Michael Hudson

Michael Hudson: Rescue for the Few, Debt Slavery for the Many

10/13/08 7:27 PM

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The Great Bailout Swindle The brilliant economist Michael Hudson lays out the stupidity of Paulson’s bailout plan and the lead role in Congress of Democrats in the bankers’ plot. What happened? What should be done? Read Hudson. PLUS the complete text of Alexander Cockburn and Fred Gardner’s probe of the McCain health dossier. Find the answers in CounterPunch newsletter. Get your copy today by subscribing online or calling 1-800-840-3683 Contributions to CounterPunch are tax-deductible. Click here to make a donation. If you find our site useful please: Subscribe Now! CounterPunch books and gear make great presents. Order CounterPunch By Email For Only $35 a Year !

Today's Stories October 13, 2008

October 13, 2008

Congress Should Bail Out of the Bailout

Michael Hudson Rescue for the Few, Debt Slavery for the Many

Rescue for the Few, Debt Slavery for the Many

October 10 / 12, 2008

By MICHAEL HUDSON

Alexander Cockburn Is McCain a Lot Sicker Than We Know?

We are now entering the financial End Time. Bailout “Plan A” (buy

Jeffrey St. Clair / Joshua Frank Obama's Nuclear Ambition Douglas Valentine Mission CREEP: From John Mitchell to John McCain Noam Chomsky Exposing the UnDemocratic Face of Capitalism Ralph Nader The Derivatives Game Syed Saleem Shahzad Why the Neo-Taliban is

Now Available from CounterPunch Books! The Inside Story of the Shannon Five's Smashing Victory Over the Bush War Machine By Harry Browne

the junk mortgages) has failed, “Plan B” (buy ersatz stocks in the banks to recapitalize them without wiping out current mismanagers) is fizzling, and the debts still can’t be paid. That is the reality Wall Street avoids confronting. “First they ignore you, then they denounce you, and then they say that they knew what you were saying all the time,” said Gandhi. The same might be said of today’s overhang of debts in excess of the economy’s ability to pay. First the policy makers pretend that they can be paid, then they denounce the pessimists as spreading panic, and then they say that of course students have been taught for four thousand years now how the “magic of compound interest” keeps on doubling and redoubling debts faster than the economy can squeeze out an economic surplus to pay. What has ended is the idea that “the magic of compound interest” can make economies rich without having to work and without industry. I hope we have seen the end of derivatives formulae seeking to make money by playing in a zero-sum game. A debt overhang always ends either in foreclosure of the debtor’s property, or in a debt annulment to preserve the economy’s overall freedom and equity. This means that the postmodern economy as we know it must end –

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Michael Hudson: Rescue for the Few, Debt Slavery for the Many

Why the Neo-Taliban is Winning Patrick Cockburn War in the Time of Cholera Paul Craig Roberts A Possible Solution to the Economic Crisis Mike Whitney Run on the System Peter Morici The Deficit and the Damage Done Christopher Ketcham The End of the Economy Stephen Martin Shock and Awe in Economic Warfare Chellis Glendinning Wireless Mind, Gullible Mind Saul Landau All Guns, No Butter Ahmad Faruqui 21 Days to Baghdad Adam Turl Sheriff Tom Dart vs. the Banksters Serge Halimi The Battle for the West Anthony DiMaggio Making a Killing: the Business of Elections John Ross The Sky is Falling on Mexico, Too José M. Tirado Meltdown in Iceland Paul Krassner Beat the Crowd in Denver: Cops and TShirts David Macaray Adventures in Unionism Robert Fantina Bankrupt and Belligerent David Yearsley The Playlist for Election 2008

either in financial polarization and debt peonage to a new oligarchic elite, or in a debt cancellation, a Jubilee Year to rescue society. But when the government says that it is reviewing “all” the options, this reality is not one of them. Treasury Secretary Henry Paulson’s first option was to buy packages of junk mortgages (collateralized debt obligations, CDOs) to save the wealthiest institutional investors from having to take a loss on their bad bets. When this was not enough, he came up with “Plan B,” to give money to banks. But whereas Britain and European countries talked of nationalizing banks or at least taking a controlling interest, Mr. Paulson gave in to his Wall Street cronies and promised that the government’s stock purchases would not be real. There would be no dilution of existing shareholders, and the government’s investment would be non-voting. To cap the giveaway to his cronies, Mr. Paulson even agreed not to ask executives to give up their golden parachutes, exorbitant annual bonuses or salaries. Plan A (the $700 billion to buy mortgage-backed junk that the private sector will not buy) failed partly because it let financial institutions avoid putting a fair value on the debt packages they were selling. Instead of telling the truth about their financial position by marking assets to market prices), they can “mark to model,” Enron-style. We have seen the result: A solid week of plunging stock market prices. The public media call this a panic, but there is nothing irrational about it. Who in their right mind would buy securities or buy into a bank without knowing what the securities were worth? Faith in junk mathematical models has ended.

