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The Consequences of Moving from Industrial to Financial Capitalism
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High-ended retailer Saks Fifth Avenue added private security, fencing and barbed wire ahead of a Black Lives Matter protest in New York, June 7. 2020. (Anthony Quintano, CC BY 2.0, Wikimedia Commons)

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Michael Hudson and Pepe Escobar last month took a hard look at rent and rent-seeking at the Henry George School of Social Science.

Michael Hudson: Well, I’m honored to be here on the same show with Pepe and discuss our mutual concern. And I think you have to frame the whole issue that China is thriving, and the West has reached the end of the whole 75-year expansion it had since 1945.

So, there was an illusion that America is de-industrializing because of competition from China. And the reality is there is no way that America can re-industrialize and regain its export markets with the way that it’s organized today, financialized and privatized and if China didn’t exist. You’d still have the Rust Belt rusting out. You’d still have American industry not being able to compete abroad simply because the cost structure is so high in the United States.

Michael Hudson. (Wikimedia Commons)
Michael Hudson. (Wikimedia Commons)

The wealth is no longer made here by industrializing. It’s made financially, mainly by making capital gains. Rising prices for real estate or for stocks and for bonds. In the last nine months, since the coronavirus came here, the top 1 percent of the U.S. economy grew by $1 trillion. It’s been a windfall for the 1 percent. The stock market is way up, the bond market is up, the real estate market is up while the rest of the economy is going down. Despite the tariffs that Trump put on, Chinese imports, trade with China is going up because we’re just not producing materials.

America doesn’t make its own shoes. It doesn’t make some nuts and bolts or fasteners, it doesn’t make industrial things anymore because if money is to be made off an industrial company it’s to buy and sell the company, not to make loans to increase the company’s production. New York City, where I live, used to be an industrial city and, the industrial buildings, the mercantile buildings have all been gentrified into high-priced real estate and the result is that Americans have to pay so much money on education, rent, medical care that if they got all of their physical needs, their food, their clothing, all the goods and services for nothing, they still couldn’t compete with foreign labor because of all of the costs that they have to pay that are essentially called rent-seeking.

Housing in the United States now absorbs about 40 percent of the average worker’s paycheck. There’s 15 percent taken off the top of paychecks for pensions, Social Security and for Medicare. Further medical insurance adds more to the paycheck, income taxes and sales taxes add about another 10 percent. Then you have student loans and bank debt. So basically, the American worker can only spend about one third of his or her income on buying the goods and services they produce. All the rest goes into the FIRE sector — the finance, insurance and real estate sector — and other monopolies.

And essentially, we became what’s called a rent-seeking economy, not a productive economy. So, when people in Washington talk about American capitalism versus Chinese socialism this is confusing the issue. What kind of capitalism are we talking about?

America used to have industrial capitalism in the 19th century. That’s how it got richer originally but now it’s moved away from industrial capitalism towards finance capitalism. And what that means is that essentially the mixed economy that made America rich — where the government would invest in education and infrastructure and transportation and provide these at low costs so that the employers didn’t have to pay labor to afford high costs — all of this has been transformed over the last hundred years.

And we’ve moved away from the whole ethic of what was industrial capitalism. Before, the idea of capitalism in the 19th century from Adam Smith to Ricardo, to John Stuart Mill to Marx was very clear and Marx stated it quite clearly; capitalism was revolutionary. It was to get rid of the landlord class. It was to get rid of the rentier class. It was to get rid of the banking class essentially, and just bear all the costs that were unnecessary for production, because how did England and America and Germany gain their markets?

“We’ve moved away from the whole ethic of what was industrial capitalism.”

They gained their markets basically by the government picking up a lot of the costs of the economy. The government in America provided low-cost education, not student debt. It provided transportation at subsidized prices. It provided basic infrastructure at low cost. And so, government infrastructure was considered a fourth factor of production.

And if you read what the business schools in the late 19th century taught like Simon Patten at the Wharton School, it’s very much like socialism. In fact, it’s very much like what China is doing. And in fact, China is following in the last 30 or 40 years pretty much the same way of getting rich that America followed.

It had its government fund basic infrastructure. It provides low-cost education. It invests in high-speed railroads and airports, in the building of cities. So, the government bears most of the costs and, that means that employers don’t have to pay workers enough to pay a student loan debt. They don’t have to pay workers enough to pay enormous rent such as you have in the United States. They don’t have to pay workers to save for a pension fund, to pay the pension later on. And most of all the Chinese economy doesn’t really have to pay a banking class because banking is the most important public utility of all. Banking is what China has kept in the hands of government and Chinese banks don’t lend for the same reasons that American banks lend.

Shanghai’s Pudong district from The Bund. (CC0, Wikimedia Commons)
Shanghai’s Pudong district from The Bund. (CC0, Wikimedia Commons)

(When I said that China can pay lower wages than the U.S., what I meant was that China provides as public services many things that American workers have to pay out of their own pockets – such as health care, free education, subsidized education, and above all, much lower debt service.

When workers have to go into debt in order to live, they need much higher wages to keep solvent. When they have to pay for their own health insurance, they have to earn more. The same is true of education and student debt. So much of what Americans seem to be earning — more than workers in other countries — goes right through their hands to the FIRE sector. So, what seems to be “low wages” in China go a lot further than higher wages in the United States.)

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Eighty percent of American bank loans are mortgage loans to real estate and the effect of loosening loan standards and increasing the market for real estate is to push up the cost of living, push up the cost of housing. So, Americans have to pay more and more money for their housing whether they’re renters or they’re buyers, in which case the rent is for paying mortgage interest.

So, all of this cost structure has been built into the economy. China’s been able pretty much, to avoid all of this, because its objective in banking is not to make a profit and interest, not to make capital gains and speculation. It creates money to fund actual means of production to build factories, to build research and development, to build transportation facilities, to build infrastructure. Banks in America don’t lend for that kind of thing.

“So, you have a diametric opposite philosophy of how to develop between the United States and China.”

They only lend against collateral that’s already in place because they won’t make a loan if it’s not backed by collateral. Well, China creates money through its public banks to create capital, to create the means of production. So, you have a diametric opposite philosophy of how to develop between the United States and China.

The United States has decided not to gain wealth by actually investing in means of production and producing goods and services, but in financial ways. China is gaining wealth the old-fashioned way, by producing it. And whether you call this, industrial capitalism or a state capitalism or a state socialism or Marxism, it basically follows the same logic of real economics, the real economy, not the financial overhead. So, you have China operating as a real economy, increasing its production, becoming the workshop of the world as England used to be called and America trying to draw in foreign resources, live off of foreign resources, live by trying to make money by investing in the Chinese stock market or now, moving investment banks into China and making loans to China not actual industrial capitalism ways.

“China is gaining wealth the old-fashioned way, by producing it.”

So, you could say that America has gone beyond industrial capitalism, and they call it the post-industrial society, but you could call it the neo-feudal society. You could call it the neo-rentier society, or you could call it debt peonage but it’s not industrial capitalism.

And in that sense, there’s no rivalry between China and America. These are different systems going their own way and I better let Pepe pick it up from there.

Pepe Escobar: Okay. Thank you, Michael, this is brilliant. And you did it in less than 15 minutes. You told the whole story in 15 minutes. Well, my journalistic instinct is immediately to start questions to Michael. So, this is exactly what I’m gonna do now. I think it is much better to basically illustrate some points of what Michael just said, comparing the American system, which is finance capitalism essentially, with industrial capitalism that is in effect in China. Let me try to start with a very concrete and straight to the point question, Michael.

Okay. let’s says that more or less, if we want to summarize it, basically they try to tax the nonproductive rentier class. So, this would be the Chinese way to distribute wealth, right? Sifting through the Chinese economic literature, there is a very interesting concept, which is relatively new (correct me if I am wrong, Michael) in China, which they call stable investment. So stable investment, according to the Chinese would be to issue special bonds as extra capital in fact, to be invested in infrastructure building all across China, and they choose these projects in what they call weak areas and weak links. So probably in some of the inner provinces, or probably in some parts of Tibet or Xinjiang for instance. So, this is a way to invest in the real economy and in real government investment projects.

Right? So, my question in fact, is does this system create extra local debt, coming directly from this financing from Beijing? Is this a good recipe for sustainable development, the Chinese way and the recipe that they could expand to other parts of the Global South?

Michael: Well, this is a big problem that they’re discussing right now. The localities, especially rural China, (and China is still largely rural) only cover about half of their working budget from taxation. So, they have a problem. How are they going to get the balance of the money? Well, there is no official revenue sharing between the federal government and its state banks and the localities.

So, the localities can’t simply go to central government and say, give us more money. The government lets the localities be very independent. And it is sort of the “let a hundred flowers bloom” concept. And so, they’ve let each locality just go the long way, but the localities have run a big deficit.

What do they do? Well in the United States they would issue bonds on which New York is about to default. But in China, the easiest way for the localities to make money, is unfortunately they will do something like Chicago did. They will sell their tax rights for the next 75 years for current money now.

So, a real estate developer will come in and say; look we will give you the next 75 years of tax on this land, because we want to build projects on this (a set of buildings). So, what this means is that now the cities have given away all their source of rent.

Chicago’s Water Tower and Water Tower Place. (CC BY-SA 3.0, Wikimedia Commons)
Chicago’s Water Tower and Water Tower Place. (CC BY-SA 3.0, Wikimedia Commons)

Let me show you the problem by what Indiana and Chicago did. Chicago also was very much like China’s countryside cities. So, it sold parking meters and its sidewalks to a whole series of Wall Street investors, including the Abu Dhabi Investment Fund for seventy-five years. And that meant that for 75 years, this Wall Street consortium got to control the parking meters.

So, they put up the parking meters all over Chicago, raised the price of parking, raised the cost of driving to Chicago. And if Chicago would have a parade and interrupt parking, then Chicago has to pay the Abu Dhabi fund and Wall Street company what it would have made anyway. And this became such an awful disaster that finally Wall Street had to reverse the deal and undo it because it was giving privatization a bad name here. The same thing happened in Indiana.

High School marching band in Chicago’s 2008 Bud Billiken Parade. (Curtis Morrow, CC BY 2.0, Wikimedia Commons)
High School marching band in Chicago’s 2008 Bud Billiken Parade. (Curtis Morrow, CC BY 2.0, Wikimedia Commons)

Indiana was running a deficit and it decided to sell its roads to a Wall Street investment firm to make a toll road. The toll on the Indiana turnpike was so high that drivers began to take over the side roads. That’s the problem if you sell future tax revenues in advance.

Now what China and the localities there are discussing is that we’ve already given the real estate tax at very low estimates to the commercial developers, so what do we do? Well, I’ve given them my advice. I’m a professor of economics at the Peking University, School of Marxist studies and I’ve had discussions with the Central Committee. I also have an official position at Wuhan University. There, we’re discussing how China can put an added tax for all of the valuable land, that’s gone up. How can it be done to let the cities collect this tax? Our claim is that the cities, in selling these tax rights for 75 years, have sold what in Britain would be called ground rent (i.e. what’s paid to the landed aristocracy).

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Over and above that there’s the market rent. So, China should pass a market-rent tax over and above the ground rent tax to reflect the current value. And there they’re thinking of, well, do we say that this is a capital gain on the land? Well, it’s not really a capital gain until you sell the land, but it’s value. It’s the valuation of the capital. And they’re looking at whether they should just say this is the market rent tax over and above the flat tax that has been paid in advance, or it’s a land tax on the capital gain for land.

Now, all of this requires that there be a land map of the whole country. And they are just beginning to create such a land map as a basis for how you calculate how much the rent there is.

What I found in China is something very strange. A few years ago, in Beijing, they had the first, International Marxist conference where I was the main speaker and I was talking about Marx’s discussion of the history of rent theory in Volume II and Volume III of Capital where Marx discusses all of the classical economics that led up to his view; Adam Smith, Ricardo, Malthus, John Stuart Mill, and Marx’s theory of surplus value was really the first history of economic thought that was written, although it wasn’t published until after he died. Well, you could see that there was a little bit of discomfort with some of the Marxists at the conference. And so, they invited for the next time my colleague David Harvey to come and talk about Marxism in the West.

Well, David gave both the leading and the closing speech of the conference and said, you’ve got to go beyond volume I of Capital. Volume I was what Marx wrote as his addition to classical economics, saying that there was exploitation in industrial employment of labor as well as rent seeking and then he said, now that I’ve done my introduction here, let me talk about how capitalism works in Volumes II and III. Volumes II and III are all about rent and finance and David Harvey has published a book on Volume III of Capital and his message to Peking University and the second Marxist conference was – you’ve got to read Volume II, and III.

Well, you can see that, there’s a discussion now over what is Marxism and a friend and colleague at PKU said Marxism is a Chinese word; It’s the Chinese word for politics. That made everything clear to me. Now I get it! I’ve been asked by the Academy of Social Sciences in China to create a syllabus of the history of rent theory and value theory. And essentially in order to have an idea of how you calculate rent, how do you make a national income analysis where you show rent, you have to have a theory of value and price and rent is the excess of price over the actual cost value. Well, for that you need a concept of cost of production and that’s what classical economics is all about. Post-classical economics denied all of this. The whole idea of classical economics is that not all income is earned.

Landlords don’t earn their income for making rent in their sleep as John Stuart Mill said. Banks don’t earn their income by just sitting there and letting debts accrue and interest compounding and doubling. The classical economists separated actual unearned income from the production and consumption economy.

Well, around the late 19th century in America, you had economists fighting against not only Marx, but also even against Henry George, who at that time, was urging a land tax in New York. And so, at Columbia University, John Bates Clark developed a whole theory that everybody earns whatever they can get. That there was no such thing as unearned income and that has become the basis for American national income statistics and thought ever since. So, if you look at today’s GDP figures for the United States, they have a figure for 8 percent of the GDP for the homeowners’ rent. But homeowners wouldn’t pay themselves if they had to rent the apartment to themselves, then you’ll have interest at about 12 percent of GDP.

And I thought, well how can interest be so steady? What happens to all of the late fees; that 29 percent that credit card companies charge? I called up the national income people in Washington, when I was there. And they said well, late fees and penalties are considered financial services.

And so, this is what you call a service economy. Well, there’s no service in charging a late fee, but they add all of the late fees. When people can’t pay their debts and they owe more and more, all of that is considered an addition to GDP. When housing becomes more expensive and prices American labor out of the market, that’s called an increase in GDP.

This is not how a country that wants to develop is going to create a national income account. So, there’s a long discussion in China about, just to answer your question, how do you create an account to distinguish between what’s the necessary cost to production and what’s an unnecessary production cost and how do we avoid doing what the United States did. So again, no rivalry. The United States is an object lesson for China on what to avoid, not only in industrializing the economy, but in creating a picture of the economy as if everybody earns everything and there’s no exploitation, no earned income, nobody makes money in their sleep and there’s no 1 percent. Well, that’s what’s really at issue and why the whole world is splitting apart as you and I are discussing in what we’re writing.

“When people can’t pay their debts and they owe more and more, all of that is considered an addition to GDP.”

Pepe: Thank you, Michael. Thank you very much. So just to sum it all up, can we say that Beijing’s strategy is to save especially provincial areas from leasing their land, their infrastructure for 60 years or 75 years? As you just mentioned, can we say that the fulcrum of their national strategy is what you define as the market rent tax? Is this the No. 1 mechanism that they are developing?

Michael: Ideally, they want to keep rents as low as possible because rent is a cost of living and a cost of doing business. They don’t have banks that are lending to inflate the real estate market.

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However, in almost every Western country — the U.S., Germany England — the value of stocks and bonds and the value of real estate is just about exactly the same. But for China, the value of real estate is way, way larger than the value of stocks.

And the reason is not because the Chinese Central bank, the Bank of China lends for real estate; it’s because they lend to intermediaries and the intermediaries have financed a lot of housing purchases in China. And, this is really the problem for if they levy a land tax, then you’re going to make a lot of these financial intermediaries go bust.

That’s what I’m advocating, and I don’t think that’s a bad thing. These financial intermediaries shouldn’t exist, and this same issue came up in 2009 in the United States. You had the leading American bank being the most crooked and internally corrupt bank in the country, Citibank making junk mortgage, and it was broke.

Sheila Bair in 2016. (Matt Spangler for Washington College, CC BY-SA 4.0, Wikimedia Commons)
Sheila Bair in 2016. (Matt Spangler for Washington College, CC BY-SA 4.0, Wikimedia Commons)

Its entire net worth was wiped out as a result of its fraudulent junk mortgages. Well, Sheila Bair, the head of the Federal Deposit Insurance Corporation (FDIC) wanted to close it down and take it over. Essentially that would have made it into a public bank and that would be a wonderful thing. She said, look Citibank shouldn’t be doing what it’s doing. And she wrote all this up in an autobiography. And, she was overruled by President Obama and Tim Geithner saying, but wait a minute, those are our campaign contributors. So, they were loyal to the campaign contributors, but not the voters; and they didn’t close Citibank down.

And the result is that the Federal Reserve ended up creating about $7 trillion of quantitative easing to bail out the banks. The homeowners weren’t bailed out. Ten million American families lost their homes as a result of junk mortgages in excess of what the property was actually worth.

All of this was left on the books, foreclosed and sold to a private capital companies like Blackstone. And the result is that home ownership in America declined from 68 percent of the population down to about 61 percent. Well, right where the Obama administration left off, you’re about to have the Biden administration begin in January with an estimated 5 million Americans losing their homes. They’re going to be evicted because they’ve been unemployed during the pandemic. They’ve been working in restaurants or gyms or other industries that have been shut down because of the pandemic. They’re going to be evicted and many homeowners and, low-income homeowners have been unable to pay their mortgages.

There’s going to be a wave of foreclosures. The question is, who’s going to bear the cost? Should it be 15 million American families who lose their homes just so the banks won’t lose money? Or should we let the banks that have made all of the growth since 2008? Ninety five percent of American GDP of the population has seen its wealth go down. All the wealth has been accumulating for the 5 percent in statistics. Now the question is should this 5 percent that’s got all the wealth lose or should the 95 percent lose?

Worker installs security panels over windows after police evict woman from her foreclosed home in South Minneapolis, 2009. (Tony Webster, CC BY 2.0, Wikimedia Commons)
Worker installs security panels over windows after police evict woman from her foreclosed home in South Minneapolis, 2009. (Tony Webster, CC BY 2.0, Wikimedia Commons)

The Biden administration says the 95 percent should lose basically. And you’re going to see a wave of closures so that the question in China should be that, these intermediate banks (they’re not really banks they are sort of like payday loan lenders), should they come in and, bear the loss or should Chinese localities and the people bear the loss? Somebody has to lose when you’re charging, you’re collecting the land’s rent that was paid to the creditors, and either the creditors have to lose or, the tax collector loses and that’s the conflict that exists in every society of the world today. And, in the West, the idea is the tax collectors should lose and whatever the tax collector relinquishes should be free for the banks to collect. In China obviously, they don’t want that to happen and they don’t want to see a financial class developing along US lines.

Pepe: Michael, there’s a quick question in all this, which is the official position by Beijing in terms of helping the localities. Their official position is that there won’t be any bailouts of local debt. How do they plan to do that?

Michael: What they’re discussing, how are you not going to do it? They think they sort of let localities go their own way. And they think, well you know which ones are going to succeed, and which ones aren’t, they didn’t want to have a one-size-fits all central planning. They wanted to have flexibility. Well, now they have flexibility. And when you have many different “let a hundred flowers bloom,” not all the flowers are going to bloom at the same rate.

And the question is, if they don’t bail out the cities, how are the cities going to operate? Certainly, China has never let markets steer the economy, the government steers the markets. That’s what socialism is as opposed to finance capitalism. So, the question is, you can let localities go broke and yet you’re not going to destroy any of the physical assets of the localities, and all of this is going to be in place. The question is how are you going to arrange the flow of income to all of these roads and buildings and land that’s in place? How do you create a system? Essentially, they’re saying well, if we’re industrial engineers, how do we just plan things? Forget credit, forget property claims, forget the rentier claims. How are we just going to design an economy that operates most efficiently? And that’s what they’re working on now to resolve this situation because it’s gotten fairly critical.

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Pepe: Yes, especially in the countryside. Well, I think, a very good metaphor in terms of comparing both systems are investment in infrastructure. You travel to China a lot so, you’ve seen. You’ll travel through high-speed rail. You’ll see those fantastic airports, in Pudong or the new airport in Beijing. And then you’ll take the Acela to go from Washington to New York City, which is something that I used to do years ago. And the comparison is striking. Isn’t it?

Or if you go to France, for instance, when France started development of the TGV, which in terms of a national infrastructure network, is one of the best networks on the planet. And the French started doing this 30 years ago, even more. Is there……, it’s not in terms of way out, but if we analyze the minutia, it’s obvious that following the American finance utilization system, we could never have something remotely similar happening in United States in terms of building infrastructure.

So, do you see any realistic bypass mechanism in terms of improving American infrastructure, especially in the big cities?

TGV 2N2 Lyria train at Paris’ Gare de Lyon station. (CC BY-SA 4.0, Wikimedia Commons)
TGV 2N2 Lyria train at Paris’ Gare de Lyon station. (CC BY-SA 4.0, Wikimedia Commons)

Michael: No, and there are two reasons for that. No. 1, let’s take a look at the long-term railroads. The railroads go through the center of town or even in the countryside, all along the railroads, the railroads brought business and all the businesses had been located as close to the railroad tracks as they could. Factories with sightings off the railroad, hotels and especially right through the middle of town where you have the railway gates going up and down. In order to make a high-speed rail as in China, you need a dedicated roadway without trucks and cars, imagine a car going through a railway gate at 350 miles an hour.

So, when I would go from Beijing to Tianjin, here’s the high-speed rail, there’s one highway on one side, one highway on the other side. There’ll be underpasses. But there it goes straight now. How can you suppose you would have a straight Acela line from Washington up to Boston when all along the line, there’s all this real estate right along the line that has been built up? There’s no way you can get a dedicated roadway without having to tear down all of this real estate that’s on either side and the cost of making the current owners whole would be prohibitive. And anywhere you would go, that’s not in the center of the city, you would also have to have the problem that there’s already private property there.

And there’s no legal, constitutional way for such a physical investment to be made. China was able to make this investment because it was still largely rural. It wasn’t as built up along the railways. It didn’t have any particular area that was built up right where the railroad already was.

President Donald Trump visiting China in 2017. (PAS China via Wikimedia Commons)
President Donald Trump visiting China in 2017. (PAS China via Wikimedia Commons)

So certainly, any high-speed rail could not go where the current railways would be, and they’d have to go on somebody’s land. And, there’s also, what do you do if you want to get to New York and Long Island from New Jersey?

Sixty years ago, when I went into Wall Street, the cost of getting and transporting goods from California to Newark, New Jersey, was as large as from Newark right across the Hudson River to New York, not only because of the mafia and control of the local labor unions, but because of the tunnels. Right now, the tunnels from New Jersey to New York are broke, they are leaking, the subways in New York City, which continually break down because there was a hurricane a few years ago and the switches were made in the 1940s. The switches are 80 years old. They had water damage and the trains have to go at a crawl. But the city and state, because it is not collecting the real estate tax and other taxes and because ridership fell on the subways to about 20 percent, the city’s broke. They’re talking about 70 percent of city services being cut back. They’re talking about cutting back the subways to 40 percent capacity, meaning everybody will have to get in — when there’s still a virus and not many people are wearing masks, and there was no means of enforcing masks here.

Blue Xs mark social distancing on the platform of a New York City subway station, May 2020. (Marc A. Hermann, MTA, Wikimedia Commons)
Blue Xs mark social distancing on the platform of a New York City subway station, May 2020. (Marc A. Hermann, MTA, Wikimedia Commons)

So, there’s no way that you can rebuild the infrastructure because, for one thing the banking system here has subsidized for a hundred years junk economics saying you have to balance the budget. If the government creates credit it’s inflationary as if when banks create credit, it’s not inflationary. Well, the monetary effect is the same, no matter who creates the money. And so, Biden has already said that President Trump ran a big deficit, we’re going to run a bunch of surpluses or a budget balance. And he was advocating that all along. Essentially Biden is saying we have to increase unemployment by 20 percent, lower wages by 20 percent, shrink the economy by about 10 percent in order to, in order for the banks not to lose money.

