Michael Hudson

In April 2014, fresh from riots in Maidan Square and the February 22 coup, and less than a month before the May 2 massacre in Odessa, the IMF approved a $17 billion loan program to Ukraine’s junta. Normal IMF practice is to lend only up to twice a country’s quote in one year. This was eight times as high.

Four months later, on August 29, just as Kiev began losing its attempt at ethnic cleansing against the eastern Donbas region, the IMF signed off on the first loan ever to a side engaged in a civil war, not to mention rife with insider capital flight and a collapsing balance of payments. Based on fictitiously trouble-free projections of the ability to pay, the loan supported Ukraine’s hernia currency long enough to enable the oligarchs’ banks to move their money quickly into Western hard-currency accounts before the hernia plunged further and was worth even fewer euros and dollars.

This loan demonstrates the degree to which the IMF is an arm of U.S. Cold War politics. Kiev used the loan for military expenses to attack the Eastern provinces, and the loan terms imposed the usual budget austerity, as if this would stabilize the country’s finances. Almost nothing will be received from the war-torn East, where basic infrastructure has been destroyed for power generation, water, hospitals and the civilian housing areas that bore the brunt of the attack. Nearly a million civilians are reported to have fled to Russia. Yet the IMF release announced: “The IMF praised the government’s commitment to economic reforms despite the ongoing conflict.”[1] A quarter of Ukraine’s exports normally are from eastern provinces, and are sold mainly to Russia. But Kiev has been bombing Donbas industry and left its coal mines without electricity.

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Greg McInerney

An Interview With Professor Michael Hudson

Greg McInerney: This is Greg here from the MeltingPress.com. This the first installment of our “Alternative Voices” series where we talk to people who give us different perspectives on everything from economics, to politics, to culture. Today we’re joined by Professor Michael Hudson. He’s a research professor of economics at the University of Missouri in Kansas City. He’s also the author of “The Bubble and Beyond” which is his latest book, and “Super Imperialism: The Economic Strategy of American Empire” which I’ve read myself and is a brilliant read, you should go out and check that out.

GM: Professor Hudson, thanks so much for joining us today.

Michael Hudson: Good to be here.

GM: Professor, we’re based here in Ireland which is a country, as we both know, currently in economic ruin at the moment. Unemployment is at 14%, graduate unemployment is probably double that. Where did it all go wrong for Ireland?

MH: Your unemployment is intentional policy by the Irish leadership, of both parties. None of this unemployment is necessary. It doesn’t have to be this way. The government was suckered in to paying the debts for its corrupt bankers.

The problem is that even when you Irish did – as you should have done – and voted out the party in power, the incoming party has the same policy as the former one. It’s much like the United States, where we voted out Republican George Bush, and then got an even more Republican Democrat – Barack Obama. They all promise change, and then follow the financial sector’s directions.

So the underlying problem is that there is no body of theory or policy in Ireland to show that there is an alternative to this unemployment. There’s a belief, a Thatcherite belief that There Is No Alternative, and of course there is an alternative! You shouldn’t have paid uninsured bank depositors and bondholders, and you should not have to pay the European Central Bank, the I.M.F. or the other parties that misinformed you by telling your leaders that the cost of government bailouts would be easily managed, not a lost decade and economic disaster.

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Ellen Brown

The “fiscal cliff” has all the earmarks of a false flag operation, full of sound and fury, intended to extort concessions from opponents. Neil Irwin of the Washington Post calls it “a self-induced austerity crisis.” David Weidner in the Wall Street Journal calls it simply theater, designed to pressure politicians into a budget deal:

The cliff is really just a trumped-up annual budget discussion. . . . The most likely outcome is a combination of tax increases, spending cuts and kicking the can down the road.

Yet the media coverage has been “panic-inducing, falling somewhere between that given to an approaching hurricane and an alien invasion.” In the summer of 2011, this sort of media hype succeeded in causing the Dow Jones Industrial Average to plunge nearly 2000 points. But this time the market is generally ignoring the cliff, either confident a deal will be reached or not caring.

The goal of the exercise seems to be to dismantle Social Security and Medicare, something a radical group of conservatives has worked for decades to achieve. But with the recent Democratic victories, demands for “fiscal responsibility” may just result in higher taxes for the rich, without gutting the entitlements.

The problem is that no deal is going to be satisfactory. If we go over the cliff, taxes will be raised on everyone, and GDP is predicted to drop by 3%. If a deal is reached, taxes will be raised on some people, and some services will be cut. But the underlying problems – high unemployment and a languishing economy – will remain. More effective solutions are needed.