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Born Under a Bad Sky: Notes from the Dark Side of the Earth By Jeffrey St. Clair RED STATE REBELS: Tales of Grassroots Resistance from the Heartland

So we still await a public response to the problem of how to write down debts. Whose economic interest will have to give: that of debtors, as increasingly has been the case over the past eight centuries; or that of creditors, which have fought back to create a neoliberal economy controlled by the FIRE sector? It is not too late to decide which road to take, but Wall Street bankers and creditors have taken the lead in positioning themselves. Seeing which way the political winds were blowing, they moved to empty out the Treasury before the November 3 elections much like medieval citizens fleeing a horde of Mongolian raiders under Genghis Khan. “We’re moving. Clean out the cupboards,” much as Lehman Brothers emptied out their foreign bank accounts in Britain and elsewhere just before declaring bankruptcy, taking what they could and steering it to their best friends. The pretense was that a bailout was needed to restore confidence. But the ensuing week showed that the claims were false. It didn’t turn the stock market around as promised. The Dow Jones Industrial Average fell 2,200 points from Wednesday, October 1 through the following Friday October 10 – eight straight trading days, not even pausing for the usual zigzags. Friday’s plunge was 100 points a minute for the first seven minutes – a 690 point drop to under 8000. Each 100 points was more than a 1 percent drop, which was reflected on the NASDAQ. Nothing could withstand the pressure of so many Americans cashing in their mutual funds overnight and so many foreigners in earlier time zones putting in sell-at-market orders.

Edited by Jeffrey St. Clair and Joshua Frank How the Press Led the US into War

Short sellers made one of the largest and quickest fortunes ever, and then covered their positions by buying back the stocks they had presold. This pushed prices up even into positive territory just before 10:30 AM when George Bush began to speak. Half the financial stocks showed gains – a sign that the Plunge Protection Team had jumped in. But Mr. Bush said nothing helpful and stocks went back into freefall, ending down another 128 points despite the upcoming weekend G7 meeting. There was no talk at all of reducing debt levels – only of giving more money to banks, insurance companies and other money managers, as if “pushing on a string” somehow would lead them to lend yet more to an already debt-ridden economy.

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Michael Hudson: Rescue for the Few, Debt Slavery for the Many

Julian Clec'h The Soap Washing Through Saudi Arabia Adam Engel Sexual Healing ... for the Planet Phyllis Pollack The Rolling Stones Go Home, Again Missy Beattie Going North: the Coming Nation of Alaska Poets' Basement Landau, Moser and Henson Website of the Day Sarah as Esther? New Video From Inside Palin's Church October 9, 2008 Robert Bryce From Enron to the Current Meltdown David Vest The Great Rescue of 2008: Could Whatever Follows Bush Be Even Worse?

If Congress really wanted to restore confidence, here’s what it might have done: First, mark to market, not to model. Investors no longer believe America’s Enron-style accounting, debt rating agencies or monoline risk insurers. They don’t trust U.S. banks to be honest about their financial positions. They worry about the fraud charges brought by attorneys general in eleven states against predatory lenders such as Countrywide and Wachovia that Citibank, JPMorgan Chase and Bank of America were so eager to buy. So is it too late for Congress to change its mind and repeal the giveaway? If the $700 billion handout didn’t stabilize the unsalvageable for small investors, pension funds and even the financial sector itself, what did it do? What the Fed has been doing while the media have not been looking? Let’s put the giveaway in perspective. While Senators and Congressmen subject to voters’ choice were debating $700 billion for the major Wall Street contributors to both parties (admittedly only for starters, Mr. Paulson explained), the Federal Reserve already had given even more, without any public discussion and without the major media noticing. Since Bear Stearns failed in March, the Federal Reserve has used the small print of its charter to go outside its normal customers (which are supposed to be commercial banks), to give investment banks, brokerage houses and now large corporations almost indiscriminately some $875 billion in “cash for trash” swaps. (The statistics are released each week in the Fed’s H41 report.) Like Aladdin offering new lamps for old, the Fed has exchanged Treasury securities for junk mortgages and other securities that brokerage houses and investment banks did not have time to pawn off onto OPEC, Asian sovereign wealth funds or other investors.

The press lauds Mr. Bernanke as “a student of Winslow T. Wheeler Meltdown at the Pentagon the Great Depression.” If he were, he should know that what led to the 1929 collapse were harsh U.S. Government creditor policies toward Andy Worthington its World War I Allied governments. This The Ordeal of the created a situation where the Federal Reserve had to provide easy Wrongly Imprisoned credit to hold interest rates artificially low so as to encourage U.S. Uighurs investors to lend to Britain and Germany, which would use these dollar inflows to pay their Inter-Ally arms and reparations debts. Mr. Anthony DiMaggio Bernanke’s predecessor, Alan Greenspan, promoted easy credit simply Obama the Subhuman for ideological reasons, to enrich Wall Street by enabling it to sell more debt. Helga Serrano / Hector Tamayo Ecuador Charts the Way Dave Lindorff When Money Flies Mats Svensson At the Checkpoint on the Day of Atonement Rannie Amiri The Time for Mordechai Vanunu is Now Website of the Day The Palestine Chronicle

A student of the Great Depression would understand the conflicts of interest between retail commercial banking and wholesale investment banking and money management that led Congress to pass the GlassSteagall Act in 1933 – conflicts unleashed once again when Pres. Clinton backed then-Fed Chairman Alan Greenspan and Republican leader (and McCain hero) Senator Phil Gramm in leading the repeal of this act, opening up the floodgates to today’s financial double-dealing that has cost the American economy so much. If Mr. Bernanke does know this history, his behavior is simply that of an opportunistic student of the art of political self-advancement, toadying to Wall Street in campaigning for one last great rip-off before the Bush Administration goes out of business. The Fed has given Wall Street newly minted Treasury bonds, added to the national debt out of thin air. It has done this without feeling any need to rationalize it by

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10/13/08 7:27 PM

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Michael Hudson: Rescue for the Few, Debt Slavery for the Many

The Palestine Chronicle Needs (and Deserves) Your Support

thin air. It has done this without feeling any need to rationalize it by drawing absurd public-relations pictures about how the government may “make a profit for taxpayers.”