“You’re going to price the American economy even further out of business because they say that public investment is socialism.”

And, we’re going to privatize but we are going to do it by selling the hospitals, the schools, the parks, the transportation to finance, to Wall Street finance capital groups. And so, you can imagine what’s going to happen if the Wall Street groups buy the infrastructure. They’ll do what happened to Chicago when it sold all the parking meters, they’ll say, OK, instead of 25 cents an hour, it’s now charged $3 an hour. Instead of a $2 for the subway, let’s make it $8.

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You’re going to price the American economy even further out of business because they say that public investment is socialism. Well, it’s not socialism. It’s industrial capitalism. It’s industrialization, that’s basic economics. The idea of what, and how an economy works is so twisted academically that it’s the antithesis of what Adam Smith, John Stewart Mill and Marx all talked about. For them a free- market economy was an economy free of rentiers. Free of rent, it didn’t have any rent seeking. But now for the Americans, a free-market economy is free for the rentiers, free for the landlord, free for the banks to make a killing. And that is basically the class war back in business with a vengeance. That blocks and is preventing any kind infrastructure recovery. I don’t see how it can possibly take place.

Pepe: Well, based on what you just described, there is a process of turning the United States into a giant Brazil. In fact, this is what the Brazilian Finance Minister Paulo Guedes, a Pinochetista, as you know Michael, has been doing with the Brazilian economy for the past two years, privatizing everything and selling everything to big Brazilian interests and with lots of Wall Street interests involved as well. So, this is a recipe that goes all across the Global South as well. And it’s fully copied all across the Global South with no way out now.

Michael: Yes, and this is promoted by the World Bank and the International Monetary Fund. And when I was brought down to Brazil to meet with the council of economic advisers under Lula, [Luiz Inácio Lula da Silva, former president of Brazil], they said, well the whole problem is that Lula’s been obliged to let the banks do the planning.

So, basically free markets and libertarianism is adopting central planning, but with central planning by the banks. America is a much more centrally planned economy than China. China is letting a hundred flowers bloom; America has concentrated the planning and the resource allocation in Wall Street. And that’s the central planning that is much more corrosive than any government planning, could be. Now the irony is that China’s sending its students to America to study economics. And, most of the Chinese I had talked to say, well we went to America to take economics courses because that gives us a prestige here in China.

I’m working now, with Chinese groups trying to develop a “reality economics” to be taught in China as different from American economics.

“America has concentrated the planning and the resource allocation in Wall Street. And that’s the central planning that is much more corrosive than any government planning, could be.”

Pepe: Exactly, because of what they study at Beijing University, Renmin or Tsinghua

is not exactly what they would study in big American universities. Probably what they study in the U.S. is what not to do in China. When they go back to China, what they won’t be doing. It’s an object lesson for what to avoid.

Michael, I’d like to go back to what the BRICS [Brazil, Russia, India, China and South Africa] had been discussing in the 2000s when Lula was still president of Brazil and many of his ideas deeply impressed, especially Hu Jintao at the time, which is bypassing the U.S. dollar. Well, at the moment obviously we’re still at 87 percent of international transactions still in U.S. dollars. So, we are very far away from it, but if you have a truly sovereign economy, which is the case of China, which we can say is the case of Russia to a certain extent and obviously in a completely different framework, Iran. Iran is a completely sovereign, independent economy from the West. The only way to try to develop different mechanisms to not fall into the rentier mind space would be to bypass the U.S. dollar.

Occupy Wall Street picket of HSBC, midtown Manhattan; Feb. 14, 2013. (Michael Fleshman Via Flickr)
Occupy Wall Street picket of HSBC, midtown Manhattan; Feb. 14, 2013. (Michael Fleshman Via Flickr)

Michael: Yes, for many reasons. For one thing the United States can simply print the dollars and lend to other countries and then say, now you have to pay us interest. Well, Russia doesn’t need American dollars. It can print its own rubles to provide labor. There’s no need for a foreign currency at all for domestic spending, the only reason you would have to borrow a foreign currency is to balance your exchange rate, or to finance a trade deficit. But China doesn’t have a trade deficit. And in fact, if China were to work to accept more dollars, Americans would love to buy into the Chinese market and make a profit there, but that would push up China’s exchange rate and that would make it more difficult for her to make its exports because the exchange rate would come up not because it’s exporting more but because it’s letting American dollars come in and push it up.

Well, fortunately, President Trump as if he works for the Chinese National Committee, said, look, we don’t want to really hurt China by pushing up its currency and we want to keep it competitive. So, I’m going to prevent American companies from lending money to China, I’m going to isolate it and so he’s helping them protect their economy. And in Russia he said, look Russia really needs to feed itself. And, there’s a real danger that when the Democrats come in, there are a lot of anti-Russians in the Biden administration. They may go to war. They may do to Russia what they tried to do to China in the ‘50s. Stop exporting food and grain. And only Canada was able to break the embargo. So, we’re going to impose sanctions on Russia. So immediately, what happened is Russia very quickly became the largest grain exporter in the world. And instead of importing cheese from the Baltics, it created its own cheese industry. So, Trump said look, I know that Russians followed the American idea of not having protective tariffs, they need protective tariffs. They’re not doing it. We’re going to help them out by just not importing from them and really helping them.

Pepe: Yeah. Michael, what do you think Black Rock wants from the Chinese? You know that they are making a few inroads at the highest levels? Of course, I’m sure you’re aware of that. And also, JP Morgan, Citybank, etc. What do they really want?

Michael: They’d like to be able to create dollars to begin to buy and make loans to real estate; let companies grow, let the real estate market grow and make capital gains.

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The way people get wealthy today isn’t by making an income, it’s been by making a capital gain. Total returns are current income plus the capital gains. As for capital gains each year; the land value gains alone are larger than the whole GDP growth from year to year. So that’s where the money is, that’s where the wealth is. So, they are after speculative capital gains, they would like to push money into the Chinese stock market and real estate market. See the prices go up and then inflate the prices by buying in and then sell out at the high price. Pull the money out, get a capital gain and let the economy crash, I mean that’s the business plan.

Pepe: Exactly. But Beijing will never allow that.

Michael: Well, here’s the problem right now, they know that Biden is pushing militarily aggressive people in his cabinet. There’s one kind of overhead that China is really trying to avoid and that’s the military overhead because if you spend money on the military, you can’t spend it on the real economy. They’re very worried about the military and they say, how do we deter the Biden administration from actually trying a military adventure in the South China Sea or elsewhere? They said well, fortunately America is multi-layered. They don’t think of America as a group. They realize there’s a layer and they say, who’s going to represent our interests?

“There’s one kind of overhead that China is really trying to avoid and that’s the military overhead because if you spend money on the military, you can’t spend it on the real economy.”

Well, Blackstone and Wall Street are going to represent their interests. Then I think one of the, Chinese officials last week gave a big speech on this very thing, saying look, our best hope in stopping America’s military adventurism in China is to have Wall Street acting as our support because after all, Wall Street is the main campaign contributor and the president works for the campaign contributors.

The politician works for the campaign contributors. They’re in it for the money! So fortunately, we have Wall Street on our side, we’ve got control of the political system and they’re not there to go to war so that helps explain why a month ago they let wholly-owned U.S. banks and bankers in. On the one hand, they don’t like the idea of somebody outside the government creating credit for reasons that the economy doesn’t need. If they needed it, the Bank of China would do it. They have no need for foreign currency to come in to make loans in domestic currency, out of China.

The only reason that they could do it is No. 1, it helps meet the World Trade Organization’s principles and, No. 2, especially during this formative few months of the Biden administration, it helps to have Wall Street saying; we can make a fortune in China, go easy on them and that essentially counters the military hawks in Washington.

Pepe: So, do you foresee a scenario when Black Rock starts wreaking havoc in the Shanghai stock exchange for instance?

Wall Street, Nov. 21, 2009. (Dave Center, Flickr)
Wall Street, Nov. 21, 2009. (Dave Center, Flickr)

Michael: It would love to do that. It would love to move things up and down. The money’s made by companies with the stock market going up and down; the zigzag. So of course, it wants to do a predatory zigzag. The question is whether China will impose a tax to stop this, all sorts of financial transactions. That’s what’s under discussion now. They know exactly what Black Rock wants to do because they have some very savvy billionaire Chinese advisers that are quite good. I can tell you stories, but I better not.

Pepe: Okay. If it’s not okay to tell it all, tell us part of the story then.

Michael: The American banks have been cultivating leading Chinese people by providing them enough money to make money here, that they think that, okay they will now try to make money in the same way in China and we can join in. It’s a conflict of systems again, between the finance capital system and industrial socialism. You don’t get any of this discussion in the U.S. press, which is why I read what you write because in the U.S. press, the neocons talk about the fake idea of Greek history and fake idea of the Thucydides’ problem of a country jealous of another country’s development.

There’s no jealousy between America and China. They’re different, they have their own way. We are going to destroy them. And if you look at the analogy that the Americans draw —and this is how the Pentagon thinks — with the war between Athens and Sparta. It’s hard to tell, which is which. Here you have Athens, a democracy backing other democracies and having the military support of the democracies and the military in these democracies all had to pay Athens protection money for the military support and that’s the money that Athens got to ostensibly support its navy and protection that built up all of the Athenian public buildings and everything else. So, that’s a democracy exploiting its allies, to enrich itself via the military. Then you have Sparta, which was funding all of the oligarchies, and it was helping the oligarchies overthrow democracies. Well, that was America too. So, America is both sides of the Thucydides war if the democracy is exploiting the fellow democracies and is the supporter of oligarchies in Brazil, Latin America, Africa and everyone else.

So, you could say the Thucydides problem was between two sides, two aspects of America and has nothing to do with China at all except, for the fact that the whole war was a war between economic systems. They’re acting as if somehow if only China did not export to us, we could be re-industrialized and somehow export to Europe and the Third World.

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And as you and I have described, it’s over. We painted ourselves into such a debt corner that without writing down the debts, we’re in the same position that the Eurozone is in. There’s so much money that goes to the creditors to the top 1 percent or 5 percent that there is no money for capital investment, there is no money for growth. And, since 1980 as you know, real wages in America have been stable. All the growth has been in property owners and predators and the FIRE sector, the rest of the economy is in stagnation. And now the coronavirus has simply acted as a catalyst to make it very clear that the game is over; it’s time to move away from the homeowner economy to rentier economy, time for Blackstone to be the landlord. America wants to recreate the British landlord class and essentially what we’re seeing now is like the Norman invasion of England taking over the land and the infrastructure. That’s what Blackstone would love to do in China.

“There’s so much money that goes to the creditors to the top 1 percent or 5 percent that there is no money for capital investment, there is no money for growth.”

Pepe: Wow. I’m afraid that they may have a lot of leeway by some members of the Beijing leadership now, because as you know very well, it’s not a consensus in the political arena.

Michael: We’re talking about Volume II and III of Capital.

Pepe: Exactly. But you know, you were talking about debt. Coming back to that, in fact I just checked this morning, apparently global debt as it stands today is $277 trillion, which is something like 365 percent of global GDP. What does that mean in practice?

Michael: Yeah, well fortunately this is discussed in the 19th century and there was a word for that — fictitious capital — it’s a debt that can’t be paid, but you’ll keep it on the books anyway. And every country has this. You could say the question now, and The Financial Times just had an article a few days ago that China’s claims on Third World countries on the Belt and Road Initiative is fictitious capital, because how can it collect?

Well, China’s already thought of that. It doesn’t want money. It wants the raw materials. It wants to be paid in real things. But a debt that can’t be paid, can only be paid either by foreclosing on the debtors or by writing down the debts and obviously a debt that can’t be paid won’t be paid.

“Fictitious capital — it’s a debt that can’t be paid, but you’ll keep it on the books anyway. And every country has this.”

And so, you have not only Marx using the word fictitious capital. At the other end of the spectrum, you had Henry George talking about fictive capital. In other words, these are property claims that have no real capital behind them. There’s no capital that makes profit. That’s just a property claim for payment or a rentier claim for payment.

So, the question is, can you make money somehow without having any production at all, without having wages, without having profits, without any capital? Can you just have asset grabbing and buying-and-selling assets? And as long as you have the Federal Reserve in America, come in, Trump’s $10 trillion Covid program gave $2 trillion to the population at large with these $1,200 checks, that my wife and I got, and $8 trillion all just to buy stocks and bonds. None of this was to build infrastructure. None of this $8 trillion was to build a single factory. None of this 8 trillion was to employee a single worker. It was all just to support the prices of stocks and bonds, and to keep the illusion that the economy had not stopped growing. Well, it’s growing for the 5 percent. So, it’s all become fictitious. And if you look at the GDP as I said, it’s fictitious.

Pepe: And the most extraordinary thing is none of that is discussed in American media. There’s not a single word about what you would have been describing.

Michael: It’s not even discussed in academia. Our graduates at the university of Missouri at Kansas City, we’re all trained in Modern Monetary Theory. And as hired professors they have to be able to publish in the refereed journals and the refereed journals are all essentially controlled by the Chicago School. So, you have a censorship of the kind of ideas that we’re talking about. You can’t get it into the economic journals, so you can’t get it into the economics curriculum. So, where on earth are you going to get it? If you didn’t have the internet you wouldn’t be discussing at all. Most of my books sell mainly in China, more than in all the other countries put together so I can discuss these things there. I stopped publishing in orthodox journals so many years ago because it’s talking to the deaf.

“None of this $8 trillion was to build a single factory, employee, a single worker.”

Pepe: Absolutely. Yeah. Can I ask you a question about Russia, Michael? There is a raging, debate in Russia for many years now between let’s say the Eurasianists and the Atlanticists. It involves of course, economic policy under Putin, industrial capitalism Russian style. The Eurasianists basically say that the central problem with Russia is how the Russian central bank is basically affiliated with all the mechanisms that you know so well, that it is an Atlanticist Trojan Horse inside the Russian economy. How do you see it?

Michael: Russia was brainwashed by the West when the Soviet Union broke up in 1991 . First of all, the IMF announced in advance that there was a big meeting in Houston with the IMF and the World Bank. And the IMF published all of its report saying, first you don’t want inflation in Russia so let’s wipe out all of the Russian savings with hyperinflation, which they did. They then said, well now to cure the hyperinflation the Russian central bank needs a stable currency and you need a backup for the currency. You will need to back it with U.S. dollars.

“Russia was brainwashed by the West when the Soviet Union broke up in 1991.”

So, from the early 1990s, as you know, labor was going unpaid. The Russian central bank could have created the rubles to pay the domestic labor and to keep the factories in place. But, the IMF advisers from Harvard said, no you’ll have to borrow U.S. dollars. I met with people from the Hermitage Fund and the Renaissance Fund and others. We had meetings and I met with the investors. Russia was paying 100 percent interest for years to leading American financial institutions for money that it didn’t need and could have created itself. Russia was so dispirited with Stalinism that, essentially, it thought the opposite of Stalinism must be what they have in America.

They thought that America was going to tell it how America got rich, but America didn’t want to tell Russia how it got rich, but instead wanted to make money off Russia. They didn’t get it. They trusted the Americans. They really didn’t understand that, industrial capitalism that Marx described had metamorphosized into finance capitalism and was completely different.

And that’s because Russia didn’t charge rent, it didn’t charge interest. I gave three speeches before the Duma, urging it to impose a land tax. Some of the people I noticed, Ed Dodson was there with us and we were all trying to convince Russia, don’t let this land be privatized. If you let it be privatized, then you’re going to have such high rents and housing costs in Russia that you’re not going to be able to essentially compete for an industrial growth. Well, the politician who brought us there, Viatcheslav Zolensky was sort of maneuvered out of the election by the American advisers.

Russian Duma Building, Moscow, 2017. (Wikimedia Commons)
Russian Duma Building, Moscow, 2017. (Wikimedia Commons)

The Americans put billions of dollars in to essentially finance American propagandists to destroy Russia, mainly from the Harvard Institute of International Development. And essentially, they were a bunch of gangsters and the prosecutors in Boston were about to prosecute them.

The attorney general of Boston was going to bring a big case for Harvard against the looting of Russia and the corruption of Russia. And I was asked to organize and to bring a number of Russian politicians and industrialists over to say how this destroyed everything. Well, Harvard settled out of court and essentially that made the perpetrators the leading university people up there. (I’m associated with Harvard Anthropology Department, not the Economics Department.)

So, we never had a chance to bring my witnesses, and have our report on what happened, but I published for the Russian Academy of Sciences a long study of how all of this destruction of Russia was laid out in advance at the Houston meetings by the IMF. America went to the leading bureaucrats and said; look, we can make you rich why don’t you register the factories in your own name, and if you’re registered in your own name, you know, then you’ll own it. And then you can cash out. You can essentially sell, but obviously you can’t sell to the Russians because the IMF has just wiped out all of their savings.

You can only cash out by selling to the West. And so, the Russian stock market became the leading stock market in the world from 1994 with the Norilsk Nickel and the seven bankers in the bank loans for shares deal through 1997. And, I had worked for a firm Scutter Stevens and, the head adviser, a former student of mine didn’t want to invest in Russia because she said, this is just a rip off, it’s going to crash. She was fired for not investing. They said look, we know that’s going to crash. That’s the whole idea it’s going to crash. We can make a mint off it before the crash. And then when it crashes, we can make another mint by selling short and then all over again . Well, the problem is that the system that was put in with the privatization that’s occurred, how do you have Russia’s wealth used to develop its own industry and its own economy like China was doing. Well, China has rules for all of this, but Russia doesn’t have rules, it’s really all centralized, it’s President Putin that keeps it this way.

President Vladimir Putin meeting with German business executives, Nov. 1, 2018. (The Kremlin)
President Vladimir Putin meeting with German business executives, Nov. 1, 2018. (The Kremlin)

Well, this was the great fear of the West. When you had Mikhail Gorbachev beginning to plan to do pretty much what is done today, to restrain private capital, the IMF said hold off. We’re not going to make any loans to stabilize the Russian currency until you remove Mr. Primakov.

The U.S. said we won’t deal with Russia until you remove him. So, he was pushed out and he was probably the smartest guy at the time there. So, they thought [President Vladimir] Putin was going to be sort of the patsy. And he almost single-handedly, holding the oligarchs in and saying, look, you can keep your money as long as you do exactly what the government would do. You can keep the gains as long as you’re serving the public interest.

But none of this resulted into a legal system, a tax system, and a system where the government actually does get most of the benefits. Russia could have emerged in 1990 as one the most competitive economies in Eurasia by giving all of the houses to its people instead of giving Norilsk Nickel and the oil companies to Yukos. It could have given everybody their own house and their own apartment, the same thing in the Baltics. And instead it didn’t give the land out to the people. And Russians were paying 3 percent of their income for housing in 1990. And rent is the largest element in every household’s budget.

“Russia could have emerged in 1990 as one the most competitive economies in Eurasia by giving all of the houses to its people.”

So, Russia could have had low-price labor. It could have financed all of its capital investment for the government by taxing, collecting the rising rental value. Instead, Russian real estate was privatized on credit and it was even worse in the Baltics.

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In Latvia, where I was research director for the Riga Graduate School of Law, Latvia borrowed primarily from Swedish banks. And so, in order to buy a house, you had to borrow from Swedish banks. And they said, well, we’re not going to lend in the Latvian currency because it can go down. So, you have a choice; Swiss Francs or German Marks or U.S. Dollars. And so, all of this rent was paid in foreign currency. There came an outflow that essentially drained all the Baltic economies. Latvia lost 20 percent of its population. Estonia and Lithuania followed suit.

And of course, the worst hit by neo-liberalism was Russia. As you know, President Putin said that neo-liberalism cost Russia more of its population than World War II. And you know that to destroy a country, you don’t need an army anymore. All you have to do is teach it American economics.

Pepe: Yes, I remember well, I arrived in Russia in the winter of 91 coming from China. So, I transited from the Chinese miracle. In fact, a few days after Deng Xiaoping’s famous Southern tour when he went to Guangzhou and Shenzhen. And that was the kick for the 1990s boom, in fact a few years before the handover, and then I took the Trans-Siberian and I arrived in Moscow a few days after the end, in fact, a few weeks after the end of the Soviet Union.

But yeah, I remember the Americans arrived almost at the exact minute, wasn’t it, Michael? I think they already were there in the spring of 1992. If I’m not mistaken.

Russian 1992 privatization voucher. (Wikimedia Commons)
Russian 1992 privatization voucher. (Wikimedia Commons)

Michael: The Houston meeting was in 1990. But all before that already in, 1988 and 1989, there was a huge outflow of embezzlement money via Latvia. The assistant dean of the university who ended up creating Nordex, essentially the money was all flying out because Ventspils in Latvia, was where Russian oil was exported and it was all fake invoicing. So, the Russian kleptocrats basically made their money off false export invoicing, ostensibly selling it for one price and having the rest paid abroad and, this was all organized through Latvia and the man who did it later moved to Israel and finally gave a billion dollars back to Russia so that he went on to live safely for the rest of his life in Israel.

Pepe: Well, the crash of the ruble in 1998 was what, roughly one year after the crash of the baht and the whole Asian financial crisis, no? It was interlinked of course, but let me see if I have a question for you, in fact, I’m just thinking out loud now. If the economies of Southeast Asia and Northeast Asia, the case of South Korea and Russia, were more integrated at the time as they are trying to integrate now, do you think that the Asian financial crisis would have been preventable in 1997?

Michael: Well, look at what happened in Malaysia with Mohammad Mahathir. Malaysia avoided it. So of course, it was preventable, and they had the capital controls. All you would have needed was to do what Malaysia did. But you needed an economic theory for that.

And essentially the current mode of warfare is to conquer the brains of a country to shape how people think and how they perceive the economy. And if you can twist their view into an unreality economics, where they think that you’re there to help them not to take money out of them, then you’ve got them hooked. That was what happened in Asia. Asia thought it was getting rich off the dollars inflows and then the IMF and all the creditors pulled the plug, crash the industry. And now that all of a sudden you had a crash, they bought up Korean industry and other South Asian industries at giveaway prices.

That’s what you do. You lend the money; you pull the plug. You then let them go under and you pick up the pieces . That’s what Blackstone did after the Obama depression began, when Obama saved the banks, not the constituency, the mortgage borrowers. Essentially that’s Blackstone’s modus operandi to pick up distressed prices at a bankruptcy sale, but you need to lend money and then crash it in order to make that work.

Pepe: Michael, I think we have only five minutes left. So, I would expect you to go on a relatively long answer and I’m really dying for it. It’s about debt, it about the debt trap. And it’s about the New Silk Roads, the Belt and Road Initiative, because I think rounding up our discussion and coming back to the theme of debt and global debt.

The No. 1 criticism apart from the demonization of China that you hear from American media and a few American academics as well against the Belt and Road is that it’s creating a debt trap for Southeast Asian nations, Central Asian nations and nations in Africa, etc…. Obviously, I expect you to debunk that, but the framework is there is no other global development project as extensive and as complex as Belt and Road, which as you know very well was initially dreamed up by the Ministry of Commerce. Then they sold it more or less to Xi Jinping who got the geopolitical stamp on it, announcing it, simultaneously, (which was a stroke of genius) in Central Asia in Astana and then in Southeast Asia in Jakarta. So, he was announcing the overland corridors through the heartland and the Maritime Silk Road at the same time.

At the time people didn’t see the reach and depth of all that. And now of course, finally the Trump administration woke up and saw what was in play, not only across Eurasia but reaching Africa and even selected parts of Latin America as well. And obviously the only sort of criticism, and it’s not even a fact-based criticism, that I’ve seen about the Belt and Road is it’s creating a debt trap because as you know Laos is indebted, Sri Lanka is indebted, Kyrgyzstan is indebted etc. So, how do you view Belt and Road within the large framework of the West and China, East Asia and Eurasia relations? And how would you debunk misconceptions created, especially in the U S that this is a debt trap.

