Hudson's 1-2 Punch

[don]

Why Government is More Afraid of Debt than Depression

[ThePythonicCow]

Re: Hudson's 1-2 Punch

I hear a strange inconsistency in Michael Hudson's comments. Overall, I quite agree with Hudson that the FIRE interests and their government toadies are looking to reduce the cost of labor, lower the portion of government spending on social services and further shift the tax burden from large corporations to labor and the (soon to be former) middle class.

This will cause a depression, by which I mean that ordinary Americans will be poorer. They will have fewer jobs, paying less, taxed more, with fewer social services. Americans will come to know the austerity that has been foisted on so many other nations already.

However he says on the one hand that a "dumb parasite" has taken over the US brain, the government (Obama, the media, the deficit commission, ...) and has gotten them to thinking that the way to save the US economy is by using the resulting depression to lower the cost of labor, while he says on the other hand that the financial interests realize that "a debt that can't be paid won't", that the US host is terminally ill, that wealth is being shifted to the BRIC countries, and that the financial interests are just sucking what remaining value they can out of the dying US host.

So ... is the FIRE parasite [a] a smart parasite, realizing that it must suck what remaining value it can out of a dying host (the West) and move on to the next host (the BRIC nations), or is it [b] a dumb parasite, using its control of the hosts brain to get the host thinking that to save itself, it must destroy the wealth of its people (shades of Vietnam -- we had to destroy the village to save it.)

I think the resolution of this apparent conundrum depends on realizing that the financial interests come in (at least) two layers.

The top layer, the wealthiest and most powerful, are shifting from the West to the BRIC nations, especially from the US to China. They are sucking what wealth they can out of the US. They will leave it as a source of food, forest, gas, oil and mineral resources to be mined and harvested, and tax revenues to be collected in service of national debt. Human labor is no longer a precious resource. Not even well educated engineers are in short supply. Indeed, with peak cheap oil upon us, humans are (in their cold blooded, aka reptilian, view) in a surplus of what the planet can sustain.

The next layer down, being the management of the major Western banks and corporations and their captive governments, media and various NGO's, displays a mix of dumb greed (the dumb parasite, inadvertently killing its own host) and misguided efforts to save the Western economy through austerity (raise taxes and lower social services to tackle the debt.) This layer is being used by the top layer, to suck the remaining vital fluids from a dying host.

[sishya]

Re: Hudson's 1-2 Punch

Good one by Hudson.

[bill]

Re: Hudson's 1-2 Punch

thanks don.

my take year ago
http://www.itulip.com/forums/showthr...46106#poststop

bill 1-27-10
Debts will have to be paid down. Running deficits and simultaneously devaluing the dollar will be a process over time.
Thus, leaving limited banking expansion in US. Decision were made to move the finance processing plant assembly line somewhere with more potential and ramp up new debt production, Asia comes to mind.
In doing so debt collection is necessary from previous produced debtors, financially making it feasible to make such a move setting up a new finance production processing plant.
Move on to extract equity value and process more debt for future revenue.

http://www.moneycontrol.com/news/wor...an_504907.html

China revenue up over 80% to record: JPMorgan


Published on Mon, Dec 13, 2010 at 20:43
JPMorgan & Chase Co will see record revenues from China this year, as the second-largest US bank benefits from a surge in equity raising by Chinese companies, the head of the bank's China investment banking business said on Monday at the Reuters China Investment Summit.
JPMorgan's China revenue will rise more that 80% over 2009 levels, and up 40% over the bank's previous record for China in 2007, said Fang Fang, the bank's CEO of China investment banking.


"Our pipeline is now stronger than ever, with a number of deals landing in January," Fang said at the Summit held at the Reuters office in Beijing. "A lot of clients are coming to talk to us about next year."
Asia, and China in particular, is a key source of investment banking revenue for global banks. Agricultural Bank of China Ltd's record USD 22.1 billion IPO, in which JPMorgan participated, is a case in point.
The bank's number of completed deals will also be about 80% higher than last year.
Fang, who is also a member of the Chinese People's Political Consultative Conference, a largely ceremonial advisory body to parliament, predicted a rise in debt and equity deals in a number of Chinese sectors in 2011, including financial services, health care, transportation, education, food and beverage and luxury goods.
"It's related to the increase in household disposable income," Fang said, referring to the rising demand for capital.
JPMorgan is doing deals -- both equity and debt -- with a much wider range of companies than in the past, he said, which could help shield the bank in the event of any economic turbulence in China.
"In the past, our business was like a 9-inch, black-and-white TV with one channel: state-owned enterprises going public offshore," he said. "Now it's like a 52-inch plasma TV with 30 channels. If one or two channels go blank, we still have others."
Priorities for 2011 include hiring more investment bankers and significantly increasing clients and products and services through a planned joint venture with a Chinese partner, said Fang, a graduate of Tsinghua and Vanderbilt Universities who is also vice-chairman of JPMorgan's Asia investment banking.
The joint venture, with First Capital Securities Co Ltd of Shenzhen, will allow JPMorgan to tap China's lucrative underwriting market.
"Right now we can only raise money for Chinese clients offshore," Fang said. "With a domestic securities license we will be able to provide clients with renminbi equities and bonds capabilities.
"Most importantly, we are looking at increasing the number of clients we cover in China and we want to offer more products to them," Fang said.
Getting a license to operate in yuan currency securities markets "is very important to us," he said. "Not initially from a revenue point of view, but we want the ability to go to our best clients and say we can do both offshore and domestic business."
The joint venture, in which JPMorgan will hold a one-third stake, is awaiting regulatory approval. JP Morgan is behind rivals such as UBS Securities, Goldman Sachs or Credit Suisse, which already have established JVs with Chinese partners.
While it does not break out revenue by country, JPMorgan said in October that its third-quarter global investment banking profit fell by a third to USD 1.2 billion.
Investment banking revenue for the Asia-Pacific region grew 6% in the first nine months of this year compared with the same period last year, while investment banking revenue for Europe, the Middle East and Africa fell 29%, and declined 8% for the Americas.

