Michael Hudson Quotes

“When other countries run sustained trade deficits, they must finance these by selling off domestic assets or running into debt — debt which they actually are obliged to pay. It seems that only the Americans are so bold as to say “Screw the world. We’re going to do whatever we want.” Other countries simply cannot afford the chaos from which the U.S. economy is positioned to withstand as a result of the fact that foreign trade plays a smaller role in its economy than in those of nearly all other nations in today’s interdependent world.

Using debtor leverage to set the terms on which it will refrain from causing monetary chaos, America has turned seeming financial weakness into strength. U.S. Government debt has reached so large a magnitude that any attempt to replace it will entail an interregnum of financial chaos and political instability. American diplomats have learned that they are well positioned to come out on top in such grab-bags.”
― Michael Hudson, The Bubble and Beyond

“Popular morality blames victims for going into debt – not only individuals, but also national governments. The trick in this ideological war is to convince debtors to imagine that general prosperity depends on paying bankers and making bondholders rich – a veritable Stockholm Syndrome in which debtors identify with their financial captors.”
― Michael Hudson, Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy

“But money doesn’t work in the sense that labor or tangible capital expends
effort to produce commodities. Credit is debt, and debt extracts interest. Financial salesmen who promise investors, “Make your money work for you” actually mean that society should work for the creditors — and that means for the banks that create credit.

The effect is to turn the economic surplus into a flow of interest payments, diverting revenue from tangible capital investment. As the economy’s reproductive powers are dried up, the financialization process is kept going by easing credit terms and lending — not to produce more goods and services, but to bid up prices for the real estate, stocks and bonds being pledged as collateral for larger and larger loans.”
― Michael Hudson, The Bubble and Beyond

“Surprising as it may seem today, classical ideas of creating a free market were to be achieved by “socialist” reforms. Their common aim was to protect populations from having to pay prices that included a non-labor rent or financial tax to pay landlords and natural resource owners, monopolists and bondholders. The vested interests railed against public regulation and taxation along these lines. They opposed public ownership or even the taxation of land, natural monopolies and banking. They wanted to collect rent and interest, not make land, banking and infrastructure monopolies public in character.”
― Michael Hudson, J Is for Junk Economics: A Guide to Reality in an Age of Deception

“When the volume of debt has grown as large as national income or GDP, and when it bears an interest rate (typically 5%) above the economy’s rate of growth (typically just 1% to 2%), then all the growth in national income is taken by the creditors.”
― Michael Hudson, J Is for Junk Economics: A Guide to Reality in an Age of Deception

“In fact, they are not taught in any university departments: the dynamics of debt, and how the pattern of bank lending inflates land prices, or national income accounting and the rising share absorbed by rent extraction in the Finance, Insurance and Real Estate (FIRE) sector. There was only one way to learn how to analyze these topics: to work for banks. Back in the 1960s there was barely a hint that these trends would become a great financial bubble.”
― Michael Hudson, Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy

“In contrast to Ricardo’s expectation that banking would retain its early focus on international commerce — and hence,on industrial capital formation to provide foreign markets with British exports in exchange for raw materials — banking has found real estate to be the key, along with its traditional market in creating monopolies and trusts. Some 80% of bank loans in the United States and Britain are mortgages, and consequently they account for 70% of the economy’s interest payments.”
― Michael Hudson, The Bubble and Beyond