风萧萧_Frank
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Radhika Desai，the professor at the University of Manitoba
Political Studies
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https://geopoliticaleconomy.com/author/radhika-desai/
Radhika Desai is a professor in the Department of Political Studies and director of the Geopolitical Economy Research Group at the University of Manitoba. She is the convenor of the International Manifesto Group and the author of several books, most recently "Capitalism, Coronavirus and War: A Geopolitical Economy".
民主和人权的帝国主义 vs 帝国主义的民主和人权
作者：拉迪卡·德赛，2022 年 6 月 8 日
https://doi.org/10.1080/21598282.2022.2065719
自从美国领导人清楚地认识到，他们认为增加与中国的贸易和接触将导致中国成为西方新自由主义金融化资本主义的苍白模仿，而中国继续恪守其社会主义承诺之后，西方对中国的言论就变得强硬起来。在以与特朗普同等甚至更大的力度对中国发动新冷战时，拜登只是用帝国主义传统的虚伪立场取代了特朗普的“美国优先”立场，帝国主义总是假装为它试图统治、压迫、压迫的世界做好事。利用或以其他方式破坏。该言论的最新版本是关于促进人权和民主。 当美国和西方民主国家正受到不平等、贫困、不信任、社会分裂以及政治不满和两极分化等有害因素的攻击时，当美帝国主义明显的反民主边缘变得越来越明显时，这一立场是 只是面临越来越大的矛盾，本文将探讨它们。
The Imperialism of Democracy and Human Rights vs the Democracy and Human Rights of Imperialism
https://www.tandfonline.com/doi/full/10.1080/21598282.2022.2065719?scroll=top&needAccess=true
By Radhika Desai, 8 Jun 2022
https://doi.org/10.1080/21598282.2022.2065719
Western discourse towards China had been hardening since it became clear to US leaders that their assumption that increasing trade and engagement with China would lead it to become a pale imitation of Western neoliberal financialised capitalisms was coming unravelled and China continued to adhere to its socialist commitments. In waging the US’s New Cold War on China with equal if not greater vigour than Trump, Biden merely replaced Trump’s “America First” stance with the traditionally hypocritical stance of imperialism that always pretends to do good for the world it seeks to dominate, oppress, exploit and otherwise destroy. The latest version of this discourse is about promoting human rights and democracy. At a time when US and Western democracies are being assailed by a toxic combination of inequality, poverty, distrust, social division and political disaffection and polarisation, at a time when US imperialism’s distinctly anti-democratic edge is becoming ever more evident, this stance is only facing mounting contradictions. The present article explores them.
债务爆炸：新自由主义如何助长债务危机
https://geopoliticaleconomy.com/2024/01/12/debt-neoliberalism-radhika-desai-michael-hudson/?
政治经济学家拉迪卡·德赛和迈克尔·哈德森讨论了美国和世界各地债务的大规模爆炸，以及新自由主义经济学如何导致基于投机和资产价格通胀的巨大泡沫。
作者：拉迪卡·德赛和迈克尔·哈德森 2024-01-12
对话 债务新自由主义, 拉迪卡·德赛, 迈克尔·哈德森
政治经济学家拉迪卡·德赛和迈克尔·哈德森讨论了美国和世界各地债务的大规模爆炸，以及新自由主义经济学如何导致基于投机和资产价格通胀的巨大泡沫。
RADHIKA DESAI：大家好，欢迎来到第 21 届地缘政治经济时段，该节目探讨了当今时代快速变化的政治和地缘政治经济。 欢迎来到充满坎坷的新的一年，所以让我们帮助它朝正确的方向发展。 我是拉迪卡·德赛。
迈克尔·哈德森：我是迈克尔·哈德森。
RADHIKA DESAI：有句老话说，金钱让世界运转。 与许多其他真理一样，新自由主义也微妙但决定性地改变了这一真理。 新自由主义时代的格言可以说是“债务让世界运转”。
事实上，债务不仅让世界运转，而且让世界疯狂旋转。 如此疯狂以至于失控的可能性始终存在。
放眼望去，到处都是债务危机。 有学生债务危机，2008年的抵押贷款危机从未真正消失，有商业房地产危机，有政府债务危机，当然还有住房危机，我指的是信用卡债务、汽车债务等 。
为了保持债务周期持续下去，美联储甚至正在改变其长达十年的不容忍通胀的容忍度。 一些报告称，对于美联储来说，3.5%的通胀率是可以接受的。 它宁愿容忍3.5%的通胀，也不愿牺牲因低利率而持续上涨的资产市场，也不希望利率超过一定水平。
此时加息意味着资产市场更难上涨并维持上涨，这就是为什么美联储无论能否解决通胀问题都会降息。
因此，今天，我们将继续仔细研究四十多年来的新自由主义政策，以及它们如何通过关注债务、房地产和金融不稳定的三角关系来改变我们的经济。
简而言之，我们将讨论这几十年来，虽然收入停滞不前，但债务却不断扩大，以至于家庭、政府和企业都负债累累。
如今，其中一份报告显示，偿债本身已增加 50%，目前几乎占美国政府总支出的六分之一。
住宅和商业地产如何陷入金融化的漩涡是我们要谈的另一件事，因为从这种经济中受益的不是生产者而是食利者，甚至连租金也在被金融化的炼金术所转化。 变成兴趣。
因此，归根结底，即使是土地所有权和房屋所有权也不再重要。 重要的是你有多少钱以及如何让你的钱生更多的钱。
最后，我们要讨论的是，尽管所有这些都使金融部门受益，但鉴于其本质，金融部门的扩张只能导致危机，以及今天堆积如山的债务如何威胁到金融部门的稳定。 首先是美国金融部门，然后是美国经济，正如迈克尔和我多次讨论的那样，还有美元体系本身。
那么让我们开始看这张图表。 这是美国总债务图表。
欠美国非金融部门债务
所以你在这里看到，这只是债务的总体水平。 底部的蓝色部分是企业债务，这里的绿色部分是家庭债务，这里的紫色部分是联邦债务，然后在顶部，你有州和地方政府债务，当然人们都知道这些债务受到了限制 通过宪法、法律手段。
所以你这里所看到的是 20 世纪 60 年代以来的债务，你可以清楚地看到，真正的债务，债务的积累只有在 20 世纪 80 年代以后的新自由主义时代才开始起飞，而且它真正开始在 20 世纪 80 年代左右开始起飞。 当然，2000 年代，美联储首次尝试了低利率政策，当然，这一政策在 2008 年金融危机后又恢复了。
迈克尔·赫德森：嗯，你可以看看基本的扫描，它是向上扫描，指数增长。 任何债务都是加倍的时间，这种斜率有一些非常独特的地方。 经济不是那样增长的，经济是在商业中增长的
尼斯循环，向上和向下。
你在这里看不到的是大幅下滑，这是因为复利导致债务增长继续增加。 债权人、银行只需将他们在发放新贷款中获得的所有利息进行再投资，这是指数级的，而且他们可以简单地在自己的计算机上创造自己的货币。
所以，这张图表确实应该与一个经济周期并列，然后你会发现任何债务增长如此之快都超出了支付能力，这就是过去5000年债务的显着特征。 债务的自然趋势是超过偿还能力。
现在，这张图表只是按拥有债务的部门（家庭部门、企业）显示债务。 它没有表明这笔债务的用途。 抵押的目的是什么？ 嗯，几乎所有的家庭债务都是房地产债务，商业银行债务也是如此。 该债务的银行贷款80%是房地产贷款。
政府债务的蓝图实际上并不那么重要，因为政府只是创造了债务。 这是永远不会偿还的债务。 家庭和企业必须偿还债务。 这就是导致问题的原因。 没有人遇到过负债的麻烦。
政府不会遇到债务问题，因为它可以简单地印钞票来支付。 但个人、家庭和企业都必须付出代价。 当他们无法付款时，就会损害银行，银行就会破产。
美联储的目的是确保债务继续增长，尽管它正在抑制经济并导致萧条。
央行的作用是对整个经济体实施紧缩政策，让我们在偿还债务方面看起来像第三世界国家，因为这与全球南方国家欠债的清偿方式完全相同。 外债以及西方每个国家的债务。
因此，整个西方、欧洲、美国都有一张与此完全相同的图表，它们都在放缓，而且现在都处于所谓的债务通货紧缩之中。
