Michael Hudson

The Coming European Debt Wars

Fasten your seatbelts.  The world is in for a bumpy ride on the debt default trail.

Government debt in Greece is just the first in a series of European debt bombs that are set to explode. The mortgage debts in post-Soviet economies and Iceland are more explosive. Although these countries are not in the Eurozone, most of their debts are denominated in euros. Some 87% of Latvia’s debts are in euros or other foreign currencies, and are owed mainly to Swedish banks, while Hungary and Romania owe euro-debts mainly to Austrian banks. So their government borrowing by non-euro members has been…

Wall Street’s War Against Consumers and Labor Heats Up

Michael Hudson takes on Henry Paulson, Goldman Sachs, and the devastating effects of regressive taxation.

Former Treasury Secretary Hank Paulson wrote an op-ed in The New York Times Monday outlining how to put the U.S. economy on rations. Not in those words, of course. Just the opposite: If the government hadn’t bailed out Wall Street’s bad loans, he claims, “unemployment could have exceeded the 25 percent level of the Great Depression.” Without wealth at the top, there would be nothing to trickle down.

The reality, of course, is that bailing out casino capitalist speculators on the winning side of A.I.G.’s debt swaps and…

State of the Union Part II: Euphemisms, oxymorons and internal contradictions

Will Obama abandon myths about deficits and social spending? Or is Wall Street still in charge?

The State of the Union address is in danger of purveying the usual euphemisms. I expect Obama to brag that he has overseen a recovery. But a jobless recovery? What has recovered are stock market averages and Wall Street bonuses, not disposable personal income or discretionary spending after paying debt service.

There is a dream that what can be “recovered” is something so idyllic as to be mythical: a Bubble Economy enabling people to make money without actually working, by borrowing and riding the tide of…

State of the Union: Change of Heart Towards Wall Street Needed

It’s make or break time for Democrats. At stake is Obama’s credibility as an agent for change. Will the party be able to drag Obama away from the Corporate Democrats?

Massachusetts voters who felt duped by Obama’s promise of reform punished Democrats last Tuesday for failing to make a credible start fixing the debt-strapped economy. The President has begged the banks to start lending again. But this means loading the economy down with yet more debt. The $13 trillion bailout was supposed to help banks do this, but they have simply taken the money and run.

The contrast between Wall Street’s recovery…