Six proposed corridors of Belt and Road Initiative, showing Italy inside circle, on maritime blue route. (Lommes, CC BY-SA 4.0, Wikimedia Commons)
Six proposed corridors of Belt and Road Initiative, showing Italy inside circle, on maritime blue route. (Lommes, CC BY-SA 4.0, Wikimedia Commons)

Michael: There are two points to answer there. The first is how the Belt and Road began. And as you pointed out, the Belt and Road began, when China said, what is it we need to grow and how do we grow within our neighboring countries so we don’t have to depend upon the West, and we don’t have to depend on sea trade that can be shut down? How do we get to roads instead of seas in a way that we can integrate our economy with the neighboring economies so that there can be mutual growth?

So, this was done pretty much on industrial engineering grounds. Here’s where you need the roads and the railroads. And then how do we finance it? Well, The Financial Times article, last week, said didn’t the Chinese know that [with past] railroad development, they’ve all gone broke? The Panama Canal went broke, you know, the first few times there were European railway investment in Latin America in the 19th century, that all went broke.

Well, what they don’t get is China’s aim was not to make a profit off the railroads. The railroads were built to be part of the economy. They don’t want to make profit. It was to make the real economy grow, not to make profits for the owners of the railroad stocks. The Western press can’t imagine that you’re building a railroad without trying to make money out of it.

Then you get to the debt issue. Countries only have a debt crisis if their debt is in a foreign currency. The first way that the United States gained power was to fight against its allies. The great enemy of America was England and it made the British block their currency in the 1940s. And so, India and other countries, that had all these currencies holdings in sterling, were able to convert it all into dollars.

The whole move of the U.S. was to denominate world debt in dollars. So that No. 1, U.S. banks would end up with the interest in financing the debt. And No. 2, the United States could, by using the debt leverage, control domestic politics.

Well, as you’re seeing right now in Argentina, for instance, Argentina is broke because it owes foreign-dollar debt. When I started the first Third World bond fund in 1990 at Scutter Stevens, Brazil and China and Argentina were paying 45 percent interest per year, 45 percent per year in dollars debt. Yet we tried to sell them in America. No American would buy. We went to Europe, no European buy this debt. And so, we worked with Merrill Lynch and Merrill Lynch was able to make an offshore fund in the Dutch West Indies and all of the debt was sold to the Brazilian ruling class in the central bank and the Argentinian bankers in the ruling class, we thought oh, that’s wonderful.

We know that they’re going to pay the foreign Yankee Dollars debt because the Yankee Dollars debt is owed to themselves. They’re the Yankees! They’re the client oligarchy. And you know, from Brazil client oligarchy is, you know, they’re cosmopolitan, that’s the word. So, the problem is that on the Belt and Road, how did these other countries pay the debt to China?

Well, the key there again is the de-dollarization, and one way to solve it is since we’re trying to get finance out of the picture, we’re doing something very much like, Japan did with Canada in the 1960s. It made loans to develop Canadian copper mines taking its payment, not in Canadian dollars, that would have pushed up the yen’s exchange rate, but in copper.

So, China says, you know you don’t have to pay currency for this debt. We didn’t build a railroad to make a profit and you want, we can print all the currency we want. We don’t need to make a profit. We made the Belt and Road because it’s part of our geopolitical attempt to create what we need to be prosperous and have a prosperous region. So, these are self-reinforcing mutual gain. Well, so that’s what the West doesn’t get — mutual gain? Are we talking anthropology? What do you mean mutual? This is capitalism! So, the West doesn’t understand what the original aim of the Belt and Road was, and it wasn’t to make a profitable railroad to enable people to buy and sell railway stocks. And it wasn’t to make toll roads to sell off to Goldman Sachs, you know. We’re dealing with two different economic systems, and it’s very hard for one system to understand the other system because of the tunnel vision that you get when you get a degree in economics.

“We’re dealing with two different economic systems, and it’s very hard for one system to understand the other system because of the tunnel vision that you get when you get a degree in economics.”

Pepe: Belt and Road loans are long-term and at very low interest and they are renegotiable. They are renegotiating with the Pakistanis all the time for instance.

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Michael: China’s intention is not to repeat an Asia crisis of 1997. It doesn’t gain anything by forcing a crisis because it’s not trying to come in and buying property at a discount at a distressed sale. It has no desire to create a distressed sale. So obviously, the idea is the capacity to pay. Now, this whole argument occurred in the 1920s, between [John Maynard] Keynes and his opponents that wanted to collect German reparations and, Keynes made it very clear. What is the capacity to pay? It’s the ability to export and the ability to obtain foreign currency. Well, China’s not looking for foreign currency. It is looking for economic returns but the return is to the whole society, the return isn’t from a railroad. The return is for the entire economy because it’s looking at the economy as a system.

The way that neoliberalism works, it divides the economy in parts, and it makes every part trying to make a gain, and if you do that, then you don’t have any infrastructure that’s lowering the cost for the other parts. You have every part fighting for itself. You don’t look at in terms of a system the way China’s looking at it. That’s the great advantage of Marxism, you’ll look at the system, not just the parts.

Pepe: Exactly and this is at the heart of the Chinese concept of a community with a shared future for mankind, which is the approximate translation from Mandarin. So, we compare community with a shared future for mankind, which is, let’s say the driving force between the idea of Belt and Road, expanded across Eurasia, Africa and Latin America as well with our good old friends’, “greed is good” concept from the eighties, which is still ruling America apparently.

Michael: And the corollary is that non-greed is bad.

Pepe: Exactly and non-greed is evil.

Michael: I see. I think we ran out of time. I do. I don’t know if Alanna wants to step in to wrap it up.

Michael: There may be somebody who has a question.

Pepe: Somebody has a question? That’ll be fantastic.

Alanna: There is a question from Ed Dodson. He wanted to know why there are these ghost cities in China? And who’s financing all this real estate that’s developed, but nobody’s living there? We’ve all been hearing about that. So, what is happening with that?

Michael: Okay. China had most of its population living in the countryside and it made many deals with Chinese landholders who have land rights, and they said, if you will give up your land right to the community, we will give you free apartment in the city that you could rent out.

So, China has been building apartments in cities and trading these basically in exchange to support what used to be called a rural exodus. China doesn’t need as many farmers on the land as it now has, and the question is how are you going to get them into cities? So, China began building these cities and many of these apartments are owned by people who’ve got them in exchange for trading their land rights. The deals are part of the rural reconstruction program.

Alanna: Do you think it was a good deal? Vacant apartments everywhere.

Pepe: You don’t have ghost cities in Xinjiang for instance, Xinjiang is under-populated, it’s mostly desert. And it’s extremely sensitive to relocate people to Xinjiang. So basically, they concentrated on expanding Urumqi. When you arrive in Urumqi it is like almost like arriving in, Guangzhou. It’s enormous. It’s a huge generic city in the middle of the desert. And it’s also a high-tech Mecca, which is something that very few people in the West know. And is the direct link between the eastern seaboard via Belt and Road to Central Asia.

Pepe Escobar at the Khunjerab pass, China-Pak border, on New Silk Road overdrive.
Pepe Escobar at the Khunjerab pass, China-Pak border, on New Silk Road overdrive.

Last year I was on an amazing trip. I went to the three borders, the Tajik-Xinjiang border, Kyrgiz-Xinjiang border and the Kazakh-Xinjiang border, which is three borders in one. It’s a fascinating area to explore and specially to talk to the local populations, the Kyrgiz, the Kazakhs and the Tajiks. How do they see the Belt and Road directly affecting their lives from now on? So, you don’t see something spectacular for instance, in the Xinjiang – Kazakh boarder, there is one border for the trucks, lots of them like in Europe, crossing from all points, from Central Asia to China and bringing Chinese merchandise to Central Asia.

There’s the train border, which is a very simple two tracks and the pedestrian border, which is very funny because you have people arriving in buses from all parts of Central Asia. They stop on the Kazakh border. They take a shuttle, they clear customs for one day, they go to a series of shopping malls on the Chinese side of the border. They buy like crazy, shop till it drops, I don’t know for 12 hours? And then they cross back the same day because the visa is for one day. They step on their buses and they go back.

So, for the moment it’s sort of a pedestrian form of Belt and Road, but in the future, we’re going to have high-speed rail. We’re going to have, well the pipelines are already there as Michael knows, but it’s fascinating to see on the spot. You see the closer integration; you see for instance Uyghurs traveling back and forth. You know, Uyghurs that have families in Kyrgizstan for instance, I met some Uyghurs in Kyrgyzstan who do the back-and-forth all the time. And they said, there’s no problem. They are seen as businessmen so there’s no interference. There are no concentration camps involved, you know, but you have to go to these places to see how it works on the ground and with Covid, that’s the problem for us journalists who travel, because for one year we cannot go anywhere and Xinjiang was on my travel list this year, Afghanistan as well, Mongolia.

These are all parts of Belt and Road or future parts of Belt and Road, like Afghanistan. The Chinese and the Russians as well; they want to bring Afghanistan in a peace process organized by Asians themselves without the United States, within the Shanghai Cooperation Organization, because they want Afghanistan to be part of the intersection of Belt and Road and Eurasian Economic Union. This is something Michael knows very well. You don’t see this kind of discussions in the American media for instance, integration of Eurasia on the ground, how it’s actually happening.

Michael: That’s called cognitive dissonance.

Alanna: To try to understand it gets you cognitive dissonance.

Pepe: Oh yeah, of course. And obviously you are a Chinese agent, a Russian agent. And so, I hear that all the time. Well, in our jobs we hear that all the time. Especially, unfortunately from our American friends.

Alanna: Okay. I know you have other things to do. This has been fabulous. I want to thank you so much, both of you, uh, with so easy to get attendance for this webinar. There were 20 people in five minutes enrolled and in two days we were at capacity. So, I know there are many more people who would love to hear you talk another time, whenever you two are so willing. And I think you both got much out of your first conversation in person. Everybody listening knows these two wonderful gentlemen, they have written more than 10 books, and they have traveled all over the world. They are on the top of geopolitical and geoeconomic analysis, and they are caring, loving people. So, you can see that these are the people we need to be listening to and understanding all around the world.

So, thank you so much. Ibrahima Drame from the Henry George School is now going to say goodbye to you and will wrap this up. Thank you again.

Pepe: Michael it was a huge pleasure. Really, it was fantastic. Really nice, we’re on the same website. So, let’s have a second version of this.

Ibrahima: So, let’s have a second version of this two months from now. Thank you very much for participating and I really hope you liked this event. And, we also want to ask for your support by making a tax-deductible donation to the Henry George School. I believe I shared the link on the chat. Thank you. And see you soon.

Pepe: Thank you very much. Thanks Michael. Bye!

Michael Hudson is an American economist professor of economics at the university of Missouri Kansas City and a researcher at the Levy Economics Institute at Bard College. He’s a former Wall Street analyst political consultant commentator and journalist. He identifies himself as a classical economist. Michael is the author of J is for Junk Economics, Killing the Host, The Bubble and Beyond, Super Imperialism: The Economic Strategy of American Empire, Trade Development and Foreign Debt and The Myth of Aid , among others. His books have been published translated into Japanese, Chinese, German, Spanish and Russian.

Pepe Escobar, born in Brazil, is a correspondent and editor-at-large at Asia Times and columnist for Consortium News and Strategic Culture in Moscow. Since the mid-1980s he’s lived and worked as a foreign correspondent in London, Paris, Milan, Los Angeles, Singapore, Bangkok. He has extensively covered Pakistan, Afghanistan and Central Asia to China, Iran, Iraq and the wider Middle East. Pepe is the author of Globalistan – How the Globalized World is Dissolving into Liquid War;Red Zone Blues: A Snapshot of Baghdad during the Surge . He was contributing editor to The Empire and The Crescent and Tutto in Vendita in Italy. His last two books are Empire of Chaos and 2030 . Pepe is also associated with the Paris-based European Academy of Geopolitics. When not on the road he lives between Paris and Bangkok.

(Republished from Consortium News by permission of author or representative)
 
• Category: Economics • Tags: Banking Industry, Rentier, Wall Street 
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  1. In summary, China has embraced Christianity.

    • Troll: HeebHunter
    • Replies: @HeebHunter
    , @Shaman911
  2. Chris Moore says: • Website

    When I said that China can pay lower wages than the U.S., what I meant was that China provides as public services many things that American workers have to pay out of their own pockets – such as health care, free education, subsidized education, and above all, much lower debt service.

    But taking essential government services private and making people pay for them, and putting people in debt up to their eyeballs, is the Jewish specialty. What do you think the neocon “Harvard boys” were doing in Russia before Putin took over from the drunken Jew-stooge Yeltsin?

    Raiding the public sector, “privatizing” everything in sight, building up Zionist riches.

    Why do you think US liberal-elites and neocons hate Putin so much? Because he put an end to organized Jewish predations in Russia, and jailed many of the “international” oligarchs.

    Americans need to do the same.

    • Agree: Irish Savant, Alfred
    • Replies: @anon
  3. JWalters says:

    Excellent article as far as it goes. The big omission in this economic model, it seems to me, is leaving out the gigantic role corruption plays in our financial system. At the center, our money creation system is controlled by clever crooks, who have captured our media and government. That’s why our government makes decisions for these crooked financiers and against the general population. The core story, it seems to me, is in The Secrets of the Federal Reserve by Eustice Mullins and Web of Debt by Ellen Brown. This core story, and the bigger story in which it is embedded, is sketched along with essential corrective measures in
    “War Profiteers and Israel’s Bank”
    https://warprofiteerstory.blogspot.com/p/war-profiteers-and-israels-bank.html

    • Replies: @Realist
  4. Its the “Physical Economy Stupid”
    -Make wealth determine the value of money, not money the value of wealth-
    Time for a Return to Parity Act…a progressive return to agricultural and raw materials parity with attendant breakup of Wall Street farming operations.

    Here is something from the 1940’s on how to have prosperity!
    http://www.normeconomics.org/rmnc41cp.pdf

    • Thanks: ivan, cronkitsche
  5. USA is a cronyism construct –Plutocracy — and the 1% have those Mainstrret 99% subdued and lied to but the 99% looks afar for the enemy —but the Real enemy is in DC Congress and Senate and lives in gated communities and MUST be millioaire to join their league. All men created equal but it has an Electoral College. DEBT at 29 TRILLION— no chance this will ever be paid off but one day as in the game Monopoly the BIG JEW banker will be calling in this HUGE loan and then —BOIK -Bust !!

    • Replies: @Realist
  6. It’s actually blacks. Blacks ruin everything.

    Back in the 60s and 70s, the US had a far more of an industrial economy. But Detroit and other black-heavy cities began to burn and fall to ruin. Indeed, Detroit, Newark, Baltimore, and other black-heavy cities were in ruins long before Wall Street won it all.

    And NY would not have fallen into the current mess if not for BLM riots, but those were instigated by Jews to get rid of Trump. Jews also used the media to vastly hype Covid fears.

    When blacks got more freedom and the power, they showed their true colors: Blackity-Black.

    True, financialization of the economy wasn’t a good idea.

    But Hong Kong’s economy was largely financial, but it wasn’t know for looting and violence. The recent protests were political, not about smashing shop windows and running away with the loot.

    Blacks evolved in Africa to hunt, fight, and run like a mofo.

    Under white rule in the past, blacks lived in fear of the white man and behaved. They knew they could hang for attacking and killing whites. They knew they could be lynched for raping a white woman.

    But once whites got weak and blacks lost their fear of whitey(and were also instilled with moral pride of ‘muh slavery’), they began to revert to their jungle jive nature.

    Jews control the gods, and black possess holiness whereas whites are tainted with ‘sin’.

    • Agree: kerdasi amaq
  7. frontier says:

    China got rich after Wall Street, with the full cooperation of the US government, forced the US industry to move to China wholesale, early 90s until today. Many people warned about the perils of that strategy, Andy Grove plainly stated that if the gov doesn’t do something everybody would go out. He was removed from Intel shortly thereafter and the company is no longer the technology leader today. W. Buffet himself proposed a scheme for balanced trade without tariffs. I’m highly suspicious of people like Hudson who avoid the words “balanced trade” because balancing the current account is the key to free trade, unbalanced trade is very costly and isn’t at all free. There was even a balanced trade bill in Congress circa 2006 or so, went nowhere.

    So those in power knew, but they gambled …and lost. I’m pretty sure the intent was to ramp up the “war effort” and then establish a full spectrum dominance over rivals but they underestimated their own greed and corruption, China’s cheap labor became an addiction, then Indian, and it went down from there.

    Hudson talks about “low-cost government education” like 6 or 7 times as some sort of a miracle savoir, when the high cost of education is due to government mandates, regulations, immigration, welfare state and direct mismanagement. Same for the FIRE sector, market manipulation, the $27 Trillion debt went half there, half to China. Hudson is basically peddling more of the same, more government regulation, more debt and going all-out Marxist to make a China out of America… how smart, no? Hudson is using the US-built China as an example of the wonders of Marxism which a glorious chairman can mercifully provide to US too. That’s it in a nutshell, you can skip the article, it’s a pile of garbage.

    • Thanks: Ivan
    • Troll: HeebHunter
  8. GMC says:

    Great Article , should be in every school book. lol Never Happen. When Hudson said – during the part of the Soviet downfall – that the IMF told the Buro-rats in charge in Moscow – that the people can’t have savings accounts because it will F … up everything, The Banks in Russia and Ukraine etc. closed up shop and stole everyone’s savings . They downright stole all the money. It happened to my father in law in 91 and he lost his loot – 4,000 bucks – which at the time ws a good nest egg – in Soviet standards. Think it can’t happen in the USA — lol Then what is that little clause called the Bail – in all about ? The IMF walked into Ukraine after the Maidan – and looked what happened – approx. 1, ooo,ooo pensioners lost their pensions – 6 years ago = 7.2 billion dollars { converted } owed to those people.

  9. @Carlton Meyer

    More like National Socialism.

    • Agree: cronkitsche
    • Troll: Ann Nonny Mouse
    • Replies: @nokangaroos
  10. @frontier

    Honestly kike, try harder. Nobody is buying your shit, and the article isn’t advocating for (((marxism))).

    We are very tired of your kind. You probabbly won’t get your throat slitted but try to be careful drinking that coffee or going up and down a stair 🙂

    • Replies: @Thomasina
    , @troof
    , @troof
  11. Ivan says:

    Adolf Hitler, in Mein Kampf propounded the idea that the German Mark be backed by the labour effort put into acquiring it. He had some good ideas.

    The American type of financialisation is only possible because the US dollar is world’s reserve currency. Everyone else pays for America’s excess. But the other obvious contender the Chinese Yuan, has no traction, since nobody believes they’ll get their money back if they run afoul of the Chicoms.

    • Replies: @Tom Welsh
  12. Ivan says:
    @frontier

    All this bellyaching about financialization really gained traction only after about the 2007/8 crash . When the money kept flowing in by flipping houses, or taking loans that no one but the honourable had the intention of paying, everyone was happy playing along. In the chimerical world of ‘anti-capitalism”, the workers, housewives, students and grifters have no moral agency. Presented with the alternative between frugality and excess, they invariably chose the easier way out, then go on to blame unnamed capitalists. They themselves are all clear with their respective consciences, whatever be their own actions.

    • Replies: @Baron Cyborg
    , @frontier
    , @troof
  13. The picture above of a boarded Saks Fifth Avenue has little to do with “moving from industrial to financial capitalism”, since New York City is the epicenter of financial capitalism and abounds in the dirty money it generates. It does have everything to do with American negrophilia. Instead of negro “peaceful protesters” being mowed down mid-riot, they are coddled and we are all forced to pretend their intractable problems with the law are caused by something other than their own behavior and genetic unsuitability for life in an advanced, knowledge-based society.

    • Agree: Alden
    • Replies: @Showmethereal
  14. Anon[253] • Disclaimer says:

    There is saying in my language, translate as below:
    if you can make a life by stock market, you won’t go back to work to get the salary
    if you can make a life by gambling, you won’t go back to stock market
    if you can make a life by rob, you won’t go back to gambling

    USA the nation is just too blessed that it can make a good life not by salary.

  15. @frontier

    Michael Hudson has advocated protectionist strategies, which would involve tariffs in arguments against Free Market ideologues which have been recorded and uploaded in video format. It seems you don’t know much about Hudson, and are kneejerking to the word Marxist, as anyone is likely to do when they’ve internalized the manichean economic thought of our times.

    Macroeconomically, politically, common sensically, you aren’t going to resolve the government gifts to the FIRE sector by crowing about free markets and small government. What about “That’s failed for the past 50 years” don’t you folks understand? Capturing government and leveraging it to the national benefit is a must for any nationalist program, and this also means channeling state credit into productive, rather than extractive (FIRE) sectors.

    • Agree: Fred777
    • Replies: @frontier
  16. @Ivan

    It seems you aim to characterize Hudsons work here as some kind of wrongheaded, afterthought whine about the largesse of the FIRE sector.
    Anti-FIRE economic content has been produced since the American economy was financialized, and indirectly for centuries prior to financialization becoming a scholarly term, in the form of anti-usury scholarship.

    There is no conspiracy against poor capitalists here. And if you believe questioning the Faustian fetish for contract law and the right-to-steal by usurious financiers is anti-capitalist, then you’ve accidentally driven yourself into a philosophical corner.

    • Replies: @ivan
  17. Clyde says:

    Bookmark to read more of this later. Thanks Ron Unz in this new year!

    • Agree: Ann Nonny Mouse
  18. Anon[191] • Disclaimer says:

    MH,
    Thanks. I hope this gets double-and-triple reads. Manufacturing real goods is so tremendously important. At least 10% of any item we buy should be produced here simply for military/national defense purposes. The PPE shortage at the beginning of the pandemic should have shown is that.

    • Agree: Ann Nonny Mouse
  19. John Hagan says: • Website

    Great Vidio of Pepe and the most discerning economist we have today Paul Roberts.

    Logic and excellent reasons why the US dollar will crash. Even the ancients knew that if greed was inbilt into the system that in the long term it would destroy that system. This is not and was not something that was intellectually challenging even within primitive cultures. What it does do however is to encourage a process of ‘bag snatching’ where short term gains make such activities profitable. The US are ‘bag snatchers’ and that anyone who disbelieves such is not a student of history. That the US went even further to protect their ‘bag snatchers’ with military force is also indisputable.

  20. onebornfree says: • Website

    Hudson: “America has concentrated the planning and the resource allocation in Wall Street. And that’s the central planning that is much more corrosive than any government planning, could be.””

    And there you have it, in all it’s glory. A bald “reveal”, or “uncloaking”, as it were.

    Bottom line: Hudson is just another in a long line of court intellectuals employed to justify ever more [this time Hudson approved, of course], government interference in economies.

    As Rothbard has said: “States have always needed intellectuals to con the public into believing that its rule is wise, good, and inevitable”

    To further translate/summarize Hudsons statement above :

    “Central planning is good if the right people [ i.e. governments] do it, but bad if banks do it”.

    As Rothbard also said: “The state has typically been a device for producing affluence for a few at the expense of many.” [Which is why it needs court intellectuals like Hudson to justify its/their economic criminality “for the good of society” etc. etc. blah, blah blah, yadda yadda yadda.]

    This “just” in: Central planning of economies by either governments or banks is TOTALLY DESTRUCTIVE of economies.

    And there’s really no difference between the two [except in the “minds” of persons such as Hudson]; at the present time – the government is the banks, and the banks are the government .

    [MORE]

    And to expand, central planning by even a fully private business or bank will also invariably lead to failure of that business/bank, sooner or later.

    But true to form, the Marxist halfwit Hudson fantasizes over ever more central planning [just as long as its the government doing it, and not their partners in crime, the banks, which, in his tiny mind, have absolutely no mutually beneficial, symbiotic relationship with governments whatsoever 😎].

    And I’m sure there are millions of Chinese suckers who don’t know their ass from their elbow ready to believe him too [ after all “there’s a sucker born every minute”].

    This just in: government solutions never work. “Everything the government touches turns to crap” Ringo Starr. [Even a drummer in a rock band understood that much!]