RADHIKA DESAI：嗯，你知道，我想补充几点，因为这张图表确实比乍一看更有趣。 当然，有你所说的上升趋势，迈克尔，但还有一个事实是，如果你看一下从 1950 年左右到 1970 年代末的这段时期，就会发现有上升趋势，但不是那么明显。 。
在 1980 年之后的新自由主义时代，特别是在 2000 年左右，你现在看到的是债务真正呈指数级增长的时候。 我认为，正如我所说，这与两件非常重要的事情是一致的。
第一，《格拉斯-斯蒂格尔法案》的废除，这意味着这本质上是允许美国金融部门简单地进行最激烈的相互竞争，以便放贷越来越多，投机越来越多，等等 在。 这就是你所看到的。
当然，另一部分是 2000 年互联网泡沫破灭后的历史性决定，当时美联储首次开始尝试低利率。
因此，从 2000 年左右到 2004 年 5 月左右，利率在 1% 到 2% 之间，当时由于美元面临很大压力，美联储被迫开始加息。 当然，一系列逐步加息最终刺破了房地产和信贷泡沫。 所以，我的意思是，这是一回事。
第二件事也是美国政府债务。 你知道，在某种程度上你可以说，是的，当然，政府债务不必偿还。 但问题是，政府债务并不是不重要。
归根结底，即使美国政府，或者即使美国政府借了很多钱，它也会遭受损失。 因为今天，美国政府为了从市场借款，必须支付比以前更多的钱来偿还债务。
因此，即使在低利率时代，美国政府也比德国等国家支付了更高的溢价和更高的债务利率。
所以从这个意义上说，我认为你在这里看到的，特别是在新自由主义时代债务增加之后，你在这里看到的直到2008年的最初增加，基本上是通过向富人减税而产生的。 因此，尽管社会保障等方面有所削减，但联邦赤字还是扩大了。
如今，美国债务的很大一部分实际上是用来支付利率的，即支付美国政府债务的利息。 所以从这个意义上来说，这很重要。
最后，当然，家庭债务的扩张，你会看到它再次增加，在 20 世纪 80 年代略有增加，然后有所放缓，但
你会发现，随着 2000 年代房地产和信贷泡沫的出现，这一数字尤其增加。
然后它再次减慢，然后再次增加。 当然，这种增长几乎完全是因为美国家庭遇到了困难。
因此，一方面，在借贷的顶端，当然，你借钱是为了增加消费，为了以一种或另一种方式花更多的钱，包括为了在股票市场上进行更多的投机。 但另一方面，你也有很多不良贷款。 这就是我们正在关注的。
最后，企业债务的增加也是因为过去几十年发生的事情本质上是公司被其他公司收购。
然后，这些公司所做的就是让他们购买的每家企业承担尽可能多的债务，以便将这些钱用于其他目的，包括向所有者提供丰厚的股息等等。
但这就是你所看到的。 因此，我们看到的是一个负债累累的世界。
迈克尔·赫德森：嗯，该图表中也有很多要点。 2000年后，政府债务中有很多是战争债务，即伊拉克战争债务。 从 1950 年到 1980 年左右，政府债务的增长几乎全部来自海外军事支出。
而这笔债务不仅欠美国持有者和美联储，还欠外国政府。 所以这没有包含在图表中，但这就是增长的大部分。
有趣的是，2008 年之后债务加速增长，但那是零利率政策时期。
美联储表示，当奥巴马崩溃时，我们必须确保的一件事是，家庭首当其冲地承受着这一巨大金融欺诈、不良贷款和垃圾抵押贷款的影响。 我们想拯救银行，我们想为此牺牲房主。 我们希望让公众向银行付款，以确保房主失去房屋并损失金钱。
企业破产了，但银行却因为这些债务而变得越来越富有，而且这些债务不会因为破产而消失。 它会不断增长，就像学生贷款债务不断增长一样。 你会看到很多商业债务在增加，但这些商业债务几乎是无息的，非常低。
如果我们真的有一组图表，那么该图表应该与之相关的是，所有这些债务都不是用于生产商品和服务，不是用于建造工厂和生产资料，不是用于雇用劳动力，而是用于购买股票和 债券和投机。 这些钱都被用来收购公司，让它们背上债务。
因此，公司债务的上升是由于兼并和收购、公司突击搜查、公司收购以及以一种能为股东和私人所有者赚钱而不是为整个经济赚钱的方式对待公司的结果。 。
所以一家公司会赚钱，假设你接管了西尔斯或玩具反斗城，私人资本会接管，他们会借钱，几乎没有任何利息从银行，100％，收购西尔斯或其他公司。
他们做的第一件事就是说，好吧，现在我们已经接管了公司，可能是《芝加哥论坛报》，让我们拿投资股票的养老基金来借钱。 让养老基金把钱借给公司，让我们从银行借更多的钱给公司。 我们借来的钱将向自己支付特别股息。
因此，钱从银行流向业主，根本不会产生任何积极影响，反而会产生非常负面的影响。 它让公司负债累累，以至于破产，就像西尔斯或玩具反斗城或所有其他基本上已经破产的公司一样。
当它们破产时，它们就会被卖给越来越大的公司。 因此，这种债务具有将所有权集中在该部门内的效果。
家庭债务增加是因为随着银行以住房为抵押贷款的金额增加，银行开始竞争。 谁可以为想要买房的新家庭提供最多的房屋抵押贷款？
好吧，银行竞相放贷如此之多，以至于如果你是一个买房的家庭，你必须比从银行借款的竞争对手借更多的钱，而银行刚刚创造了一个新的房地产泡沫。
这就是我们现在的处境。 房地产价格上涨如此之高，租金价格如此之高，其副产品之一就是无家可归者的增加。
由于所有这些债务，人们不知何故没有足够的钱来购买商品和服务，生活水平也下降了。
由于债务激增，我们生活在第三世界日益紧缩的计划之中。
拉迪卡·德赛： 不，绝对不。 你知道，你所说的让我想起我们已经说过，特别贫困家庭借贷的原因之一
是因为他们基本上入不敷出。 他们必须借钱，因此他们负债累累。
但还有另一个原因，那就是，你知道，为什么新自由主义几十年来学生债务激增？ 这是因为政府的削减已经停止了对大学的同等程度的资助。 所以费用就上涨了。
当然，学生的生活成本会上升，因为你不能租到任何半体面的东西，甚至不雅的东西，除非你花很多钱。 因此，所有这些因素都会增加教育成本，这意味着学生必须获得贷款，等等。
所以本质上是削减社会服务，顺便说一句，我们还没有谈论医疗债务。 大量债务的产生是因为人们如果想要支付某些医疗费用就必须借钱。
所以所有这些事情再次表明，在新自由主义下，真正受到伤害的是普通民众、劳动人民和穷人。
这些人还有另一种被欺骗的方式。 当低利率加剧购房竞争时，最激烈的竞争通常发生在低端市场。
因此，由于低端买家之间的竞争，低端市场，即首次购房者将购买的房屋和房屋，往往会出现最大的价格升值。 这就是让很多人望而却步的原因。
但我最后想说的是，这种债务扩张也很有趣，因为它恰好发生在 20 世纪 80 年代初政府承诺限制货币供应、承诺美联储 限制货币供应量以杀死通货膨胀之龙。
但这本质上意味着人们赚的钱越来越少，但债务却越来越多。 从本质上讲，债务成为向经济发行货币的方式。
当然，美联储本身自 1987 年以来一直坚持一项政策，即如果要救助金融部门，无论创造多少货币都不算太多。 因此，从1987年开始，当1987年金融危机发生时，格林斯潘首先进行了这种流动性供给，以救助金融部门。 它被称为“格林斯潘看跌期权”。
现在多年来它已成为美联储的看跌期权。 结果是，你知道，我们刚刚向你展示了债务图表。 根据美联储的数据，美国的总债务或非金融债务目前接近美国 GDP 的三倍。 自 1980 年以来已经翻了一番。
还有一点非常有趣。 这些图表，即我们向您展示的图表，并不包括美联储本身为救助金融部门而创造的巨额债务。 从 2020 年开始，企业部门将成为高端企业，金融部门将依赖企业部门的最佳资产。
因此，本质上，这让我感到非常惊讶，2008 年，你们大学的一位名叫詹姆斯·福尔克森 (James Fulkerson) 的学者和密苏里大学堪萨斯城分校 (UMKC) 的迈克尔 (Michael) 表明，美联储无法仅靠 发挥最后贷款人的正常作用，通过提供充足的流动性、大幅降息等方式，将当时的利率从5%降到了0%。 但这并没有起到稳定系统的作用，甚至使情况变得更糟。
然后，根据福克森的说法，美联储采取了一系列非常规措施，无论是规模还是范围都是史无前例的，而且合法性也值得怀疑。 这是他的话。 这些目标是明确改善市场状况。 据他介绍，这个计划总计达29万亿美元。
迈克尔·赫德森：你很快就明白了这一点，我想展示这是多么的革命性。 从美联储成立到 2008 年，中央银行的基本理念一直可以追溯到英格兰银行以及人们在 1880 年代和 1890 年代讨论的规则。
关于中央银行的想法，您使用了“最后贷款人”一词。 这意味着每个人都意识到，有时当商业不景气或利率发生变化时，人们会拥有非常健全的财产。 这些建筑物在破产时并未被摧毁。 公司没有被摧毁。
但问题是商业周期出现了暂时的低迷。 因此，银行应该只以高利率借贷短期资金。 世界上每个中央银行都遵循这一政策。 您不补贴银行信贷利率。
自2008年以来，银行控制了美国财政部，控制了美联储，不劳而获。 事实上，他们是有偿借钱的。
美联储表示，2008 年之后，我们必须让银行家变得更富有。 尽管事实上他们是
他们支付给自己的钱比任何其他部门都多，但他们没有足够的钱继续放贷。 我们会给他们所有他们想要的钱。 我们这样做的方式是银行向企业提供收购贷款，为商业房地产提供贷款。 他们会将这些欠条以存款形式转入美联储。
美联储将借钱给他们作为交换。 银行已将所有不良贷款和不稳定贷款存入美联储。 美联储向他们支付这些存款的利息。 银行不是从企业借款人那里赚取利息，而是美联储正在创造利息来支付银行，以实现贷款的大幅增加。
您可以将其视为大通曼哈顿和花旗银行的分支机构。 本质上，他们已经控制了美联储。
这确实是银行计划的中央计划经济的自由主义理想。 当自由主义者说，让我们让政府破产，让政府不出现赤字时，这意味着如果政府不出现赤字，它就会减税，就会削减支出。 这意味着人们需要的、经济需要的所有信贷都将由银行提供。
美联储已经说过，现在我们要真正加大力度。 我们将让银行赚取 5% 的钱。 突然之间，你所看到的这种蓝色增长，即政府债务将会飙升。 利率将占他们已经在谈论的政府支出的很大一部分，我们将不得不削减社会保障和医疗保险。
共和党候选人[尼基]黑利就是这么说的。 共和党人想说，如果在支付社会保障和医疗保险或向银行和债券持有人支付利息之间做出选择，债券持有人是第一位的，因为他们是我们的竞选捐助者。 你不会从破产者那里得到竞选捐款人，因为他们没有银行那样的钱。 当然，我们将救助我们的竞选贡献者。
政府本身已经私有化。 这就是新自由主义。 这就是反政府自由主义。 这意味着银行的自由和广大民众的债务体系。 这就是这些图表的含义。
拉迪卡·德赛：当然。 我只想说一件事。 当然，大多数人都会知道这一点，但如果人们不知道的话，美联储在世界中央银行中是很奇特的，因为它仍然是私有的。 从这个意义上说，我认为迈克尔所说的非常有意义。
从本质上讲，美联储在过去几十年里所做的就是将美国经济转变为这样一个经济体：赚钱的主要方式、最好的方式、最快的方式本质上是通过投机，而不是通过投资于经济。 生产普通人需要的商品和服务，但通过夸大已经生产的商品和服务的价值。
