terms of — pipes and copper and anything that ghouls could carry away.

Then came scavengers that went into the neighborhoods, bought the homes — the shells — at a rock bottom, made some minor repairs to, and flipped them to create another opportunity and still more victims.

So what’s happened is, the financial community, and the financialization of our economy — focusing on where the wealth that most Americans have — in their homes — has been able to suck that money out and financialize it, turning the whole country and Wall Street into one great casino. And as a result –going back to the point you’re making –the wealth of the country is just accelerating upwards and the government had basically let this happen.

The government — when it picks winners and losers, it sided with Wall Street against the people of the country.

DAVID KELLEY: But Dennis they were able to collect their fees and their shareholders did well and so did the executives. You’re being a little petty I think.

DENNIS KUCINICH: [Laughing] Yeah right, well you know — (crosstalk)

DAVID KELLEY: Just because the American people you represent got screwed, who cares?

DENNIS KUCINICH: That was one of the issues in the hearings that we had investigating: the subprime meltdown. The issues of compensation, of whether the public was misled, investors were misled. And no one wanted to take responsibility, ultimately.

I mean they said they did, but they didn’t really want to take legal responsibility. Whether it was AIG, Bank of America, Merrill Lynch, Lehman Brothers — that whole sordid situation went on. The government looked the other way. The Fed looked the other way. They were supposed to be monitoring lending practices and the American people — homeowners — just took it right in the neck.

And in terms of the Black community, the wealth of African-Americans around the country crashed, just crashed during this period.

MICHAEL HUDSON: Well that’s exactly what happened and, as you just pointed out, not only the Black Americans, but for thirteen years the entire economy has been polarizing. The growth and wealth — there’s been a huge inflation. The largest inflation in American history. And it hasn’t been consumer-price inflation — it’s asset-price inflation for stocks and bonds and real estate.

And the government says, “Well, look at how much richer Americans are getting. Their homes are worth more and more and more.”

But all of this home pricing has been financed by debt, and so the homeowners, who are taking out mortgages to buy the homes, own a smaller and smaller and smaller proportion of their home in equity. It’s almost all debt.
Well, the question is: Why did the Fed end all of this? Here you have the economy polarizing — great for the political campaign contributors. Why did it end it?

Well, it ended it because Federal Reserve Chairman Powell said, “There’s a problem. Two million Americans have to lose their job in order to create enough unemployment so that wage levels are not going to go up, and they will not rise in keeping with the inflation of oil prices and home prices and food prices” — the result from America’s sanctions against Russia that have raised prices all over the world. And from the monopoly pricing.

So the Fed said, “We have to raise interest rates in order to bring on a recession, lower wage levels.”

And it didn’t seem to have occurred to him that you’re not only going to lower wage rates, but when interest rates go up, bond prices go down.

DAVID KELLEY: Would you explain, Michael, the two major points you just made.

One was about monopoly prices. And the fact is, that there was corporate gouging of profits from monopolies, was one of the keys — and also the supply chain problems that occurred because of the Ukraine war.

And explain how those are actually a larger factor — and they’re doing it on the back of American workers. They’re going to, quote, stem this problem on the back of American workers by driving up inflation, [end quote]. I thought Elizabeth Warren was very good in hearings actually last week on that.

MICHAEL HUDSON: Well, she was attacking the monopolists. Let’s [look at] food prices [which] you can all follow when you go to the store. The food prices for eggs and other crops are going way up, but the farmers aren’t getting more.
The dairy farmers are going out of business. The chicken farmers are going out of business. There are a couple of monopolies for the food distribution business, and these monopolies have simply taken a much larger chunk of the prices that they supply to the stores.

And right across the board, the pharmaceutical companies have a monopoly. And they say, “We’re going to raise the prices for our drugs because we anticipate there’s going to be an inflation.”

And right down the line for almost every kind of product that is a monopoly, the monopolist said, “Well the Fed says there’s going to be an inflation. We’re going to raise our prices now.”

And the prices have been [raised] without any of their costs rising, just because they can do it.

DENNIS KUCINICH: Look at the compounding issues here. So President Biden makes the design to pour over 140 billion dollars-plus into this enterprise trying to overthrow Russia.

That of course, and blowing up of Nord Stream pipeline, set the stage for sharp increase in energy prices which also set the stage for sharp increase in food prices — a part.