    In other words, central planning, regardless of which government [or bank] is running the show, never works, it always destroys market economies.

    Solution: Get the government and the government run banks, [all are nothing more than a bunch of know -nothing -know -it -all con men in $3000 suits], entirely out of the fake business of “running” the economy[ or anything else]. All they do is run it into the ground, while they, themselves make enormous profits.

    Fer chrissakes, Hudson, get a grip- at the very least read Hayek’s “Road To Serfdom” [at least twice].

    I’m not a big Hayek fan [like Smith, Ricardo, Friedman, he’s too socialist for me] , but at least in that book he clearly explains why central planning always fails and systematically destroys economies and the wealth and lives of the people. [Which is bad, unless, of course, you already know that and deliberately plan for that, so that “one world government” eventually occurs via the “Great Reset “/Covid-19 scam/excuse].

    No regards, onebornfree

    • Replies: @frontier
  21. Scotist says:

    ‘When I said that China can pay lower wages than the U.S., what I meant was that China provides as public services many things that American workers have to pay out of their own pockets.’

    I don’t quite understand what this means. The government which finances all those things has to get its funds from somewhere, doesn’t it? So instead of workers getting a higher salary and paying for them directly, the government gets the difference and pays for it itself. What exactly is the difference though? Aren’t you just shuffling the money around in either case?

  22. gotmituns says:

    We’re coming up on the centennial of 1923 when the German middle class was pauperized. I get the heebeegeebeeze when I think about it.

  23. Realist says:
    @JWalters

    The big omission in this economic model, it seems to me, is leaving out the gigantic role corruption plays in our financial system.

    Corruption plays a gigantic role in all American systems.

  24. Realist says:
    @GomezAdddams

    USA is a cronyism construct –Plutocracy — and the 1% have those Mainstrret 99% subdued and lied to but the 99% looks afar for the enemy —but the Real enemy is in DC Congress and Senate and lives in gated communities and MUST be millioaire to join their league.

    Excellent synopsis…but the hard part is the solution.

  25. Realist says:
    @frontier

    China got rich after Wall Street, with the full cooperation of the US government, forced the US industry to move to China wholesale, early 90s until today.

    How were US industries forced to move to China? Avarice was the reason industry moved to China.

  26. @Priss Factor

    Black-on-White rape and murder are rampant today, tens of thousand annually, but at least the Klan is no more. When the Klan was active such crime was almost unknown. Has it been worth it?

    • Troll: Showmethereal
    • Replies: @JohnPlywood
  27. Rdm says:

    So, all of this cost structure has been built into the economy. China’s been able pretty much, to avoid all of this, because its objective in banking is not to make a profit and interest, not to make capital gains and speculation. It creates money to fund actual means of production to build factories, to build research and development, to build transportation facilities, to build infrastructure. Banks in America don’t lend for that kind of thing.

    It’s been spreading in Chinese forums and whatnot, everyone knows in China why Ant IPO was shut down.

    But Wall Street just wants the money made out of thin air.

    Here how it goes. Ma thought it’s a good idea for younger generations to take out small credits when they’re going for outing and friends gathering and pay by Alipay with 20% interest. For small expenses, 20% is a penny, but 1.3 billion family gathering? Ma will be the richest person on Earth while hanging all Han Chinese with his 20% interest.

    So you’d be the judge if Ma’s greed is good OR CCP handling of the matter is the top notched.

    • Replies: @antibeast
  28. dearieme says:

    the FIRE sector — the finance, insurance and real estate sector

    — and other monopolies

    I suppose the most obvious, and most corrupting, are media, education, and government: MEG.

    (I am treating law as part of government.)

  29. “They don’t have to pay workers enough to pay enormous rent such as you have in the United States”

    They don’t. I’ve not had a raise since 1997. I’ve actually lowered my shop rate since then.

  30. Alden says:
    @Priss Factor

    I agree completely. Much of the reason for government dysfunction from leaky subway tunnels to violent dysfunctional public schools is due to 52 years of affirmative action for blacks.

    In 1980, government still functioned because most employers were still merit selected functional Whites. But they were in their late 30s. Now they’re all gone replaced by totally useless blacks.

    China’s really on a roll now. I’m old enough to remember when every year several books were published claiming japan would soon rule the world and ambitious MBAs were learning Japanese. Who knows how long China will be at the top of the wheel of fortune?

    Back before affirmative action American government agencies functioned.

    Public transit. Reason Americans avoid public transit is because of the blacks on it. Even without crime and violence, who wants to listen to them screeching mofa and other obscenities?

    Hudson is just an anti White pro black liberal.

    I read a 1890s edition of the protocols of Zion. Protocol 4 “ We shall see to it my brothers that the goyim appoint nine but the incompetent and unfit to government positions. And thus we will weaken them and easily conquer them when the time comes”

    Affirmative action is the epitome of “ appoint only the unfit and incompetent”

    • Agree: Sam J.
  31. @HeebHunter

    My thoughts exactly …
    it´s straight out of Mein Kampf 😀
    But given vol.I was shredded by Walras and Menger before it was published
    (and everything hinges on the labour theory of value) and vols.II and III were
    not written by Marx, I guess one has to grasp for straws to remain catholic.

  32. The trouble with this article is that it’s way too long and full of economics expertise that simply weakens its message. A different post by Hudson was much shorter and far more effective.

    • Replies: @xyzxy
    , @Tom Welsh
  33. Interesting….the whole US economy is a bubble and joke. What do I know about economics? Still, it strikes me that China’s GDP is mostly real…they build stuff, like roads and airports and buildings and dams. The US GDP is mostly fake…buying and selling services to each other does not produce anything…when I sell my $300k home to move to a different neighborhood and buy a $4ook home, the GDP just went up $700k, even though nothing happened…if the GDP were called Money Velocity Tracker instead, it would be more honest, but it’s not, so it isn’t…

  34. As usual, the good and smart Jew Michael Hudson not only knows what he’s talking but is giving a good talk, while Pepe Ecsactly (exactly) trying to show off his limited knowledge by interjecting excessively… is it because Hudson is an ashkenazi thus bearing northern European discipline and Escobar, who is most likely a sephardic Jew, has the southern European undisciplined character?

  35. What Hudson apparently cannot say in all this is how completely is China a MERIT-based society. Idiots don’t go to college. Idiots have no merit or heft there. They also haven’t diversity to deal with. With some of Biden’s picks, we confirm that we are no longer a serious, but rather laughable entity. And dangerous for all the unstable broads installed in executive positions at defense and intelligence. We are most unserious.

    • Replies: @Tom Welsh
  36. @Irish Savant

    >Thinks the dimunitive and decadally decreasing number of black on white murders/rapes is “rampant”

    >Doesn’t think +500,000 deaths a year from COVID-19 is even a threat

    This is why you’re banned from Twitter. You have to have an IQ higher than 40 to tweet.

    • Troll: kerdasi amaq
    • Replies: @Anonymous
  37. xyzxy says:
    @phillip sawicki

    I guess it’s asking too much to expect people to maintain focus for more than a meme cartoon, a tweet, or a YT music video. Pathetic how dumbed down Americans are.

    • Agree: Tom Welsh
  38. Tom Welsh says:
    @Ivan

    Hitler was intelligent and imaginative, but most of all he had absolutely no respect for authority. If something seemed to him to make no sense, he assumed it didn’t unless someone could persuade him it was true. Perhaps he was so used to brainwashing people with propaganda that he became immune to it.

    Many times he was asked about his legacy and how people in the future would regard him. His answer was always the same: “I don’t care!”

    Very healthy.

  39. anon[604] • Disclaimer says:
    @Chris Moore

    1 Lantos some kind of type of vulture looking Shedlon Adelson of A.D. 2000 who used to roam California like a smelly Dinosaur embraced some of these oligarchs and introduced them to US Congress .

    He was joined by other Americans

    [MORE]

    2 “One of our witnesses today is a former Russian intelligence
    agent, Colonel Stanivlav Lunev. He is the highest ranking GRU
    officer ever to defect to the United States. The GRU is
    Russia’s premiere military intelligence agency. Colonel Lunev
    is in the witness protection program and special arrangements
    have been made to conceal his identity. So I apologize to the
    media who’s here, we’ll have to have him come in and be covered
    up so that his identity is maintained so he won’t be in any
    jeopardy.According to Colonel Lunev, part of the Soviet’s plan
    called for the use of, “portable tactical nuclear devices,”
    to be used to commit sabotage against highly protected targets.
    If has now been widely reported that the Soviet Union
    manufactured portable briefcase-size nuclear devices that
    cannot all be accounted for.
    Were conventional or nuclear weapons prepositioned in the
    United States? Colonel Lunev doesn’t know if the sites he
    identified were ever used. However, a second Russian defector
    says drop sites were established all over the United States and
    Western Europe. Vasili Mitrokhin was an archivist for the KGB.
    When he defected to the West he brought with him pages and
    pages of handwritten notes about KGB activities. He says that
    for decades the Soviet Union deployed sabotage and intelligence
    groups whose mission it was to commit assassinations or acts of
    sabotage in times of crisis or impending war.
    In his book, “The Sword and the Shield,” he states that
    drop sites for explosives were scattered all over Western
    Europe and the United States. They contained everything from
    communications equipment to handguns to explosives. At one
    point in his book, he states that a standard arms package to be
    placed in a drop site would include mines, explosive charges,
    fuses, and detonators.
    Mr. Mitrokhin brought information on the exact locations of
    several sites in Europe, in Belgium, and Switzerland. Local
    police found these sites exactly where Mitrokhin said they
    would be. That’s significant because a lot of people tried to
    pooh-pooh what we’re talking about here today but several sites
    have been located in Europe. They were booby-trapped with
    explosives. The bombs had to be set off with water cannons
    before the caches could be opened. Mr. Mitrokhin states that
    many drop sites were established here in the United States.
    However, he was not able to smuggle out the locations. He knows
    that one site was established in Brainerd, MN.
    In his book, he also mentions the possibility of drop sites
    in New York, Pennsylvania, and Texas.”
    JANUARY 24, 2000
    RUSSIAN THREATS TO UNITED STATES SECURITY IN THE POST-COLD WAR ERA
    https://fas.org/irp/congress/2000_hr/hr_012400.htm

  40. Tom Welsh says:
    @Jim Christian

    Jim, I think it’s more that Mr Hudson focuses tightly on his allocated topic. Otherwise there is so much to say that he could talk for 72 hours and not be finished.

    You see far too much unfocused discussion on the Web, which is one reason why people don’t arrive at definite conclusions.

  41. Tom Welsh says:
    @phillip sawicki

    You seem to be saying that Mr Hudson sometimes speaks at length and in detail, at other times much more quickly and summarily.

    That sounds ideal to me: the simple version for those with little patience, and an in-depth version for those who want to understand more fully.

    Of course his books are even more detailed.

    It often occurs to me how very intelligent he is, and what a brilliant communicator. The main sign of that is how very easy his talks are to understand, and how simple and obvious it all seems – once he has explained it. Like, for instance, Richard Feynman.

    Like some other very clever people, he seems to be ageing well too.

    Bertrand Russell lived to 97 and apparently used to down seven double Scotches every day. At first I doubted this, but I have found independent confirmation.

    • Replies: @Mefobills
  42. ivan says:
    @Baron Cyborg

    Boss I live in Singapore. I don’t deny that people do fall between the cracks. But for everyone that are done in by excessive debt, there would be three or four that have taken the money and ran.

  43. All so true. There is nothing else to be said. One might disagree on minor points here and there, but overall, this writer hit it on the nose.

  44. It wasn’t that long ago we had industry. We made things. Then we sent the masses to college to become our betters. Also with all the demographic changes we are no longer a nation state like China is. We have no shared common interest other than dollars. I don’t even know what to characterize what the US anymore but dangerous and disfunctional. However China’s future problem, and India’s, will be all those helicopter parents desire to educate their children to become aristocratic like professionals. They either come here or their homelands will have a limited time frame of industrialization.

    Never underestimate the fundamental jealousy a entitled degree holder has over those who can produce. They hate people with skills, and want to control them out of some weird sense of superiority mixed with spite. I’m all for learning, but a social structure base on education is a huge problem, and an explanation to why we are where we are.

    • Replies: @Louis Litt
  45. anonymous[712] • Disclaimer says:

    Someone should proofread this article for grammar. One of America’s problems is sloppiness, and bad grammar is sloppiness. Proper English sentences don’t begin with “and”. Our competitors know how to structure an English sentence properly.

    • Replies: @xyzxy
  46. In addition to the FIRE payments, don’t forget about child support and alimony (since about half of adults are divorced), and other retarded court-ordered transfers of moneys….

  47. Anonymous[712] • Disclaimer says:
    @JohnPlywood

    Twitter was created for the illiterate, simple-minded modern celebrity with the attention span of a squirrel to broadcast to his fellow brethren of brain-dead squirrels Getting banned from it should be a badge of honor to any person with any modicum of decency or self-respect.

    • Agree: Sam J.
    • Replies: @GeneralRipper
    , @troof
  48. Can America compete with China? Ever? Try this, America. Produce one item, Just ONE, that can be mfg. at home, shipped 9 thousand miles and… sell for $1.00 at a profit. NEXT CASE.

    • Replies: @blake121666
  49. xyzxy says:
    @anonymous

    This is a chat transcript. People speaking. People do not speak exactly as they would write. That should not be too difficult for you to comprehend inasmuch as you are (presumably) someone who knows how to structure an English sentence properly.

  50. frontier says:
    @Baron Cyborg

    I know very well what he has advocated, just like Trump advocated MAGA – a fraud, a gatekeeper. In other words, the details matter. The article is there to prove it. Why is he promoting more debt – isn’t it clear that the entire FIRE sector feeds on government debt, subsidies and immigration? Section 8 most notorious but not only? Rent, utilities paid? On debt? Doesn’t he know about it? Where was he when Trump imposed tariffs on raw materials and components, leaving finished goods without any tariffs – practically punishing local industry and rewarding those who had exported their entire production chains abroad? This tariff structures pushed more production to China and the trade deficit grew instead of going down. After mountains of talk, the iPhone tax never happened, correct?

    As I said, a fraud. It’s not entirely his fault though it’s pretty clear that to become an “established economist” of whatever persuasion, one has to be a fraud or at least act like one. Have you heard any of them talk about the massive fraud with subsidized rent? That’s a government-controlled FIRE sector for you – politicians moving minorities to good neighborhoods, causing white flight and a subsequent real estate price crash? Then the “connected developers” move in, push the minorities out, gentrify and sell for a nice profit… while absolutely devastating a large number of people… with their jobs in China? Where are the “economists” to utter a single word about it? Supply and demand? A curve? A bunch of fraudsters. The time for pussy-footing around is over, we have waited long enough and we can see the results of “economists’ consensus”, they have ruined America for a few crumbs from the DC table.

    • Replies: @obwandiyag
    , @Baron Cyborg
  51. frontier says:
    @Realist

    How were US industries forced to move to China? Avarice was the reason industry moved to China.

    How were they forced? Easy, get an issue WSJ from the early/mid 2000s, that was the time of the great exodus, and read a few analyst reports. They all sounded something like this “Company XYZ is on time (or late) with their outsourcing efforts, their share price is expected to grow (resp. stagnate)… bla, bla, bla” If your company happened to be “late” and “stagnating”, you’d see the board piss all over themselves that same day, fire the CEO and hire an “outsourcing specialist”, usually a Wall Street insider, to replace him. Easy, no?

    • Thanks: Fred777
    • Replies: @Realist
  52. Anonymous[231] • Disclaimer says:
    @Alden

    BS, look at the fall of Boeing, are Blacks responsible for that?

    • Replies: @nokangaroos
  53. Realist says:
    @frontier

    The CEO as most Americans are little pussies…they were not forced they caved in. It is not China’s fault that greedy bastards in the US made them rich.

    • Replies: @frontier
  54. TG says:

    I hear you and agree with much of what you say, but you have I think made one primary error.

    “You’d still have American industry not being able to compete abroad simply because the cost structure is so high in the United States.”

    Wrong. America did not become an industrial power because it was ‘globally competitive’, but because it refused to compete at all! The American system was to protect the domestic market, and it worked. America became great even as its labor costs were far higher than other nations!

    Remember, we are not talking about American industry competing against foreign industry. We are talking about American industry relocating to low-wage foreign countries. Ultimately the only way that American workers can ‘compete’ against dollar-an-hour foreign labor, is to work for a dollar an hour themselves.

    Competition is all well and good, but if you can’t win get out of the game.

    • Agree: Sam J.
  55. @frontier

    There is a false misconception about US companies being forced to move their labor to China. Actually the capital and the exppertise that built up China was mostly from ethnic Chinese who were already industrialists in Hong Kong (many of whom were originally Shanghai i dustrialists) – Taiwan – and South East Asia. They all (and South Korea) followed the post WW2 Japan model. The differemce is mainland China is 200 Hong Kongs 70 Taiwans and 10 Japan’s.

    Western companjes moved into China late. For instance – Apple phones are made by Foxconn – which is a Taiwan company which has most of its operations in mainland China. Apple doesnt make the phones. Talk to you local distributor of things like aluminum pans and a store that needs parts for a coffee maker. There is nothing stopping US firms from competing with the Chinese firms. The Chinese firms are simply faster and can meet price points much better. The latter has somewhat to do with what was discussed in this piece. Going further up the chain – Elon Musk stated plainly why he now has a Tesla gigafactory in Shanghai. Simply put – he said the Chinese just know how to get things done. He didnt go there to “teach” China anything.

    The first issue with fixing a problem is dealing with false notions. The US did not re-build China. So fighting China cannot fix America’s problems.

    • Replies: @R2b
    , @Blissex
  56. frontier says:
    @Realist

    It is not China’s fault that greedy bastards in the US made them rich.
    Who said anything about “China fault”? CEO caved? None of that, sorry, you grasp of the topic is abysmal.

    • Replies: @Realist
  57. @Ray Caruso

    But actually NYC didnt get rich because of finance. NYC was an industrial town – which is why it was so polluted. NYC had the biggest ports and the waterways were used to make anything imaginable. Even cars were made in NYC for a time. NY was known as the Empire State when the canal was built linking it to the midwest and Canada (in the same way the Grand Canal in China did something similar centuries before) – which allowed NY companies to export faster to those areas. NYC finance started to serve the industry. When industry hallowed out – finance took over the economy.

    • Replies: @Ray Caruso
  58. @Realist

    You are correct, the Chinese just made the most of what they could, it is not like sneaky Chinese frogmen came to the West to steal the technologies and jobs from us. The finance capitalism delusion was only a prelude for other future delusions, most notably the transgender and multicultural delusions.

    • Thanks: Realist
    • Replies: @Mefobills
  59. @Scotist

    That was an argument in the auto industry between Detroit and Japan. The US companies noted for instance the burden of healthcare. Its not just about where the money comes from but how much. Japan has a lomger life expectancy than the US. So it must have a good healthcare system right??? Now compare the costs of healthcare between the US and Japan. Even something like the cost of an MRI. It is obscene when you look at the difference. So no matter who pays the healthcare burden is much less in Japan auto sector than the US auto sector. If it wasnt for trade issues Japanese automakers would never have built any plants in the US – even though they did in the cheaper South. They did that even kicking and screaming.

  60. frontier says:
    @onebornfree

    Hudson: “America has concentrated the planning and the resource allocation in Wall Street. And that’s the central planning that is much more corrosive than any government planning, could be.”

    Nice catch. What Hudson is trying to slip between the lines, is the assumption that Wall Street and government are somehow different, they are not, they are one and the same and have been for many years. Who is on top doesn’t really mater, they never disagree, ever. It’s even worse than the ephemeral, circus differences between Republicans and Democrats… both serving Wall Street. With that little stratagem, the fraud Hudson is trying to slip in a new boss, the same as the old boss, just under a different name.

    • Replies: @Mefobills
  61. zimmitz says:

    Real wages have dropped ever sine Aug 1971, not 1980 as Hudson asserts. Industrial jobs have also been disappearing ever since Aug 1971. Gee, I wonder what happened in Aug 1971.

    • Replies: @Fallingwater
  62. Fantastically brilliant article. It took only title to seal the explanation of the fate of USA.
    There is no solution, no way out. The path is leading inevitably to ravine.
    But there will be rebirth with better financial system.
    (Lots of pain between.)

    • Replies: @James Charles
  63. Agent76 says:

    Aug 30, 2011 CORPORATE FASCISM: The Destruction of America’s Middle Class

    A new kind of fascism has taken over America: the merger of corporations and government whereby corporate power dominates. With the emergence of ever-larger multinational corporations — due to consolidation facilitated by the Federal Reserve’s endless FIAT money — the corporatocracy has been in a position to literally purchase the U.S. Congress.

  64. frontier says:
    @Ivan

    In the chimerical world of ‘anti-capitalism”, the workers, housewives, students and grifters have no moral agency.

    That was the media line back then, but it was a cover up. Nobody should be running a bank relying on their customers “moral agency”. The banks should be responsible for their lending, at least as much as their borrowers, instead, we have a bailout system, on two levels actually… that whole contraption wasn’t built to provide economic value, that much is clear.

    • Agree: ivan
  65. Just shut down all the military adventures and the cost savings alone would be immense. But I suspect its too late to save the empire

  66. Rdm says:

    Pepe and Michael,

    This was really an interesting conversation and I enjoyed very much. I read your entire transcript at one sitting. I couldn’t wait to read your travelog from Xinjiang and the rest when the pandemic eases off in the future.

    Keep up the true journalism, ground work and real stuff instead of those WSJ, NYT armchair journalists.

    I know the anti-semitism is very prevalent here in Unz. But I’d like to know what your take on Jewish involvement on global scale on this financial system, bankrupting other countries?

    this was all organized through Latvia and the man who did it later moved to Israel and finally gave a billion dollars back to Russia so that he went on to live safely for the rest of his life in Israel.

    I couldn’t help but keep seeing those crooks somehow ended up either fully Jewish or part-Jewish. If I find something, I dig up their race and somehow it’s all pointed to Jews. You said there’s a guy run away from Russia and now finally settled in Israel. Is he Jews as well?

    • Replies: @Michael Hudson
  67. @Alden

    So here is the soltuion since its all blacks fault in your eyes. Either pay a princely sum and repatriate all those brought over on the slave ships progeny (you can exempt ones who migrated freely)… Or you and all your ill can repatriate yourselves back to Europe. Take your pick. In the meantime – whining won’t do a thing. Nor does it add anything. When people like you arent blaming blacks you are blaming Jews. Then when its niether of those two its the Chinese who “stole your jobs”. Find the whitetest country in Europe and move there then. My guess would be Iceland? I would say the Balakans but there are Muslims there and I doubt you like “those” either.

    • Replies: @Sam J.
  68. @Anonymous

    Yes.

    LOL

    Excellent post.

    The Twitterverse is essentially a circle jerk of semi-retarded Leftist ideologues and their adoring house niggers.

  69. @Alden

    “I agree completely. Much of the reason for government dysfunction from leaky subway tunnels to violent dysfunctional public schools is due to 52 years of affirmative action for blacks.”

    What planet are you from? Leaky subway tunnels?

    How much is much? Like 95% or almost none? Be specific. See if you can get your theory published.

  70. R2b says:
    @Scotist

    I think this is well said.
    The question is a politics of partitioning.
    All would be well, if that worked out in order.
    That is, the underpayed workers, got transportation, healthcare and housing.
    But if this transfer isn’t correct, there is a deficit.
    And if costs are connected, like rent, that is usury, that which bites, then the system has to go slippery slope.
    No great difficulty, actually.

  71. Realist says:
    @frontier

    Who said anything about “China fault”? CEO caved? None of that, sorry, you grasp of the topic is abysmal.

    Your grasp of grammar is abysmal. You don’t seem to know who to blame for the situation you are pissing and moaning about.

  72. Shaman911 says:
    @Carlton Meyer

    It pays well!
    Ask the Jews who created that BS story!