October 8, 2008

The Fed Chairman is not elected democratically. He traditionally is designated by the Wall Street financial sector that the Fed is supposed to regulate, acting as its lobbyist for creditor interests – the top 10 percent of the population – against that of the indebted “bottom 90 percent.” This “independence of the central bank” is trumpeted as a hallmark of democracy. But it is undemocratic, precisely by being isolated from public control.

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10/13/08 7:27 PM

The Age of Oligarchy Treasury Secretary Paulson has no such luxury. The Treasury is Click Here to Order! supposed to represent the national interest, not that of bankers – even though its head these days is drawn from Wall Street and acts as its lobbyist. Mr. Paulson presented his almost totalitarian giveaway gruffly to Congress on a take-it-or-leave it basis, announcing that if Congress Grand Theft Pentagon did not save Wall Street from taking losses on its mountain of bad How They Made a Killing on loans, the banks were willing to crash the economy out of spite. the War on Terrorism “Please don’t make us wreck the economy,” he said in effect. As Margaret Thatcher used to say while selling off the British government’s crown jewels in the 1980s, TINA: There is no alternative. In making this bold threat Mr. Paulson behaved as arrogantly as Lehman’s CEO Richard Fuld did when he tried to bluff Korea and other prospective investors into paying the full, fictitiously high book value for his company. (His bluff failed and Lehman went bankrupt, wiping out its shareholders, including the employees and managers who held 30 percent of its stock.) There turned out to be an alternative after all. Responding to the loudest public condemnation in memory, Congress called Mr. Paulson’s bluff. What made his $700 billion Troubled Asset Relief Program (TARP) so much more visible to the media than the Fed’s actions is that Congress is involved, and this is an election year. The level of deception and false argument is therefore enormous – along with a few tradeoffs and tax cuts to distract attention. Erstwhile Republican opponent Sen. Jeff Sessions of Alabama came right out and said that “This bill has been packaged with a lot of very popular things to give it even more momentum,” so that (as The New York Times explained), “instead of siding with a $700 billion bailout, lawmakers could now say they voted for increased protection for deposits at the neighborhood bank, income tax relief for middle-class taxpayers and aid for schools in rural areas where the federal government owns much of the land.” Left behind while Wall Street’s believers in the rapture of free markets were swept up to heaven by “socialism for the rich” have been mortgage debtors, student-loan debtors, the Pension Benefit Guarantee Corporation (PBGC, some $25 billion short), the Federal Deposit Insurance Corporation (FDIC, about $40 billion short), as well as Social Security which, we are warned, may run up a trillion dollar deficit thirty or forty years down the line. Only the wealthiest have been beneficiaries, not voters, homeowners and other debtors. Still, Congress was panicked into acting on Friday, October 3, because a week earlier, September 26, stocks fell 777 points after Congressmen responded to an unprecedented volume of voter protest against the bailout. “This sucker could go down,” Pres. Bush warned as Wall Street’s lobbyists blamed the market downturn to the failure of Congress to preserve the “monetary system,” and specifically the banks and insurance companies that already had lost their net worth and

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Michael Hudson: Rescue for the Few, Debt Slavery for the Many

Uri Avnery Olmert's Final Divorce From "All of Eretz Israel" P. Sainath The Cop-Out Election Major Candidates, Congress, Press, All Fail in the Big Crisis Peter Morici The Dow Tanks as Bank Bailout Fails to Restore Confidence Conn Hallinan The Great Game in the Caucasus: Bad Moves by Uncle Sam Martha Rosenberg Training America's Youth Today a Pheasant, Tomorrow Osama Binoy Kampmark Let's Talk About Extinction: CERN and Halo October 6, 2008 Paul Craig Roberts A Futile Bailout as Darkness Falls on America Mike Whitney Still on the Edge of the Abyss Tariq Ali Goodbye to Grosvenor Square