And then you go to the monopoly factors that are working in the economy and that’s why people [end] up paying so much for eggs and bread and everything else, because there’s a compounded thing.

You raise another point. It’s a long standing canard of the Fed that a certain amount of unemployment is necessary for the proper functioning of the economy.

Well that’s easy for the people in Wall Street to say, but tell that to Main Street where people are struggling to put gas in the car, to pay their mortgage, to feed their families. And so there’s kind of a destructive undermining of Main Street once more.

In the way that a street hollows out before it collapses, but the hollowing out of the equity, as you mentioned, that people have in their homes. The hollowing out of savings. The hollowing out of pensions.

All of this sets the stage for a financial collapse. And the money that was pumped in during the COVID period actually belied the fact that people then were desperate. And now, as that period seems to be over, they’re going to be more desperate.

Because as a matter of fact, as we’re speaking, the government is getting ready to cut in half the food benefits that people had with the supplementary nutritional benefits, so people won’t be able to have the food they need.

Meanwhile back on Wall Street — you screw up the management of a bank, you don’t have the proper accounting standards, you have inadequate due diligence, you have a lack of regs or changes in the law. The Feds going on policies working against the country, and Main Street gets hit once again.

I really think that we have the preconditions here for a political revolt in this country.

DAVID KELLEY: I want to introduce something, Dennis. You wrote a 696-page book called The Division of Light and Power which occurred when you basically saved the Cleveland municipal light system from its corporate competitor, which basically used what is now seen as likely illegal means to [attempt to] buy it out and destroy any competition.
By the way, this competitor [a power company] recently has put $60 million into bribing Ohio officials. That’s a whole other matter.

You stood up against them because you did not take any PAC money from these groups. Can you explain to me — and I’d like both of you to comment on this — is this contagion — and this reluctance of Congress to deal with [these] issues of the banks, and the incredibly dark dark influence of Dark Money — going to spread?

Is the bank contagion going to spread, Michael? And how much worse is it going to have to get, Dennis, before people recognize the utility bills — all the debt they are incurring — will cause a debt deflation as the [middle] class evaporates and doesn’t buy products.

MICHAEL HUDSON: I want to comment on what Dennis just was saying, because I want to follow up on the logic.
He pointed out that the savings were being eroded [for] workers — not only their own savings, but that of their pension funds. Because when you wind down interest rates — pension funds had corporations set aside — a given amount of money — states and municipalities had set aside a given amount to pay the workers.

And they all assumed that they were going to be able to make 8.5% a year.

But now that interest rates went down to about 0.2% on government bonds, all of the pensions in this country were pushed into deficit. So who is going to rescue them?

Well, you’ve just seen the Fed rescue uninsured bank depositors saying, “No wealthy bank depositor will — even though they’re not insured — no one will lose a penny.”

But the pension funds are going to lose as much as they have. The savers are going to lose. And by the way, the student debtors are going to have to pay their debts.

The only debts that do not have to be paid are the debts owed by the wealthiest 1%-to-10%. The rest of the 99% have to pay their debts. I think that’s what Dennis was pointing to.

DENNIS KUCINICH: Thank you for mentioning that, because what you have here is a clear example of the socialization of risk that goes on. And this is where capitalism — the underlying challenge to the system of capitalism is that there’s a number of myths that support it.

And one of the myths is that we all benefit from competition. That people are on their own to go up and down by their own merits. Well, we have a massive moral hazard here that’s been visited upon the country, and it needs to be addressed directly, lest the country itself fail.

And there are deeper issues here that have to do with monetary policy itself. Most people are not aware that in 1913 the money supply of America was privatized with the passage of the Federal Reserve Act. It’s not a coincidence that the government created — almost simultaneously — the federal income tax. So that instead of the government issuing the money to meet the needs of the country, the government started borrowing money from banks. So the government goes into debt.

Our whole system’s been turned upside-down by — and the corollary today is regulatory capture. You have all these agencies that cannot enforce the law because they’re held captive by these financial interests — either through the executive branch or the legislative branch.

And David to answer your question directly, the Citizens United case, Buckley v. Valeo.

DAVID KELLEY: SpeechNow [court case versus FEC which removed all contribution limits for people giving to groups running political influence campaigns independent of the actual candidate].

DENNIS KUCINICH: We’re right now in an era where we’re seeing that the door was open for the corporatization of the entire government, and because these corporations essentially have a hammerlock on government policy, because they can pour unlimited amounts of money through these dark money PACs into campaigns and totally upend the political fortunes of those [who] are either executing the laws or making them.