  73. R2b says:
    @Showmethereal

    You are pointing to the crucial question.
    Do we want to work?
    The answer is no.
    That is how all these disgusting factories landed East.
    Do we want to work?
    Yes!
    But not in factories.
    So how do we solve this?
    Manufacturing.
    Slow down.
    Stop the speed.
    Start making equivalence between work and symbol of work, that is money.
    And ban usury, which bites.

  74. Mefobills says:
    @The Spirit of Enoch Powell

    Wall street wanted to make arbitrage on Chinese labor.

    Wall street then worked out mechanisms to export American industry. New words like Green-Mail entered the vocabulary. China being given quasi MFN status was part of the game, as well as Gramm-Leach-Blily act.

    China helped the gambit along and did sneaky things as well. Copy-cat factories and forcing technology transfer to then enable Wall Street access to China’s market.

    China isn’t pure as the driven snow. Things are seldom black and white.

    Goods exported from former American Industry (now located in China) were exported back to the U.S. at the “China Price” which was held just below the American price.

    The objective was to put those American Industries that hadn’t relocated to China out of business.

    There was also various types of skiff and skim. This is under the table payments to dock workers and retail, like Wall Mart.

    Chinese made goods then get choice location on the shelf at eye level, and dock workers are made happy to where they unload the goods without complaint.

  75. Mefobills says:
    @frontier

    Nice catch. What Hudson is trying to slip between the lines, is the assumption that Wall Street and government are somehow different, they are not, they are one and the same and have been for many years. Who is on top doesn’t really mater,

    Cause and effect don’t matter? The order of operations don’t matter?

    China’s government is OVER capital. China’s government is in the drivers seat. In the U.S. and the West it is hidden actors, usually with said actors trying to make gains with their capital.

    In America capital gains have been untaxed, where said gains are taxed at less than labor.

    Financialization, (finance capital) wants to untax itself, and act as a parasite on existing assets.

    To paraphrase Hudson , Finance Capitalism privateering (private capital) tends to make loans against already in-place and fixed assets, essentially flogging the past, rather than improving the future.

    The U.S. used to be industrial capitalist, where state credit channeled toward industry, improving the future by building out new industry and infrastructure.

    • Replies: @troof
    , @frontier
  76. anon[901] • Disclaimer says:

    I’ve seen a lot of vlogs on Central Asia. The economy is heavily based on natural resources and people selling handcrafted goods such as rugs, porcelain, paintings, crafts etc. All these mom-and-pop industries could be wiped out by cheap Chinese made junk when the BRI is completed.

    Or maybe I’m too pessimistic and the hordes of Chinese tourists will enrich the local merchants by buying up all their craft.

    But I am a skeptic. I don’t buy that the CCP is trying to establish a “world community” with BRI. They are mainly doing this to obtain raw materials on the cheap from these countries and to sell finished goods from China back to them. Many of the railroads are also built by Chinese workers. What do the local economies get out of all this except being invaded by loud, noisy, bad behaving Chinese tourists?

    Also, Michael Hudson left out the tech sector in the US completely. The US is already essentially running the world through tech. Facebook, Google, Twitter, Microsoft, Apple, Amazon, Netflix are all slowly but surely conquering every corner of the globe. Thanks to the internet English is now the de facto lingua franca of the world. China’s Chinese based websites and software can’t compete with that.

  77. troof says:
    @HeebHunter

    You should try suicide now that Trump is gone, there’s nothing left for you anymore.

  78. @Robert Magill

    I was under the impression that USA food, beverage, and feed exports were quite high. Surely something in that list sells for a dollar or less 9 thousand miles away, don’t you think?

    I fail to see any constructive point to your post. Why don’t you tell me how your post applies, for instance, to Germany?

    Are you saying that you want the USA to produce and sell cheap crap far away?

  79. troof says:
    @Ivan

    There is no “moral agency” involved with the function of a mechanical system. This machine is broken and produces opposite results to the objective purpose.

    • Replies: @ivan
  80. troof says:
    @Mefobills

    Is that really true? So far as housing, banks give mortgage loans for construction and rehab. I assume anything can be financed if it is approved by the underwriter. And there is a lot of capital out there, looking for home.

    • Replies: @Mefobills
  81. Mefobills says:
    @frontier

    I’m highly suspicious of people like Hudson who avoid the words “balanced trade” because balancing the current account is the key to free trade, unbalanced trade is very costly and isn’t at all free. There was even a balanced trade bill in Congress circa 2006 or so, went nowhere.

    Hudson is a balance of trade and flows specialist. It was his first job.

    His book super imperialism is an outgrowth of his insights watching trade flows while working on wall street.

    https://michael-hudson.com/wp-content/uploads/2010/03/superimperialism.pdf

    The first edition was in 1972.

    Nixon went off of the trading gold standard in 1971.

    The trading gold standard forces external trade to balance, as gold flows signal exchange rate differences.

    https://michael-hudson.com/2020/04/the-hard-fist-of-american-imperialism/

    Now Herman Kahn and I on another occasion went to the Treasury Department, and we talked about what the world would look like on a gold standard. I said, “Gold is a peaceful metal. If you have to pay in gold, no country with a gold standard can afford to go to war anymore. Because a war would entail a foreign exchange payment, and you’d have to pay this foreign exchange in gold, not IOUs, and you would end up going broke pretty quickly.”

    Needless to say, someone from the Defense Department said, “That’s why we’re not going to do it.”

    Lol-bertarians are good for the LoL’s.

    • Thanks: nokangaroos, Showmethereal
    • Replies: @Anon-88
  82. Mefobills says:
    @troof

    Banks do give mortgage loans for construction and rehab.

    Over 70 percent of the money supply is bank credit which points at housing. This then pushes housing prices in a bubble.

    One reason for the housing bubble in the 90’s was recycled dollars from China. These dollars flowed into TBills, causing TBill price to go high. TBill price high means interest rates low.

    So, China recycling dollars in unbalanced trade (not buying U.S. goods) helped cause the housing bubble.

    You can argue if that was intentional China policy or not, and I think it was. It was also wall street getting in on it, in what I call the Wall Street/China gambit. China isn’t pure as the driven snow, they did play the game to their advantage, including intellectual property theft.

    The reason private banks point their loans at housing is due to FDIC insurance, and the ability to foreclose on a fixed asset.

    Builders are encouraged to slap together a crap home because builder loans have interest on the back end. See you at home depot while you have rebuild your home due to substandard parts and construction.

    At the moment a loan is hypothecated, the new debt instrument is attached to the double entry ledger. This debt instrument can be paid by foreclosing on the home, which will be a fixed asset in a few months.

    This ability to foreclose on fixed assets is low risk for the privateering banking industry. Heads I win and tails you lose.

    Channeling new credit into a nascent industry used to be done by state credit (from Treasury or a State Bank).

    Finance capitalism tends to finance in-place assets, or push prices of already existing assets, or even paper instruments pretending to be assets; witness the run-up in wall street for stocks, when businesses have large price to earnings ratios.

    So, you are right, new credit pointing at housing is a feature of finance capitalism. It is a negative feature though as it pushes prices and makes access to life expensive.

    In the article Hudson talks about how post communist Russia (which was debt free) could have given extant housing to all of Russia’s citizens. This then would have made Russian labor the lowest cost in the world, bolstering industrial capitalism.

    Unfortunately, Russia did not go down that road, as they were punked by the (((Harvard Boys))).

    • Agree: frontier
    • Replies: @troof
  83. troof says:
    @Anonymous

    In this case getting banned from it was a badge of honor for Twitter,

    Twitter was created for the illiterate, simple-minded modern celebrity with the attention span of a squirrel to broadcast to his fellow brethren of brain-dead squirrels

    Indeed

  84. Sean says:

    Long and excellent article which I am reading carefully and only part way though. Something that in and of itself merits comment:

    It creates money to fund actual means of production to build factories, to build research and development, to build transportation facilities, to build infrastructure. Banks in America don’t lend for that kind of thing.

    “So, you have a diametric opposite philosophy of how to develop between the United States and China.”

    They are not necessarily two closed systems though. It is at least possible that American advances in scientific research can flow to the Chinese, whose commercial focus enables them to be first with a commercial iteration even in things that they are, in scientific terms, far from world leaders in. It may always be that for innovation, a society requires ‘autonomy, diversity, failure tolerance and the recombination of knowledge’. China has efficiency–competition is cruel in China–one might question if creativity is going to be fostered in such a system. Does that matter? Maybe not, China is not going to be cut off from America under Biden, even Trump could not do it.

    Innovation delivers the most shareholder value when sent to China where joint ventures like Musk’s with Chinese make and market products. I take the view that the long term Chinese strategy is one of using their native work discipline and economies of scale (gigantic Gigafactory complexes) for utilising American advances in manufacturing the actual products, Letting Western firms in on Chinese growth and sell to Chinese is a feature not a bug of technology transfer, China wants and needs America to continue to believe it is winning, not take its ball home.

    • Replies: @Anonymous
  85. troof says:
    @Mefobills

    It’d be so much easier to just burn all the records… court records, land record, financial records, personal records, identification records. start all over

  86. Katrinka says:

    https://21stcenturywire.com/2016/12/31/us-middle-class-still-suffering-from-rockefeller-kissinger-industrial-transfer-scheme-to-china/

    Rockefeller is a member of the Rothschild family through the female line. Kissinger is a Jew. And, the rest is history.

    • Replies: @troof
  87. ivan says:
    @troof

    I suspect it was designed that way, which makes it even more devious.

  88. frontier says:
    @Mefobills

    Cause and effect don’t matter?
    Not for the complete agreement between Wall Street and the US government., it doesn’t matter at all for the point I was trying to make – namely that placing the government in the driver seat changes absolutely nothing because at the moment the government and WS are one and the same. Can they be pried apart? That’s a lot harder than a heart surgery and it’s outright impossible under the present two-party system. You apparently misunderstood my words, as evident by the rest of your comment.

    I can see that you have great trust in the government and Hudson in particular, and you hope they would oppose Wall Street. However, all evidence points to the contrary, I’ve explained enough on this thread about it, although it might be hard to grasp at first. As I said, details matter and Hudson doesn’t even get close there. Swapping the government for WS changes priestly nothing, it’s not even rearranging the chairs on the Titanic.

    In America capital gains have been untaxed, where said gains are taxed at less than labor.
    Of course, no disagreement here. The tax structure has a lot to do with the sagging economy but it’s not the primary driver.

    gold standard
    Aren’t you an MMT guy? How come you got interested in lolbertarian gold? I’m probably missing something.

    • Replies: @Mefobills
    , @Mefobills
  89. Anon[240] • Disclaimer says:

    In China, a widely prevalent custom is “the price of the bride.” The guy has to pay the gal’s parents. No tickee, no laundry. In the last decade this has increased from around $10,000 to around $30,000. In addition, the guy must have saved up enough money to have bought an apartment. Having met these requirements, he can now satisfy what the psychologists call “the biological imperative.” Thus, while the U.S. dude is majoring in grievance studies or video games, relying on having a cool tat and stubble, his incentivized Chinese counterpart is working his tail off, pragmatically.

  90. Mefobills says:
    @frontier

    gold standard
    Aren’t you an MMT guy? How come you got interested in lolbertarian gold? I’m probably missing something.

    I’m a sovereign money guy. MMT is not sovereign money. They make pretend that in MMT, the government is a sovereign issuer of credit. Government is a sovereign borrower from the private banking sector, and government does it by going into public debts. A government should never borrow its own credit.

    https://sovereignmoney.site/

    It is also called “chartalism.”

    The gold standard Hudson was talking about in “Super Imperialism” was the “trading gold standard.”

    Trading gold standard means that all external trade, which is trade between nations, has to be balanced. Any imbalance in trade flow is made up by gold flow. For example, if the U.S. had a trade deficit with China, the difference would be made up by the U.S. losing its gold. The loss of gold would then signal to change the dollar exchange rate relative to the Yuan. Then trade would come back into balance as the dollar drops in exchange rate, making American made goods cheaper for China to buy.

    Under the current TBill standard, China returns dollars by buying TBills instead of goods. This action makes the dollar appear stronger, not weaker. This Tbill strategy China used screwed over the U.S., and it could not have happened if there was a trading gold standard. To my eye, China bought TBills so they could keep the dollar price high, so the U.S. citizens would continue to buy China junk, to then continue to lose American industry.

    A gold standard inside of a country is a different thing than a trading gold standard.

    • Thanks: frontier
    • Replies: @frontier
    , @anon
  91. What is this shit? Don’t you know that capitalism is good. Period. All kinds. Even if you starve. Because if you do it’s your own fault.

    Or that’s what the creeps on here believe anyhoo.

  92. anon[901] • Disclaimer says:
    @Realist

    How were US industries forced to move to China? Avarice was the reason industry moved to China.

    It was a combination of labor unrest and Wall Street pressure. The former stirred up by Jewish union leaders, the latter stirred up by Jewish corporate raiders in the ’80s because they were bitter about not being let into the C-suite country club in corporate America — threat of a Wall Street takeover was their way of lording over the CEOs, forcing them to “maximize profit” as Milton Friedman advocated, which led to the large scale offshoring in our race to the bottom.

    Milton Friedman and his Chicago gang of thugs were instrumental in the shift of America’s wealth from Main Street to Wall Street, hollowing out our economy by replacing industrialization with financialization. Instead of reviling this snake oil salesman for his evilness, we lionize him in our economics classes, B-schools and financial publications.

    Read the book Tailspin – The People and Forces Behind America’s Fifty Year Fall by Yale law prof Steven Brill.

  93. @frontier

    You idiot. That kind of shit is exactly the kind of shit Hudson talks about, sans the dumbass race-baiting.

  94. Mefobills says:
    @frontier

    I can see that you have great trust in the government and Hudson in particular, and you hope they would oppose Wall Street. However, all evidence points to the contrary

    I have no hope for a government captured by wall street and money – essentially a monetarist ideology, which in turn is finance capitalism.

    The money power has to be sovereign along with an armed citizenry; Citizens point their guns at the monetary authority.

    You cannot aim your guns in finance capitalism, because the debt instruments are distributed in “free markets.”

    So, I have faith in an armed citizenry, who has the ability to aim their guns at a well defined target. This well defined target is the well spring from which a sovereign people derive their money/credit.

    There is always hierarchy, even down to the cellular level. How you arrange your hierarchy is what matters. In the U.S., the money power was never properly codified, which is why the constitution failed.

    • Replies: @frontier
  95. @Priss Factor

    What would Sub-Saharan Africa be like without whitey’s influence? Basically the same as it was before whitey’s influence.

    Sure, they were pillaged by the Colonial powers, but that was with GOVERNMENT approval.

  96. frontier says:
    @Mefobills

    Dollar sterilization in bonds is common for surplus disposal and it’s a not-so-subtle bribery scheme, where one government bribes the other by financing its bloated budget. Of course it comes to tears in the long run… and the long run is now. For some rather bizarre reason, the US government manages to waste its budget in the most destructive ways imaginable… and, among others, that’s a political problem rather than economic.

  97. frontier says:
    @Mefobills

    In the U.S., the money power was never properly codified, which is why the constitution failed.

    Right, Jefferson was trying but it was too early back then. After that the Constitution wasn’t properly maintained. Still, improvisation shouldn’t be thrown out of the window just yet.

  98. dvorak says:

    the mixed economy that made America rich — where the government would invest in education and infrastructure and transportation and provide these at low costs so that the employers didn’t have to pay labor to afford high costs — all of this has been transformed over the last hundred years

    Even if Georgists triumphed and drove the landlords into the sea, why should more Americans work in manufacturing? Why should manufacturing workers be paid more than they are currently (beyond sharing in the general rise in standard of living)? What’s the point?

    American domestic manufacturing has produced more goods year-over-year, roughly forever. Manufacturing employment ratchets heavily downward in each recession. Perhaps it will reach a high-single-digit steady state (7% of the population).

    [MORE]

    It’s the same as this: American farming has produced more food and feed year-over-year, roughly forever. Farming employment has reached a low-single-digit steady state (3% of the population).

    If global trade is severely restricted by war hawks (on their way in) or trade hawks (on their way out), domestic manufacturing output could boom, with a temporary spike in employment; but nothing can stop the productivity-driven decline in manufacturing employment.

    When manufacturing employment reaches a steady state, it will cease to be a national issue, just as farming employment has long ceased to be a national issue.

    Hudson’s Georgism is intended to distract from his socialist, pro-immigration views. Ignore Hudson, and instead keep out cheap foreign labor. If you don’t keep out cheap foreign labor, then labor has to run as fast as it can just to stay at its existing wage.

  99. @zimmitz

    I thought the turning point was the energy/financial crisis stemming from the US bailing out Israel (existentially) in the October War of 1973 and the retaliatory Arab embargo. But I guess, if you are referring to the end of Bretton Woods, you may be correct.

  100. Anonymous[105] • Disclaimer says:
    @Sean

    I take the view that the long term Chinese strategy is one of using their native work discipline and economies of scale (gigantic Gigafactory complexes) for utilising American advances in manufacturing the actual products, Letting Western firms in on Chinese growth and sell to Chinese is a feature not a bug of technology transfer, China wants and needs America to continue to believe it is winning, not take its ball home.

    China seems to have been planning ahead for the likely eventuality that the US would eventually try to take its ball home by using its trade surpluses with the US to invest in Eurasian economic integration. Moreover, given demographic trends, US innovation would be unlikely to persist at its historical levels.

    John Kenneth Galbraith’s son recently wrote:

    https://foreignpolicy.com/2021/01/15/forgotten-prophet-john-kenneth-galbraith-united-states-pandemic-economy/

    As Biden prepares to take office, what lessons can his team draw? The first is that the success of the Galbraithian states in coming to dominate worldwide industrial competencies is a fact. It is a fact that the United States has no choice but to accept and live with. This also means that, sooner or later, the whole Eurasian landmass will pull together into a vast economic unit—not a union but a trade and development region, based largely on Chinese capacity, Russian energy and science, and German and Japanese engineering. The time to thwart this development has passed, the capacity to do so does not exist, and the use of military power to make the attempt, short of a world-ending nuclear war, is a formula for rapid defeat and destruction of American power.

    This sort of Eurasian economic integration was always the nightmare of the sea based British and then American empires, and their primary geopolitical objective has been to prevent it, by war if necessary. So it appears war is in the offing in the near future if the US decides to shoot for one last gamble to try to prevent Eurasian economic dominance.

    • Replies: @Sean
    , @Anonymous
  101. anon[389] • Disclaimer says:
    @Mefobills

    This Tbill strategy China used screwed over the U.S., and it could not have happened if there was a trading gold standard. To my eye, China bought TBills so they could keep the dollar price high,

    China’s holdings of US debt have declined gradually since 2014. China has made great efforts to reduce its reliance on the US dollar as it is not in China’s best interest to hold so much US debt.

    When the 2008 financial meltdown hit, the first thing Paulson did was to ask China for help. One of the requests was to buy more US debt. China cooperated fully with the US and was the engine to help the world economy to recover. The idea that China was trying to screw over the US with US debt is ridiculous. Tell me how much money the US has printed recently? Do you see any inflation? The US dollar, being the world’s dominant reserve currency, enjoys unparallel privileges. You can just print money and buy goods and services, so to speak.

    ………………………………………….
    U.S. Treasury Secretary Henry Paulson on Tuesday praised China’s cooperation in taming global financial turmoil and urged the next U.S. president to continue an active economic dialogue with Beijing.

    https://www.nytimes.com/2008/10/22/business/worldbusiness/22iht-22paulson.17155092.html

    Five Countries That Own the Most U.S. Debt
    https://www.investopedia.com/articles/markets-economy/090616/5-countries-own-most-us-debt.asp

    1) Japan
    Japan is the largest holder of U.S. debt

    2)China
    3) the United Kingdom
    4)Brazil
    5)Ireland

    If you want to keep the dollar price low, you know what to do.

    • Replies: @Showmethereal
    , @Mefobills
  102. gT says:
    @frontier

    I used to like Prof Hudson’s writings, until he became too China friendly. The thinking on some sites suggests that Hudson’s forgive the people their debts scenario will happen, but not in the manner Hudson envisioned it. Because in order to forgive people their debts, the people must first hand over all their assets to the government, which will then benevolently rule over the people according to the acclaimed “from each according to his ability, to each according to his needs” communist theory.

    Take a look at this little gem from a 1938 writing by William Pelley, hidden empire pdf.

    “It was stated by Gregori T. Giko, Soviet Finance Minister, in a book recently published in the United States by him: “The five year plan is an important part in the offensive of the proletariat of the world against capitalism; it is a plan tending to undermine capitalistic stabilization; it is a great plan of world revolution.” The people of our country will never know the terrible price that is being paid by the Russian workers in order to make possible the successful culmination of this communist economic offensive. Laboring men in Russia are slaves, denied full rations and proper clothing in order that these commodities can be dumped on our shores in competition with American industry. Their strategy is based upon the knowledge that the greater the number of unemployed in America the more fertile the field for their propaganda. With other countries being added to the Soviet system from time to time, it means that conditions will get steadily worse until the foe is uncovered and brought out into the open.”

    So back in 1938 already it was known that to undermine the USA and the West, all that was needed was to provide cheaper goods to the US and the West. Then there would be no jobs in the West and the West would come crashing down. Communist China has certainly fulfilled the role of supplying cheaper goods to the West most adequately, and the US is crashing because of China’s communist economic offensive. Lets not forget that is was Brzezinski and President Carter who went to China in the 1970’s to obtain China’s assistance in this regard, just like it was the West which enabled the Communist Revolution to happen in Russia in the first place.

    Looks like the communist takeover of world plan with a One World Government ruled by (((you know who))) is coming together successfully.

  103. @Anonymous

    Someone (heh) in marketing – sure as hell not the engineers – decided to hastily (to beat Airbus) issue a minimally modified (so it wouldn´t have to be recertified which would have meant retraining the pilots = selling point) airframe they knew to be unstable with an untested software patch (not the usual approach to stability problems I assure you).
    Rest assured those really responsible will get a free pass.

    It´s a bit reminiscent of the M14 rifle … the FAL was far superior in every respect but the M14 “could be made on the same machinery as the Garand” (a known lie) and would therefore be cheaper (yeah, right).

    – All these are just symptoms of the hollowing out of the industrial base and not the fault of any malicious spying termite Chinese but the inevitable result of the reserve currency racket – it allows spending but necessitates a fucked-up balance of payments, puts selective pressure on the competition to be cheaper and better and enables affirmative action at home; the rest is Darwin.
    Once upon a time Little Britain forced the Germans to stamp their wares “Made in Germany” to mark them as inferior – this is where the US is now: Industrial product is becoming a laughingstock while the empire and the navy slowly bankrupt what is left … as soon as the World can no longer be forced to use $$$ it´s over, and there is no way out.

  104. But Hong Kong’s economy was largely financial, but it wasn’t know for looting and violence. The recent protests were political, not about smashing shop windows and running away with the loot.

    Hong Kong’s protests were partially funded and supported by Western Intelligence and NGO’s (CIA, MI6, NED, RFA etc..). There were many instances of public/private property damage and terrorist activity such as setting citizens on fire with gasoline. What these “youth” protesters did was not shown in Western mainstream media. The “fifth column” groups took advantage of inequalities that exist in Hong Kong due to “rent seeking”. Hong Kong is one of the most expensive places to live in the world with home prices averaging around $28,500 USD per square meter (1 square meter = 10.8 square feet). The typical income for Hong Kong citizens is around $35,000 USD.

  105. @frontier

    You don’t seem familiar with Hudson’s work, and have advanced numerous categorical errors. Ideological kneejerking.

  106. @anon

    But I am a skeptic. I don’t buy that the CCP is trying to establish a “world community” with BRI. They are mainly doing this to obtain raw materials on the cheap from these countries and to sell finished goods from China back to them. Many of the railroads are also built by Chinese workers. What do the local economies get out of all this except being invaded by loud, noisy, bad behaving Chinese tourists?

