D@W Exclusive Podcast: Michael Hudson on Junk Economics

Democracy at Work's Paul Sliker and Dante Dallavalle talk with Michael Hudson, one of the world’s six economists who accurately predicted the 2007-2008 financial crisis. His new book, J is for Junk Economics, reveals how the mainstream economic vocabulary has been turned around in an Orwellian way to mean just the opposite of what words used to mean. Michael explains how the corporate media and academia use well-crafted euphemisms to conceal how the economy really works, the economy under Obama vs. Trump, and what might be coming next. 

Listen to the podcast on YouTube, Facebook or Soundcloud.  

Praise for the book:

"There are few people alive who have taught me more than Michael Hudson. [His] incisive and brilliant essays... should be assigned to every first year student of economics."

— David Graeber, author of Debt: The First 5,000 Years and co-organizer of Occupy Wall Street

"A dictionary of Junk Economics is a concept so good I wish I'd thought of it, but there's no better person than Michael Hudson to write it. There's so much junk, and it deserves his classically-informed barbs linking today's neat, plausible, and wrong economics to the Sophists of Ancient Greece, the philosophers-for-hire who used superficially plausible logic to distract discussion away from real substance."  
— Steve Keen, economist and author of Debunking Economics 
"Michael Hudson is the best economist in the world... Readers often ask me how they can learn economics. My answer is to spend many hours with Hudson's book [Killing The Host]. First, read the book through once or twice in order to get an idea of what is covered. Then study it closely section by section. When you understand the book, you will understand economics better than any Nobel Prize-winning economist. Many current events cannot be understood independently of Hudson's explanation of the financialized Western economy."
— Paul Craig Roberts, former under-secretary of the U.S. Treasury (Reagan Administration) and author of The Failure of Laissez Faire Capitalism and Economic Dissolution of the West
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For more on Michael, please visit michael-hudson.com


Showing 9 comments

  • commented 2017-09-04 19:01:04 -0400
    A transcript of this interview is available in HTML, PDF, and text-only at: https://ratical.org/ratville/MichaelHudson-JunkEcon.html
  • commented 2017-08-26 20:59:26 -0400
    @Brent Irving, I totally agree with you that there is a strong and important overlap between Marxian theory and Modern Monetary Theory. Indeed, Marx himself was quite clear about this in the first 100 pages of Grundrisse. Marx’s arguments are much closer to today’s Modern Monetary Theorists than orthodox Marxists.
    According to mainstream economists, governments should never issue their own currency because it begets hyper-inflation. To prove their argument, they point to some examples where states have printed money and there has been hyper-inflation (e.g. Weimar Germany, Vietnam, Iran, etc.). Their alternative is to borrow the money from either other governments, international financial institutions (such as IMF or World Bank), or from private banks.
    The truth, however, is that as long as a government issues new currency to fuel and support domestic growth, there will be no inflation. This kind of severe hyper-inflation is always a consequence of only two possibilities: 1) a balance of trade deficit, and 2) scarcity in domestic market. The former is the main case for developed nations (such as Germany during Weimar republic), and the latter is the acute problem of all third-world and underdeveloped countries. Both cases are exacerbated by the neoliberal prescription (to finance government deficit through borrowing rather than printing their own money).
    Why is this neoliberal nonsensical ideology so pervasive then? Precisely because the financial class has become dominant. Finance is decoupled from the real economy and pursuits its own agenda independently. Michael Hudson explains it all too brilliantly, so I would not like to reiterate all he has already said.
  • commented 2017-08-26 09:08:35 -0400
    I would also like to add to my previous lengthy comment the all important issue of how do we take these understanding and implement them, organize around them and begin to make real changes in the real world. I also think we need a vision (not a blueprint) of where we hope to be headed. I am sympathetic to Participatory Economics and Participatory Society by Michael Albert and Robin Hannel

    http://www.participatoryeconomics.info/

    https://zcomm.org/life-after-capitalism/
  • commented 2017-08-26 08:58:27 -0400
    I think there are many allies in the MMT (Modern Money Theory) “world”. True some of them are post Keynesians that want to use their understandings to moderate and “save” some version of capitalism, but I am pretty sure Michael Hudson is not one of those and neither are a lot of MMT’ers in my experience. I believe one of the key areas that separates a lot of the the MMT’ers from progressives like myself and perhaps professor Wolff are ideas about incentivising intelligent creative people. Professor Wolff has talked brilliantly about this issue in the past and I am aligned with his views (brief summary: don’t believe it, historically not accurate, but if incentives are required let’s find out how much and provide the minimum required). I believe many MMT’ers think that you have to create material incentives to entice people to exercise their creative genius (perhaps in the end it is just a matter of degree then).
    I also believe historically progressive struggle advances more when gains are made than when backslides happen. Intermediate progressive gains like a living wage, debt forgiveness, universal health care, tuition free education… remove people from precarious positions and frees up precious time for learning and understanding and becoming more politically involved, enroute to a more egalitarian, inclusive, caring, empathetic, cooperative and participatory society. We must struggle to understand the world as it really exists and IMHO economics, the financial world and particularly money are best understood through the teachings of what has become call MMT. For people working towards the above stated progressive advances there are some simple truths about how money actually functions that need to be clearly understood:

    THE ANSWER TO THE QUESTION “How are we going to pay for all these progressive gains”? Is simple. The same way the federal government pays for everything.

    BY ISSUING THE CURRENCY!!

    That is what the federal government does, By law. (as do all sovereign governments that issue their own currency like the USA, Canada, Japan, the UK, China etc but not the European Monetary Union countries like Greece who are destroying their society largely because they don’t issue their own currency and have un-democratized their currency issuance and given it over to a bunch of elite technocrats)

    The USA federal government ISSUES THE US DOLLAR!!