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and insurance companies that already had lost their net worth and were plunging deeper into Negative Equity territory. Democratic leaders Barney Frank and House Speaker Nancy Pelosi said, in effect, “Look what you’ve done! You irresponsible politicians are grandstanding on principle, and wiping out peoples’ stock market savings and threatening their pension funds. If you don’t give Wall Street firms enough money to cover their losses so that everyone wins, they’ll kill the economy until they get their way.” Well, they didn’t quite say this, but that was basically their message. It certainly was Wall Street’s message: “Wall Street to Economy: Your money or your life.” So Congress gave in. Democrats ran like lemmings to “save the economy.” Yet the stock market fell a few hundred points, and kept on plunging all week long, much worse and much faster than had occurred right after Congress had initially defeated the bill. The “Reality Problem” What did the “free market” theory underlying the giveaway leave out of account? For starters, “the monetary system” turns out to be a euphemism for the fortunes of financial gamblers using junk mathematics (the Merton-Scholes derivatives formula) based on junk economics (blessed with Nobel Prizes) to buy, speculate and even to insure junk mortgages, junk bonds and junk commercial paper and derivatives based on their relative prices. So what is left out first of all was full knowledge of the value of what is being bought and sold. Mark-to-market models leave the price up to the investment bankers. If trust existed and there really was honor among these thieves, a government bailout would not be necessary, because “the market” could clear. “Free market” ideology assumes that each party will act in his or her self-interest. If this is so, why should foreign governments accumulate more dollar claims on the U.S. Treasury, which already owes their central banks $4 trillion? When there hardly were enough Treasury securities to go around even as the United States ran unprecedented federal budget deficits, U.S. officials urged these banks and sovereign wealth funds to buy packaged mortgages yielding a higher rate of return. And at least by buying these bonds, foreign governments would not be accused of funding America’s war in Iraq that most of their voters opposed. But investors made a fatal mistake in believing U.S. representations of the value of their junk-mortgage packages. This trust has now been lost, all the more so since the bailout’s permission to keep on “marking to market.”

Congress thought that its $700 billion would distract attention at least until the November 4 election. But to no avail. Markets fell 157 points Emily Horowitz on Giveaway Friday, and kept on going down another 800 points on How People Tell Cops Monday, October 6 (to about 9500) before bouncing 500 points off the They're Guilty Even When floor, only to fall even more through Friday. So the giveaway failed in They Aren't its stated purpose to rescue stock market investors (“peoples’ capitalism”) or their pension funds. But that was not its real purpose. Michael Hudson The time simply had come to clear out and take whatever one could. What Did Jesus Say? A Christian Perspective on Making banks and insurers in the zero-sum derivative game whole, so the Paulson Bank Bailout that winners can collect their bets while losers can sell their bad Ron Jacobs Winter Soldiers and Washington's Wars

October 3 - 5, 2008 Alexander Cockburn Creatures of Capital Paul Craig Roberts

investments to the Treasury, is supposed to re-inflate the credit pyramid. The idea is to solve the debt problem with yet more debt to prop up housing prices once again to unaffordable levels! This is not a long-term solution, but it would give insiders enough time to arrange a do-over and get out of the game more quickly, to sell out their junk mortgages and junk bonds to the proverbial “greater fool” – in this case, the “greater fool of last resort,” the U.S. Treasury, as long as it can be run by Mr. Paulson or, under Mr. Obama, perhaps the former Goldman-Sachs official Robert Rubin. The banks are to “earn” their way out of their negative equity position by selling more of their product – credit – to increase the economy’s

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Michael Hudson: Rescue for the Few, Debt Slavery for the Many

Paul Craig Roberts Why Paulson's Plan is a Fraud Saul Landau The Chutzpah of Hank Paulson Jonathan Cook The Souring of a West Bank Romance: Israel's Army and Settlers Fall Out Andy Worthington The Dark Heart of the Guantánamo Trials

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debt levels and hence receive more interest payments. The problem is that most families are already “loaned up.” They have no more discretionary income to pledge to carry more debt. Without writing down their debts, there will be no fresh lending, and hence no source of credit and purchasing power for new autos, appliances, goods and services in general. Debt deflation is being imposed on the “real” economy. Creditors and speculators alone are to be made whole. If no revenue was available for future Social Security, public health care and repair the nation’s depleted infrastructure before this giveaway, think of how bare the cupboard must be now that the government has run up the recent trillions of dollars in new debt rather than writing off a penny of the bad mortgage debts being blamed for causing the debacle.