    Developing countries are tired of being looted by the USA and European powers under the guise of “freedom and democracy” and getting nothing in return. China is offering loans and “world class” infrastructure development. Every developing country requires infrastructure to grow. If loans cannot be paid back, natural resources will be accepted as payment otherwise they will buy “natural resources”. This is a win-win situation compared with the past when the USA and European powers invaded, looted and destroyed a country forcing them to take un-payable IMF and World Bank loans. This always lead to a countries “natural resource” rights being sold to a Western corporation. There are too many victims to list but here are a handful; Iraq, Iran, Afghanistan, Libya, Nicaragua, Venezuela, Honduras, Congo, Angola etc…

    • Agree: Showmethereal
  107. Sam J. says:
    @Scotist

    “…The government which finances all those things has to get its funds from somewhere, doesn’t it?…”

    This is not hard to understand. In the US the FED charges interest for every single dollar in the economy. It’s ALL debt. All money, every last penny is debt based. So if the government needs money it must give a bond to the FED which doesn’t do one damn thing for us. Now the Chinese have figured it out and THEY own the central bank not the Jews.

    So let’s look at the difference. In the US the FED since the banking crisis has lent at at least $40 trillion at essentially zero interest to the banks which they used, I would bet, to buy everything. This $40 trillion devalues all our dollars worth. The banks get a bigger share of the total wealth based on our good will.

    Now say the Chinese do the same but buy houses with their $40 trillion and owe no one but their own central bank. Themselves.

    The Japanese central bank is much the same. They have had 200% debt to GNP which the west said would collapse them but since they own their FED they just quietly zero out the debt because it’s owned by their own central bank.

    In all three cases yes the printing of money lowers the value of the whole but in the US only the bankers get the benefit. The citizens just get the lowered value. No benefit at all.

    Let’s put some numbers on this for US citizens if the $40 trillion of zero interest loans went to them instead of the banks. It comes to around $533,333 for a family of four. Now think we’ve created no more money than has been created by the banks but do you think the US citizen would be in better shape if they had this sort of zero interest cash to spend? Hell yeah. We would be all much wealthier. Here’s what they have done.

    http://charleshughsmith.blogspot.com/2017/08/the-5-steps-to-world-domination.html

    Michael Hudson’s articles are always great.

    • Replies: @frontier
  108. Anon-88 says:
    @Mefobills

    Because a war would entail a foreign exchange payment

    Can somebody please explain this? Why does war necessitate an exchange payment? From whom to whom? Thanks.

  109. Sam J. says:
    @Realist

    “…How were US industries forced to move to China? Avarice was the reason industry moved to China…”

    No Jews were the reason all our manufacturing moved to China. Jews used junk bonds to gobble up industries and then used wage arbitrage to pay back the high interest rates, if they could. Some just went broke taking all the employees pension money with it. Of course the Jews got paid first.

    • Replies: @Realist
  110. @Showmethereal

    That was then; this is now. If NYC still relied on manufacturing, it would be a bigger version of Detroit. It seems set to turn into that anyway. The technologies being rapidly adopted as a consequence of the COVID crisis have made it clear that geographic location is much less important than it once was, while runaway negrophilia is making NYC a dangerous, chaotic, and wholly uncongenial place, one where financiers don’t want to be.

    • Replies: @showmethereal
  111. Sam J. says:
    @Showmethereal

    “…here is the soltuion…” Blah, blah, blah

    Actually you only provide bad solutions. Here’s some good ones. Stop letting Blacks violate the law and build “gulags” in the desert waste of the US and have them terrace the whole damn thing to create permaculture revitalization of the land called the “Great American Western Desert Permaculture Project”. It’s astounding what a little terracing can do combined with purposely chosen trees and plants to control desertification. Look at this before and after picture in China.

    You could also build canals like the plans made long ago for watering the west. If when Black people stole and attacked people they knew they were going to spend ten years breaking rocks I suspect they would stop. If they didn’t then we could just build more canals.

    Another solution is to pile them all up in public high rise housing instead of spreading out the dysfunction like now. These would soon be hellholes because…well you know why. Then offer them the equivalent of 40 acres and a mule to move back to Africa and build nice apartments for them in Liberia. Tell them they get one years worth of reparations for themselves and each child as soon as they sign up. Say $50,000 and then another $50,000 a year over five years after they move to Africa. How many do you think would sign up? Say they have two kids they could get $150,000 up front cash tax free. Same deal for all the prisoners. I bet you could get at least 40% and those 40% would be the ones most likely to cause trouble. The rest of the Blacks could stay and follow the same laws as the rest of us.

    • Replies: @Showmethereal
  112. @Zarathustra

    No ‘rebirth’?

    ‘We’ have ten years?

    [MORE]

    “ . . . our best estimate is that the net energy
    33:33 per barrel available for the global
    33:36 economy was about eight percent
    33:38 and that in over the next few years it
    33:42 will go down to zero percent
    33:44 uh best estimate at the moment is that
    33:46 actually the
    33:47 per average barrel of sweet crude
    33:51 uh we had the zero percent around 2022
    33:56 but there are ways and means of
    33:58 extending that so to be on the safe side
    34:00 here on our diagram
    34:02 we say that zero percent is definitely
    34:05 around 2030 . . .
    we
    34:43 need net energy from oil and [if] it goes
    34:46 down to zero
    34:48 uh well we have collapsed not just
    34:50 collapse of the oil industry
    34:52 we have collapsed globally of the global
    34:54 industrial civilization this is what we
    34:56 are looking at at the moment . . . “

  113. “The stock market is way up, . . . ”

    ‘Some’ shares are ‘up’?
    “If you separate out the top  
    06:22 five or six stocks from the US equity market and  just look at how the other 490- something stocks  
    06:28 behave, they look, in some ways, more like the  euro stock index, right? So they’ve been flat-ish  
    06:34 for the past decade or so, whereas the top five,  six, seven, stocks have really lifted the whole  
    06:39 index. So if you separate those super companies  out, there’s less of a difference in some ways.”

    (11) Lyn Alden’s Macro Masterclass (w/ Raoul Pal) – YouTube

  114. Realist says:
    @Sam J.

    If what you say is true…that is avarice. And Whites allowed them to do it.

  115. @anon

    Kazhaks go to a duty free zone on the Chinese border and sell plenty of stuff to the Chinese (of course there are many ethnic Kazahks in China who are included in those shoppers – but a lot are Han). You can check them out on YouTube. Meanwhile they buy things from Chuna that they dont efficiently produce themselves. The beauty of trade. But yes – commodities are their main exports overall.

    Some in the oil industry complain too many Chinese get the jobs – but hey – the investor has to protect their investment. People have to be realistic.

    As to your last paragraph – that is only true of Microsoft. The whole reason Trump attacked Tik Tok is because the algorithm is more sophisticated than US social media. The threat of the ban was to get them to joint venture. But he lost because the company said point blank they will give up the US rather than give access to the algorithm (but they had no problem keeping the data in the US). Amazon? JD.com and Alibaba surpassed them in ecommerce and logistics. I cant speak to the cloud but I know Alibaba’s AI chip they are using is more sophisticated than anything Amazon is doing. Huawei passed Apple in sales and is now going forward with its new OS ecosystem in spite of the chip ban. That will affect Google as well because it is open sourced and could pull people away from the Android ecosystem… Internet search isnt where the money and innovation is anymore. Google is very worried. Chinese companies combined dominate the world smart phone market and China has the most app developers in the world.
    If they all switch from Android to Harmony that would be a huge blow… All because the US gov tried to kill Huawei. Additionally China has its own navigation system now and Chinese companies like Baidu and Huawei are building mapping systems for it. Another challenge to Google.
    I bring all these up because they all conquered the Chinese market and are going out into the world. Thats why Trump and his team attacked them so much. The Global South WANTS alternatives to being shackled by US tech. English no longer guarantees a stranglehold. There are AI apps used by Chinese companies that translate into many languages – which is better for everybody. People use English because they have to… They prefer their native tongues.

    Again Microsoft is the only US company still in a dominant position. There are actually 2 Linux OS in China that are now increasing traction but it would take YEARS before they can challenge Microsoft on the global stage.. I would say more than 5 years.

    • Agree: dogbumbreath, antibeast
    • Replies: @Chinaman
    , @antibeast
  116. @anon

    Exactly in the 2008 crisis the US ASKED China to buy more US T Bils to keep the US afloat. China effectively said “not this time”. Now that US hostility is open again like in the 60’s from both major US parties they said time for “dual circulation”. ASEAN and the EU both passed the US in terms of trade volume with China and the BRI isnt even in full gear yet. Reducing reliance on trade with the US means it can reduce holdings of US T bills. I really dont get what US politicians are/were trying to accomplish. China is not “communist” anymore. They were a trading nation for centuries and literally invented currency… They know how to do capitalism. They have built up their military so there is no re-run of the British invasion of the Opium Wars. The real cause of that was trade imbalance. Europe was spending all their silver in China while China didnt really want any goods in return… Just silver. While they do want some US goods now – like Tesla’s and I Phones – it is better for those companies to simply make them in China anyway. That makes Uncle Sam and Five Eyes more angry. China learns from history and thats why they want to build up the Global South to trade with – while being able to defend its borders.

  117. Mefobills says:
    @anon

    So many strawmen to knock down and so little time.

    China’s holdings of US debt have declined gradually since 2014. China has made great efforts to reduce its reliance on the US dollar as it is not in China’s best interest to hold so much US debt.

    No kidding Sherlock. I did mention that the strategy for propping up T-bill price started in the 90’s did I not? Since 2008 U.S. has used QE to prop up TBill price.

    Also, China has already moved up the technology curve (thanks to their strategy starting in the 90’s), so they can turn on internal consumption at any time rather than being a mercantilist exporter. Belt and Road is part of that transition, and also to gain raw materials for Chinese industry.

    When the 2008 financial meltdown hit, the first thing Paulson did was to ask China for help. One of the requests was to buy more US debt. China cooperated fully with the US and was the engine to help the world economy to recover. The idea that China was trying to screw over the US with US debt is ridiculous.

    The U.S. asked for Chinese help, because dumb finance capitalists like Paulson did nothing to stop Chinese accumulation of TBills. Again, China bought TBills rather than goods, creating trade imbalance.

    You cannot in good faith say that China’s economy was more capable and diversified than that of the U.S. in 1995.

    Five countries that own U.S. debt? So what? The reserve currency status of the U.S. is actually damaging to American labor. Triffin’s dilemma and all.

    If you want to keep the dollar price low, you know what to do.

    Yes I do, probably more so than most people alive, including you Mr. Strawman.

    • Replies: @antibeast
  118. @Rdm

    Gregory Lautchansky was indeed Jewish. You can google him, as well as the leading Russian kleptocrats.
    Many Jewish Russians had moved to the Baltics to avoid Soviet anti-Semitism. After independence, Latvia banned Russian-speakers — especially Jewish — from political life. So they went into business instead. This was explained to me quite explicitly by Jewish students in Riga.

    • Replies: @Rdm
  119. Mefobills says:
    @Tom Welsh

    It often occurs to me how very intelligent he is, and what a brilliant communicator.

    No question about it. Hudson has enormous recall ability, and can talk at length about his subject.

    I would place his intelligence in the top 1% of the population. That he produces new books and new thought at such a pace, and at his age, is something to behold.

    Usually it takes people of the future to look backwards in time, to recognize genius.

  120. Sean says:
    @Anonymous

    That fellow in Barbados or somewhere is Roland Franklin brother of Rosalind Franklin the DNA structure researcher who should have got a Nobel. Galbraith appears to explains the technostructure. Curtis says it was a result of the Depression and political turmoil for protection of workers, not an natural economic outgrowth. Reagan removed the protection the corporations had enjoyed and they were asset stripped for the benefit of the shareholders.

    Why do American CEOs get paid so much? James K Galbraith
    The important issue raised by this report is one that it doesn’t discuss. Was it a good idea to align CEO compensation in the country’s largest corporations with the casino of the stock market? This has been the mantra of finance economists since the 1970s – maximize shareholder value! Let the market decide! Let the workers and the consumers and the public fend for themselves!

    Please give me a post Eisenhower era example of this Russian science that will replace American innovation for the Chinese. Hudson does not seem to believe Russia has a system capable of any such feats.

    Professor of Epidemiology W. Ian Lipkin had been warning the Chinese about another pandemic similar to SARS for a decade before his prediction came true. Lipkin was invited to China many times because they understood he was a world authority, but they just didn’t listen when he warned about the wildlife wet markets having already originated a novel pandemic with SARS in 2003 meant they ought to be shut down if they wanted to avoid creating a new disease and pandemic. The Chinese ignored him. On February the 27th, Trump said he had spoke to Xi and been told that the spread of infections in China had been declining for two days. Unless one believes that Trump dared fabricate the content of the aforementioned conversation and the Chinese leader let him, Xi must have deliberately misled Trump about what was heading his way. For that, they deserve to be treated as if we know they secretly detonated a thermonuclear weapon in an American city.

    American advances in scientific research can flow to the Chinese, whose commercial focus enables them to be first with a commercial iteration even in things that they are, in scientific terms, far from world leaders in. China has efficiency–competition is cruel in China–one might question if creativity is going to be fostered in such a system. Does that matter? Maybe not, China is not going to be cut off from American energy, capital and technology under Biden, even Trump could not manage it.

    Trump had China worried, but it is just too big for half measures, and even their carelessness–as with the creation of the second novel coronavirus in their live wildlife wet markets within 18 years–worked in their favour. Stopping China’s rise relative to the US is going to get harder and riskier until requiring something very dangerous by the end of the Biden/ Harris regime. But by 2030, people will begin to realise that Trump was right and the last hope to settle things peacefully. War is a couple of decades away, and it will be conventional naval, fought mainly by submarines against sea lanes. On climate change, and above all on Covid-19 the Chinese have exhibited culpable and reckless conduct. They simply cannot be trusted are going to have to be dealt with before their lack of critical abstract imagination and totalitarian impunity destroys the world with something like Artificial General Intelligence stolen from the USA and stripped of vital safety features.

    • Replies: @Anonymous
    , @Anonymous
  121. frontier says:
    @Sam J.

    I read you wax pathetic about the good government and the bad banks and I shake my head. You make so many mistakes that I can’t go one by one. However, the core reason for you confusion is simple, it’s your belief that the Chinese, Japanese and US central banks are somehow different. They are not, they’re the same. The split between the Fed and the Treasury has always been small and today it’s just meaningless, it’s not there at all. Those “$40 trillion to the banks” are promptly used to buy… what?… treasuries of course. Interest?… Print some more! Understand? It’s banana republic money printing, ditto China and Japan. No difference. The government always gets as much money as they want, then they do bailouts for their cronies, banks or not. It’s a small club, understand?

    It’s a political problem, not a financial one. The US government can and is getting all the money they want, just as the other banana heads. However, here nobody cares about the people in America, they are busy running around the same vicious circle they have started themselves in their desire to conquer the world. It can literately lead to the complete evaporation of all bananas… It’s not “good life” that is at stake, it’s life itself.

    Hudson has messed up your head, continue worshiping him if you want to go from stupid to insane.

    • Replies: @Mefobills
  122. Rdm says:
    @Michael Hudson

    Thanks Mike!

    That was interesting. Voila, he’s Jewish. Not that I’m particularly pinning on every crook as Jewish. But every person in history that somehow turns into a kind of parasite, in my opinion, always seems to be Jews. Correct me if I’m wrong. There are brilliant Jews as well. But there’s also an interesting phenomenon between Jews and European Whites as well. 

    When I say “Brilliant”, Jews are very good at regaling or recounting the story. This comes with a double edged sword. In one hand, you can excel at telling stories. OTOH, you could have some believable stories that do not make sense at all: whatever historical story that you could think of. Maybe Bible? The most iconic comics story “Superman” was invented by Jews. But it’s always cast by some buffy European White guys. So you’d have an argument every now and then, who should be the cast for Superman, Spiderman etc. It just a complex relationship between Jews and Whites. 

    Regarding the parasitic nature of Jews, this is what I think. No person with an innate feeling of belonging to one’s own land will ever betray their motherland. Granted, there are Chinese bosses who survive on their own brethren Chinese workers with low wages or some Japanese perverts who captured an innocent Japanese girl and confined them. But I have never seen in history where there would be some kind of a traitor who would hollow out their own mother’s land for one’s own good with the most deplorable nature as Jews. 

    We now have the most perverted interracial porn between Blacks and all White girls. Some are just like you’re watching a ritual between a prehistoric midget in complete dark skin with the most attractive White woman in fair skin you could ever imagined, who could have been a model easily. I’m intrigued. So I checked. Who founded this genre? I traced the origin and not surprised. Jews. 

    I found some similarity between Jews and Chinese, not the evil aspect. One is they are spread all over the world. But the difference is I have never seen some Chinese Americans pimping the US for their own good at the deplorable level or Chinese in Singapore bankrupting their neighboring countries. But Jews. Every story I heard in Europe or Russia, even they were born in those lands, it’s a different story. 

    Anyway, thanks again for your info. I’ll check his story. 
     

  123. Mefobills says:
    @frontier

    However, the core reason for you confusion is simple, it’s your belief that the Chinese, Japanese and US central banks are somehow different. They are not, they’re the same.

    Your LoLbertarianism is showing again.

    China has four large state banks. They also have a mid tier of private banks. Hudson talks about how the mid tier of private banks are a problem.

    China’s State Banks house debt instruments, which means said debt can be jubileed anytime China feels the desire. The State banks hold the debt instruments, they are theirs and they can do what they want. Do you think that Treasury can ring up the FED and say, “Hey, just erase those debts on your books please?” Most of the TBills are distributed around the world in various places, especially including Panama, where they are “off the books.”

    Also, when the Chinese state releases debts it simultaneously makes debt free money. The former Yuans that were debt based are now free to float in the Chinese economy, and often go on to become savings. How do you think China got quasi MFN status in the mid 90’s? They erased communist era debt off the books… presto changeo, now former communist assets look good.

    China also CHANNELS its credit toward production and industry. Does that happen with the FED?

    With regards to Japan, Japan’s postal bank is playing playing rope-a-dope with the BIS and other stupid western economists. I’m not going to say anymore and give away Japan’s secrets because I like them. Japan also used credit guidance windows in the past, and western economists still haven’t figured that one out either. Too much cognitive dissonance blinds western economists.

    PCR has good advice. Take your western economic degree, and chunk it in the trash. Then pick up Hudson’s books.

    Just because the FED rebates interest, doesn’t mean it is subordinate to Treasury or the political class. The FED is not a state bank, it is a quasi state operation, more private than government.

    Does anybody at the FED get a government pension? NO. Didn’t think so.

    • Agree: Biff
    • Replies: @frontier
  124. @Sam J.

    You claim I give bad solutions and then detail exactly one of them??? I wonder if you white supremacist s actual hear yourselves??? In any event if you pretend to be a “good Christian” then you should know that until you foster just compensation the punishment of God wont leave your house. Decide what you want to be… Put up enough money to repatriate and comoensate the descendants of slaves. Even back when 40 acres and a mule were offered that was never just compensation since those freed slaves didnt have access to the same markets. But you all are never interested in justice and fairness. So again – read your bible. If you dont plan for real justice then you should go back to Europe because the thorns will remain in your side if you stay in the US.

    You could by law shut off all immigration tomorrow (though of course Democrats wont do that since they need the non white vote to win) but that wont stop Mexicans who feel you are squatting on their ancestral lands that you stole.

    In any event – the obsession with race has absolutley nothing to do with the problems. That is a simpleton reasoning. Explain to me how if every black or race you dont like left the US tomorrow that would increase US industrial capacity. Explain concisely how that would reform the banking and economic system back to a “real” economy and not a finance economy. You cant so its “just blame the blacks”. In fact do you know how many rural towns would die without all the employment that the prison system provides..???? Where all those food service and security jobs go?

    As to Africa itself.. What are the Chinese doing? Putting in hard infrastructure and training Africans to run it. They then offer Africans more UNIVERSITY scholarships than anyone else so that can study in China and then return to Africa to build up local economies. The exact opposite of 40 acres and a mule. China isnt segregating African countries – it does business with them. And lets be frank – the Chinese dont expect Africans to live up to Chinese standards. That is part of why the relationship works…. They dont try to lecture and put down the Africans…. They attempt to meet them where they are.

    They also arent trying to enslave them to China’s financial system. As noted by the two speakers inthe webinar. The infrastructure is there to aid the economy – not to seek rent. And if they cant pay in cash they can pay in commodities. I know of a case closer to the US in Jamaica. The cou try desperately needed a highway to cut through the islamd to shorten travel times. A French company built a piece and then abandoned it. The Chinese wemt in and negotiated – no cash upfront – the only thing the government put up was land. In exchange the Chinese control the tolls for 40 years so the ppl paying for it are the users and not the taxpayers. If revenues dont meet projections then they would give more acres to the company to develop themselves. As a consequence Jamaica added NO DEBT and got a brand new highway that after completion employs locals to maintain it. Industry is very happy to pay the toll to save hours of travel.. Even tourism benefits. So guess what happened Jamaica suddenly became of the best performers in the Caribbean and paid down national debt to the IMF and World Bank because they didnt have to use tax revemue in order to get a brand new highway. But you dont get the difference… Just blame black people.

  125. Anonymous[721] • Disclaimer says:
    @Anonymous

    The end conclusions of that article are extremely disappointing. Whining about “racial injustice” and accepting permanent third worldism.

  126. Anonymous[721] • Disclaimer says:
    @Sean

    But by 2030, people will begin to realise that Trump was right and the last hope to settle things peacefully. War is a couple of decades away, and it will be conventional naval, fought mainly by submarines against sea lanes.

    There isn’t going to be any war with China. White Americans aren’t going to fight it for a negro-jew country that hates them.

  127. bayviking says:

    We would be so much better off if we would pay more attention to experts like Michael Hudson.

    The way that neoliberalism works, it divides the economy in parts, and it makes every part turn a profit, and if you do that, then you don’t have any infrastructure that’s lowering the cost for the other parts. You have every part fighting for itself. The great advantage of Marxism, is you consider the best interests of the system, not just the parts. You assign primary responsibility for natural monopolies to the Government, not the private sector.

    The purpose of the post office, roads, railways, airports, schools is to achieve mutual prosperity, to promote the general welfare as declared in our constitution, but NOT to make a profit. The return is to the whole society, the return isn’t from a railroad. These concepts are foreign to Goldman-Saks and their ilk. Its very hard for one system to understand the other system because of tunnel vision you get from a US degree in economics. But the US was originally developed with these concepts just as China is developing today.

    China gets it. The USA does not and Russia did not.

  128. Anonymous[164] • Disclaimer says:
    @Sean

    Please give me a post Eisenhower era example of this Russian science that will replace American innovation for the Chinese.

    Russia isn’t the only country in Eurasia. There’s plenty of science done by the 2 billion+ Europeans and Asians.

    Demographically, Russia and the other countries across Eurasia are more or less the same as they were in the Eisenhower era. The same can’t be said for the US, where the past is literally a different country.

    China has efficiency–competition is cruel in China

    As Galbraith points out, China’s economy is dominated by large state firms and an emphasis on stability over efficiency and competition. I’m not sure where you’re getting your picture of the Chinese economy. The US economy’s departure from Galbraith and corporatism towards financialization has lead to a focus on efficiency and competition.

    On climate change, and above all on Covid-19 the Chinese have exhibited culpable and reckless conduct. They simply cannot be trusted are going to have to be dealt with before their lack of critical abstract imagination and totalitarian impunity destroys the world with something like Artificial General Intelligence stolen from the USA and stripped of vital safety features.

    I don’t think the Chinese have been particularly reckless regarding climate change and covid. But if you’re trying to maintain your relative power and hegemony, those are natural avenues to attack a rising power and challenger.

    If you listen to what Elon Musk and other tech people working on this stuff in the US say, they don’t even pretend that the AI they work on and promote can be safely controlled. They say it’s going to replace humans and that biological humans are a mere stepping stone and embrace some sort of “transhumanism.” So I’m not sure where you get this idea that AI in the US will be “safe.”

    It is perfectly natural to wish that one’s own group controls a new technology rather than some alien Other. People tend to instinctively feel this way even if it means self-destruction, as long as the other group doesn’t “win.” But this doesn’t mean that AI will necessarily be “safe” in US hands.