那些对马克思主义稍有了解的人可能会欣赏它，但如果马克思在的话，他会称其为一种非常奇特的死灵术形式。 我这么说是什么意思？ 因为已经生产出来的商品和服务包含已经消失的死劳动，它现在已经死了，不再活着，它已经投入到生产中，而你正在夸大其价值。
然而，当你这样做时，你正在贬低活劳动力的价值，其中大部分可能仍然失业，而所有这些都是生产普通人每年、每个时期都需要的新商品和服务所必需的。
我们需要更多的食物，我们需要更多的衣服，我们需要更多的交通，我们需要更多的住房，等等。而这些都是被扼杀的东西。 活劳动力被扼杀，而死劳动力则上升。 因为有一个非常奇特的东西。
请记住，正如迈克尔所指出的，正如我所指出的，很多债务已经产生。 事实上，其中大部分都是为了投机、夸大现有资产的价值而产生的。 这有一些非常奇特的地方，因为想象一下一套房子的价格上涨了 30%、40%、50%。 它可能没有任何改变，但价格无论如何都会上涨。 什么也没生产，但价格却上涨。 所以，这就是已经创建的经济。
我还想向你们展示另一个结果，这就是我这次的最后一点，也是这次大幅增长的另一个结果，即联邦政府救助金融机构的庞大计划。
所以，你看，这是美联储资产负债表上总资产的图表。
2024年1月美联储资产
你可以看到，从 2000 年代开始，它基本上徘徊在略低于 1 万亿美元的水平。 在 2008 年金融危机中，这一数字翻了一番，实际上翻了一倍多一点，达到了 2 万亿美元以上。
然后在接下来的十年里，得益于量化宽松政策，联邦政府实质上启动了一项购买金融机构无价值资产的计划
金融机构的好钱。 这就是量化宽松，因此它不断增加，增加了自己的资产负债表，同时基本上弥补了造成 2008 年金融危机的金融机构受损的资产负债表。
然后当 2020 年到来时，它开始缩减资产负债表，大流行来了，然后你会看到联邦政府的资产绝对史无前例地增加到 9 万亿美元。 这是美联储斥资 29 万亿美元救助金融业的结果。
所以，迈克尔，请继续，是的。
迈克尔·赫德森：当你使用“无价值资产”这个词时，如果你能从美联储获得 100% 的资金，那么它们并不是完全没有价值。 从19世纪到今天，马克思和几乎所有人都在使用“虚拟资本”这个词。 换句话说，所有这些债务和银行资产都算作资产。
如果银行向办公楼内的大型企业业主提供贷款，银行就将其视为资产。 但正如我们今天所看到的，这些资产价格无法实现。 换句话说，如果银行说，好吧，现在你的抵押贷款即将到期，因为这是一笔大额抵押贷款，你必须支付，该怎么办？ 每隔几年，您就必须全额支付或重新借款。
好吧，突然之间，如果它以办公楼为抵押贷出 1 亿美元，而该办公楼现在价值 4000 万美元，那么银行为什么要向价值 4000 万美元的办公楼的业主贷出 1 亿美元呢？ 这就是我们今天的处境。
现在，看看这两个跳跃。 2008 年之后的第一次跳跃是垃圾抵押贷款的跳跃。 所有这些贷款都是针对虚构的抵押贷款，这些抵押贷款假装有价值，但银行主要向黑人和西班牙裔借款人发放抵押贷款，银行欺骗了他们，高估了价格。
大约在 2004 年之后，银行普遍发现了一种新的赚钱方式。他们可以通过向少数族裔收取更高的利率来赚钱，几乎是向白人收取的利率的两倍。 有很多银行和经纪人专门从事这方面的工作，这基本上就是垃圾抵押贷款集团。 从全国范围来看，金融业是最明显的受益者。
有许多臭名昭著的银行最终被合并。 美国银行是不诚实的银行之一。 花旗银行是最不诚实的银行之一，这一点已有充分记录。
利维研究所和堪萨斯城的兰德尔·雷 (Randall Wray) 发表了一篇重要的解释，解释了这些 29 万亿美元、27 万亿美元的贷款是谁的。 最终，其中许多贷款被展期并重新放贷，因此净额不是 27 万亿美元，但这就是这次大幅跃升后向银行提供的金额。 他们没有把银行家送进监狱，而是让他们成为亿万富翁。 他们奖励了他们。
这就是奥巴马的政策，也正是这一政策使他们成为美国现代历史上最恶毒的种族主义总统之一。 民主党致力于恢复内战前的种族主义政策。
好吧，下一组是您在 2020-21 年看到的银行贷款大幅增长。 他们来自哪里？ 美联储开始加息。 当美联储将利率从不足1%提高到5%时，这意味着债务人突然要支付以前10倍的利息。
这样做的作用是降低了资产的价格。 它与利率成反比。 突然之间，倒闭的银行持有的股票和债券都是虚构的。
事实上，尽管硅谷银行和纽约银行倒闭了，但所有银行，尤其是花旗银行和大通曼哈顿银行，都拥有了所有的贷款。 突然之间，它们的价值根本不及账面上的价值。 银行资不抵债。
现在，这是一个绝佳的机会。 美联储本可以让政府接管它们，然后说，你们无力偿债。 我们将消灭股东和债券持有人，因为你们发放了不良贷款。 相反，美联储表示，与其让银行破产，不如让经济破产。
这就是我们今天的政策。 美联储贷款的增加是为了支持信贷的增加，从而增加了负担。 所有这些信贷增长远远超过了人们获得的工资和薪水。
不知何故，利息费用、摊销费用和罚款的增加最终导致食品、服装和其他消费支出减少，导致经济陷入贫困。 如果消费者支出增加，那是因为通货膨胀。
拉迪卡·德赛： 一个小小的更正。 当然，这一大幅增长是因为美联储在疫情爆发时启动了一项新的大规模流动性供应计划，即量化宽松计划。 而你所说的那个， esse
最初他们救助硅谷银行等，这是这里的小幅增长，这是利率开始上升后发生的情况。 但在此期间，直到此时为止，利率仍处于历史低位。
在我们结束这次谈话之前，我还想说一件事，那就是，你知道，在 2013 年左右，基本上，美联储决定尝试缩小其资产负债表的规模 。
所以你可以看到，当时仍然只有大约三万亿美元，而不是今天的九万亿美元。 但你知道金融机构和金融部门做了什么吗？ 2013年，当时的金融业爆发了“缩减恐慌”。
你知道，美联储威胁要缩减资产负债表，本质上是为了减少资产负债表。 他们说，我们没有。 你必须继续支持我们，你必须购买我们的资产。 因此，本质上，美联储迁就了他们的脾气，他们继续扩大资产负债表。 然后，正如我们在大流行中看到的那样，做得更多，等等。这就是我们正在关注的事情。
当然，我想指出的另一件事是，你知道，我完全同意迈克尔所说的关于这个制度有多么种族主义的一切，因为归根结底，你知道，人们认为 债务是一种市场关系。
债务不是市场关系。 总体而言，这是一种相对享有特权的人之间的关系，其中一个人决定借钱给另一个人。 因此，通过一项立法，你可以让美国的穷人、美国的黑人、美国的西班牙裔成为房主，这种想法总是有点问题。
最终，在整个 2008 年金融危机中，之前的债务大量增加，只有一小部分（发生在债务大幅增加的最后阶段）实际上是向次级借款人提供的贷款。 金融机构只有在向优质借款人提供了他们可以承担的所有债务后才开始向次级借款人提供贷款，然后他们才会采取行动。
因此，从很多方面来说，次贷借款人都是最后的，当然，他们也是受害最深的人。 所以，是的，我的意思是，我认为我们确实生活在一个充满债务的经济中，正如我们刚才所说，这确实与我们应该拥有的经济背道而驰。
迈克尔，你知道，关于土地、租金和利息等整个古典概念的一件事当然是，古典政治经济学总是瞧不起这样的东西，比如利息和租金，因为它看到了它 作为非劳动收入，不是吗？
迈克尔·赫德森：嗯，我可以花一小时的时间来讨论这个问题，但我想跟进一些有关种族因素的图表。 我们已经讨论了债务量太大而无法偿还，但我想说债务还有另一个方面，如果你能显示种族，那就对了，那个图表非常有趣。
美国房屋拥有率竞赛
债务的结果之一是创造了一个分裂的经济，这意味着我们处于一种种族隔离的经济之中。 我们处于金融种族隔离经济中。 10%的人口拥有人口中75%以上的股票和债券，而且他们几乎全部是白人。
我们已经讨论过抵押贷款债务占总债务负担的 80%。 我想展示 2002 年图表开始之前很久发生的事情。
我想从 1945 年二战结束时开始。 那确实是在大萧条时期房屋还没有建造的时候，因为人们没有市场。 它们不是在第二次世界大战期间建造的，因为所有原材料都用于战争，而且 1945 年整个经济的债务非常非常低，因为没有什么可以借钱的。 你不能借钱消费，因为无论如何一切都是配给的。
但最后，他们开始发放贷款，这刺激了美国和其他国家的腾飞。 欧洲、美洲和其他国家都在战后重建，其中大部分重建是住房重建。 那是伟大的住房建设的时候。 在皇后区，有主要的开发商，不仅是特朗普的父亲，而且所有著名的实验和集体住房都是在这里进行的。
只有一件事。 白人能够以大约 10,000 美元的价格购买房屋，这是现在价值 100 万美元的房屋的典型价格。 问题是，为了买房子，银行只会让你申请抵押贷款。 没有人有足够的钱来购买一栋房子的全部价值，如果 1945 年的工资可能是 3,000 或 4,000 美元，你甚至买不起 10,000 美元的房子。 没有人有这样的经历。 你必须去银行。 银行，直到 2000 年、2001 年左右，只会
抵押贷款几乎全部向白人发放，除非你是一个非常非常富有的黑人或西班牙裔。
你创造的是一个分裂的社会。 1945年买房的人——他们从战争中归来。 他们从事民事工作。 他们买了房子，很多人都老死了，却把房子留给了孩子们。
一代又一代的白人把房子留给孩子们，给他们留下足够的遗产，让他们拥有自己的房子和自己的教育。 所以你拥有的是一个拥有房屋、受过教育的白人阶层，但这个国家的非白人无法享受到这一点。
那么，对主要人类而非未成熟借款人的信贷限制有多深？ 我们正在谈论一项相当种族主义的政策。 这是非常重要的一个事实，即现在已经有 75 年了——嗯，比这更长，自二战以来的 75 年——在美国，有一个被剥夺权利的非白人阶层，他们的世袭房主可以进入大学 因为他们的父母和祖父母都上过常春藤盟校。
经济金字塔的顶端存在对住房、教育和财富的垄断，而经济的其他部分基本上被剥夺了权利，就好像我们处于我们自己的金融化种族隔离经济中一样。
RADHIKA DESAI：是的，还有其他几点。 顺便说一句，在这张图表中，我应该解释一下，这里的第一行本质上显示的是美国非西班牙裔白人的住房拥有率，约为 75%。
底部的红线代表美国的黑人，绿线代表美国任何种族的西班牙裔。 因此，这大概包括，例如，如果你是一个相对白人的西班牙裔，他们会做得更好一些。
但你可以看到，从2000年代初到现在，黑人的拥有率确实没有变化。 如果说有什么不同的话，那就是今天的情况比以前稍微糟糕一些，而且在大流行之前变得更加糟糕，实际上达到了 40% 左右的非常低的水平。 无论如何，事情就是这样。