We can see where this is leading. The wealthiest 1 percent of the population will come into possession of even more returns to wealth than the 57 percent that they are now taking. In contrast to the Statue Dave Marsh of Liberty’s inscription “give me your poor … yearning to breathe free,” Bono (Himself) Challenges the Fed – and now the Treasury, with Congressional blessing – is Me to a Debate taking from the public purse and giving to America’s wealthiest investors and insiders. This “Robin Hood in Reverse” program is being Sasan Fayazmanesh done without strings, without asking banks to stop paying dividends, Using the IAEA to Spy on exorbitant executive salaries and golden parachutes, and without taking Iran over banks with negative net worth of the kind that many homeowners are experiencing. John Ross Massacre in Morelia Nobody is talking about a debt write-down or moratorium. The subprime mortgage problem could have been solved by writing down Brian Cloughley just $1 or $2 trillion of the face value and interest rates of predatory The Unacceptable Face of loans. Instead, the $10+ trillion in financial-sector damage in recent Capitalism weeks reflects Wall Street’s fraudulent packaging and sale of junk mortgages at unrealistically high prices, using junk mathematics to Wajahat Ali calculate junk derivatives and sell them to gullible investors who Dueling Partners: an believe that the pretenses these mathematics, credit ratings and Interview with Tariq Ali projected income have a basis in reality. on Pakistan The amazing feature of today’s crash is how many Wall Street firms Robert Schwartz actually believed that the game of musical financial chairs could go on A Serious Blow to the before they had to stop dancing and indeed, escape from the room. I Rights of U.S. Workers: remember one day back in the 1970s when I warned Frank Zarb of NLRB Limits Political Lazard Freres about the likelihood of Third World debt defaults, and Strikes suggested that the firm should do an ability-to-pay analysis. “We don’t have to do any such thing,” he replied. “We have the schedule of what Alan Nasser they owe right here in this IMF report.” It was a thick printout of the FDR's Response to the scheduled debt service for an African country that soon became Plot to Overthrow Him: a insolvent. But Wall Street’s mentalité was that of Herbert Hoover on Paradigm for Today's the eve of the Great Depression: A debt is a debt, and that is that. The Democrats? response is to blame the victim, as if the irresponsibility lies with debtors rather than creditors. David Ker Thomson The Case for Drunk No reversal of the Bush tax cuts is offered to re-inflate the economy, Driving no move toward more progressive taxation of Wall Street speculators who pay only a 15 percent “capital gains” tax rate instead of the much Peter Morici higher income-tax and FICA withholding rates that wage-earners pay. Gone in 30 Days: U.S. (Wall Street has its own golden parachute program, so why should it Loses 159,000 Jobs in pay for Social Security for the rest of society?) There is to be no September reduction in the special tax benefits for real estate, whose tax favoritism led to the crisis by “freeing” more income from the tax William Blum collector to be pledged to mortgage bankers as interest. The Bubble When is a Holocaust Not Economy is to be re-inflated by Fannie Mae, Freddie Mac and the FHA a Holocaust? lending to help buyers bid up housing and commercial office prices once again to a rate that promises to impose debt peonage on William S. Lind homeowners. War on Two Fronts: Without Railroads The budget deficit will soar, without any prosecution of tax evasion scams by UBS or KPMG. Instead of a fiscal or regulatory comet driving Michael Donnelly http://www.counterpunch.com/hudson10132008.html

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Michael Hudson: Rescue for the Few, Debt Slavery for the Many

Michael Donnelly The Ghost of Gen. McClellan Thom Rutledge On Presidential "Rule" Manuel Garcia, Jr. Science and the 2008 Presidential Elections: a Survey of the Candidates Dave Lindorff Calling the Problem Early Cindy Ellen Hill Waging a Sustainable Peace? Paul Krassner Dying to Get High: the Side Effects of Medical Marijuana Daniel White Vietnam's Masterspy Poets' Basement Corseri, Absher, Gibbons and Jenkins Website of the Weekend How We Lost Glen Canyon: a Legal Chronology October 2, 2008 Paul Craig Roberts Can a Bailout Succeed? Joe Bageant Speaking in the Tongues of Brokers: the Bailout in Plain English Ralph Nader Soulmates in Deregulation Mike Whitney Why the Bailout Stinks Madis Senner When Push Comes to Pull: How a Foreign Banker Invasion Sent the Markets Reeling Winslow T. Wheeler Congress as Usual:the Crisis Will Pass, But This Bunch Will Remain the Same

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these dinosaurs to extinction, the climate has turned more conducive to their proliferation. Our Age of Deception is to be locked in even more tightly. The Congressional bailout’s suspension of mark-to-market rules to rely on Wall Street’s “self-regulation” should win a prize for Oxymoron of 2008 as investors have no clue as to what financial assets are worth. No wonder lending has dried up, especially to banks themselves. Just as financial victims fail to vote and support their self-interest, predators also turn out to pursue self-defeating “free market” strategies. The financial sector’s short-termism is the greatest enemy to its survival. It has translated its wealth into a fatal political control of its legal climate, blocking [with the explicit support of Barack Obama, Editors] Congressional efforts to rewrite the oppressive bankruptcy laws that credit-card banks lobbied so hard to pass, [with vital help from Joe Biden, the senior senator from credit card company HQ, the state of Delaware, Editors] crucial. These hard bankruptcy terms prevent the courts from renegotiating homeowner debts to keep property occupied, accelerating the real estate price collapse. The result is today’s negative equity, posing the question of just who is to bear the cost of bring debts back in line with the economy’s ability to pay. Will it be the financial institutions that sponsored asset-price inflation and lobbied for deregulation of lenders? Or, will it be the debtors who thought they were riding the wave to get an inflationary free lunch? Instead of requiring creditors to absorb losses on the excess of debts over what can be paid, the debts are being kept in place, not scaled back to what the economy can pay. The government is to make creditors and computerized derivatives speculators whole – and will act as collecting agent for the overhead of bad debts the economy has run up. Today we can see the debt-fueled bubble of asset-price inflation that Alan Greenspan trumpeted as real wealth creation for what it really is – credit creation to bid up real estate, stock market and packaged-debt prices. Tangible capital formation has been left out of account, as if postindustrial economies no longer need it. Will voters see the asymmetry in Congress’s failure to offer debt relief for homeowners as real estate prices plunge below the mortgages that are owed? Will its members be blamed for not rewriting the nation’s bankruptcy laws to free families from debt peonage – and free housing markets from the price declines that result from today’s proliferation of foreclosure sales? For that matter, will there be no relief for corporations having to cut back investment in order to service their junk bonds and other debts with which Wall Street’s corporate raiders and “shareholder activists” have loaded then down? Evidently not. Michael Hudson is a former Wall Street economist specializing in the balance of payments and real estate at the Chase Manhattan Bank (now JPMorgan Chase & Co.), Arthur Anderson, and later at the Hudson Institute (no relation). In 1990 he helped established the world’s first sovereign debt fund for Scudder Stevens & Clark. Dr. Hudson was Dennis Kucinich’s Chief Economic Advisor in the recent Democratic primary presidential campaign, and has advised the U.S., Canadian, Mexican and Latvian governments, as well as the United Nations Institute for Training and Research (UNITAR). A Distinguished Research Professor at University of Missouri, Kansas City (UMKC), he is the author of many books, including Super Imperialism: The Economic Strategy of American Empire (new ed., Pluto Press, 2002) He can be reached via his website, [email protected]

