Michael Hudson Quotes

You could say that the vote to withdraw from Europe is, it's really a vote of the British middle class, the working class, to withdraw from the U.S. neoliberalism that has been running Europe for the last ten years.

It's amazing that Europe says, "What are we going to do with these refugees?" It's as if it doesn't realize that being part of NATO and bombing these countries forces them to choose to live by fleeing, or to stay and get bombed.

Since 2008 you've had the largest bond market rally in history, as the Federal Reserve flooded the economy with quantitative easing to drive down interest rates. Driving down the interest rates creates a boom in the stock market, and also the real estate market. The resulting capital gains not treated as income.

Normally, if someone goes bankrupt, you wipe out the debt and get a fresh start. But that's not permitted with student loans. So the effect is to impoverish many graduates with very high debts.

A derivative is a bet on whether a stock, or a bond or a real estate asset, is going to go up or down. There's a winner and a loser. It's like betting on a horserace.

Now, suppose that a homeowner puts down only 3% of their own money or 3.5% for the FHA. That means if prices go down by only 3%, the house will be in negative equity and it would pay the homeowner just to walk away and say, "The house now is worth less than the mortgage I owe. I think I'm just going to move out and buy a cheaper house." So it's very risky when you have only a 3% or 3.5% equity for the loan. The bank really isn't left with much cushion as collateral.

The ideological foundation of today's business schools is that economic control should be shifted out of government hands into those of financial managers - that is, Wall Street.

We're in a chronic debt-deflation. There's no way we can recover unless you write down the debts. And that's what the IMF basically is implying (and it was explicit regarding Greece), but its not spelling it out, because that's not what can be said in polite company.

Textbooks don't teach people how to avoid paying any income tax. But that's what an army of tax lawyers and corporate tax accountants do.

The myth is that if housing prices go up, Americans will be richer. What banks - and behind them, the Federal Reserve - really want is for new buyers to be able to borrow enough money to buy the houses from mortgage defaulters, and thus save the banks from suffering from more mortgage defaults.

That's why Apple, Microsoft and the big information technology companies have kept so much money registered abroad (although in US dollar accounts with a nominal foreign address's owner). They pretend to make their global income in Ireland. They have an office, which could be simply a postal drop box in Ireland, and claim to make all their money there, not in America.

If you want to see where Trump is moving, look at what the United States neoliberals advised Russia to do after 1991, when they promised to create an ideal economy. Russia was under the impression that the neoliberal advisors were going to make Russia as rich as the United States. What they really did was create a kleptocracy that was virtually tax-free.

One basic myth is that rich people get wealthy by earning income. But that's not how most get rich. Most of the gains of the rich people since 1945 have been "capital gains".

Today, people are having to spend so much of their money, to acquire a house and to get an education that they don't have enough to spend on goods and services, except by running into yet more debt on their credit cards and other borrowings.

People are putting their money into treasuries because they worry that the risk of putting their money into the bond market, the stock market or even the money markets is very high.

The aim of academic trade theory is to tell students, "Look at the model, not at how nations actually develop." So of all the branches of economic theory, trade theory is the most wrongheaded.

Debtor countries may postpone the inevitable by borrowing from the IMF or U.S. Treasury to buy out bondholders. This saves the latter from taking a loss - leaving the debtor country with debts that are even harder to annul, because they are to foreign governments and international institutions.

The problems of 2008 were never cured. The Federal Reserve's solution to the crisis was to lend the economy enough money to borrow its way out of debt. It thought that if it could subsidize banks lending homeowners enough money to buy houses from people who are defaulting, then the bank balance sheets would end up okay.

Economists often define their discipline as "the allocation of scarce resources among competing ends." But when resources or money really become scarce, economists call it a crisis and say that it's a question for politicians, not their own department.

Inflation usually helps the economy at large, but not the 1% if wages rise. So the 1% says that it is terrible.

Mr. Trump wants to turn the U.S. economy into the kind of real estate development that has made him so rich in New York. It will make his fellow developers rich, and it will make the banks that finance this infrastructure rich, but the people are going to have to pay for it in a much higher cost for transportation, much higher cost for all the infrastructure that he’s proposing. You could call Trump's plan "public investment to create private profit". That's really his plan in a summary.

I think we're in the take-the-money-and-run stage of the economy. So the banks may go under, but the bankers, who make the policy, clean up.