MICHAEL HUDSON: Well Dennis, you just said two key words: one is “the lack of competition,” and the other is “banking.”

And I should have said that the banking is the most powerful monopoly in the country. Let’s look at what the banks have been paying depositors.

Even though interest rates have been going way up, banks have only been paying depositors 0.2% on their deposits. Well, the reason that Silicon Valley Bank (SVB) went under, and the reason other banks are going under, is [that] the banks are greedy.

They’re making a killing on higher interest rates. They’re raising the prices that they charge people for mortgage loans, for bank loans, for credit card loans, but they’re not giving the depositors anything more.

If you’re a depositor who has enough money — you have a retirement fund or your own money — you’re going to pull your money out of the bank and, instead of holding money in the bank it’s 0.2%, you’re going to buy a short-term treasury bond, a Tertiary note at 4% interest.

And that’s exactly what was happening last Thursday and Friday. That’s what caused the run. Not only for Silicon Valley Bank but for the entire country. Americans have been pulling their money out of the banks because the banks don’t pay interest. You want to get something that does pay interest. And you don’t want to speculate in the stock market because that’s going down, so you buy bonds.

And that’s why on Monday, Moody’s came out and downgraded the entire banking system — [it] being no longer really viable. Because the banks have used their monopoly power to shoot themselves in their own foot and be so greedy that they really don’t play a productive function.

DENNIS KUCINICH: You want to talk about how things have changed — I mean, there was a time when the banks were actually dictating rating standards to the Wall Street ratings agencies on behalf of certain clients.

The other thing is, in the wake of the collapse of these three banks, I think it’s time to have a whole series of questions about what were those banks’ capital standards? What were their liquidity standards? What were their leverage standards?

Because it becomes very clear — when you see what appears to be a quick collapse was the result of practices that these banks were able to get away with because no one was looking over their shoulder, and they were basically the banking equivalent of honor (unintelligible).

And I’m sorry, that didn’t work. And what’s happening now — very interesting — is that, look, I’m not a fan of so-called “wokeism” — and whatever people call that — but they’re trying to blame the collapse of the banks on certain cultural and social and racial minorities, which could cause heaven to grow hair.

It is absolutely a catastrophe that was engineered inside the banks, not because they suddenly wanted to show themselves in a more progressive light, but because they could have been using that as a cover to just engage in any kind of sharp practice.

DAVID KELLEY: Dennis, Dennis, you worry me, though, because it sounds like you may even be pushing for things like better braking systems in trains and things like that — so I think you’re a little out of control right now.

DENNIS KUCINICH: [Laughing] How about better braking systems in banking, right?

MICHAEL HUDSON: I want to focus on what Dennis said about rating systems and management. You can ask these questions, but who’s going to answer them?

Well the answer is — who was in charge of overseeing the banks? — who are the bank examiners?

Well, the bank examiners and the bank regulators were all — as Dennis just said — appointed by the banks. If you were blacklisted by the banks, you’d be treated like the banks wanted to treat Dennis. You were considered “overqualified” for the position.

The banks wanted examiners who would treat them as their clients — [examiners] who thought, “Well, we’re here as the Federal Reserve examiner or the Federal Home Loan Bank [Board] examiner, to really help the banks get by. We’re their protectors. We’re their guardians.”

One of the problems is that there are many bank regulatory agencies, and banks get to choose the regulatory agencies that govern them.

And the Silicon Valley Bank chose the Federal Home Loan Bank Board. Which is what — if you’re going to stretch the envelope, if you’re going to do something that is wildly risky — you want the Federal Home Loan Bank Board to be your examiner. Because they were the people who didn’t see the Savings & Loan crisis of the 1980s. They were the most corrupt, pro-banker, “the customer is always right” examiners there were.

And the funny thing is that Silicon Valley Bank doesn’t make home loans. It made big loans to the high-tech industries and also to the governor of California Newsom and his winery — he kept his money [at SVB] — but they don’t make home loans.

But any bank can choose the [Federal Home Loan Bank Board] precisely because they qualify for believing that whatever the banks decide to do must be reasonable.

DAVID KELLEY: Michael, I want to just cut in a little bit and point out — Dennis, in the lead-up to the Iraq War you spoke on the floor of Congress 341 times about Iraq, and you saw no evidence. You spoke 155 times on Iran, and as one great advertising person put it, you had “the eyes that saw through the lies.”

