To Wall Street and its backers, the solution to any price inflation is to reduce wages and public social spending. The orthodox way to do this is to push the economy into recession in order to reduce hiring. Rising unemployment will oblige labor to compete for jobs that pay less and less as the economy slows.
This class-war doctrine is the prime directive of neoliberal economics.…
Michael Hudson — On Finance, Real Estate And The Powers Of Neoliberalism
Michael Hudson: The Fed’s Austerity Program to Reduce Wages
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
Michael Hudson: The Fed’s Austerity Program to Reduce Wages
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
https://michael-hudson.com/2022/06/the-feds-austerity-program-to-reduce-wages/
See also
Michael Hudson Talks About Almost Everything with Jonathan Brown (transcript)
https://www.nakedcapitalism.com/2022/06/michael-hudson-talks-about-almost-everything-with-jonathan-brown.html
4 comments:
Hudson: “To Wall Street and its backers, the solution to any price inflation is to reduce wages and public social spending. The orthodox way to do this is to push the economy into recession in order to reduce hiring.”
Most Americans have been programmed to accept their poverty as normal. For example, they think that inflation is always a result of “printing too much money.” They forget that “printing too much money” only causes inflation if the supply of money outstrips the production and availability of goods and services.
The US government could offset inflation by working to increase the production and availability of goods and services. But instead the US government seeks to remove money from the real economy (not the fake Wall Street economy) and impoverish the masses.
The USA faced an inflation problem during World War II. Everyone had jobs, but workers had little to spend their money on, since consumer goods were rationed for the war effort. This surfeit of money, combined with material scarcity, threatened to make prices skyrocket, and thereby cause inflation. In order to get money out of the economy, the U.S. government introduced the federal withholding tax during the war, and also urged workers to give their money back to the US government by purchasing “war bonds.” The U.S. government falsely claimed that the bonds and taxes were necessary to “fund the war.”
Today, as Michael Hudson notes, the U.S. government’s preferred way to removed money from the economy is to raise interest rates, and thereby cause unemployment, so that violence and homelessness are quadrupled. The peasants starve to death, slaughter each other, and live like rats, but at least they don’t have inflation.
In this way the problem is “solved,” and the USA becomes a dystopia.
Hudson: “This class-war doctrine is the prime directive of neoliberal economics.”
Not only class war, but race war and other conflicts. Politicians and media outlets constantly attack males, heterosexuals, and white people in order to keep the peasants at each other’s throats, so they don’t unite against their owners.
Elsewhere, Hudson correctly says there has been no disruption of oil and gas supplies in the USA. Oil companies are using Ukraine as an excuse to gouge their North American customers. Biden is too feeble to stop this. Republicans are owned by the oil companies, and Democrats only care about their Jan 6 clown show.
Hudson speaks of “Covid’s shutdown of the U.S. and foreign economies.” In reality the lockdowns were political decisions. Covid did nothing.
Hudson: “The United States is turning into a landlord economy.”
In the words of Klaus Schwab and the WEF, “You will own nothing, and you will be miserable.”
No matter. The USA as we know it will collapse within five years, or at most ten years.
"They forget that “printing too much money” only causes inflation if the supply of money outstrips the production and availability of goods and services.
"
Not the supply. The spending of money.
You can create hyperinflation with a single $100 bill if you can get the money to move fast enough.
See how MMT has overturned ruling class dogma?
/rose-tinted glasses
“ Today, as Michael Hudson notes, the U.S. government’s preferred way to removed money from the economy is to raise interest rates,”
This INCREASES income via interest income… govt interest payments INCREASE…
While increase in risk free rate REDUCES the NPV of fixed rate financial assets (stocks/bonds) …
So price of financial assets goes down but income goes up…
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