但除了这些东西之外，我们生活的那种金融化经济，越来越多地拥有房子和土地等等，并不一定，因为抵押贷款，拥有土地或房子并不一定会给你带来任何特权， 因为房主发现他们正在向银行支付利息，甚至房东的杠杆率通常也很高，因此他们收取的大部分租金实际上最终都变成了银行的利息。
因此，从某种意义上说，我们想说的是，美联储设计了一种经济，在这种经济中，不仅利润和工资基本上成为支付利息的对象，而且租金也被用来支付利息。 因此，可以说，利息已经成为收入金字塔顶端的主要收入形式。
这也是税收结构变化的结果。 例如，在美国的税收制度中，利息和租金收入的待遇比我们的工作收入要宽松得多，优惠得多。 这是一个很大的问题。
迈克尔·赫德森：这又回到了价值理论，我认为需要单独进行讨论，因为它是如此基础。
古典经济学和自由市场的整体理念是一个免于租金的市场，租金是非劳动收入。 房租是房东在睡觉时赚的钱。
地租不是劳动创造的，大多数人没有意识到什么是建立在李嘉图和马克思以及整个19世纪基础上的所谓劳动价值论。
这个想法是将劳动创造的价值与经济租金分开，经济租金是由世袭、特权、财产所有权、所有者、银行、垄断者以及赚钱的地主创造的。 ，通过拥有出租财产，或通过借贷并赚取利息，或通过拥有公司，垄断。
你只需提高价格，而大部分通胀，正如拉迪卡在演讲开始时提到的那样，他们称之为利润通胀，这意味着一家公司决定，让我们提高药品价格。
例如，我的妻子参加了雇主联合医疗保健计划。 她要支付的价格，当地药店在1月1日涨了五倍，因为医疗保险公司说，我们可以通过价格翻五倍来赚钱。
制药公司一直在全面提高价格，不是因为生产更多，也不是因为成本上升，最终成本将是生产、劳动力和材料成本，而仅仅是因为它们“ 已经成为垄断者。
民主党一直是垄断企业的伟大保护者，因为他们是竞选贡献者。 如果你看看谁是卫生委员会的领导者和国会的其他人，国会的相关委员会，他们的摄像头
Paign 贡献者来自制药和制药行业。
因此，政府代表其竞选捐助者，参议院和众议院的军事和国务院部门由军工联合体、制药公司的卫生部门等提供补贴和支付费用。
因此，我们是导致美国经济失败的问题的一部分。 由于债务种族隔离造成的紧缩政策，这是一个失败的经济。
RADHIKA DESAI：我们可能应该很快转向讨论解决方案。 但让我对你所说的内容补充一点，当然，如果你看看今天的美国经济，你会发现在新自由主义时期，所发生的情况是它已经成为主导， 当然是金融领域，也就是所谓的FIRE领域，金融、保险、房地产。
最重要的是，如果你看看美国经济的其他哪些部门非常重要且利润丰厚，你会发现它们是军工综合体，它们是大型制药公司，它们是信息和通信 技术。
在几乎所有这些情况下，这些部门的特点是高度垄断、高度寻租，例如，军事工业综合体基本上依赖于大量的政府合同，而这些合同是有风险的—— 免费，他们可以随意增加成本。
大型制药公司以及信息和通信技术公司依靠知识产权来确保其垄断地位。
因此，从所有这些方面来看，这创造了一个非常缺乏活力、效率不高的经济，但与此同时，对于拥有它的人来说却非常有利可图，这当然给普通美国人带来了额外的负担。
迈克尔·赫德森：嗯，缺乏活力的问题之一是办公空间和商业地产的减少。 我们一直在谈论住房拥有率以及这是多么不公平，但你还记得 2008 年房地产价格暴跌时，你收到了所谓的“叮当邮件”。
你会有买家，特别是在内华达州和佛罗里达州，那里的房价大幅上涨，他们会说，好吧，我欠这栋房子 50 万美元，但现在隔壁的房子售价 30 万美元 。 我会把钥匙寄回银行，然后说，好吧，我违约了，你可以拥有房子，我只是不会付款，我要申请新的贷款并买房子 隔壁。
嗯，这种现象现在正在企业中发生。 显然，[仅] 40% 的美国商业地产已被占用。 换句话说，自从新冠疫情以来，最重要的是，自从经济因债务通货紧缩而开始萎缩以来，企业一直在倒闭。
即使是那些经商的人，也有人在家工作。 现在，如果建筑物的平均入住率只有40%，业主怎么有钱向银行付款呢？
嗯，因为银行几乎将建筑物价值的 100% 借给了愿意支付所有租金作为利息的房主，所以租金是为了支付利息，这是基本的座右铭。
他们想要的是建筑物价格中的资本收益。 他们意识到他们不会获得资本收益。 这都是虚构的资本，它正在下降，我们将钥匙寄回银行，然后离开大楼。
今年和明年，不仅在英国，而且在英国和其他国家，都有数万亿美元的商业房地产到期，银行突然之间就会出现未偿还的抵押贷款。
针对这些抵押贷款，他们对储户、债券持有人负有负债，最重要的是，他们想向大通曼哈顿银行的负责人杰米·戴蒙（Jamie Dimon）支付数百万美元，每年因经营一家公司而获得 2900 万美元 该公司已经破产，但却得以维持，因为他将这 2900 万美元中的一部分交给了继续任命美联储人员来救助他们的政客。 这就是所谓的循环流。
当银行突然破产时你会做什么？ 嗯，通常情况下，如果他们发放了不良贷款，就必须有人受苦。 谁会受苦？
正如比尔·克林顿（Bill Clinton）在被告知必须按照艾伦·格林斯潘（Alan Greenspan）所说的去做并支持银行时所说的那样，克林顿说，哦，一切都与债券持有人有关。
2009年，当奥巴马上任并决定救助银行时，联邦存款保险公司负责人希拉·贝尔(Sheila Bair)表示，等一下，我们有一家不诚实、无能的银行。 美国有一家银行比其他银行更狡诈、更无能。 那是第一国民城市银行。 让我们接管它。 让我们把它变成一家公共银行。 你不能让这家银行因为过于贪婪而放出过多的贷款而摧毁整个经济
财产的价值，并一直期望得到救助，这样它就可以赚取更多的利息并支付给管理人员更多的钱。 让我们把它开到下面吧。
奥巴马和他的财政部长蒂姆·盖特纳表示，这一切都与拥有银行的债券持有人有关。
那么问题是，当所有这些抵押贷款都破产时，银行会做什么？ 好吧，消灭股东。
但债券持有人是人口中最富有的 1%。 他们拥有大部分银行债券。
您认为政府会支持谁？ 它会支持经济、股东还是1%？
这确实是你应该考虑一个经济体是种族隔离经济体的方式，不仅仅是在种族和种族上，而且在经济上。 这就是债权人和债务人之间真正的种族隔离，我认为我们所有的节目都从不同的角度审视这一点。
拉迪卡·德赛：迈克尔，我想对你所说的内容补充几点。 这非常有趣，因为如果你看看商业房地产，毫无疑问，过去几个月一直有关于商业房地产价格暴跌的头条新闻。 它来了。 事实上，这已经发生了。
正如迈克尔所说，从我们在财经媒体上读到的情况来看，商业房地产的价值已经在持续下跌。 真正的大威望建筑可能不会受到影响，但下一层以下，所有这些建筑都会受到影响。
每个走过北美大城市或欧洲其他地方的大城市的人都会发现商业空间基本上正在下降。 这么多人都被封起来了 这么多都是空的等等。
根据一项衡量标准，美国银行大约10%的资产实际上依赖于商业房地产的价值。 现在，迈克尔问道，你知道，当危机来临时，危机已经来了。
那么美联储要帮助谁呢？ 但你知道吗，我什至不确定。 而美国政府，他们要帮助谁？ 美国当局要帮助谁？
我什至不确定他们是否能够帮助他们，因为事实是，随着这些资产的价值下降，如果它们持续公开上市，银行就必须报告它们，这意味着它们的股票 已经会下降了。
毫无疑问，崩溃将会到来。 当它到来时，是的，美联储将再次，正如你在硅谷银行看到的那样，本质上，事实上，我想在那里指出另一点。 本质上，[珍妮特]耶伦女士站出来表示，我们将为所有储户提供担保，即使他们的存款高于 25 万美元。
现在，您可能会认为这在某种程度上是一件非常民主的事情。 但相反，如果你看看硅谷银行是一家什么样的银行，本质上它就像一个俱乐部，其中一群精选的富人彼此都有联系，互相借出大量资金。
那么，贷款是什么意思呢？ 这意味着我去找我的朋友，还有硅谷银行，说，请给我 500 万美元。 我要创业。 你根本不考虑我的创业公司是否值得支持。 你只要说，好吧，我给你，我要在你的账户上显示500万美元的存款。 这些是耶伦女士所保护的存款。
这甚至还不是他们存入银行的钱。 这是以我的名义存入的存款，因为它是借给我的。
因此，如果你想一想保护极少数富人的利益有多大，我希望在这个节目中我们能让你了解美国当局为保护极少数人的利益而采取的措施。 这个少数人的财富。
在我们的下一个节目中，也许我们会做的是，我们将完全致力于讨论如果我们要摆脱这种经济，需要发生什么。
迈克尔·赫德森：这是结束这一切的好方法。 它会导致很多事情。 美联储最不想看到的就是——如果银行报告其资产的实际市场价值怎么办？
当你有资产负债表、资产和负债时，他们以贷款的价格持有资产，比如一栋大楼的 1 亿美元。 但如果他们报告的大楼资产仅为 4000 万美元呢？ 你在这里有银行资产，在这里有负债。 他们看起来就像大多数美国人一样。
50%的美国人没有任何资产，但却背负着巨额债务。 这是一个有趣的条形图，可以显示资产和负债。 你可以按收入群体来查看。
美联储没有提供关于债务占收入比例的可信统计数据。
如果你看看美联储按百分位数（10%、20%）计算的债务与收入的统计数据，就会发现过去 50 年没有任何变化。 根本没有人负债。 因为他们说，让我们假设最后半美分的债务保持不变
乌里。 统计数字是虚构的。
它们是虚构的，因为这保护了这样一个事实：大部分所谓的银行资本都是虚构的。 我的意思是，我们处于一个虚拟的经济中。
这有点像试图在《纽约时报》上阅读有关国际事务的文章。 这与美联储的统计数据一样现实。
拉迪卡·德赛：没错。 我的意思是，基本上美国的富人和美国的大型金融机构都处于这样的境地：他们做了糟糕的投资，他们亏损了，然后他们就走了，哎呀。
然后美联储，也就是他们的糖爹，基本上就会来弥补他们的所有损失。 它给了他们更多的钱来填补资产负债表上的漏洞，这些漏洞是他们自己因贪婪、误判和错误判断而造成的。
因此，我们有它。 不幸的是，美国今天所面临的正是这种经济。 那么问题自然而然地出现了，美国人需要什么样的经济来取代它？
迈克尔·赫德森： 我想补充一点。 重要的是，这些不偿还债务的富人不必支付罚金。 欠债的大商人不支付罚金。
您知道，如果您是一个家庭并且背负着信用卡债务，如果您错过了电费账单或任何其他地方的付款，您的利率会从 19% 上升到 30% 或更多。
如果你是富人，情况就不是这样了。 有一套利率和罚款适用于 99% 的人口，另一套适用于最富有的 1% 到 10% 的人口，而你不在其中。
拉迪卡·德赛：这就是我们所说的金融种族隔离。 所以我想，迈克尔和我将告别，并希望在几周后见到你，我们将讨论我们需要什么样的经济。
非常感谢您加入我们，几周后再见。 再见。
The debt explosion: How neoliberalism fuels debt crises
https://geopoliticaleconomy.com/2024/01/12/debt-neoliberalism-radhika-desai-michael-hudson/?