    • Replies: @Sean
  129. Uncoy says: • Website
    @anon

    Thanks to the internet English is now the de facto lingua franca of the world.

    Fortunately English is not owned by either the USA or the UK. In fact, better English is spoken in many international universities than in the United States. The ability to communicate either orally or in written form among native English speakers is heading towards grade 6 level. There are apparently 12 % of Americans who can communicate in an advanced way at this point. Many countries will be able to match that percentage of their population who can handle English in an advanced way. Strangely Russia and Slovakia score low on the EF English Proficiency Index in comparison to the Netherlands, Scandinavia and Austria. Russians and Slovaks who do speak English do so no worse than Austrians or Scandinavians., just fewer do so.

    I.e. I don’t think other countries will be at a comparative disadvantage for long by communicating in English. Strangely, by becoming accepted lingua franca, native English is not the advantage it once was. That said, the Chinese should pick up their socks and improve their English for the sake of their international commercial ambitions.

  130. Uncoy says: • Website
    @anon

    The US is already essentially running the world through tech. Facebook, Google, Twitter, Microsoft, Apple, Amazon, Netflix are all slowly but surely conquering every corner of the globe.

    This is an issue as it gives the US far too much intelligence and kopmpromat on politicians and businessmen and women around the world. Governments are waking up to these dangers. It’s not hard to extricate oneself from these nets. My company runs with no Microsoft and no almost no Google. It would be nice to purge Apple and we could do so now but I’d miss the excellent third party developers.

    The situation with Huawei is fascinating. Gradually the US has pushed Huawei to remove the USA from the chain. My mother-in-law now enjoys a Google-free Huawei P40 phone. No problem at all, runs fine without signing in to any Huawei or Google services at all. Apple’s recent forced updates and forced contact tracing nonsense prompted that choice.

    Same with sanctions: Russia, China, Venezuela and Iran are all building ways around those sanctions as the USA have overused the rod. Europe is now becoming very nervous about unilateral sanctions as well.

    None of us are indispensable and the same applies to countries as well.

    Hubris before the fall. Doesn’t make the fall any less painful for those inside. For those outside, the fall will send some rubble scattering. As long as the rubble is not nuclear fallout, the rest of the world and the BRI will be fine.

    • Agree: Showmethereal
    • Replies: @Showmethereal
  131. frontier says:
    @Mefobills

    Yeah, I know what you’re saying, you don’t want to get real, you want to stay formal… that’s how we got here, right? Well, it’s a valid personal choice but that’s where the validity stops. Reality isn’t the same as formality, unfortunately, thanks mainly to the tragic state of our social sciences. That realization was worth it though, I can’t say I’m disappointed by this conversation. Thank you for you contribution, it was really interesting to get a glimpse from your point of view. BTW you’re quite knowledgeable and clever, as is Hudson, of course. I’ve noticed that smart people tend to get fixated on their clever ideas, sometimes at the expense of reality. I’m not saying that’s the case but it could be.

    • Replies: @Mefobills
  132. Mefobills says:
    @frontier

    at the expense of reality.

    Our false reality is funded into existence, mostly by usury. Clown world is funded.

    In Lolbertarian Lol Lol land, there is no such thing as usury, because free market is god.

    In Hudson’s latest book, “and forgive them their debts,” he notes that if you don’t release debts, then civilization will polarize into feudalism or oligarchy.

    That is where we are at today…polarization due to debt mechanics. He also noticed that the god-kings of the ancient near east, did periodically release debts in a jubilee, which is how they balanced their civilizations; some civilizations of which lasted for thousands of years.

    The West has no such jubilee mechanism, and the sooner the west pulls head-out-of-rectum, the better. Finance capitalism is especially a problem, as debt instruments are distributed in markets.

    • Replies: @frontier
  133. Sean says:
    @Anonymous

    The trouble with Hudson is he is an internationalist who looks at nation states as mere vehicles for venal elites to enrich themselves. Hudson sees no difference between Trump and Biden, who has repeatedly went on record saying China is not competition for America.

    China certainly has not been reckless with itself, everything has worked out nicely for them (and Biden) now their enemy Trump has been replaced, courtesy of Covid-19.

    China is depleting the world’s seafood stocks with a quarter of a million fishing boats, those are going to play a big part in the coming naval war with the US.

  134. @Uncoy

    Good points. Honestly I think the only thing keeping MS afloat in the OS sphere is that MS Office is so entrenched… Especially Excel. If they lose that dominance its over. Most Linux solutions are safer from a security standpoint. From a stability standpoint MS has at least “improved”.

    • Replies: @Chinaman
  135. frontier says:
    @Mefobills

    release debts, feudalism, god-kings, witches on brooms…jubilee

    Is that the best you can do? “Release debts” is not an economics term, you may call it a jubilee but everyone else is going to call it a default, and that’s quite different from a jubilee. You aren’t serious bro, also, you weren’t honest when you denied being an MMT guy, your jubilee is just a heavily obfuscated version of MMT, and a rather spooky one for the markets. Well, good luck with your “jubilee”, I don’t have much time for jokes.

    • Replies: @Mefobills
  136. @Old and Grumpy

    Dear sir,
    Totally agree. I look at the presidents and pm of the world. The French president, Treadou in Canada, Clinton’s, Merkel – are all lauded as intelligent well behaved people. They are all useless, unskilled windbags. Proud of their uselessness rather than being ashamed of it. All for free sex, sodomy,not working for a living who wish to live in a gated community lounging around a pool telling everyone how smart they are. They promote hate from the student unions, the gay community and the kkk (kill Catholics after your bashed and raped them)
    Then have a look at the presidents who are veciferouly abused, Trump, Putin and in Oz Tony Abbot.
    Tump builds magnificent hotels, Putin is a solder, Tony Abbot – ok low skill but is a champion amateur boxer, surf life saver and fire fighter.
    These men are so abused that the truth is so contorted that the sickest things are said about these men.
    These men know the importance of civil society, reliable and low polluting energy, interaction of the physical world for the benefit of mankind.
    The others do not under stand any thing of the physical world, science or exercise. Hence they talk rubbish and get trained as lawyers, bankers, actors, and use social media to be entrepreneurs and influencers – totally useless

  137. @Ray Caruso

    My point was the historical analysis to the comment I replied to. It was a false notion to think NYC got wealthy from finance. It was in fact manufacturing and trade – thanks to it’s huge natural port and a long river that allowed big ships to travel inland….
    The idea that covid was going to kill cities is nonsense. This was not the first pandemic – and unless the world doesn’t last another century – it won’t be the last either.
    Humans and humans and still want contact. The addiction to social media didn’t mean people stopped going to parties. They “share” their partying on social media. Humans are still humans.
    As to NYC’s current economy – you should get a refresh. After Silicon Valley – NYC has now passed Boston as the second tech center in the US.

    Asia is the most crowded continent – location matters their too. Urbanization continues there as well… Location is important because talent clusters.

  138. Meena says:

    I wonder whether manufacturing and domestic engineering , mom and pop type of business will return if the stock market crashes or is forced to revert the valuation to 10,000 instead of 30,000 .

    When the market goes up because of the jugglers stealing files from treasury and Fed by trillions ,
    some one has to spend 32 hours of labor to earn enough money to fly from New York to Chicago or pay one week of groceries instead of 8 hours of labor .
    Because inflation and scarcity both crop up .
    Import cost of raw materials also go up at the final distribution. ( coffee bought at 1 cent is sold in USA at 50 cent ) while American rich corner the world market , its base is still outside USA .
    There is a possibility though a Cambodia Vietnam Congo or Bangladesh type of parallel economy can be created for the American middle class and poor
    who will be entirely separate from the decision making process or the system that we call government.

    It will be like bringing Honduran and blaming them in Alabama or Idaho and letting them live their lives restricted to churches , schools that teach obedience religiosity, English. arithmetics , and basic skill of putting things together in right time in right place .

    Alternatively American rich with the rich from rest of the world might decide to have this arrangement all over with the provisions of movement of unskilled labor from one place to another in place .

  139. bayviking says:

    The stock market is huge, yet less than consumer spending which is 70% of the economy. The real and are all activity which creates new wealth. New wealth can only be created in farming, manufacturing (construction is a subset) and mining. US BLS statistics are chronically defined to make things look better than they actually are.

    http://www.shadowstats.com/charts_republish

  140. The main thesis of this long article is that the FIRE sector is taking control of the economy by moving investment away from productive capitol into real estate and finance. The big players in this are all the same politically connected “too big to fail” insiders that got bailed out in 08-09 with the bailout for billionaires program that was being constructed ever since the Reagan ad. with Greenspan. Now under the cover of the fake virus, fake test, and fake numbers along with some staged rioting the same Wall St. insiders have stolen trillions more while bankrupting millions of smaller businesses and causing massive unemployment. Now as in o8-09 the insiders at Black Rock (Rothschilds) will be picking up bargains everywhere.

    This whole process started with the creation of the banking cartel in 1913. Since then the dollar has depreciated at the rate of 50% every 17 years. What is the reason for this? The insiders main man, the pervert self proclaimed bolshevik, Keynes tells us:

    “By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens.” This process has been at work in Jewmerica now for over a hundred years and will now get even worse. This same cartel controls the finances, the banking system and the government. This is monopoly capitalism and that is why they had to get rid of our original system of a free market gold backed currency. It provided a standard of measurement and a store of value that did not allow for the unlimited centralized credit expansion or a system where each bank stood or fell on its own integrity.

    There have throughout history been those who are able to use the power go government to make society work for them. Control of banking and the issue of credit is the key. Once this power is achieved then all other areas will eventually follow through. There is hardly any limit from that point to government expansion along with the ever present payoffs to their cronies. From then on its more programs for the goyim and more power to the gov. (elite insiders).

    It is always good to keep the livestock focused on an external enemy or even a fake virus so that they can more easily be herded along in the right direction while the elite fleece the flock all the way. China is ahead of Jewmerica in this area. Having never had a history of individual rights, secure property rights or limited government, the herd is more easily managed. Now the benevolent leaders of China are instituting the social credit score total surveillance total control system to monitor (for their own good of course) and control the barnyard animals. This is only the beginning. In a situation where there were a real fee market, competition would reduce prices and the dead hand of government would not be working just for the politically connected.

    There is a bias in the popular culture against private property ownership. Property rights are the hallmark of free people. When property rights are gone so will all other freedoms. Hudson fails to mention that his icon Karl Marx (Moses Mordecai Levy) with his ten planks of the communist manifesto had #1 as the abolition of all private property. Then other 9 were really just to accomplish #1. Marx was financed all his life by his uncle Lyon Philips, founder of one of the first big industrial corporations. Marx was not from the proletariat (workers) but from a family of wealthy rabbis. His Aunt was even married to a Rothschild. Do you really think he cared about the “people.”

    • Replies: @bayviking
    , @Mefobills
  141. Chinaman says:
    @Showmethereal

    As someone who have brought every iPhone since day one, I can say that the Hauwei x mate with the fold screen are the best phone I ever used and have surpassed Apple ( and Samsung Fold ) in every way. It take amazing photos and even the headphones are better.

    My Huawei Mate X were one of the special ones made for Tencent employees. ( brought 2nd hand of course). Cost about 2 iPhone each but I will brought 2. Every Chinese should support Huawei! I hope you and Dan are using Huaweis…

    Everyone can support China with small deeds, not just words.

    Can’t wait for the harmony OS. Android is crap and the interface have always been laggy compared to iPhone.

    The problem will be that app are not for international enough. I am still reliant on google outside China.

  142. Chinaman says:
    @Showmethereal

    I tried some of the Chinese office competitors and they are at least better than google docs.

    Microsoft Office is so passé. Can’t believe they are trillion dollar companies with such crappy software.

    Looks like the singularity is really upon us and it will happen in China.

    • Thanks: Showmethereal
  143. antibeast says:
    @Rdm

    Here how it goes. Ma thought it’s a good idea for younger generations to take out small credits when they’re going for outing and friends gathering and pay by Alipay with 20% interest. For small expenses, 20% is a penny, but 1.3 billion family gathering? Ma will be the richest person on Earth while hanging all Han Chinese with his 20% interest.

    Here’s what Ma did that caught the CCP’s wrath:

    Using his customer base of hundreds of millions from Alibaba, ANT Financial offered consumer loans to online buyers and business loans to online sellers at higher interest rates than the loans extended to ANT Financial by China’s State-owned banks as well as its own money-market funds offered to Alibaba customers. ANT Financial then turned around and packaged those microloans into securitized financial products which were then sold to third-party financial investors, the proceeds of which were used to pay off the debts owed to China’s State-owned banks as well as the customers of its own money-market funds. ANT Financial makes a tidy profit from the interest rate arbitrage without incurring any loan risks to its balance sheet.

    But ANT Financial didn’t have the requisite banking license to extend loans of any kind nor the cash reserves to cover those loans, thus violating the banking laws and regulations of China. All it had was a online payment license which covers Alipay but not its online banking business.

  144. antibeast says:
    @Showmethereal

    Silicon Valley used to be the place for designing and making silicon chips until Japan, South Korea, Taiwan, Singapore, Malaysia and now China caught up in the global semiconductor industry. Same thing happened to the PC and data networking industries which moved to East Asia along with smartphones, tablets, servers, etc. Now software development is moving to India while biotech R&D is moving to China. Meanwhile, all the top AI, cryptocurrency, Fintech and e-commerce Unicorns are in China which also hosts all the top drone, 5G, electric vehicle, maglev and high-speed rail companies in the world.

    What has happened over the past two decades is that Google, Facebook, Twitter, Airbnb, Netflix, Uber and other Internet companies have taken over Silicon Valley which is now home to the most highly-valued Internet companies in the USA. Likewise, homegrown companies all over the world have sprung up to provide similar Internet services but tailored to their home regions at the same time that foreign governments have become hostile to these US-based Internet companies over data privacy, content piracy, digital taxation, etc. The software technology behind those Internet services is not that difficult to replicate while the barriers to entry are not that high. More Internet companies in the future will offer social media services to local users who would rather not depend upon US-based Internet companies.

    Lastly, Trump tried to ban WeChat and TikTok but ended up becoming a victim himself of US tech companies such as Facebook and Twitter which decided to suspend his account indefinitely. As a result of the suspension, Trump’s deplorable followers have been flocking to foreign alternatives such as Telegram.

    As they say, what goes around comes around.

  145. bayviking says:
    @Mark Tapley

    Neither Marx or Hudson are enemies of Capitalism. Marx naively thought Capitalism would naturally morph into Communism. Instead it naturally morphs into a monopolistic kleptocracy. Hudson believes in a mixed economy, where natural monopolies are controlled by Government and free market competition runs the rest. That is how the US, Japan, Germany and China have grown. Unfortunately, the USA took a wrong turn under Friedman, Greenspan, Rubin and their ilk. Larry Summers even helped to set Russia on the path of kleptocracy.

    • Replies: @Castellio
    , @Mark Tapley
  146. Castellio says:
    @bayviking

    That’s an amazing amount of clear thinking and social experience captured in 82 words.

  147. @bayviking

    Marx (Moses Mordecai Levy) didn’t believe in communism. That was just propaganda that he was paid to push by his supper rich uncle Philip in order to keep the workers weak, divided and unorganized. Thats why Marx never did any time in prison unlike real proletariat agitators such a Bakunin. Marx got a free pass because he was the main agent for the early industrialists in their effort to consolidate control a the top. His program was also aimed at the European monarchies as were the widespread revolts that occurred all over Europe in 1848.

    All of this is easy to confirm. Just look at his most famous document, his communist manifesto. Who gets the power? Not the workers but all of it into the private hands of the elite. The main objective being #1 the abolition of all private property. So the elite own everything. Marx was not mistaken, he was just selling the scam just like the same bunch is doing today with the fake virus.

    With Hudson’s program you end up in the same place. Monopoly capitalism through the banking cartel has enabled the insiders to use the system they engineered to distort the market. They despise a real free market. Hudson believes more government and more regulations are the answer. Does he really think the socialist policies of Zionists like Biden, Harris and AOC are going to make things better? As Patrick Henry stated “we have no light to guide us but the lamp of experience.”

  148. antibeast says:
    @Mefobills

    The U.S. asked for Chinese help, because dumb finance capitalists like Paulson did nothing to stop Chinese accumulation of TBills. Again, China bought TBills rather than goods, creating trade imbalance.

    You’re contradicting yourself here. The USA did ask China for help in buying TBills because it had accumulated US$ 3 Trillion by 2008. What else can China buy from the USA when most US consumer goods sold in the USA are made outside of the USA? By the way, Apple’s iPhones sold in China are not counted in the trade balance between China and the USA because they’re assembled in China. Same with the Dell and HP PCs, Ford and GM cars, Nike shoes, etc. and other US brands sold in China.

    Five countries that own U.S. debt? So what? The reserve currency status of the U.S. is actually damaging to American labor. Triffin’s dilemma and all.

    Exactly. So you can’t pin the blame on China when US multinationals themselves were moving their factories to lower-cost developing countries BEFORE China joined the WTO in 2001. The trade deficits that the USA had with the entire world went into US Tbills. China is no different from what the Japanese, Saudis, British, etc. have been doing for decades. After China’s accession to the WTO, China started buying lots of Tbills but stopped doing so after 2014.

    Yes I do, probably more so than most people alive, including you Mr. Strawman.

    The political rhetoric that China somehow caused the ‘deindustrialization’ and ‘financialization’ of the US economy deflects blame on China as the Strawman after its accession to the WTO in 2001. The fact of the matter is that the USA had been losing its manufacturing industries to foreign imports and offshore outsourcing long before 2001, starting with the liberalization of its domestic market to German and Japanese imports after WWII. The outsourcing trend began in earnest with the GATT which allowed textile and garment imports from the Third World in order to prevent them from falling to Soviet Communism. The GATT then evolved into the WTO while Mexico opened up its maquiladoras to US multinationals reeling from foreign imports. NAFTA then came into being with the US automakers moving their factories en masse to the South of the border in order to compete against German and Japanese auto imports. Meanwhile, PC makers outsourced their manufacturing to Taiwanese outfits such as Foxconn, Wistron, Pegatron, etc. which forced Steve Jobs to hire Tim Cook in 1998 in order to save Apple which was on its death throes unable to compete against PCs made in Asia. What did Tim Cook do? He signed the contract with Foxconn to outsource the manufacturing of Apple’s products in Asia. After joining the WTO in 2001, China then became the destination of the ‘export processing’ trade when those factories moved from Asia and Latin America to China. But that ‘export processing’ trade has been moving out of China since 2010 as those factories relocate to Asia and Latin America, even to Africa, in places like Vietnam, Indonesia, Bangladesh, Ethiopia, Mexico, etc.

    China is the Strawman here because the Chinese economy has already become diversified enough that its export trade with the USA now accounts for less than 2% of its GDP.

    • Replies: @Mefobills
  149. Mefobills says:
    @frontier

    Is that the best you can do? “Release debts” is not an economics term, you may call it a jubilee but everyone else is going to call it a default, and that’s quite different from a jubilee.

    More confusion from a lolbertarian.

    There are different kinds of debts. Those that accrue and make excessive demands will polarize society.

    Some debts have a counterpart in production and are left alone.

    The case of post Nazi Germany, where America released debts is a good example. Debts that were overhanging from the war were claims that could not be paid, and those were erased.

    Those debts that were left in place that were part of the production system, where people get paid for their livelihood – those “good” debts were left in place.

    The end result was the “German Miracle.”

    Again, Lol-bertarians are in cognitive dissonance and don’t have the framework for understanding the world.

    If you want to use the word “default” go ahead. Debts that have already been paid two or three times already should be defaulted on.

    A modern jubilee would have to be fairly sophisticated and able to discern debt types. Those who are earning sordid gain have become parasites, and they should be defaulted into the toilet.

  150. Mefobills says:
    @Mark Tapley

    When property rights are gone so will all other freedoms. Hudson fails to mention that his icon Karl Marx (Moses Mordecai Levy) with his ten planks of the communist manifesto had #1 as the abolition of all private property.

    Hudson also favorably mentions Georgist taxation of property.

    So, which is it? Georgist taxation of the site value, or Karl Marx abolition?

    • Replies: @Mark Tapley
  151. Mefobills says:
    @antibeast

    I stop reading when I hear my points being twisted:

    You’re contradicting yourself here. The USA did ask China for help in buying TBills because it had accumulated US$ 3 Trillion by 2008. What else can China buy from the USA when most US consumer goods sold in the USA are made outside of the USA? By the way, Apple’s iPhones sold in China are not counted in the trade balance between China and the USA because they’re assembled in China. Same with the Dell and HP PCs, Ford and GM cars, Nike shoes, etc. and other US brands sold in China.

    The over-all pattern was that Wall Street worked out a plan to off-shore jobs to China. The idea was to use all of that debt-free post-communist labor as the work-shop of the world. The end result would be that China would join the atlantacist liberal world order. The supposed end result was due to hubris and “end of history” bad thinking.

    After all, raw material can come into China by ship, and finished goods can leave China’s west coast by ship.

    The increment of production can then be accrued by the “masters of the universe” in wall street and London, as their “capital” works for them.

    Iron rule of economics are abrogated,: ALL EXTERNAL TRADE IS ONLY BARTER. ALL EXTERNAL TRADE MUST BALANCE.

    External Trade Flows between China and the U.S. are not barter because they are denominated in dollars.

    Those dollars then accrued in China due to mercantile trade imbalance, and then they were sent back to the U.S. to buy TBills. They bought TBills rather than goods. Say it again: The returning dollars bought Tbills rather than goods.

    This point cannot be hand waved away. China did do this to keep the game going. Or, alternatively, the U.S. was corrupted to allow it to happen. It was not in American labor’s benefit to off shore high paying industrial jobs. It was not in American labor’s benefit to have returning dollars falsely signal interest rates low with purchase of Tbills.

    The 2008 crash was a knock-on effect of the iron rules being abrogated. This is my point that you didn’t understand. Going to China for help as if they were a savior is a ridiculous claim.

    And yes, you are correct about finance capitalism off-shoring jobs before China. Finance Capital falsely signals and tells lies, AND ignores iron rules of economics.

    I make the case often that the U.S. became finance capitalist and lost its American System of Economy by 1912.

    • Replies: @antibeast
  152. antibeast says:
    @Mefobills

    The over-all pattern was that Wall Street worked out a plan to off-shore jobs to China.

    That’s the false trope that US politicians want the US public to believe in which has no basis in economic reality. Remember that the USA imposed sanctions on China after Tiananmen which forbade US multinationals from trading with or investing in China. Foreign investors from East Asia then moved in and took up the slack after the US withdrawal with a only few US companies such as Nike and Motorola staying behind. Western multinationals from Europe especially Germany later moved in to take advantage of the US absence from the Chinese market. Once it became clear that China was moving ahead with its economic liberalization, allowing foreign investors access to the Chinese market, that’s when US Chamber-of-Commerce types lobbied the US government to lift US sanctions on China, grant MFN status on China and allow China’s entry into the WTO in 2001.

    The political rhetoric blaming the ‘deindustrialization’ and ‘financialization’ of the US economy on some kind of a conspiracy by ‘Communist China’ is non-sequitur. The US auto industry is a good example where China hardly had any impact on the ‘outsourcing’ of blue-collar factory jobs from Detroit to Mexico due to the inability of US automakers to compete against German and Japanese imports. The US electronics industry is another good example of the inability of US electronics companies to compete against East Asia manufacturers which forced them to ‘outsource’ the manufacturing of hard-disk-drives to Southeast Asia, semiconductors to Taiwan and South Korea, electronics assembly to Mexico and Southeast Asia. Same goes for the production of apparel, footwear, furniture, toys, plastics and other consumer goods which were ‘outsourced’ to developing countries in Asia and Latin America BEFORE China’s entry into the WTO in 2001.

    What happened after China joined the WTO in 2001 was that those ‘export processing’ factories moved from Asia and Latin America to China’s coastal cities where so-called ‘Special Economic Zones’ had been established to capture the ‘export processing’ trade. Those ‘export processing’ factories did NOT relocate from the USA which had been hallowed out from five decades of foreign imports and ‘offshore outsourcing’ BEFORE China’s entry into the WTO in 2001.

