Are we heading to an economic crash in the next few years?

Quote

Quote of 2013 – “Marx was too optimistic about banking”

Why? Because although he described banks as parasitic, Marx believed that they would eventually evolve such that they would:

‘make productive loans to finance industry. The aim was for banks to do something new, that no economy had done in the past: make loans not merely to ship and market goods once they were produced, but to finance new capital investment by manufacturers and producers, as well as by the public sector to build infrastructure. The idea was for these investments to create profits out of which to pay the interest and the principal back to the lenders.  This was defined as productive lending.’

http://www.nakedcapitalism.com/2012/09/michael-hudson-on-how-finance-capital-leads-to-debt-servitude.html#BjdeoUqAOHOiiyGY.99

Marx never envisaged General Pinochet and Margaret Thatcher’s ‘Pension Fund Capitalism’ as being a way to exploit the workers’ wages.  Under Defined Pension Plans, the workers know what they pay in but not what they will get out because the pensions are all invested in the casino financial sector and profits skimmed off for the financial elite.

‘The turning point was in 1980, when the Reagan Administration was elected in the United States, right after Margaret Thatcher led Britain’s Conservatives into office and began the big privatization sell-offs at enormous, unprecedented commissions that made the financial sector richer than ever before. Drexel Burnham led the practice of turning the stock market into a vehicle for banks to emulate their real estate loan departments by creating credit for corporate raiders to take over companies, load them down with debt and extract profits to pay out as interest. This was done by downsizing the labor force, shifting over to non-union labor, and where possible, renegotiating employee pensions downward or simply grabbing the pension funds or Employee Stock Ownership Plans (ESOPs) to pay creditors. So corporate finance became destructive instead of productive.’
http://www.nakedcapitalism.com/2012/09/michael-hudson-on-how-finance-capital-leads-to-debt-servitude.html#BjdeoUqAOHOiiyGY.99

“The idea is that you can make money without  producing an economic surplus… so the economy will shrink and shrink… We need a renewal of classical economics.”

Are we heading to an economic crash in the next few years?

Published on Jan 11, 2013

Dr. Michael Hudson, Institute for the Study of Long-Term Economic Trends, joins Thom Hartmann.

The United States is the only developed nation in the world that doesn’t guarantee paid holidays, paid annual leave, or paid maternity leave. They’ve taken away our sense of safety in the workplace – as safety laws and regulations are continually getting watered down. Heck, they’ve even taken our money by flattening our wages during a time of increased productivity. And in New Hampshire – Republicans are doing the bidding of Corporate America to get rid of our lunch breaks. This is nothing short of theft – and pretty soon, we’ll be handing over the shirts on our backs, just so our bosses can squeeze out whatever profits they can. It’s also symptomatic of a larger war being wages on not just working people – but entire cities and even our federal government by the financial elite.