Political economists Radhika Desai and Michael Hudson discuss the massive explosion of debt in the US and around the world, and how neoliberal economics leads to large bubbles based on speculation and asset-price inflation.
By 
Transcript
RADHIKA DESAI: Hello and welcome to the 21st Geopolitical Economy Hour, the show that examines the fast-changing political and geopolitical economy of our time. Welcome also to a new year that promises to be nothing but rocky, so let’s help rock it in the right direction. I’m Radhika Desai.
MICHAEL HUDSON: And I’m Michael Hudson.
RADHIKA DESAI: There’s an old saying, money makes the world go around. Like so many other truths, neoliberalism has subtly but decisively altered this one too. The adage of the neoliberal age can be said to be “debt makes the world go around”.
Indeed, debt is not just making the world go around, it is making it spin madly. So madly that the possibility that it will spin out of control is ever present.
Everywhere you look, there’s a debt crisis. There’s a student debt crisis, the mortgage crisis of 2008 never really went away, there’s the commercial real estate crisis, there’s a government debt crisis, and of course, there is the crisis of housing, I mean credit card debt, auto debt, etc.
To keep the debt cycle going, the Federal Reserve is even changing its decade-long tolerance of intolerance of inflation. For the Federal Reserve, inflation is acceptable at 3.5%, according to some reports. It would rather tolerate 3.5% inflation than sacrifice the asset markets that keep going up thanks to which have kept going up thanks to low interest rates, and it doesn’t want to take interest rates beyond a certain level.
Raising interest rates at this point means making it harder for asset markets to go up and stay up, and that’s why the Federal Reserve is going to cut interest rates no matter whether it’s managed to solve the inflation problem or not.
So today, we are going to continue our closer look at more than four decades of neoliberal policy and how they’ve changed our economy by focusing on the triangle of debt, real estate, and financial instability.
In short, we are going to talk about how in these decades while incomes have stagnated, debt has expanded such that households, governments, and businesses have all become indebted to the gills.
Today, one of the reports shows that debt servicing itself has gone up by 50% and today accounts for almost a sixth of total government spending in the United States.
How both residential and commercial real estate have become bound up in the vortex of financialization is another thing we want to talk about because it is not producers but rentiers who benefit from this type of economy, and even rent is being converted by the alchemy of financialization into interest.
So at the end of the day, even land ownership and home ownership no longer matter. What matters is how much money you’ve got and how you can make your money make more money.
So finally, we are going to talk about how even though all of this has benefited the financial sector, given its very nature, the expansion of the financial sector can only lead to crisis, and so how the mountain of debt today threatens the stability of the US financial sector and by turn of the US economy, and as Michael and I have discussed so many times, the dollar system itself.
So let’s start looking at this chart. This is the chart of total indebtedness in the United States.
So you see here, this is simply the aggregate level of indebtedness. The kind of blue bits at the bottom are business debt, this green bit here is household debt, this purple bit here is federal debt, and then on top, you have state and local government debt which of course as people will know has been restricted by constitutional, by legal means.
So what you have here is debt from the 1960s onwards, and you can see clearly that really the debt, the accumulation of debt begins to take off only out in the neoliberal era from the 1980s onwards, and it really begins to take off around the 2000s when of course the United States Federal Reserve first experimented with low-interest policies, and of course, which then resumed after the 2008 financial crisis.
MICHAEL HUDSON: Well, you can look at the basic sweep which is an up sweep, an exponential growth. Any debt is a doubling time, and there’s something very unique about this kind of slope. The economy doesn’t grow like that, the economy grows in business cycles, up and down.
What you don’t see here is very much of a downswing, and that is because the growth of debt continues to mount up by compound interest. The creditors, the banks, simply reinvest all of the interest that they get in making new loans, which is exponential, and they can create their own money simply on their own computers.
So, this chart really should be juxtaposed with one of the business cycles, then you’ll see that any debt that grows this rapidly exceeds the ability to be paid, and that is the distinguishing feature of debt for the last 5,000 years. The natural tendency of debt is to exceed the ability to be paid.
Now, this chart simply shows debt by the sector that owns it, the household sector, business. What it does not indicate is what this debt is for. What is it collateralized for? Well, almost all of the household debt is for real estate, and the same thing with commercial bank debt. 80% of bank loans for this debt are real estate loans.
And the blue chart of government debt really doesn’t matter that much because the government simply creates the debt. And it’s debt that doesn’t ever expect to be repaid. Households and businesses have to pay the debt. That’s what’s causing the problem. Nobody ever got into trouble running into debt.
The government doesn’t run into trouble running into debt because it can simply print the money to pay. But individuals, families, and corporations have to pay. And when they can’t pay, that hurts the banks, and the banks go under.
And the purpose of the Federal Reserve is to make sure that this debt keeps on growing despite the fact that it is stifling the economy and leading to depression.
The role of the central bank is to impose austerity on the whole rest of the economy to make us look like a Third World country in paying the debt, because this is exactly the same kind of sweep that you have for the global south countries owing their foreign debt and for every country in the west.
So the whole West, Europe, the United States, has a chart just exactly like this, and they’re all slowing down, and they’re all in what’s called a debt deflation right now.
RADHIKA DESAI: Well, you know, I’d just like to add a few more points because this chart is really kind of more interesting than might appear at first sight. Of course, there is the upsweep that you talk about, Michael, but there is also the fact that if you look at the period from essentially from about 1950 till the end of the 1970s, there is an upsweep, but it is not so pronounced.
What you see now in the neoliberal era after 1980, and particularly after about 2000, that’s when you see the really exponential increase in debt. And I think that that, as I say, coincides with two very important things.
Number one, the repeal of the Glass-Steagall Act, which meant that this was essentially permission for the U.S. financial sector to simply enter into the most breakneck competition with one another in order to lend more and more, speculate more and more, and so on. So that’s what you’re looking at.
And of course, the other part is the historic decision after the 2000 crash, the dot-com bubble crash, when the Federal Reserve first began experimenting with low interest rates.
So you had sort of one, between one and two percent interest rates from about 2000 till about 2004-5, when because the dollar was coming under a lot of pressure, the Federal Reserve was forced to start raising interest rates. And that graduated series of interest rate increases was, of course, what eventually pricked the housing and credit bubble. So, I mean, that’s one thing.
The second thing as well is that United States government debt as well. You know, at one level you can say that, yeah, sure, the government debt doesn’t have to be paid off. But the thing is, it’s not as though the government debt does not matter.
At the end of the day, even when the U.S. government, or when even the U.S. government borrows a lot, it does suffer. Because today, the U.S. government is having to pay much more money in return for its debt in order to borrow from the market than it used to have to.
So, and even in the era of low interest rates, U.S. government paid a higher premium, higher interest rates on its debt than, say, a country like Germany, for example.
So in that sense, I think that what you see here, which is particularly after the increase in the debt in the neoliberal era, this initial increase here you see up to 2008, is basically created out of essentially giving tax cuts to rich people. So that expanded the federal deficit, even though you had cutbacks in Social Security and so on.
And today, a very large part of U.S. debt is actually going to paying interest rates, paying interest on U.S. government debt. So in that sense, it’s important.
And then finally, of course, the expansion of household debt, which again, you see it increases, it increased a little bit in the 1980s, then it sort of slowed, but then you see it particularly increasing in the 2000s with the housing and credit bubble.
Then it slows again, and then once again, it is increasing. And this increase, of course, is almost entirely because of the difficulties in which U.S. households find themselves.
So on the one hand, at the top end of the borrowing, of course, you have borrowing in order to consume more, in order to spend more in one or the other way, including in order to speculate more in stock markets. But on the other hand, you also have a lot of distressed borrowing. So this is what we are looking at.
And finally, this increase in business debt is also because essentially what has been happening over the last several decades is that companies are bought by other companies.
And then what these companies do is they burden every business they buy with as much debt as they can get in order to essentially use the money for other purposes, including giving fat dividends to owners and so on.
But this is what you’re looking at. So we’re looking at a highly, highly indebted world.