[DSpencer]

Re: Hudson's 1-2 Punch

...the problem is that the parasite has not only taken over the brain of the economy, which is supposed to be the government...

The brain of the economy is supposed to be the government? Is this just Hudson expressing his opinion or is this the common understanding in the US today?

If the government is the brain of our economy, then parasite or not, we are screwed.

[c1ue]

Re: Hudson's 1-2 Punch

TPC,

Dr. Hudson refers to a smart parasite which helps its host by 'encouraging' the host to find new foods, or better environments, or whatever.

The dumb parasite is the one which destroys the host then must find another.

It isn't a question of intelligence per se so much as it is long term vs. short term goals.

The previous Exiledonline article referring to the Sacculina crab parasite is a good example of a 'dumb' parasite: it changes the host's sex then makes it run into vulnerable areas where the host will get eaten.

A smart parasite would be like certain types of symbiotes.

[ThePythonicCow]

Re: Hudson's 1-2 Punch

TPC,

Dr. Hudson refers to a smart parasite which helps its host by 'encouraging' the host to find new foods, or better environments, or whatever.

The dumb parasite is the one which destroys the host then must find another.

My point was that Hudson sometimes seems to refer to the American FIRE elite as at least having enough sense to realize they will have to move on to China or somewhere, and sometimes being foolish enough to think that austerity will revive the American economy. Which is it?

[mesyn191]

Re: Hudson's 1-2 Punch

I don't think he believes that they (FIRE elites) believe austerity will revive the economy, but rather that is them sucking what wealth they can out of the economy into others ASAP before the shit hits the fan so to speak.

[llanlad2]

Re: Hudson's 1-2 Punch

I hear a strange inconsistency in Michael Hudson's comments. Overall, I quite agree with Hudson that the FIRE interests and their government toadies are looking to reduce the cost of labor, lower the portion of government spending on social services and further shift the tax burden from large corporations to labor and the (soon to be former) middle class.

This will cause a depression, by which I mean that ordinary Americans will be poorer. They will have fewer jobs, paying less, taxed more, with fewer social services. Americans will come to know the austerity that has been foisted on so many other nations already.

However he says on the one hand that a "dumb parasite" has taken over the US brain, the government (Obama, the media, the deficit commission, ...) and has gotten them to thinking that the way to save the US economy is by using the resulting depression to lower the cost of labor, while he says on the other hand that the financial interests realize that "a debt that can't be paid won't", that the US host is terminally ill, that wealth is being shifted to the BRIC countries, and that the financial interests are just sucking what remaining value they can out of the dying US host.

So ... is the FIRE parasite [a] a smart parasite, realizing that it must suck what remaining value it can out of a dying host (the West) and move on to the next host (the BRIC nations), or is it [b] a dumb parasite, using its control of the hosts brain to get the host thinking that to save itself, it must destroy the wealth of its people (shades of Vietnam -- we had to destroy the village to save it.)

I think the resolution of this apparent conundrum depends on realizing that the financial interests come in (at least) two layers.

The top layer, the wealthiest and most powerful, are shifting from the West to the BRIC nations, especially from the US to China. They are sucking what wealth they can out of the US. They will leave it as a source of food, forest, gas, oil and mineral resources to be mined and harvested, and tax revenues to be collected in service of national debt. Human labor is no longer a precious resource. Not even well educated engineers are in short supply. Indeed, with peak cheap oil upon us, humans are (in their cold blooded, aka reptilian, view) in a surplus of what the planet can sustain.

The next layer down, being the management of the major Western banks and corporations and their captive governments, media and various NGO's, displays a mix of dumb greed (the dumb parasite, inadvertently killing its own host) and misguided efforts to save the Western economy through austerity (raise taxes and lower social services to tackle the debt.) This layer is being used by the top layer, to suck the remaining vital fluids from a dying host.

Strangely enough he seems to say it is dumb and smart, but smart by accident. He says the financiers do actually think that policy A (austerity will cure the economy) will have the desired result (a functioning exploitable economy) . However policy A has resulted in the unplanned result B(making money abroad) which they didn't predict, giving them an escape route by accident . ie they were dumb but have stumbled on a possible "result" (that suits the financiers).

