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.’
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.’
“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.
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If we don’t get the Neoliberal Politics out of westminster yes we will have an economic break-down in the next 5 yrs probabley with Riots on a v/large scale not seen in Britain for 150 yrs.
However, the elactorate are much more educated now and, many can see that the Tory/Neoliberal ideology which is now discredited & a failed economic model is not the way to go. There must be no Transfer of the Gov’t Responsability to provide services for the nation. This is B’cos the private Banks must not be allowed to usurp the ability to provide Capital they dont have and then require repayment & interest. this is theft from the PEOPLE. The Central Bank(BofE) is the only bank to have this power as it is the basis of our Currency & Economy. The PFI contracts,now discredited, are an example of this highjack of BofE power. Also BofE should take-over the House Mortgage loan market as it should have done decades ago. The reason is the Working conditions of the people have reached a level where it is not SAFE for many people who have families to also be put into a situation where they may have their Mortgage foreclosed throwing them on the streets.
If BofE holds the mortgage they can just change, Temporarily, to a CLL. House status and then revert to Mortgage when occupiers can repay capital.
The other advantage is that BofE mortgages need no interest to be charged as the capital is “CREATED” capital. Some banks have already been doing this & pocketing the capital “CREATED” which is the next big Scandal to hit the PRIVATE BANKS soon.
If we Can Build Cll. Houses for people who cannot afford to buy, we need to treet House buyers equaly. And interest free Mortgages that are “SAFE MORTGAGES” is the way to go.
Many Politicians & Economists do not understand the diff. between Gov’t Funding & loans to Business & housholds. Gov’t uses “FUNDING” because it CREATES ITS OWN MONEY via the BofE. BUSINESS & HOUSEHOLDS HAVE TO “EARN” MONEY.
I think that we should incorporate the BoE into the treasury. It is outrageous that an independent bank should dictate the UK economy. In fact, in Mervyn King we have clear evidence that ‘independent’ means support for the City and their political party, the Tories.
One would assume the BofE creates money under license from the government. I wonder what would happen if that license were to be revoked? Suppose it were transferred away from banks and granted to chippies? Remember, there was a time before there was central banking and there may well soon be a time after it. Whichever time arises, it promises to be interesting 🙂
Didn’t Lincoln circumvent the central bank by issuing greenbacks? I know that resisting a central bank was a major preoccupation for US Presidents until finally the Fed got its own way.
Thought you might like this:
Indeed he did, and I thank you for the link. I read a few paragraphs… his ideas seem reasonable but… for one thing, he appears to think this is a democracy, and it isn’t. Did you read the other week the Queen can and has veto laws, approved by Parliament, she and Philip don’t like? It made the Guardian at least, not sure about the other nationals… so then, not a democracy, instead it’s a monarchy/oligarchy/feudal system dressed up like a democracy. I suspect no-one at the heart of the Establishment is interested in any reasonable solution, they have control and they don’t care who they kill, directly or indeirectly, to maintain it. The gloves are coming off. These are not reasonable times. For many, I doubt they’ll be survivable either.
Just read a paper in Clinical medicine J which was the health implications of imposing austerity across the EU. ‘Health implications’ included the rise in suicide.