MICHAEL HUDSON: Well, there are a number of points also in that chart. After 2000, a lot of that government debt was the war debt, the Iraq War debt. From 1950 through about 1980, almost all the growth in government debt was military spending abroad.
And this debt is not only owed to the United States holders and the Federal Reserve, but the foreign government. So that is not included in the chart, but that’s much of the growth.
The interesting thing also is that you see this acceleration of debt after 2008, and yet that was the period of zero interest rate policy.
When the Obama crash occurred, the Federal Reserve said, the one thing we have to make sure is that families bear the brunt of this enormous financial fraud and bad lending and junk mortgages that have taken place. We want to save the banks and we want to sacrifice homeowners for it. We want to make the public pay to the banks to make sure that homeowners lose their home and lose money.
Businesses go bankrupt, but the banks continue to get richer and richer with this debt, and this debt will not get wiped out by bankruptcy. It’s going to grow and grow, just like student loan debt has grown. And you see a lot of this business debt going up, and yet this business debt was almost interest free, very low.
What the chart should be correlated with, if we really had a group of charts, was all of this debt was spent not on producing goods and services, not in building factories and means of production, not in employing labor, but in buying stocks and bonds and speculating. It was all used to buy companies, load them down with debt.
And so this corporate debt that’s going up is a result of the mergers and acquisitions, the corporate raids, the corporate takeovers, and treating corporations in a way that would make money for their stockholders and their private owners, but not for the economy at large.
So a company would make money, suppose you take over Sears or Toys R Us, the private capital that would take over, they would borrow the money, hardly any interest from a bank, 100%, buy out Sears or another company.
The first thing they’d do is say, okay, now we’ve taken over the company, could be the Chicago Tribune, let’s take the pension funds that’s invested in stocks and let’s borrow against that. Let’s let the pension funds lend the money to the company, and let’s borrow more money from the banks to the company. And the money that we borrow, we will then pay out a special dividend to ourselves.
So the money goes from the banks to the owners without having any positive effect at all, but having a very negative effect. It leaves the company so deeply in debt that it goes bankrupt, like Sears or Toys R Us or all of the other companies that have been essentially going bankrupt.
And when they go bankrupt, they’re sold to larger and larger companies. And so this debt has the effect of concentrating ownership within the sector.
And the household debt has gone up because as you increase the amount of money that banks will lend against housing, banks have competed. Who can lend the most money against homes for new families wanting to buy a home?
Well, the banks compete to lend so much money that if you’re a family buying a home, you have to borrow more money than your rival who’s borrowing from their bank, and the banks have just created a new real estate bubble.
And that’s what we’re in now. The real estate prices have gone up so high, the rental price is so high that one of the byproducts of this is a rise in homelessness.
And with all of this debt, somehow people don’t have enough money to buy goods and services, and standards of living have gone down.
We’re living in a increasing Third World austerity plan as a result of this upsweep in debt.
RADHIKA DESAI: No, absolutely. And you know, what you say reminds me that we’ve already said that one of the reasons why especially poor households borrow is because they basically cannot make ends meet. They have to borrow, and so they are becoming indebted.
But there’s another reason, and that is, you know, why has there in the neoliberal decades been such a huge explosion in student debt? It’s because government cutbacks have stopped funding universities to the same extent. So fees go up.
And of course, the cost of living goes up for students because of course you can’t rent anything half decent, or even indecent, unless you pay a lot of money. And so all of these things drive up the cost of an education, which then means that students have to get a loan, and so on.
So essentially, cutbacks in social services, including, by the way, we haven’t talked about medical debt. A lot of the debt is incurred because people have to borrow money if they want to pay for certain medical procedures.
So all of these things just goes to show that once again, under neoliberalism, it’s ordinary people, the working people, and the poor people who get really shafted.
There’s another way in which these people get shafted. When you have a low interest rate fueled competition for buying houses, buying homes, typically the sharpest competition is happening at the lower end of the market.
So that the lower end market, that is to say the kind of houses and homes that first time buyers will buy, tend to see the most appreciation in prices as a result of competition among the lower end buyers. And this is what prices out so many people.
But a final thing I want to say is this expansion of debt is also interesting because it has taken place exactly in that era when the government, right at the beginning of the 1980s, committed itself to restricting money supply, it committed the Federal Reserve to restricting money supply in order to slay the dragon of inflation.
But what that has meant essentially is to have an economy in which people are making less money but incurring more debt. And essentially debt becomes the way in which money is issued into the economy.
And of course the Federal Reserve itself has kept up a policy going back to 1987 where no amount of money creation is too much if it is to bail out the financial sector. So from 1987 onwards, when you had the 1987 crash, Greenspan first engaged in this kind of liquidity provision in order to bail out the financial sector. It was called the “Greenspan put”.
Now over the years it has become a Federal Reserve put. And the result is, you know, we just showed you the chart of indebtedness. And according to the Federal Reserve, the total debt or non-financial debt in the United States is now close to three times U.S. GDP. It has doubled since 1980.
There is another point that is really interesting. These charts, the chart we showed you, does not include the vast amount of debt which the Federal Reserve has itself created in order to bail out the financial sector. And the top end of the corporate sector, starting in 2020, on which the financial sector relies for its best assets.
So essentially, and this was very surprising to me, in 2008, a scholar called James Fulkerson from your university, Michael, from UMKC (University of Missouri-Kansas City), showed that the Federal Reserve could not cope with the 2008 crisis by just playing its normal role of lender of last resort, by providing ample liquidity, slashing interest rates, etc. It slashed interest rates at that time from 5% to 0%. But this did not function to stabilize the system and even made it worse.
And then, according to Falkerson, the Federal Reserve engaged in a host of unconventional measures, unprecedented in terms of size or scope and of questionable legality. They’re his words. And the goal of these was to explicitly improve market conditions. And this program, according to him, amounted to a total of 29 trillion dollars.
MICHAEL HUDSON: You’ve gone very quickly over that, and I want to show how revolutionary this was. Until from the founding of the Federal Reserve to 2008, there was a basic philosophy of central banks going all the way back to the Bank of England and to the rules that people discussed in the 1880s and 1890s.
The idea of central banks, you used the words “lender of last resort”. That means everybody realized that sometimes when there would be a business downturn or a shift in interest rates, people would have very sound property. The buildings weren’t destroyed when they became insolvent. Companies weren’t destroyed.
But the problem is there was a temporary downturn in the business cycle. So banks are supposed to only borrow for short term and at a high penalty rate. Every central bank in the world followed the policy. You don’t subsidize rates for credit for banks.
Since 2008, the banks have taken control of the U.S. Treasury and taken control of the Federal Reserve to get all the money that they want for nothing. Actually, they’re paid to borrow.
After 2008, the Fed said, we’ve got to make bankers richer. Despite the fact that they’re paying themselves more than any other sector, they don’t have enough money to keep on lending. We will give them all the money they want. The way we’ll do this is the banks will make loans to corporations for takeovers, make loans for commercial real estate. They will transfer these IOUs to the Federal Reserve in deposits.
The Federal Reserve will lend them money in exchange for this. The banks have put all of their bad loans and shaky loans into the Federal Reserve. The Federal Reserve pays them interest on these deposits. The banks make interest not from the corporate borrowers, but the Federal Reserve is creating the interest to pay the banks to make this huge upsweep in loans.
You can look at that as an arm of Chase Manhattan and Citibank. Essentially, they’ve taken control of the Federal Reserve.
That’s really the libertarian ideal of a centrally planned economy planned by the banks. When the libertarians say, let’s get the governments out of business, let’s get the governments [to not] run a deficit, that means if the government doesn’t run a deficit, it’ll cut taxes, it’ll cut spending. That means that all the credit that people need, the economy needs, will be produced by the banks.
The Fed has said, now we’re going to really turn up the screws. We’re going to let the banks make 5% of the money. All of a sudden, this growth in the blue, the government debt that you saw, is going to soar. The interest rates are going to be such a large proportion of the government spending that they’re already talking about, we’re going to have to cut back Social Security and Medicare.
That’s what [Nikki] Haley, the Republican nominee, says. The Republicans want to say, if there’s a choice between paying Social Security and Medicare or paying interest to the banks and bondholders, the bondholders come first because they’re our campaign contributors. You don’t get campaign contributors from people who are broke because they don’t have the money that the banks have. Of course, we’re going to bail out our campaign contributors.
The government itself has been privatized. That’s what neoliberalism is. That’s what the anti-government libertarianism is. It means liberty for the banks and debt system for the population at large. That’s what these charts imply.
RADHIKA DESAI: Absolutely. I would say just one thing. Of course, most people will know this, but in case people don’t, the Federal Reserve is peculiar among the central banks of the world in being still privately owned. In that sense, I think that what Michael says is very relevant.
Essentially, what the Federal Reserve has done is over the last many decades, it has transformed the U.S. economy into an economy in which the primary way, the best way, the fastest way to make money is by essentially speculating, not by investing in the production of goods and services that ordinary people need, but by inflating the value of goods and services already produced.
Those of you who know a little bit of Marxism might appreciate it, but if Marx was around, he would have called it a very peculiar form of necromancy. What do I mean by that? Because already produced goods and services contain the dead labor that has gone, it is now dead, it is no longer living, that has gone into producing it and you are inflating the value of that.
Whereas, as you do that, you are disvaluing the living labor, much of which may remain unemployed, and all of which is necessary to produce the new goods and services which every year, in every period, ordinary people need.
We need more food, we need more clothing, we need more transportation, we need more housing, etc., etc. And these are the things that are strangulated. Living labor is strangulated while dead labor goes up. Because there’s something very peculiar.
Remember, as Michael pointed out, and as I pointed out, a lot of this debt has been incurred. In fact, most of it has been incurred to speculate, to inflate the value of already existing assets. And there’s something very peculiar about it, because imagine a house that goes up in price by 30%, 40%, 50%. Nothing in it may have changed, but it goes up in price anyway. Nothing is produced, but it goes up in price. So, this is the kind of economy that has been created.
And I just also want to show you one other outcome, just my last point this time around, but one other outcome of this vast increase, this vast federal government program to bail out the financial institutions.
So, you see here, this is a chart of the total assets on the Federal Reserve balance sheet.
And you see here, from up until the 2000s, it was basically hovering at about just below $1 trillion. In the 2008 financial crisis, it doubled, a little more than doubled actually, to over $2 trillion.