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Stephen Lendman

Since 2008, Western nations have force-fed their people austerity poison. Decline replaces prosperity. Millions suffer. Living standards deteriorate. Societies become no longer fit to live in. Neoliberal and imperial priorities let essential public needs go begging. How much more people will take before erupting remains to be seen. The longer fiscal pain continues, the closer an ultimate day of reckoning approaches. It'll arrive disruptively. Perhaps people will recognize that throwing out bums for new ones accomplishes nothing.

America is Exhibit A. Political Washington is corrupt, immoral, degenerate, and unprincipled. Instead of helping people, they destroy them. They benefit from imposing misery. Allied with criminal bankers an other corporate predators, their policies made conditions for growing millions intolerable.

Imperial wars destroy nations. Austerity leaves "nothing to drive the economy," says Paul Craig Roberts. Washington's solution is increase it. Doing it is economically destructive. Only bankers, other corporate favorites, and war profiteers benefit.

Michael Hudson says austerity sacrifices the "production economy, the consumption economy, (and) the real economy...." Viable alternatives are ignored to benefit privileged elites at the expense of most others. Hudson calls it

"financial warfare against the entire society, not only against labor, but against industry and, most of all, against government." Productive "industrial capitalism" became predatory "finance capitalism." It's not financing industry. It's furthering "economic parasitism and overhead."

Politicians in Washington support it. Obama exceeds the worst of Bush. Europe is corrupted the same way.

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Stephen Lendman

Photo: Riverdale, Ill. has run operational deficits for a number of consecutive years, driven primarily by a reduction in the amount the village relies on debt financing. “The village funded itself by borrowing money from its sewer and water funds, and now carries an operating fund balance of -52.1 percent of revenues.” The city, like many others on this list, is extremely small, with a population of just over 14,000. (AP Photo/Nam Y. Huh)

In past decades, many US municipalities declared bankruptcy. Since 1981, 42 cases were filed. Ten came in the past four years. Given hard times getting harder, what's happening now is unprecedented since the Great Depression. Cities occasionally declare bankruptcy. In America, they're coming more often. Others in dire financial straits may follow.

San Bernardino, CA is the latest. On July 11, The New York Times headlined "Third City In California Votes to Seek Bankruptcy," saying:

Officials have no choice. They can't meet payroll obligations through summer. "Faced with a budget shortfall of $45 million and city coffers that have already been drained, the San Bernardino City Council voted on Tuesday to file for bankruptcy."

Interim city manager Andrea Travis-Miller said:

"I am concerned about our ability to make payroll, not only in the next 30 days but also in the next 60 to 90 days. A major restructuring of this organization is needed."

California cities have two Chapter 9 bankruptcy options. They can either hire a third-party mediator to negotiate with unions and creditors or declare a fiscal emergency. San Bernardino chose the latter way. Depression conditions ravage the city. Many others face similar problems. Stockton and Mammoth Lakes declared bankruptcy earlier. Other financially strapped cities and towns around the state and country may follow. It's hard keeping up with many troubled municipalities, counties, school systems, and other public services potentially facing bankruptcy.

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Stephen Lendman

European/American austerity assures a wealth grab of the 1% at the expense of all others. Prioritizing banker payments causes debt bondage, human misery, economic wreckage, and eventual collapse. What can't go on forever, won't. It's not rocket science. It's fact.

Economies thrive on productive economic growth. It includes public sector infrastructure investment in transportation, research and development, roads and bridges, education, healthcare, and other vital areas. Sacrificing it for bankers and other vulture investors causes Greek-type crises.

Financialization highlights "the great problem of our time," says Michael Hudson. He defines is as "capitalizing every form of surplus income and pledging it for bank loans at the going interest rate, personal income over and above basic expenditures, corporate income over and above cash flow....and whatever government can collect in taxes over and above its outlay."

Banker nirvana depends on securing all economic surplus as interest, says Hudson, or in hard times as bailouts. However, doing it "leaves nothing over for living standards and what (18th and 19th century) economists (called) human capital formation (training and education) required for labor productivity to rise." Economies need it to thrive.

There's also "no cash left over for corporations to invest in new tangible capital formation, and no government spending for infrastructure or other social and economic needs."

Hudson talks about a financialization-caused economic/political "Dark Age," "a form of neo-feudalism." Industrial capitalism and people suffer to enrich financial oligarchs. Austerity becomes policy. Debt peonage and hard times follow. Jobs are cut, wages slashed, and living standards shrink. Prioritized banker demands sacrifice fundamental human needs.

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Stephen Lendman

The vultures: Christine Lagarde, the managing director of the International
Monetary Fund and Angela Merkel, the Chancellor of Germany.

Greece is being systematically raped, pillaged and destroyed. Bankers demand it. What they want, they get, no matter the human toll and economic ruin. Standing armies pale by comparison. Financial oligarchs wage war by other means and take no prisoners. Greece is Exhibit A. More on it below.