William Blum A Boy's Game: the Origins of the Financial Crisis http://www.counterpunch.com/hudson10132008.html

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Michael Hudson: Rescue for the Few, Debt Slavery for the Many

Crisis P. Sainath Wall Street Transforms Presidential Race

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The Occupation by Patrick Cockburn

Website of the Day McCain's Meltdown in Des Moines October 1 , 2008 Glen Ford The Last Hold Up Steven Conn Trashing Sarah Palin: the Boomerang Effect Alan Maass / Lee Sustar Why Not a Bailout for the Rest of Us? Kenneth Couesbouc The Blame Game: When Wall Street Pigs Sprout Wings Stan Goff How the Republicans Can Win (And Deserve It) Adolfo Gilly Racism, Domination and Bolivia Rannie Amiri Bombs in the Levant Ismael Hossein-Zadeh The Recurring Myth of Peak Oil Adam W. Parsons Food and Markets Dave Lindorff Bums' Rush to the Bailout: Where are the Hearings? Douglas Valentine The Bush Continuity Plan? Adrien Rain Burke The Party's Over: an Open Letter to Nancy Pelosi Website of the Day Sarah Palin's Beauty Pageant

September 30, 2008

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Pam Martens What Wall Street Hoped to Win Chris Floyd The Shadow of the Pitchfork: Elite Panic on Wall Street Stephen Martin A Biological Walk Down Wall Street Deepak Tripathi A Bitter Harvest in Afghanistan Mark Engler Bad Money Jonathan Cook The Attack on Zeev Sternhell: Has Israel Become a Breeding Ground for Jewish Settler Terrorism? Dave Lindorff The Power of No Manuel Garcia, Jr. Time for a General Strike? Ahmad Faruqui In Cold Blood: Buried Alive in Pakistan John Chuckman Will the Bride Wear White? As Rome Burns, Bristol Palin Prepares to Tie the Knot with Mr. "Sex on Skates" David Macaray Blaming the Labor Unions Fatemeh Keshavarz What Obama Could Have Said

Humanitarian Imperialism By Jean Bricmont

Website of the Day 538: a Cognitive Map of American Politics

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Michael Hudson: Rescue for the Few, Debt Slavery for the Many

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September 29, 2008 Mike Whitney Black Monday Jeff Gibbs "Just Say No!" to Reverse Robin Hood Paul Craig Roberts Why America Should Listen to Ahmadinejad Peter Morici The Bailout and the Economy Tim Wise Racism as Reflex John Walsh Sarah Palin is a Rotten Mom Uri Avnery Israeli Fascism: Yes, It Can Happen Here Alan Farago Hell to Pay: the Financial Collapse and the Housing Market Andy Worthington Is Khalid Sheikh Mohammed Running the 9/11 Trials? David Michael Green Where's the Repudiation? Carl Finamore Capitalism on Steroids; Labor on Tranquilizers Iris Keltz Postcards from the DNC Bill Hatch Take This Shrimp Slayer! Website of the Day Tina Fey as Palin, Round Two September 27 / 28, 2008 Alexander Cockburn How McCain Blew It Linn Washington, Jr. Alaska's Blacks and Palin: a Strained Relationship Christopher Ketcham An Israeli Trojan Horse

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Michael Hudson: Rescue for the Few, Debt Slavery for the Many

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Mike Whitney The People vs. the Banksters Kevin Alexander Gray Race in the Race: Is Obama Shining Us On? Anthony DiMaggio The Unspoken War: Pakistan, the Media and Nuclear Weapons Mary Lynn Cramer Their Assets; Our Debts: How Economic Crises Are Overcome Marc Levy / Susan Erony War Jokes Wanted: No Laughing Matter Stan Cox Livestock of Mass Destruction: Germ Labs in the Heartland Saul Landau Election Drizzle Ali Khan Meltdown in American Markets: an Islamic Perspective David Rosen The Great Fear: the Sexual Politics of Sarah Palin Todd Alan Price Bailing Out the Foes of Public Eduction Matts Svensson The Red and White Bird in Gaza Ron Jacobs Pakistan Through the Eyes of a Native Son Robert Fantina McCain and the Economy Richard Rhames Hank-ering for a Bailout David Krieger The U.S.-India Nuclear Proliferation Deal Seth Sandronsky Rethinking Charter Schools

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Michael Hudson: Rescue for the Few, Debt Slavery for the Many