Then over the course of the decade that followed, thanks to quantitative easing in which the federal government essentially started a program to buy the worthless assets of the financial institutions for good money. This was quantitative easing, and so it piled on, it increased its own balance sheet while essentially making good the damaged balance sheets of the very financial institutions that had caused the 2008 financial crisis.
And then it was beginning to reduce its balance sheet when 2020 came, the pandemic came, and then you see that you have seen an absolutely unprecedented increase to $9 trillion of assets in the federal government. And this is the result of that $29 trillion worth of effort that the Federal Reserve made to bail out the financial sector.
So, please, Michael, go ahead, yeah.
MICHAEL HUDSON: When you use the [phrase] “worthless assets”, they weren’t exactly worthless if you could get 100% from the Federal Reserve. The word that was used by Marx and almost everyone in the 19th century and today was “fictitious capital”. In other words, all of these debts and bank assets were counted as an asset.
If a bank makes a loan to a large corporate property owner in an office building, the bank has that as an asset. But as we’re seeing today, these asset prices can’t be realized. In other words, what if the bank said, okay, now your mortgage is just falling due because it’s a balloon mortgage, you have to pay that. Every few years, you have to pay the entire amount or re-borrow it.
Well, all of a sudden, if it’s lent $100 million against an office building, and the office building is now worth $40 million, why would a bank lend $100 million to an owner of a $40 million office building? That’s the situation we’re in today.
Now, look at these two jumps. The first jump that you have after 2008, that’s the junk mortgage jump. All of these loans were against fictitious mortgages, mortgages that pretended that there was value there, but there were mortgages mainly to Black and Hispanic borrowers by banks who cheated them, who over-evaluated the prices.
The banks in general discovered a new way of making money after about 2004. They could make money by charging racial minorities much higher rates, almost double the rates that they charged white people. There were whole banks and brokers that specialized in this, and this was basically the junk mortgage group. Countrywide, Financial was the most obvious beneficiary of this.
There were a number of notorious banks that ended up being merged. Bank of America was one of the crooked banks. Citibank was one of the most crooked banks, as has been very well documented.
Randall Wray at the Levy Institute and Kansas City published a big explanation of who were these $29 trillion, $27 trillion of loans for. It ended up many of these loans were rolled over and reloaned, so the net amount was not $27 trillion, but that’s how much was given to the banks with this huge jump. Instead of sending the bankers to jail, they made them billionaires. They rewarded them.
That was the Obama policy, and that is what makes them one of the most viciously racist presidents in modern American history. The Democratic Party became committed to returning to its pre-Civil War racist policies.
Well, the next group is you see in 2020-21, this huge jump in bank loans. What were they from? The Federal Reserve began to raise interest rates. When the Federal Reserve raises interest rates from less than 1% to 5%, this means all of a sudden debtors had to pay 10 times as much interest as they did before.
What that did was that reduces the price of an asset. It’s an inverse proportion to the interest rate. All of a sudden, the stocks and the bonds held by the banks that went under were fictitious.
In fact, although Silicon Valley Bank and New York Bank went under, all of the banks, especially Citibank and Chase Manhattan, had all of the loans that they had. All of a sudden, they were not worth anywhere near what they carried them on the books. The banks were insolvent.
Now, here was a wonderful opportunity. The Federal Reserve could have taken them over by the government and said, you’re insolvent. We’re going to wipe out the stockholders and the bondholders because you’ve made bad loans. Instead, the Federal Reserve said, well, instead of making the banks insolvent, let’s make the economy insolvent.
That’s the policy we’re in today. This increase in Federal Reserve loans has been to support this upsweep of credit that is increasing the burden. All of this upsweep in credit is far in advance of the wages and salaries that people are getting.
Somehow, all this increase in interest charges and amortization charges and penalty fees end up impoverishing the economy by leaving less to spend on food and clothing and other consumer spending. If consumer spending is going up, it’s because of the inflation.
RADHIKA DESAI: A small correction. This big increase, of course, was increased because the Federal Reserve started a new, massive liquidity provision program, quantitative easing program, when the pandemic hit. And the one that you’re talking about, where essentially they were bailing out Silicon Valley Bank, etc., this is the small increase here, which is what happened after interest rates started rising. But throughout this period, right up until about here, interest rates remained at historic lows.
And just one other thing I wanted to say about this before we close this chat, which is that, you know, around 2013, about here, essentially, the Federal Reserve decided that it was going to try to decrease the size of its balance sheet.
So you can see, you know, it was still only about three and a half trillion, not the nine trillion that it is today. But you know what the financial institutions and the financial sector did? The financial sector at the time, in 2013, threw a “taper tantrum”.
The Federal Reserve was threatening to taper its balance sheets essentially, you know, to decrease it. And they said, we’re not having it. You’ve got to keep supporting us and you’ve got to buy our assets. And so essentially, the Federal Reserve humored them in their tantrum and they continued to expand the balance sheet. And then, as we saw in the pandemic, did even more so, etc. So that’s the thing we’re looking at.
And the other thing I just wanted to point out, of course, is that, you know, I completely agree with everything that Michael said about just how racist the system is, because at the end of the day, you know, people think that debt is a market relationship.
Debt is not a market relationship. It’s a relationship between, on the whole, relatively privileged people, one of which decides to lend money to the other. So the idea that somehow, by passing a piece of legislation, you can make the poor people of the United States, the black people of the United States, the Hispanic people of the United States into homeowners, this was always a bit problematic.
And in the end, the whole 2008 financial crisis, the vast buildup of debt that preceded it, only a tiny fraction, which happened towards the very end of that vast increase, was actually loans to subprime borrowers. The financial institutions only began lending to the subprime borrowers once they had filled the prime borrowers to the gills with all the debt they could take, and only then they moved.
And so, in many ways, the subprime borrowers came last, and they were also, of course, the ones to suffer the most. So, yeah, I mean, I think these are really, so really we are living in an economy that is awash with debt, as we were just saying, and it really is the opposite of the sort of economy we ought to have.
And Michael, you know, one of the things about the whole classical conceptions of land and rent and interest and so on is, of course, that classical political economy always looked down on things like this, like interest and rent, because it saw it as unearned income, isn’t it?
MICHAEL HUDSON: Well, I could have a whole hour on that, but I want to follow up with some charts on the racial element of this. We’ve talked about how the volume of debt is too large to be paid, but I want to say there’s another aspect of debt, and if you could show the racial, that’s right, that chart is very interesting.
One of the results of debt is to create a bifurcated economy, and that means that we’re in a kind of apartheid economy. We’re in a financial apartheid economy. 10% of the population owns over 75% of the stocks and bonds in the population, and they’re almost entirely a white population.
We’ve talked about mortgage debt being 80% of the overall debt burden. I want to show what has happened long before the chart begins in 2002.
I want to begin in 1945 at the end of World War II. That’s really when the houses had not been built during the Depression because people, there wasn’t a market for them. They weren’t being built during World War II because all of the raw materials were going to the war effort, and debt for the whole economy was very, very low debt in 1945 because there was nothing to borrow money for. You couldn’t borrow money to consume because everything was rationed anyway.
But finally, they began to make loans, and what had spurred the American takeoff and that of other countries. All countries of Europe, America, and elsewhere were rebuilding after the war, and most of this rebuilding was rebuilding for housing. That was when the great housing was taking place. Here in Queens, you had major developers, not only Trump’s father, but all the famous experiments and group housing were made.
There was only one thing. White people were able to buy houses for maybe $10,000 was a typical price of a house that now costs a million dollars. The problem is that banks would only, in order to buy a house, you had to take out a mortgage. Nobody has enough money to buy the whole value of a house, and if wages were maybe $3,000 or $4,000 a year back in 1945, you couldn’t even buy a $10,000 house. Nobody had that. You had to go to the banks. Banks, until about 2000, 2001, would only make mortgage loans almost entirely to white people, unless you were a very, very wealthy black person or a Hispanic.
What you created was a bifurcated society. The people who bought the houses in 1945—they returned from the war. They took civilian jobs. They bought a house, and many of them died of old age, but they left the houses to the children.
And you had one generation after another generation of white people leaving the house to the children, leaving them enough inheritance to have a house of their own and an education of their own. So what you had was a home-owning, educated white class, but this was not available to non-whites in this country.
So what’s the depth of the restriction of credit to the prime human beings, not to the unprimed borrowers? We’re talking about a pretty racist policy. It was very responsible for the fact that you’ve had now 75 years—well, longer than that, 75 years since World War II—you have a disenfranchised, non-white class in the United States of hereditary homeowners who can get into college because their parents and grandparents went to an Ivy League university.
And there’s a monopoly of housing and education and wealth at the top of the economic pyramid, and the rest of the economy is essentially disenfranchised as if we’re in our own financialized apartheid economy.
RADHIKA DESAI: Yes, and there’s a couple of other points. By the way, in this chart, I should just explain that the top line here is essentially showing the home ownership rates, that is about 75 percent, of non-Hispanic whites in the United States.
The red line, which is at the bottom here, is of black people alone in the United States, and then the green line is of Hispanics of any race in the United States. So that presumably includes, for example, if you were a relatively white Hispanic, and they do a little bit better.
But you can see that the rate of ownership of black people from the early 2000s till today has really not budged. If anything, it’s slightly worse today than it used to be back then, and became considerably worse just before the pandemic, reaching a very low level of below, like around 40 percent, in fact. So anyway, that’s the thing.
But in addition to these things, the kind of financialized economy in which we live, increasingly owning of houses and land, etc., does not necessarily, because of mortgages, the ownership of land or houses does not necessarily confer on you any privilege, because homeowners find that they are paying interest to banks, and even landlords typically are highly leveraged, so the bulk of what they are collecting in rent actually ends up as interest to banks.
So in a certain sense, what we are trying to say is that the Federal Reserve has engineered an economy in which not only profits and wages have become essentially in hock to pay interest, are used to pay interest, but so is rent. So that interest has become sort of the prime form of income, at the top of the income pyramid, so to speak.
And this is a result of changes also in the tax structure. So for example, in the U.S. taxation system, earnings from interest and rent are treated a lot more softly, a lot more favorably than our earnings from work. This is a huge problem.
MICHAEL HUDSON: That sort of goes back to the value theory that I think requires a separate discussion altogether, because it’s so fundamental.