Either you can save the economy, or you can save the One Percent from losing a single penny.

If bankers can push the loans and make more profits for the bank, they get paid higher bonuses. They often also get stock options. If the bank goes under, they get to keep all of these salaries and options - and the government will bail out the bank. These guys will take their money and run, which is pretty much what they're doing now.

That's the problem with the financial sector. Banks and the financial sector live in the short run, not the long run. In principle the government is supposed to make regulations that help the economy over time. But once it's taken over by the financial sector, the government lives in the short run too.

If you look at payments to labor as a proportion of national income or gross domestic product, you find profits going way up, investment and savings going up.

In China the largest denomination bill they have is 100 yen, and that's maybe $7. So here you have a whole economy working with only a $7 note as the largest denomination. The euro wants to get rid of the 500-euro bill just as the United States years ago got rid of the $1,000 bill because only the criminals used $1,000 bills.

The price decline is a result of having to pay debts. That drains income from the circular flow between production and consumption - that is, between what people are paid when they go to work, and the things that they buy.

I think something like three-quarters of American currency is held abroad, by drug dealers, by tax evaders, Russians and Chinese. Other people think that they want to protect themselves against their own currency going down. When you have 75% of the currency and even more of the high-denomination $100 bills held abroad, you wonder whether these are people we really want to pay. If you get rid of the $100 bills, its foreign holders will be the main losers.

High prices can be the result of speculation, and maybe plunging prices can be attributed to the end of speculation, but low prices over time aren't caused by speculation. That's oversupply, mainly by Saudi Arabia flooding the market with low-priced oil to discourage rival oil producers, whether it's Russian oil or American fracking.

The current U.S. and Eurozone depression isn't because of China. It's because of domestic debt deflation. Commodity prices and consumer spending are falling, mainly because consumers have to pay most of their wages to the FIRE sector for rent or mortgage payments, student loans, bank and credit card debt, plus over 15 percent FICA wage withholding for Social Security and Medicare actually, to enable the government to cut taxes on the higher income brackets, as well income and sales taxes.

A bubble is only called that after it bursts, after the insiders get out, leaving the pension funds and small investors, Canadians and other naïve investors holding the bag.

Actually, high housing prices don't help the economy. They raise the cost of living.

There really isn't a recovery, and no signs of it on the horizon, because people have to pay the banks. It's a vicious circle - or rather, a downward spiral.

The world's politics are in turmoil, not to mention the Mideast, where the US has mounted attacks from Libya to Iraq to Syria, and ISIS is attacking governments in today's pipeline rivalry.

I don't think that governments should permit speculation in raw materials, because they're what the economy basically needs.

As you have to pay more interest and amortization on what you owe, you're left with less and less money to buy goods and services - unless you borrow even more and go further into debt.

Europe is creating the flight of refugees that's tearing it apart politically, and leading rightwing nationalist parties to gain power to withdraw from the Eurozone.

Money is not a factor of production. But in order to have access to credit, in order to get money, in order to get an education, you have to pay the banks.

We go forward with our heads held high, but look back and remember where we come from.

When there's deflation, it means that although most markets are shrinking and people have less to spend, the 1% that hold the 99% in debt are getting all the growth in wealth and income. Deflation means that income is being transferred to the 1%, that is, to the creditors and property owners.

Needless to say, banks and bondholders do not want to promote any arguments explaining the limits to how much can be paid without pushing economies into depression.

That's the "magic" of double-taxation treaties: you can shop around for the lowest taxer.

When I say the economy is shrinking, it's the economy of the 99%, the people who have to work for a living and depend on earning money for what they can spend. The 1% makes its money basically by lending out their money to the 99%, on charging interest and speculating. So the stock market's doubled, the bond market's gone way up, and the 1% are earning more money than ever before, but the 99% are not. They're having to pay the 1%.

You're having government spending on the economy being cut almost everywhere. That means that the only source of spending for growth has to come from borrowing from the banking system.

To the deficit commission, a depression is the solution to the problem, not a problem.

There are two definitions of deflation. Most people think of it simply as prices going down. But debt deflation is what happens when people have to spend more and more of their income to carry the debts that they've run up - to pay their mortgage debt, to pay the credit card debt, to pay student loans.

The Eurozone die is cast. Countries must withdraw from the euro so that governments can create their own money once again, and resist creditor demands to carve up and privatize their public domain.