However I do actually give some credence to towards your argument that there is a super rich (non-sovereign loyal layer) that is trying to manipulate it all beneath it.

Either way it doesn't matter. The US is a host being hollowed out much as the UK was previously. Investment outside the US is increasing rapidly. There are people on this website who think democracy will alter this and the US public will come to their senses. How will they if they believe austerity on themselves is the cure? The UK is the precedent for the US. The UK is the least centrally planned economy in Europe supposedly but is practically insolvent. Someone convince me why the US won't go the same way as the UK now it (the US) been captured?
On a side note in the UK (and US) people think that Germany is more efficient because each person in Germany works harder and makes more stuff. The truth is a German can live in his/her own flat in the capital Berlin for $600 a month. (London would be $1200.) Hence German citizens can have a better standard of living but earn less than an Irishman in Dublin or an Englishman in London. This is the truth of German efficiency. Rents are cheaper. No housing bubble. 35% house ownership. Result -net creditor due to cheaper costs for employers.

[ThePythonicCow]

Re: Hudson's 1-2 Punch

Either way it doesn't matter. The US is a host being hollowed out much as the UK was previously.

Agreed. Whether or not the inconsistencies I heard are there or not doesn't matter. That was probably just me being annoyed at Hudson's chronically opaque manner of speaking (that or he's just got 20⁺ more IQ points than this dumb cow.)

Either way, the US is being hollowed out, as so many before.

[c1ue]

Re: Hudson's 1-2 Punch

My point was that Hudson sometimes seems to refer to the American FIRE elite as at least having enough sense to realize they will have to move on to China or somewhere, and sometimes being foolish enough to think that austerity will revive the American economy. Which is it?

Dr. Hudson has been consistent in saying that the rentiers are looting now with the full intention of leaving the US for other parts.

Thus they are smart enough to know that everything is going to h***, but not so smart as to only clip enough off the American populace such that the parasitism can continue indefinitely.

[ThePythonicCow]

Re: Hudson's 1-2 Punch

Dr. Hudson has been consistent in saying that the rentiers are looting now with the full intention of leaving the US for other parts.

Listen to the interview, starting at 1:26. He says that they have the delusion that depression is the solution, not the problem. Yes, he says in other parts in the interview, and elsewhere, what you describe. But at this point in the interview, he does NOT say that they have full intention to loot, but rather that they HAVE THE DELUSION that they are solving America's financial problems.

[tacito]

Re: Hudson's 1-2 Punch

I think that for Hudson the smart parasite is the one that doesn't kill his host. Both layers are in the same game: sucking up as much as they can and running to other hosts. That "running naked" from one host to the other is dangerous for them. Too much visibility, too many people thinking about guillotines. They can get with it, but they are in danger. That's why they are dumb parasites. If they could restrain enough so that America could be the major power for another century, that would be a smart parasite.

[ThePythonicCow]

Re: Hudson's 1-2 Punch

I think that for Hudson the smart parasite is the one that doesn't kill his host. Both layers are in the same game: sucking up as much as they can and running to other hosts. That "running naked" from one host to the other is dangerous for them. Too much visibility, too many people thinking about guillotines. They can get with it, but they are in danger. That's why they are dumb parasites. If they could restrain enough so that America could be the major power for another century, that would be a smart parasite.

I should not have used the term "smart parasite" when I did above. I used it incorrectly and distracted from what I was trying to point out.

I was trying to point out that Hudson is saying both that (1) they (foolishly) think that the looting of America is solution, as it will lower labor costs, and (2) they don't think there is a solution, just a last round of looting the decaying carcass.

[c1ue]

Re: Hudson's 1-2 Punch

Listen to the interview, starting at 1:26. He says that they have the delusion that depression is the solution, not the problem. Yes, he says in other parts in the interview, and elsewhere, what you describe. But at this point in the interview, he does NOT say that they have full intention to loot, but rather that they HAVE THE DELUSION that they are solving America's financial problems.

Yes, Dr. Hudson does have the problem that his encyclopedic knowledge is not generally available to everyone, thus key steps which are intuitively obvious to him are not to many who don't follow him closely.

The missing steps in this case are that Dr. Hudson is speaking of 2 different groups:

1) the rentiers
2) their lackeys

He actually refers to the lackeys in this particular case. The rentiers have a specific goal to loot as much as possible and then get out - using Fed provided cheap dollars to buy hard assets abroad. The lackeys on the other hand are continuing their rentier directed anti-labor program of squeezing as much as possible out of the working class in order to reduce expenses on the part of the rentiers, and in the process enrich themselves (the lackeys).

For the rentiers - the Depression isn't a good thing because that's how revolutions, guillotines, and confiscation happen. But this isn't a problem if said rentiers are elsewhere.

For the lackeys, however, the Depression is going to be a problem. But they won't notice that until it is too late - the short term reaping of massive bankster loot obscures reality.