Loading ...Michael Hudson on “root and branch reform of financial system”
Hudson is sharp, but a quick skim has me scratching my head: Is Hudson being a Statist here?
“And the problem basically is that most money is issued by commercial banks, not by the government. And bank credit, as we’ve discussed in the last episode, is largely created for the wrong things. It’s created against housing to inflate housing prices. It’s granted for corporate takeovers.
One thing bank credit is not issued for is to build new factories and to employ labor and to increase economic growth. That’s the job of the government when the government treasury creates money to spend into the economy for functions that are supposed to serve society and serve economic growth.
But when a government lends money, it’s for very different reasons. It’s for the real economy. And when banks lend money, it’s for the financial overhead economy. And that’s why we would like to see all money created basically by the Treasury.”
So does Hudson want Treasury to loan more money to Solyndra again?
That’s why thy call Economics the Dismal Science
Everybody has an opinion on Macro Economic Theory but it seems nobody is ever right
“Nobody is right if Everybody’s Wrong”
Steven Stills
I could see Robert Reich making the same argument, definitely pro-CBDC.
“And that’s why we would like to see all money created basically by the Treasury.”
There you have it, it’s ‘created’, the gov’t is no longer beholding to taxpayer/citizen interests – this will not end well for them.
Years ago, when I studied a bit of Economic Development (where Jeff Sachs’ work was already prominent), there were articles around about Curb Lending Markets.
This is where funds were limited (say in a farming village), and loans were issued in sequence, by the community. New loans would be issued only when the prior loans were paid off. Community elders would decide if Maggie’s Farm could borrow to buy a new chicken, or if the General Store could install a public phone service. How fast could you pay back the loan from its proceeds, was the question. As I recall, the decisions were often made by a vote taken of next in line borrowers. They chose in a manner that would get them toward the head of the line.
A ripe process for political favoritism/nepotism etc, but the right concept for society. Just no clear way to implement it without abuses by government or bankers, especially when they are locked arm in arm.