10/13/08 7:27 PM

Schools Charles R. Larson Dear Mrs. Abacha: a Nigerian Email Romance Kim Nicolini Sadism in the Desert Poets' Basement La Morticella, Holt, Moser and Buknatski Website of the Day The Great Schlep September 26, 2008 Moshe Adler Bailing Out Wall Street Won't Save Main Street Bill Quigley The U.S. War on Unarmed Working Mothers Jonathan Cook When Archaeology Becomes a Curse Manuel Garcia, Jr. Visions of Pinpoint Control: the Romance of Laser Weapons Madis Senner Why the Bailout will Fail Brian Cloughley US Raids in Pakistan: Violations of Sovereignty Niranjan Ramakrishnan Oh, Henry! Joanne Mariner Passport Fraud and Torture Dan La Botz The Financial Crisis: a View from the Left David Macaray Ralph's Management Indicted by Federal Grand Jury Website of the Day Nader and Obama Girl at the Office September 25, 2008 Michael Hudson The Insanity of the $700

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Michael Hudson: Rescue for the Few, Debt Slavery for the Many

10/13/08 7:27 PM

The Insanity of the $700 Billion Giveaway Sharon Smith Democrats and Corporate Bailouts Ralph Nader Who Will Show Some Backbone Against the Bailout? Christopher Ketcham The Economy of Dead Sperm (or What I Learned From My RaceCar Grandpa Who Had No Bankers) Eric Toussaint Is Another Third World Debt Crisis in the Offing? Robert Weissman Getting Wall Street Pay Reform Right David Estabrook A Better Bailout Plan Nikolas Kozloff The Voyage of the SS Peter the Great Steve Early The High Price of Purple Dissent Judith Scherr Blue Helmets in Haiti

CITY BEAUTIFUL By Tennessee Reed

Laray Polk South Ossetia and Abkhazia: Notes from the Inside Website of the Day Letterman Spanks McCain September 24, 2008 Paul Craig Roberts The Bitter Fruits of Deregulation Nikolas Kozloff Palin at the UN: a Tutorial from Uribe Robert Weissman The Financial Crisis: How

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Michael Hudson: Rescue for the Few, Debt Slavery for the Many

10/13/08 7:27 PM

The Financial Crisis: How and Why Congress Should Play for Time Andy Worthington The Guantánamo Trials: Govt. Says Six Years Not Long Enough to Prepare Evidence Steve Conn Will Nader's Warning be Acknowledged in the Presidential Debates? Karyn Strickler The $700,000,000,000 Power Punch Diane Farsetta Stealth Marketers Gone Wild Dennis Loo Poisoned Legacy John Halle Wealth Tax Now! Khalil Nakhleh Palestinians Under the Occupation Website of the Day Nader: Debate Crasher September 23, 2008 Rev. Jesse Jackson, Sr. Bail Out on This Bailout Michael Hudson Henry Paulson and the New Yazoo Land Scandal Tariq Ali Why was the Marriott Targeted? Patrick Dyer A Death Row Visit with Troy A. Davis Franklin Lamb Hezbollah and the Palestinians Joshua Frank Oppose Barack Obama? How Dare Thee! Alan Farago Pushing the Referees: How the Financial Crisis Occurred Dave Lindorff

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Michael Hudson: Rescue for the Few, Debt Slavery for the Many

10/13/08 7:27 PM

Dave Lindorff The Bailout Will Kill the Dollar Tanya M. Kerssen / Roger Burbach Bolivia's Popular Upheaval Harvey Wasserman Nuclear Power Liabilities Dwarf Bush's Wall Street Bailout Website of the Day Hammered by the Irish: the Video September 22, 2008 Michael Hudson The Paulson-Bernanke Bank Bailout Plan: Will the Cure be Worse Than the Crisis? Mike Whitney Mushroom Clouds Over Wall Street Christopher Ketcham Let It Collapse! Ron Jacobs The Predators' Bailout Anne-Marie McManus Lost in the Rhetoric of Crisis Robert Weitzel The Twin Terrors of the Holy Land: a Sexy Fundamentalist and a White-Haired Zionist Wajahat Ali An Interview with Howard Dean John Ross A New Cold War Comes to Latin America Steve Breyman Does the U.S. Really Need Cluster Bombs? Patrick Bond On the Bellies of the Filth

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Michael Hudson: Rescue for the Few, Debt Slavery for the Many

10/13/08 7:27 PM

On the Bellies of the Filth Uri Avnery Fly, Tzipora, Fly Carl J. Mayer An Open Letter to Michael Moore (AKA God's Pen Pal): Whatever Happened to Voting Your Conscience? Website of the Day Stop the Execution of Troy Anthony Davis September 20 / 21, 2008 Alexander Cockburn Is This the Stake Through Neoliberalism's Heart? Michael Hudson America's Own Kleptocracy Pam Martens The Wall Street Model: Unintelligent Design Lila Rajiva Putting Lipstick on an AIG Mike Whitney Full-Spectrum Breakdown Richard Rhames A Bailout to Nowhere Bill Moyers / Michael Winship The NY Yankees and the U.S. Economy Bill and Kathleen Christison The Making of Recent U.S. Middle East Policies: a New Study of Neocon Influence Susan Block Palin as Venus in Furs: the Dominatrix Politics of Drilling and Killing Robert Fantina Republicans and Subpoenas: Never the Twain Shall Meet

