Monopoly capitalism may be on its last legs! This week, economist Michael Hudson joins us to say his predictions on the Trump budget have come true and seem to suggest, more than ever, that capitalism is not only a disservice to the people, but it's also unsuccessful.
Then, Stacy Mitchell and Joe Maxwell join us at the Progressive Caucus Strategy Summit in Baltimore. Monopoly capitalism, they say, translates to monopolized power.
Read the excerpt below.
Michael Hudson: When you hear the word inflation, that means rising wages. First of all, there hasn't been any inflation, there hasn't been any rise in wages. There's been a race to the bottom in terms of employment, in terms of the minimum wage. There is no chance of inflation because, as Alan Greenspan explained 10 years ago, workers are afraid to go on strike, afraid to protest, because if they fall behind in their payments to the electric companies or the phone bill, their credit card rates are going to go up from 13% to 29%. So labors cowed, their not going to really have any inflation.
The stock market's going up because of low interest rates are enabling leverage buyouts to come in. People are borrowing money from the banks at 2% and buying a stock that yields 4%, and it's all arbitrage.
Laura Flanders: There have been some dips.
Michael Hudson: Yes, it's more a tremor. Like before you have the earthquake in California, there are a few tremors and then comes the big crest. What you got was a tremor, and then the Federal Reserve and Foreign Central Banks all came in and began buying Standard and Poor's futures to bid up the market without buying the stock. You can just buy the futures and manipulate the stock market.
What the press isn't talking about is a central bank manipulation of stock and bond prices to keep them up, the enormous purchases of corporate bonds by the European Central Banks, by the Federal Reserve. The role of central banks today is to support inflation of asset prices, of stock prices, bond, and real estate and to deflate the economy. They want to make sure that labor does not get any share of the added growth. That's the basic strategy of neoliberalism, which is the new orthodoxy.
Laura Flanders: You and I have talked about this same thing for years. Is there anything new on the horizon or in this constellation of factors? Some people talk about Bitcoin and these other kinds of currencies. They were seen as radical or alternative at one point.
Michael Hudson: I don't think so. It's fictitious money. It's tax avoidance. It's really criminal money. The most liquid people in the world have always been criminals, because they don't want to have their wealth where people can see it. They like privacy. When people talk about privacy and individualism, they're probably dope dealers, arms merchants, and embezzlers. Those are the people who like privacy.
Laura Flanders: So that you can come back soon, and I hope it won't be as long as a year, and I can tell you, you were right again, what's your projection for what happens over the next few months?
Michael Hudson: The same as before, a slow shrinkage, a slow shrinkage. I just had lunch with an economist from Turkey, and he said, "We're all waiting for the big crash." Somebody's going to make a wrong bet, and the whole thread will become unraveled, and it'll be beyond the ability of central banks to support Wall Street. It'll be another crash, another bailout, and that's when the Republicans and the Democrats will come into agreement to say we've got to cut social security, we've got to cut Medicare, we've got to stop letting the parasites, the workers, exploit us creative capitalists.