What are the lies you’re seeing today around banking and Nord Stream and these other things? I may just veer off a little bit. But you’ve been confronting some of these egregious misstatements.

DENNIS KUCINICH: Well, it begins with — let me talk about this conceptually. We have a breakdown in trust in society which is affecting everything.

People putting their money in banks is a matter of trust. What banks do with that money will either confirm or undermine the trust that people have in the banks. Government has to play a role in making sure that people’s assets are going to be protected from any sharp practices.

I mean, that is what we hope will happen. But what we have found out in the past, and what we’re finding out again, is that the government does not perform its role as a protector of the public interest.

And when that happens on matters of the environment, or the economy, or any other thing in the market, the people of the United States are going to find that they’re going to lose investments. They’re going to, in some cases, lose their businesses.

I mean think of all the people out in Silicon Valley and within the reach of the banks have now gone down — who, really — a set of businesses that had a lot of drive and a lot of hope and a lot of passion. And they needed to make sure there was a cop on the beat, to protect their aspirations. To protect the jobs that they created.

And yes, the government stepped in and said, “Okay, nobody’s going to get hurt.”

But the fact of the matter is that all of us get hurt. Because if you add another $9 trillion to the $31 trillion — and even before this happened there was already predictions that America is going to go to over $50 trillion dollars in debt within 10 years. When you look at that, it means there’s a lack of fiscal discipline which harms the country. It harms our ability in international trade. It puts us on a direction of deflation one day, and the next day hyperinflation.

So we’re really at risk here, as Americans. Our economies at risk. And I’m sure the President understands that, which is why he put a stop on the closing or the destruction of these banks. The fact of the matter is, we’re not dealing with the underlying causes here.

This is a tourniquet on a wound. It’s not fixing the wound.

MICHAEL HUDSON: Well, you understand this, Dennis, because we’ve spoken about deindustrialization for twenty years. What you’ve described is exactly America’s deindustrializing.

If Americans have to pay such high prices for their homes —if they have to go so deeply into debt just to have a place to live or to rent — if they have to borrow from the banks and run into credit card debt in order to just meet their basic needs — they’re going to have to earn so much money that it prices American industry out of world markets.

That’s why American companies have all moved abroad. They can’t afford to pay American labor when American labor’s living costs have to be paid to the financial sector and the real estate sector — which is part of the financial sector — that you’ve just been describing. That’s the real problem.

The banks are responsible for deindustrializing the country by squeezing labor’s living standards while raising the price of everything that labor needs to buy.

DAVID KELLEY: Michael, what do you say to people who say, “Banks lend out money to businesses all the time — that’s their main function.”

But you put out in your books that 80% of the [bank] money is for what?

MICHAEL HUDSON: For mortgages. Banks don’t lend money for startups. Initial public offerings (IPOs) in the stock market raises money for new capital investment. Banks only lend against collateral that’s already in place — not to create new means of production. But you can pledge it.

But they do make loans to corporations to buy other corporations. They make loans to corporate raiders. They make loans for leveraged buyouts, because you can make more money by borrowing money to buy a corporation, taking it over, running it into debt, breaking it up into parts, firing the labor and moving it abroad, than you can do by employing American labor.

This is a serious structural problem. We’re not dealing with just one bank going bad because it was not competently managed. We’re talking about what Dennis was talking about — the polarization that is crushing American prosperity.

DENNIS KUCINICH: Michael, I want to refer back to something you said a moment ago, when you talked about deindustrialization. And I put a fine point on it. America used to make cars — we were the leader in the world at manufacturing cars. We were the leader in the world in steel. We were the leader in the world, unchallenged in aerospace. We were the leader in the world in shipping.

Now, that was part of our strategic industrial base. It was a strategic economic phase. It helped protect our country, but it also helped give people very good middle class jobs.

As we engaged in these trade agreements — the General Agreement on Tariffs and Trade (GATT), NAFTA, and China trade and other trades with certain regions — what we did is, we moved the good-paying jobs out.

What did we replace it with in the economy? We financialized the economy. So we don’t make things anymore. We create financial products. And this is where our nation — which used to be the leader in manufacturing — this is where our nation has taken a turn, that if we do not correct the course can only lead again and again and again to one financial crisis after another.