Last July, Christine Lagarde became IMF managing director. She replaced Dominique Strauss-Kahn. Spurious attempted rape allegations forced him out. In fact, he was targeted for supporting more responsible IMF policies. Bankers wanted his head and got it.

Lagarde's mandate is making IMF policy meaner and tougher. Straightaway, she backed harsh austerity measures banks demand. They include debt peonage and forcing nations to place money master interests above sovereign ones.

Last November, Mario Draghi replaced Jean-Claude Trichet as ECB president. Like Largarde, his mandate also entails raping and pillaging nations to pay bankers.

In late February, he told Wall Street Journal interviewers that forced austerity is firm policy. Enforcing it he claims will return troubled economies to long-term prosperity. In other words, starving people fills bellies. Withholding treatment cures patients, and destroying villages save them. Journal interviewers never asked him to explain:

• what right have bankers to prioritize their demands over sovereign state needs;
• how can ritual sacrifice increase demand; and
• how can 17 dissimilar economies coexist under straightjacket Eurozone rules.

Instead, they unquestioningly accepted his assertions about needed austerity and ending Europe's "obsolete" social contract. "There is no feasible trade-off" between social and labor related structural changes and fiscal belt-tightening, he claimed. Only banker demands matter. Draghi and Lagarge enforce them. Corrupt politicians go along.

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Stephen Lendman

Predatory bankers make serial killers look good by comparison. Their business model creates crises to facilitate grand theft, financial terrorism, and debt entrapment. They steal all material wealth and then some. They systematically rob investors and strip mine economies for self-enrichment. They demand they get paid first. They hold nations hostage to assure it. They turn crises into catastrophes. They leave mass impoverishment, high unemployment, neo-serfdom, and human wreckage in their wake. Their Federal Reserve/ECB/IMF/World Bank/political class lackeys do their bidding. They're more dangerous than standing armies. They wage war by other means. They cause "demographic shrinkage, shortened life spans, emigration and capital flight," explains Michael Hudson. They're a malignancy ravaging societies and humanity. Greece is the epicenter of what's metastasizing globally. The latest bailout deal highlights out-of-control pillage.

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Stephen Lendman

Greece's working class faces neoserfdom. They have a simple choice - leave or rebel.

On February 12, Greece's banker controlled parliament passed sweeping austerity measures on top of multiple previous rounds. New ones include:

• sacking 15,000 public workers in 2012 and 150,000 by 2015;
• slashing private sector wages by 20%;
• lowering monthly minimum wages from 750 to 600 euros;
• cutting fast disappearing monthly unemployment benefits from 460 to 360 euros; and
• reducing pensions many Greeks need to survive by 15%.

At issue is securing another 130 billion euro bailout. The more financial aid Greece gets, the greater its debt, the harder it is to repay, the more future aid's needed, and deeper the country's economic abyss heading for total collapse.

No matter. Troika power kleptocrats demanded deep cuts - the IMF, EU and European Central Bank (ECB). Money power dictates bankers get paid first. People needs are sacrificed to assure it.

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Francis J. Ward & Francis P. Ward

A father-son research team believe they have broken the code of the ancients and solved the riddle of the Great Pyramid (Giza). They think it reveals the solutions to global poverty, world hunger, and the end to the worldwide economic depression. Some of our readers may want to listen to what they have to say. - Editor

The Great Pyramid of Egypt has been called “the Bible in stone”[1], and according to an ancient Arab legend, the Great Pyramid contains the past and future history of the world.[2] Indeed, the solutions to Mankind’s toughest and most intractable problems have been symbolically written into the ground plan of the pyramids at Giza. In ancient times, Mankind solved the problem of the inequitable division of land and natural resources via a periodic declaration of economic renewal known as the Jubilee Year. The Jubilee Year of “Clean Slate” debt forgiveness and redistribution of the land and natural resources has been hard-wired into the ground plan of the pyramids at Giza, and according to the Dead Sea Scrolls, when the Messiah returns, he is going to declare a Jubilee Year. Moreover, Jesus Christ himself tried to re-establish the ancient tradition of the Jubilee Year.

The key to saving the world is contained in the first line of the American Declaration of Independence, where the American people declared their national sovereignty based upon “the Laws of Nature and Nature’s God.” This is the ancient notion that God and the Law of God can be discovered in Nature—in Creation—as opposed to the warp and woof of someone’s limited personal experiences, or fraudulent supernatural revelations whispered into a false prophet’s ears.[3] If Almighty God reveals himself to Man through Nature, then supernatural revelations —like God appearing to Moses in a burning bush, or God whispering into Muhammad’s ear— are abominable frauds.

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