    Where else could US dollars possibly come from?

    The US federal government CANNOT RUN OUT OF US DOLLARS, THEY CANNOT GO BROKE IN US DOLLARS.

    THE US FEDS ISSUE THE US DOLLARS!

    THE US FEDS DO NOT NEED TO TAX TO SPEND!

    THE US FEDS DO NOT NEED TO BORROW TO SPEND!

    THE USA FEDERAL DEBT IS SIMPLY AN ACCOUNTING OF ALL THE MONEY THE US GOV. HAS ISSUED MINUS THE AMOUNT IT HAS COLLECTED BACK IN TAXES.

    This is simply a fact of how the current money system works.

    There are of course many other issues in economics and society (inflation, employment, production, consumption, decision making, class warfare, divide and conquer etc.) but IMHO progressives MUST GET THIS BASIC UNDERSTANDING OF HOW MONEY IN THE CURRENT SYSTEM WORKS.

    I highly recommend the following MMT sources

    http://www.neweconomicperspectives.org for those interested in
    more information, and particularly for people new to this information, to their MMT primer
    http://neweconomicperspectives.org/modern-monetary-theory-primer.html or the book
    “Modern Money Theory – A Primer on Macroeconomics for Sovereign Monetary Systems” by professor Randall Wray available here
    http://www.palgrave.com/us/book/9781137539915#otherversion=9781137539908

    http://www.levyinstitute.org/publications/l-randall-wray Writings of Randall Wray at the Levy Economics Institute.

    http://bilbo.economicoutlook.net/blog/ by economics professor Bill Mitchell

    http://moslereconomics.com by Warren Mosler.
    A concise and straightforward explanation in video by economics professor Randall Wray ofthe University of Missouri Kansas City (UMKC).
    https://www.youtube.com/watch?v=-KRi9nF8BiA

    or Warren Mosler
    https://www.youtube.com/watch?v=1AyT9zftNrE

    For a longer treatment of money and debt David Graeber’s “Debt The Last 5000 years” may be of interest.

    This is not meant to be an exhaustive list.

    In Solidarity
  • commented 2017-04-14 18:37:57 -0400
    @Bruce Kline, I understand your frustration, but bear in mind that Professor Hudson has always been consistent in his argument. His fundamental argument has always been against financialization and how the FIRE sector sucks money out of the economy and, similar to a parasite, bleeds it to death.
    Yes, for a while it did appear that he favored Trump over Clinton, but he never supported Trump in a positive way. If you go back and read his previous writings during the elections, he was always maintaining that the US elections is turned into a competition between two of the most loathed people among Americans. And he was saying when both sides are detested to this degree, the one who gets more media coverage will be the loser. And that is precisely what happened, isn’t it?!
    This man knows what he is talking about. But if you really want to know what is correct and what isn’t, I’m afraid the only way to know that is to go and buy those 10 different economic books and find it out yourself. People like Michael Hudson or others can give us clues, but we can only make our own minds by understanding subjects directly. Although this is true for all scientific subjects, but it is particularly true about human sciences and most particularly about economics. The reason being that, in economics and human sciences, we ourselves are subjects of study. Therefore it is inevitable that there will be biases based on who conducts the study and what vested interests influence it.
  • commented 2017-04-12 01:19:13 -0400
    Hudson makes some provocative points, but maybe a month or two ago I saw him being interviewed by Max Keiser on the Keiser Report, on You-Tube talking about how great Donald Trump was and his infrastructure investments … MIGHT be. This was on Russia Today. To me this, what I can only describe as “fake news” undercut my belief in Hudson, though I still an interested in some of his studies of cultural economics, which are fascinating and enlightening both.

    Basically what I see these days is a bunch of talking head, celebrities, trying to make a living. This is certainly understandable, but doesn’t it almost completely prevent them from … uh, “speaking truth to power” so to speak, or speaking truth to each other.

    Not everyone can be the most brilliant economist, and there is a kind of a bandwagon that Left-leaning economists are jumping to and giving lip service to … the I-work, inequality. Funny, I have followed most of the Leftist media for decades and this inequality idea only seemed to come up around 2008, except that it was out there and a big issue a hundred years ago, and somehow got dumped or lost.

    I would like to see more of our favorite talking heads who are speaking from a Left point of view start having to discuss with each other, have conflict, resolve them, and then synthesize something that is relevant and useful for all the people, rather than having everyone have to buy 10 different economic books, read them, and then try to figure it out themselves, which few if any of us lay people are able to do.

    The Right, the corporatist, the rich, the capitalists, do this by their very natures, they have one track that leads them in the same direction – selfishness, and power seeking.

    The Left is at an inherent disadvantage, and I don’t see anyone talking about that, let alone doing anything about it. The other day on the Ralph Nader Radio Hour podcast, I heard Ralph and Noam Chomsky talking … FOR THE VERY FIRST TIME. How can that by that two towering figures from the Left had never talked, and do not work together. Both of these brilliant people who I admire and respect are billed as famous activists … but what are they doing if everyone is always doing it all alone and it leads to nowhere?
  • commented 2017-04-07 01:35:39 -0400
    Just about time to see Professor Hudson and Professor Wolff join forces together. The two are, I dare to opine, the greatest economists of our time. Professor Wolff has a knack of simplifying complicated subjects to a narrative easily digestible by ordinary people. Michael Hudson’s greatest merit is his sharp eyes abstracting obfuscating details away and coming down to the gist and crust of the issues.
    It has been three years that I am following the two very closely and I have learned massively from them.
  • commented 2017-04-04 14:21:51 -0400
    If enough people read Michael Hudson, we might, just might one day get our economy back.
  • commented 2017-04-03 22:02:16 -0400
    I listened to everything Hudson has has to say for many years now :)
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