The whole idea of classical economics and the free market was a market to be free from rent, rent being unearned income. Rent is what landlords make in their sleep.
Rent is not created by labor, and most people don’t realize what’s called the labor theory of value that is based on Ricardo and Marx and the whole 19th century.
The idea was to separate value, which is created by labor, from economic rent, which is created by hereditary, by privilege, by property ownership, by owner, by banking, and by monopolists, and by landlords who make their money, economic rent, by owning a rental property, or by lending money and making interest, or by having a company, a monopoly.
And you just raise prices, and much of the inflation, as Radhika mentioned at the beginning of the talk, they call it profit inflation, meaning a company just decides, let’s raise the price of drugs.
For instance, my wife is on an employer, United Healthcare plan. The price that she has to pay, local drugstores went up quintupled on January 1st, because the healthcare insurer said, we can make money by quintupling the price.
Drug companies have been raising the prices all across the board, not by producing more, not because their costs have gone up, which would be, ultimately, the cost would be a cost of production, labor, and materials, but simply because they’ve become a monopoly.
And the Democratic Party has always been the great protector of monopolies, because they’re campaign contributors. And if you look at who heads the health committees and the others in Congress, related committees in Congress, their campaign contributors come from the pharmaceutical and drug industry.
So you have the governments representing their campaign contributors, the military and state department desks at the Senate and House are subsidized and paid for by the military industrial complex, the health departments from the drug companies, and so on and so forth.
So we’re that part of the problem of what has made America a failed economy. And it’s a failed economy because of the austerity that this debt apartheid has created.
RADHIKA DESAI: And we should probably soon shift to talking about solutions. But let me just add a small point to what you were saying, which is that, of course, if you look at the US economy today, you will see that over the neoliberal period, what has happened is that it has become dominated, of course, by the financial sector, the so-called FIRE sector, finance, insurance, and real estate.
And on top of that, if you look at what are the other sectors of the US economy, which are really important and lucrative, you will see that they are the military industrial complex, they are the big pharma, and they are information and communications technology.
And in pretty well all of these cases, these sectors are characterized by a high degree of monopoly, a high degree of rent-seeking in the sense that a military industrial complex, for example, essentially relies on vast government contracts, which are risk-free in which they get to mark up costs as much as they like.
And big pharma and information and communications technology rely on intellectual property rights in order to secure their monopoly.
So in all of these ways, this has created an economy which is very undynamic, it is not very efficient, but at the same time, it is very lucrative for those who own it, which of course puts an added burden on ordinary Americans.
MICHAEL HUDSON: Well, one of the problems of it being undynamic is you’re having a decline in office space, in commercial real estate. We’ve been talking about homeownership rates and how unfair that is, but you remember back in 2008 when there was the property price crash, you had what was called “jingle mail”.
You would have buyers, especially in Nevada and Florida, where there was a huge run-up in housing prices, they’d say, okay, I owe $500,000 for this house, but now the house just like it next door is selling for $300,000. I’ll just mail back the keys to the bank and say, okay, I’m defaulting, you can have the house, I’m just not going to pay, I’m going to take out a new loan and buy the house next door.
Well, that phenomenon is now happening for businesses. Apparently [only] 40% of the US commercial properties are occupied. In other words, since COVID, and most of all, since the economy began to shrink as a result of this debt deflation, businesses have been going out of business.
Even those who are in business, you have people working from home. Now, if you have the average occupancy rate of buildings being only 40%, how is the owner going to have the money to pay for the bank?
Well, because the banks have lent almost 100% of the value of the building to the homeowner who’s willing to pay all of the rents as interest, rent is for paying interest, that’s the basic motto.
What they want is the capital gain in the price of the building. They realize they’re not going to be a capital gain. This was all fictitious capital, it’s going down, we’re mailing our keys back to the bank and we’re walking away from the building.
This year and next year, there is such an enormous trillions of dollars of commercial real estate falling due, not only here, but in England and other countries, that the banks are all of a sudden going to be left with mortgages that are unpaid.
Against these mortgages, they have liabilities to their depositors, to their bondholders, and most of all, they want to pay millions of dollars to the, I think Jamie Dimon, the head of Chase Manhattan, gets $29 million a year for running a company that’s gone bankrupt and is kept alive because he gives some of that $29 million to the politicians who continue to appoint Federal Reserve people who will bail them out. That’s what you call a circular flow.
What are you going to do when all of a sudden the banks should be going under? Well, normally, if they’ve made a bad loan, somebody has to suffer. Who’s going to suffer?
As Bill Clinton said when he was told you have to do what Alan Greenspan says and support the banks, Clinton said, oh, it’s all about the bondholders.
In 2009, when Obama came in and decided to bail out the banks, Sheila Bair, the head of the Federal Deposit Insurance Corporation, said, wait a minute, we have a crooked, incompetent bank. There’s one bank in America that’s more crooked than all the others and more incompetent. That’s First National City Bank. Let’s take it over. Let’s make it a public bank. You can’t let this bank destroy the whole economy by being so greedy that it makes loans way in excess of the value of property and keeps expecting to be bailed out so it can make more interest and pay its officers more. Let’s drive it under.
And Obama and his Treasury secretary, Tim [Geithner], said it’s all about the bondholders who own the bank.
So the question is, what will the banks do when all these mortgage loans go under? Well, wipe out the stockholders.
But the bondholders are the wealthiest 1% of the population. They’re the ones who own most of the bank bonds.
Who do you think the government is going to support? Is it going to support the economy or the stockholders or the 1%?
That really is the way in which you should think about an economy being an apartheid economy, not simply ethnically and racially, but financially. That’s the real apartheid between creditors and debtors that I think all of our shows are examining from different perspectives.
RADHIKA DESAI: Well, I’d just like to add a couple of points to what you were saying, Michael. This is very interesting because if you look at commercial real estate, there’s no doubt for the last many months there have been headlines about how there is a collapse of commercial real estate prices. It’s coming. In fact, it’s already happening.
As Michael says, the fall in the value of commercial real estate is already ongoing from what we read in the financial press. The really big prestige buildings may not be affected, but the next layer and down, all these buildings will be affected.
Everybody who has walked around a big city in North America or for that matter elsewhere in Europe will see that commercial space is essentially going down. So many are boarded up. So many are empty and so on.
And according to one measure, about 10% of US bank assets actually rely on the value of commercial real estate. Now, Michael asks, you know, when the crisis comes, well, the crisis is already here.
So who is the Federal Reserve going to help? But you know what, I’m not even sure. And the US government, who are they going to help? Who are US authorities going to help?
I’m not even sure they’re going to be able to help them because the fact is that as the value of these assets decline, banks already have to report them if they are publicly listed on an ongoing basis, which means that their shares will already go down.
And there is no doubt that a crash will come. And when it comes, yes, the Federal Reserve will once again, as you saw with the Silicon Valley Bank, essentially, in fact, there was another point that I wanted to make there. Essentially, Ms. [Janet] Yellen stepped forward and said, we are going to guarantee all depositors, even if their deposits are higher than $250,000.
Now, you might think that this is somehow a very democratic thing. But on the contrary, if you look at what kind of bank Silicon Valley Bank was, essentially, it was like a club in which a select group of rich people who are all connected with one another lent each other vast quantities of money.
Now, what does lending mean? It means that I go to my friend and, you know, Silicon Valley Bank and say, you know, please give me $5 million. I’m going to have a startup. You don’t even look at whether my startup is worth supporting. You just say, okay, I’ll give you, I’m going to show a deposit of $5 million in your account. These are the deposits that Ms. Yellen was protecting.
This is not even the money that they have deposited in the bank. This is money that is in a deposit in my name because it has been lent to me.
So, if you think about just how huge is the boondoggle that is protecting the interests of the tiny minority of the very wealthy, I hope in this program we’ve given you some idea of the lengths to which US authorities have gone to protect the wealth of this minority.
And in our next show, maybe what we’ll do is we are going to devote it entirely to talking about what needs to happen if we are going to move away from this kind of economy.
MICHAEL HUDSON: That’s a good way to end it. There’s so much that it’s leading into. And the last thing that the Federal Reserve wants is for—what if banks reported the actual market value of their assets?
When you have a balance sheet, assets and liabilities, they’re holding the assets at the price that they made the loan for, say $100 million for a building. But what if they reported their assets as only $40 million for the building? You would have bank assets here and the liabilities here. They’d look just like most people in America.
50% of Americans don’t have any assets, but they have a big debt. That’s an interesting bar chart to show, assets, liabilities. And you can look at it by income group.
The Federal Reserve does not produce believable statistics on debt as a proportion of income.
If you look at the Federal Reserve statistics of debt to income by percentile, 10%, 20%, nothing has changed in the last 50 years. Nobody’s run into debt at all. Because they say, let’s assume that debt is constant for the last half century. The statistics are fictitious.
And they’re fictitious because that protects the fact that most of this, what passes as bank capital is fictitious. I mean, we’re in a fictitious economy.
It’s sort of like trying to read about international affairs in the New York Times. That’s about as realistic as the Federal Reserve statistics are.
RADHIKA DESAI: Exactly. I mean, it’s basically the rich people of the United States and the big financial institutions of the U.S. are in a situation in which, you know, they make a bad investment, they make a loss and they go, oops.
And then the Federal Reserve, which is their sugar daddy, essentially comes and makes good all their losses. It gives them more money to plug the holes in their balance sheets that they have themselves created out of their own greed and misjudgment and bad judgment.
So there we have it. It’s this kind of economy that, unfortunately, the United States is laden down with today. And so the question naturally arises, what kind of economy do Americans need in its place?
MICHAEL HUDSON: I want to add one point out there. The important thing is that these rich people who are not paying their debts do not have to pay penalty rates. The large businessmen who owe debts don’t pay penalty rates.
You know that if you’re a family and you’re running a credit card debt, if you miss a payment in your electric bill or anywhere, your rate goes up from 19 percent to 30 percent or more.
That’s not the case if you’re rich people. There’s one set of interest rates and penalties for 99 percent of the population, another set for the wealthiest 1 to 10 percent of the population, and you’re not in it.
RADHIKA DESAI: And that’s what we call financial apartheid. So I think with that, Michael and I will say goodbye and hope to see you in a couple of weeks and we’ll talk about what kind of economy we need instead.
Thanks very much for joining us, and see you in a couple of weeks. Bye bye.
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