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Michael Hudson: Rescue for the Few, Debt Slavery for the Many

10/13/08 7:27 PM

Heidi Walters Hung Up on Route 36: an 18-Wheeler and a Nuclear Cask David Yearsley Germany's Lost Organs: When Bigger Was Better Raymond J. Lawrence The Politics of Tribulation: Sarah Palin and the Rapture David Rosen One Billion Pills Later: Viagra at 10 David Michael Green Living in Sarah Palin's America Anthony Papa Imprisoned Voters and the Elections Niranjan Ramakrishnan Freddie, Fannie, Daddy, Nanny Howard Lisnoff When We Notice the Homeless John Goekler Leaving Every Child Behind Missy Beattie Impalement Dave Zirin Leave Josh Howard Alone Charles R. Larson Holden Caulfield, Rest in Peace Tim Matson Too Big for His Birches: Woodlot Economics Susie Day Attack of the Angry Fetus Poets' Basement Corseri, Gibbons, Jenkins and Ford Website of the Weekend Dylan & Baez: Deportees

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Michael Hudson: Rescue for the Few, Debt Slavery for the Many

10/13/08 7:27 PM

September 19, 2008 Steven T. Banko McCain's Passion Play Mike Whitney The Point of No Return Michael Hudson The Dow Jones' Wonderfully Cheesy Addition William Kaufman Shattering the GlassSteagall Act: the BiPartisan Origins of the Financial Crisis Brenda Norrell The Fall of Lehman Bros.: Blowback for Black Mesa? Keeanga-Yamatta Taylor The New Rhetoric of Racism: Why Won't Obama Call It Out? Clifton Ross Bolivia: Cleaning Up the Bull Ring Dave Lindorff Hang On to Your Wallets: the Government's About to Rescue Us! Cynthia McKinney Seize the Time! Susan Hurlich Storm Survivors: a Dispatch from Cuba Michael Donnelly Let's Hand It All Over to the Democrats (They Helped Create This Mess) Website of the Day The Crisis Explained

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Michael Hudson: Rescue for the Few, Debt Slavery for the Many

10/13/08 7:27 PM

September 18, 2008 Benjamin Dangl The Machine Gun and the Meeting Table Harvey Wasserman The Senate's Drill, Drill, Drill Scam Susan Abulhawa The Lobby Has Spoken: Biden and Israel Robert Weissman After the Fall: the Financial Re-Regulatory Agenda Anne-Marie McManus McCain's Cinderella: the Fetishization of Sarah Palin Corey D. B. Walker The Poverty of 21st Century Progressivism William S. Lind Senator O'Bush: Why Obama is Wrong on Iran and Afghanistan Ron Jacobs Washington's False Logic of Torture Dave Lindorff American and China: Joined at the Hip Binoy Kampmark How Damien Hirst Got Away With It Website of the Day An Invisible Army September 17, 2008 Stephen Conn Palin and the Politics of Big Oil Forrest Hylton Reactionary Rampage in Bolivia Patrick Cockburn Petraeus Leaves Iraq Gregory Elich Inside North Korea Ralph Nader How the U.S. Auto Industry Wrecked Itself http://www.counterpunch.com/hudson10132008.html

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Michael Hudson: Rescue for the Few, Debt Slavery for the Many

10/13/08 7:27 PM

Franklin Lamb The Palestinians of Shabra-Shatila Pam Martens The Gang's All Here: Bush, McCain and the Old Iran/Contra Team Dave Lindorff The End of the Blue Chip Economy Peter Morici The Damage Deepens Stanley Heller The Killing of Count Folke Bernadotte Douglas Valentine Rambling David Foster Wallace Website of the Day Free Cindy McCain! September 16, 2008 Paul Craig Roberts US Economy: Rudderless and Reeling from Direct Hits Tiphaine Dickson Citizen Palin: Why Sarah Palin Quoted Westbrook Pegler Stan Goff America is Now Rome: an Open Letter to Christian Troops in Iraq and Afghanistan Uri Avnery Tzipi's Choice Michael Winship Lipstick on Polar Bears Jeff Halper Warehousing Palestinians Patrick Irelan Bolivia Versus the Empire Oscar Gonzalez Who's Dumber? Ike's Refugees or Wall Street's? Binoy Kampmark Cheney and His Records Fatemeh Keshavarz http://www.counterpunch.com/hudson10132008.html

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Michael Hudson: Rescue for the Few, Debt Slavery for the Many

10/13/08 7:27 PM

Muslims are at Peace with You Sen. Russ Feingold Restoring the Rule of Law Website of the Day The Next Great Rock Band? September 15, 2008 Mike Whitney The Tumbrils Roll at Dawn Peter Morici Toxic Lehman Patrick Cockburn Take Another Look at the Surge Charles R. Larson The Maverick Has No Clothes Jonathan Cook The Expulsion of Palestinians from Jaffa Nikolas Kozloff Racist Rhetoric in Bolivia Roger Burbach Morales Confronts the Insurrection: Bolivia and the Echoes of Allende Helen Redmond Where's the Health Care Bailout? David Michael Green The Democrats Do Poland David Macaray The Boeing Strike Ralph Nader Remembering Peter Camejo Website of the Day The Ballad of Sarah Palin

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