There’s a point at which people on one hand lose confidence in the system, and the other one is the system just doesn’t have the capacity to recover without the inevitable effects of hyperinflation.

DAVID KELLEY: Will either party have the courage to do what is necessary? Which is certainly increasing taxes for the uber-rich, who have just grown far out of proportion — grown exponential wealth as Michael was describing — which you know compounds the wealth over a period of time.

And the necessity that people who are working get a share of the profits — that they’re able to organize, that they’re able to share in the immense wealth that we create in this country for the top.

Will either party address those issues, about income, or wealth taxes, or reining in the power of this Dark Money?

DENNIS KUCINICH: I could give a brief answer to that, which is —it’s unlikely. We’re not looking at a Rooseveltian period here —

DAVID KELLEY: I find it stunning — quick tangent —I find both parties with huge lackings, in different ways. I was stunned when my party — I’m a Democrat — when my party attacked somebody who writes books like Griftopia, about the Wall Street collapse by Matt Taibbi — calling him “a so-called journalist” — which I was joking about before — who had the courage to actually write [about those who control the economy].

Or they also go after Glenn Greenwald, who wrote one of the great books — with Liberty And Justice For Some. Just a couple [of examples].

You saw how they went after [Russell] Brand, the comedian.

It’s just sort of stunning to me that — where is their patriotism rather than their party? When does patriotism and concern for the people that elected them come in, Dennis?

DENNIS KUCINICH: Well when the people are hurting enough. When they’re ready to basically say, “Look this is a unipolar moment, and the parties aren’t working for us.”

DAVID KELLEY: Well, on that sort of depressing note I guess we might want to end this up. I don’t want to leave people on a downer at this point in time. But I really was happy that the two of you could talk, and talk about the systemic problems that are cropping up in this country, and why these banks failed, and why wealth is being redistributed up the economic pyramid, and no one says anything about it.

I called the GOP sometimes the “Greed Only Party” because they will never vote for tax increases. But they seem to be better on matters of war and peace right now. The Democratic Party seems to be all war, all the time. I’m sorry. They’ll fight till the last Ukrainian dies, which is sickening me.

I have four children. I think about the grief that never goes away as your society and your families are torn asunder. So any last thoughts from either of you.


MICHAEL HUDSON: It’s very striking that the Republicans are seeing that the war is wrecking the whole economy. Dennis talked about how the steel industry can get going again. Well it got going by blowing up the gas pipeline, and without gas and Russian oil you can’t make steel in Germany anymore .

So the war turned out not to be only “fighting to the last Ukrainians.” It’s making Europe broke — pushing Europe into a chronic long-term depression and ending German industry.

And America says, “Well, why don’t you move your steel making companies to the United States, where we have cheap gas and oil, now that you have to pay six times as much for energy.” And energy is really what you make GDP out of.
So American strategy in the world is saying, “We realize that we’re losing competition to China and Asia and India and the whole rest of the world, but at least we can lock in our control of Europe. And we can make money off of Europe, Canada, and Australia. And at least we can keep going there by essentially acting as a rentier.”
The result is something that — at a certain point it’s driving other countries away.

I don’t think there’s any truth at all that Biden is working for the Chinese government as a paid agent — I think that’s just a vicious rumor. But what he’s done is force — by the sanctions on Russia he’s forced Russia to give China energy at much lower prices than anywhere else in the world.

The effect of Biden’s is to enormously increase Chinese competition and Iranian competition and Asian competition against the United States. It’s ironic. And the sanctions against Russia have made Russia decide, “Okay, we’re going to become autonomous and independent.”

DENNIS KUCINICH: You know, what I would like to do is to conclude this with the idea that perhaps we can go deeper into this discussion in a future conversation with respect to: number one, how America’s international policies — specifically with respect to war and the building up of a massive armament — undermines us here at home. That’s number one.

Number two is, how America’s insistence on the unipolar moment — as you alluded, Michael — has driven other nations together in economic alliances that I believe inevitably will lead to the decline of the dollar, and will create circumstances where the American economy will lose the elasticity it’s had over the last fifty years as a result of the dollar’s primacy.

So maybe we can get into that in the future. I want to thank Dave Kelley for convening this and moderating this discussion, and Michael it’s good to see you again. Let’s get together again.

DAVID KELLEY: Thanks very much for the input, gentlemen.

MICHAEL HUDSON: I look forward to it.

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