    Many of these ‘export processing’ factories have since moved back to Mexico, Southeast Asia even Africa as China’s labor costs have risen in the last ten years or so after the GFC in 2008 forced Chinese authorities to restructure the Chinese economy away from export-oriented low-cost manufacturing industries to technology and services industries serving the domestic market. China’s exports to the USA has now declined to just 2% of its GDP with half of that consisting of US goods made in ‘export processing’ zones inside China which should have been excluded from the trade balance figures. The other half consists of intermediate goods that are used as inputs by US manufacturers which now incurs the 25% tariffs imposed by Trump.

    This whole China thing is overhyped by US politicians in order to obfuscate real issues such as the Triffin Dilemma facing the US economy which is inflated by the tax-cost structure of the US government due to excessive spending on warfare and welfare. This anti-China political rhetoric also ignores the fact that Chinese companies hardly compete against US multinationals nor sell to US consumers but instead blames the inability of US manufacturing industries to compete against Germany, Japan, Italy, UK, South Korea, Mexico, etc. on their favorite bogeyman, ‘Communist China’.

  153. Blissex says:

    «you had economists fighting against not only Marx, but also even against Henry George, who at that time, was urging a land tax in New York. And so, at Columbia University, John Bates Clark developed a whole theory that everybody earns whatever they can get. That there was no such thing as unearned income and that has become the basis for American national income statistics and thought ever since.»

    Michael Hudson should have mentioned that the memory of this amazing politicization of Economics was kept alive by the late Mason Gaffney, professor at UC Riverside, with several very interesting publications:

    “Mason Gaffney Brief Biography”
    https://masongaffney.org/vita.html

    “Neo-classical Economics as a Stratagem Against Henry George”
    https://masongaffney.org/publications/K1Neo-classical_Stratagem.CV.pdf

    But also:

    https://masongaffney.org/publications/K2008_Keeping_Land_in_Capital_Theory.pdf
    https://masongaffney.org/publications/K9-StabileHGInfluenceonJBClarkMGComments.CV.pdf
    https://masongaffney.org/publications/L2Rent-Seeking_and_Global_Conflict.CV.pdf
    https://masongaffney.org/workpapers/WP039%20How_Rising_rents_devour_%20capital_1993_WP039.pdf
    https://masongaffney.org/workpapers/How_a_Land_Boom_Destroys_Capital_10_2005.pdf
    https://masongaffney.org/workpapers/Capital_Gains_and_Future_of_Free_Enterprise.pdf
    https://masongaffney.org/essays.html

  154. Mefobills says:

    This whole China thing is overhyped by US politicians in order to obfuscate real issues such as the Triffin Dilemma facing the US economy which is inflated by the tax-cost structure of the US government due to excessive spending on warfare and welfare. This anti-China political rhetoric also ignores the fact that Chinese companies hardly compete against US multinationals nor sell to US consumers but instead blames the inability of US manufacturing industries to compete against Germany, Japan, Italy, UK, South Korea, Mexico, etc. on their favorite bogeyman, ‘Communist China’.

    Of course. It would mean admitting that Finance Capitalism is a failure.

    You are not getting off the hook though. China did purposefully buy Tbills, and you can see this in China’s TBill accumulation data, especially early on the cycle. In other words, the U.S. finance capitalist system was hoisted on their own petard, especially as the real physical economy was exported.

    Make wage arbitrage today, by selling a countries patrimony.

    Also, China’s buying of goods or real assets in other dollar zones in the world still served China’s agenda, and was allowed by the “reserve currency” petrodollar system. And so, China buys up other dollar denominated assets in the world? Of course they do. You have to do something with your excess dollars won in mercantile trade.

    Eventually U.S. goods trade imbalance is consummated by TBill debt flow to somewhere in the world-wide dollar zone system.

    Personally, I would have done the same if I were China. The Wall Street/China gambit dissipated the U.S. while allowing China to go up the industrial curve quickly.

    And as a personal anecdote, I personally was involved as one the first companies to move to China, and quickly realized how we were selling our patrimony for arbitrage.

    • Replies: @antibeast
  155. Blissex says:

    «So, if you look at today’s GDP figures for the United States, they have a figure for 8 percent of the GDP for the homeowners’ rent.»

    The GDP nominal index is much “improved” by various “metholodogies”, but it is also “improved” by a much bigger strategy: confusing GDI (Gross Domestic *Income*) with GDP (Gross Domestic *Product*), where the difference is that there is a large chunk of income which does not correspond to any (final) product, and it is the income from various forms of rent. For example around 8% of USA GDI is for the direct cost of the finance sector, but very little of it corresponds to any product, final or intermediate, and nearly all such product would be intermediate, so to *subtract* from GDP, not to add it.

    How does finance cost so much? Consider for example 401k pension funds:

    * Typically finance extract 1-2% per year in “fees” from each fund, during its entire lifetime, that is both before retirement, when it is being accumulated, and after retirement, when it is being spent.

    * Typical guidelines for 401k pensions funds are that they can last during retirement if one does not take out more than 3-4% per year.

    * So every year before retirement the 401k pays 1-2% to “Wall Street”, and every year after retirement the 401k pay 2-3%% to the owners 1-2% to “Wall Street”.

    * That means that adding the costs before and after reitrmeent between 30 and 60% of a a 401k pension is paid every year to “Wall Street”.

    * The pension component of Social Security charges instead around less than 1% per year in management fees. That’s why “Wall Street” wants to abolish Social Security or at least turn it into a stockmarket fund based system.

  156. Blissex says:
    @Showmethereal

    «They all (and South Korea) followed the post WW2 Japan model.»

    It is much older than that, an excellent book by A Landes “The wealth and poverty of nations” has this quote:

    «”Of all things Western, what do you dread most?” asked the Satsuma daimyo Shimazu Nariakira of his councillors. European guns and ships, came the answer. “No,” said the daimyo. “It is cotton cloth. Unless we begin preparing now, we shall soon be dependent on Westerners for our clothing.” In an effort to prepare, the han began to distribute better cotton seeds, purchased better spindles and looms (not yet powered), built a manufactory near Kagoshima, and set unemployed samurai to work there. The result: cotton goods costing half as much as before. […] In 1867, it opened a mechanized cotton mill.»

    he did several other industrial development actions:

    https://primer.com.ph/travel/2019/03/16/japan-travel-satsuma-kiriko-glassworks-features-the-art-of-glass-making-in-kagoshima/
    «Satsuma Kiriko, a cut crystal glass, was first manufactured in 1851. It was pioneered by Nairakira, the 28th head of the influential Shimadzu clan. Nariakira started to modernize Japan in fear of Western colonization; thus he created the Shuseikan Project. This project spawned many factories and workshops, which then included Satsuma Kiriko.»

    That was in the 1850s. But already in 1905 the japanese fleet attacked and defeated the russian fleet, something that caused great “disconcert” to white race supremacists back in the Europe and the Americas.

    • Replies: @Showmethereal
  157. antibeast says:
    @Mefobills

    Of course. It would mean admitting that Finance Capitalism is a failure.

    Agree. The whole meme of ‘Commie Chinaman’ is to blame for hallowing out US manufacturing is a giant Strawman. The real culprit is Finance Capitalism.

    Make wage arbitrage today, by selling a countries patrimony.

    Agree. My point is that the whole offshore outsourcing play consisting of wage arbitrage (cheap labor) and tax evasion (transfer pricing) started way back in the 1950s, long BEFORE China joined the WTO in 2001. Mexico began its maquiladoras business back in the 1960s, long before NAFTA which was ratified only in 1996. In the auto industry, China had ZERO role whatsoever in the decline of Detroit which could not compete against auto imports from Germany and Japan, the top two auto exporting nations in the world, followed by the USA and Mexico. China is not among the top ten auto exporting nations in the world and hardly export autos to the USA. And yet, Trump was blaming China for destroying the auto industry in Detroit.

    Personally, I would have done the same if I were China. The Wall Street/China gambit dissipated the U.S. while allowing China to go up the industrial curve quickly.

    You can’t really blame China for ‘dissipating’ the USA in electronics manufacturing because China didn’t join the game until 2001. A good example is the PC industry: when Apple was already on its death throes unable to compete against PC makers in Asia, Steve Jobs famously hired Tim Cook in 1998 for one and only reason: to outsource the manufacturing of Apple’s products to Asia. Coming from Compaq, Tim Cook knew how to manage the industrial supply-chains of the PC maker using contract electronics manufacturers such as Foxconn, Wistron, Pegatron, Flextronics, etc. in Asia. After China’s entry to the WTO in 2001, all they did was move their factories from other parts of Asia to China. So it’s not like Foxconn, Wistron, Pegatron, Flextronics, etc. were ‘dissipating’ the USA but rather helping US tech companies like Dell, HP, IBM, Apple, Cisco, etc. to become globally competitive by manufacturing their products in Asia.

    And as a personal anecdote, I personally was involved as one the first companies to move to China, and quickly realized how we were selling our patrimony for arbitrage.

    I witnessed this too after working in Silicon Valley. Apple tried doing everything from design, software, technology to manufacturing in the USA but nearly went bankrupt. But that’s why Silicon Valley remained globally competitive because US tech companies such as Apple were able to keep the high-value work of developing technology IP while ‘outsourcing’ manufacturing to Asia. That’s the horizontally-integrated industry structure of Silicon Valley which differs from the vertically-integrated industry structure of Japanese keiretsu and South Korean chaebol industrial conglomerates.

    I doubt those electronics factories will ever return to the USA because they can be relocated to Mexico which is part of the USMCA, given the extra cost of 25% Trump tariffs on intermediate goods from China, most of which goes to electronics/electrical products.These business decisions involving the supply-chains of US multinationals have very little to do with China.

    • Agree: Mefobills
    • Replies: @Mefobills
  158. @Mefobills

    Sometimes the first case leads to the second as in California before prop. 13. We have a situation today in which people with no property that may even be living on welfare and therefore in most cases assume they have no stake in the community but are only concerned about how to get their hand in the till are actually determining tax policies.

    Hudson makes the LTV or ground tax sound easy but that is because he believes in the dead hand of government. He frequently talks about gov. corruption but seems to think it can just be regulated out rather that being an endemic cancer always pounced on by politically connected.

    Land owners are always an easy target for taxation and its value cannot be separated from its potential use. Land is a form of capital even if natural and that does not make it a communal asset to be plundered by the state. If that were the case then we are back to Marx and his thinly disguised monopoly capitalism, (the elite) euphemistically called communism by the left. Taxes are a punitive way to control people. The worst thing that can be done with money is give it to the government. Just a cursory look at how most of it is spent illustrates that point. The greatest good for the greatest number of people is always accomplished when taxes are as low as possible across the board. Except for the special interests of course.

    It is almost a moot issue now but Hudson’s FIRE sector and the resultant finance economy would not happen without the fiat banking cartel in collusion with their cronies in government and Wall St. This has eliminated market competition while at the same time providing sovereign immunity for the “too big to fail banks.” It was planned that way all along.

    • Replies: @Smith
    , @Mefobills
  159. Smith says:
    @Mark Tapley

    You are indoctrinated by libertarian propaganda.

    Money is printed/controlled by the government (ideal case scenario) and is given to the people to spend, and thus the government takes it back to use it to build in infrastructure, welfare, military, etc

    The fact the govt uses it to “invest” in hedge funds and corporations IN HOPE that these corpos will build up things (they won’t) is saying that the govt is making a bad business decision, not that the concept of government is bad.

    Taxation is not an either-or scenario, it’s a spectrum because the income of individuals are different, the more money you make, the more you should be taxed, and that should be the end of it.

    In the US, you have the worst case scenario where the plebs get taxed to hell, but the big corpos who make the most money don’t. Which is right wingers kinda self-own when they defend Trump’s tax evasion, they themselves pay taxes but they defend a rich guy like Trump not paying his shares, which is mind-numbling. Meanwhile, Trump does pay taxes to China, further proving that it is not the Chinese government that is broken and corrupted.

    About the role of government, human society advances due to centralization and organization in the form of the government, you can play this rugged individualism bullshit all days long but the collective will always be more powerful than alienated atom that cares for nothing but their plot of land or their printed money/precious metals. Corruption exists, and is to be fixed. The idea that a system has problems doesn’t mean you should abandon the system, but try to fix and improve the system so that it works better. Ironically, right wingers faithfully believe in the Free market Capitalism system, meanwhile it can only be fixed by removing the profit motive.

    I admit I did have the wrong understanding of Capitalism back in the 00s-10s era, I thought it means market and private property and that jazz, but there is one word to describe Capitalism perfectly, and that is hoarding, and hoarding is discouraged by every government on Earth since the first tribe starts forming, thus Capitalism has been UNNATURAL for most of the world’s history.

  160. How ridiculous can you get: “Money is printed/controlled by the government (ideal case scenario) and is given to the people to spend, and thus the government takes it back to use it to build in infrastructure, welfare, military, etc.” Here you are forfeiting your economic liberty to be willingly scammed by a bunch of financial criminals with a government mandated monopoly. Have you gotten your fake virus injection yet?

    Government, as Washington stated is a necessary evil that must be controlled. Whenever it goes beyond very basic functions then it will always be corrupted by those that will use the power of gov. to make society work for them. That has always been the case because there are way too many simps like you who are always willing let the criminal operatives on the fake left and right aggrandize themselves and their cronies in the name of “the people.”

    Trump as well as Biden are just puppet actors for the Zionist syndicate. If you look back on my previous posts you will see that I have nothing but condemnation and total disdain for them and most of the rest of this Kakistocracy of elite criminals that you pay obsequious homage to.

    As Jefferson stated, “that government that governs least governs best.” Human history has primarily been an unceasing struggle by mankind to avoid the dictatorial overreach of whatever government they find themselves subjected to and paying for in blood and treasure. You make the asinine claim that all the problems will be fixed by removing the profit motive. Government is a magnet for criminals that know government is the best clique in order to maximize profit. From its total collusion with Wall St. and the banking cartel to every type of public funded boondoggle from the public education money pit, the welfare racket that since the 60’s has pissed 15 trillion dollars down the drain that could have provided real jobs if left in the pockets of the people that produced it. Environmental scams of all types, fake viruses, fake vaccines. Bailouts by the banking cartel to their cronies on Wall St. as in 08 and again now for trillions more. No problem huh Smith, thats what governments do. Minority set asides and poverty pimps like Obama who began in Chicago while being funded by the Pritzkers and Thomas Ayers. War (the health of the state) is a the prerogative of government and brings in massive profits to the very insiders you claim should be running our money system. We will just clean up that little problem and make the world safe for “democracy” huh Smith?

    Everyone is a capitalist. It is just a matter of what type. Individual capitalism raises all boats and provides economic opportunity for all in a free market. It is really the mainspring of human progress. Government has always opposed this natural market freedom by imposing monopoly capitalism (socialism) in which the politically connected insiders create “programs” for the people and siphon off the productivity of the producers for their own profit.

    • Replies: @Smith
  161. @Blissex

    Looks like I worded it incorrectly. I should have written post WW2 East Asia followed the Japanese economic model which started with the Meiji Restoration. East Asia has similar work ethic and i telligence level and confucian philosophy. (Singapore has the same but are transplants to the southeast) The performance and influence varied by size. One could argue South Korea punches above its weight… Mainland China is a much bigger ship to turn and so it still has at least a decade of major productivity gains to go. That is what scares some.

  162. Smith says:
    @Mark Tapley

    You are having the worst government on Earth doesn’t mean the idea of government is bad, Mark.

    And no, human history has never been anti-government, better and more centralized government is made in order to better handle an increasing number of people, your anti-state view is ahistorical.

    More rather, the conflict is between hoarding vs non-hoarding, the government role is to keep things fair, they break up the rich so that the poor can get their fair shares, when the government refuses to fight for the poor, it’s called a corrupted government and ought to be removed.

    Your economic “liberty” is granted by the government, your laws and your currency as well. Without an organized state, you will all be anarchists until some warlords or other state come in and start to make their own laws and force you to comply, or you are forced to organize into a state to fight back/defend yourself.

    Americans are basically brainwashed anarchists and got conned easily by rich people.

  163. Mefobills says:
    @antibeast

    gree. My point is that the whole offshore outsourcing play consisting of wage arbitrage (cheap labor) and tax evasion (transfer pricing) started way back in the 1950s, long BEFORE China joined the WTO in 2001.

    My position is that it really started in earnest after 1912, when the American Economy transitioned to (FC) finance capitalism.

    The American System of Economy was in its death knell at that point in time, and FC then consolidated its gains in world war.

    The rumblings of death of American System of Economy were even before 1912, and one could point to Spanish American War as FC imperialism. The “international capital” beast system wanted to make gains. It had to destroy the American System of Economy, and turn to war.

    You would probably be interested in the Motorola vs Sony case. Motorola’s position was that they did everything right, yet still lost their T.V. industry to Sony.

    Japan INC. was running an Industrial Capitalism system, which is high tariffs and low internal trade friction within the economy. Japan INC was using directed credit via their credit guidance windows. This direction was under the aegis of MITI as industrial policy.

    Motorola owners ( Galvins) could not understand the larger forces at play. Eventually it was found out in court that Motorola was the aggrieved party, and that their technology did get transferred to Japan INC. This case was a microcosm of the finance capital vs industrial capital of China today.

    Finance capital is mostly speculative with the conceit that tomorrow can pay the gambles of today. The conceit assumes that a Nation’s physical economy will pay the gamble. Only the physical economy is off-shored to Japan Inc. in the case of T.V.’s or semiconductors, or whatever. Or, today, the gambles create speculative bubbles which distorts the economy and pricing.

    This is why I am sympathetic to American Labor, who is taking it in the rear. The conceit that wall street gambling will create real physical economy in the future, is shown to be false.

    Actually, what happens is that Industrial economies can be fast followers and cherry pick industries they want. Also, in the case of China they do have a robust sector of their economy which is speculative, to then make future gains. The speculation is only a small percentage and is controlled. This speculation is held in control by the state banks, and communist party. FINTECH is the latest speculation held in check.

    Hudson’s argument is framed by how China’s policy makers are making some mistakes on the margins, especially by allowing fictitious finance capital to make gains where it shouldn’t.

    It still remains that China is mercantile and recycles its dollars to buy TBills. Japan INC. did the same, especially after the petrodollar/Tbill system came into being in 1973.

    In the U.S. the politicians are lackeys of the finance class and other vested interests (the deep state) and do not understand anything of which we are discussing here. Even if they do understand, they don’t give a damn because they are making gains.

    • Replies: @Smith
    , @antibeast
  164. Mefobills says:
    @Mark Tapley

    Sometimes the first case leads to the second as in California before prop. 13

    Then you would agree that California’s demise can be traced to proposition 13?

    Improper (non -georgist) taxation of land created absentee land owners, and a protected class. This protected class then made gains as their housing prices increased, while they did nothing but sit on their rear.

    There was no relation between price and production.

    Lolbertarianism really is junk economics.

    • Replies: @Mark Tapley
  165. antibeast says:

    You would probably be interested in the Motorola vs Sony case. Motorola’s position was that they did everything right, yet still lost their T.V. industry to Sony.

    Japan INC. was running an Industrial Capitalism system, which is high tariffs and low internal trade friction within the economy. Japan INC was using directed credit via their credit guidance windows. This direction was under the aegis of MITI as industrial policy.

    Motorola owners (Galvins) could not understand the larger forces at play. Eventually it was found out in court that Motorola was the aggrieved party, and that their technology did get transferred to Japan INC. This case was a microcosm of the finance capital vs industrial capital of China today.

    Here’s an interesting documentary video on the rise of Japan INC and the role of MITI:

    The US Deep State also played a key role by allowing Japan INC to protect its manufacturing industries from US competition while at the same time failing to protect US manufacturing industries from Japanese competition. The Cold War at the time dictated US foreign policy towards Japan INC which meant that US geopolitical interests took precedence over US economic interests until things became so bad that the US government forced Japan INC to accept the Plaza Accord in 1985. Shortly thereafter, Japan INC entered into its ‘Lost Decade’ which lasted from 1991 to 2001 due to excessive financial speculation causing the real-estate bubble to burst in 1991.

    Actually, what happens is that Industrial economies can be fast followers and cherry pick industries they want. Also, in the case of China they do have a robust sector of their economy which is speculative, to then make future gains. The speculation is only a small percentage and is controlled. This speculation is held in control by the state banks, and communist party. FINTECH is the latest speculation held in check.

    There’s quite a lot of financial speculation in the real-estate industry which acts as a store-of-wealth in China. That’s why there are millions of housing units that people have bought but are not ‘utilized’ because their primary function is to serve as physical assets to store financial wealth. But the Chinese State has set real-estate purchasing/lending limites especially after the GFC 2008 to curb excessive real-estate speculation fueled by loose monetary policies. The other speculative sector is FINTECH such as online peer-to-peer lending as well as Jack Ma’s ANT Financial which have attracted the attention of Chinese regulators.

    Finance capital is mostly speculative with the conceit that tomorrow can pay the gambles of today. The conceit assumes that a Nation’s physical economy will pay the gamble. Only the physical economy is off-shored to Japan Inc. in the case of T.V.’s or semiconductors, or whatever. Or, today, the gambles create speculative bubbles which distorts the economy and pricing.

    Hudson’s argument is framed by how China’s policy makers are making some mistakes on the margins, especially by allowing fictitious finance capital to make gains where it shouldn’t.

    It still remains that China is mercantile and recycles its dollars to buy TBills. Japan INC. did the same, especially after the petrodollar/Tbill system came into being in 1973.

    Methinks that US manufacturing industries suffered from the Triffin Dilemma once Nixon took the USD off the Gold Standard while Kissinger negotiated the Oil-for-USD deal with the Arabs in exchange for US military ‘protection’ in the Middle East. This Petrodollar System allowed the unlimited printing of USD by the US Fed which fed the appetite for debt-driven consumption and spending in the USA. In addition, the US Deep State’s obsession with the Cold War dictated US foreign policy to favor the economic interests of US allies such as Japan INC against the economic interests of US manufacturing industries. For as long as foreign countries recycled their trade surpluses by buying USD debt, the US Fed could print unlimited amounts of USD which fed the appetite of the US government as well as US citizens to borrow unlimited amounts of USD from the world. That’s how the USA achieved $60,000 GDP per capita which is 20% higher than Germany’s $50,000 GDP per capita and 50% higher than Japan’s $40,000 GDP per capita. It’s all DEBT!!!

    In the U.S. the politicians are lackeys of the finance class and other vested interests (the deep state) and do not understand anything of which we are discussing here. Even if they do understand, they don’t give a damn because they are making gains.

    US politicians serve ‘special interests’ who buy legal favors by hiring political lobbyists in Washington, D.C.’s K-Street. It’s legalized bribery that everyone practices including Trump’s own family business — the Trump Organization — which has a long history of doing business with foreign countries including Saudi Arabia and China. And I suspect that was the sole reason why Trump entered politics after making a name for himself as a Reality TV star because Trump could peddle his political influence for HUUGE amounts of money. That’s how US politics work!

    • Thanks: Mefobills
    • Replies: @showmethereal
  166. Smith says:
    @Mefobills

    Japan Inc. seems to be doing the right thing earlier on, but why has Japan hit a slump that it can never recovered and despite the various stimulus (to the corporate sector)? It goes a bit deeper than the Plaza Accord.

    The answer, it seems, is the fact the corporate sector is not loyal to the people of Japan nor the state of Japan, all it wants is to make profit, so all that stimulus poured into it, it’s just gonna invest in say China or Vietnam because the labor cost is cheaper, the material cost is cheaper and the made good can still be sold in Japan anyway, instead of its home country. This in turn devastates the Japan labor scene, and nowadays it can be said that the jap corporations are way more progressive than the jap state that is getting weaker and older. The jap govt now must give stimulus to urge the corporations to go back to Japan, the corporations will just take the money and say no, of course.

    This shows that no matter how nice the corporations were at the beginning when everything gets started, they will always follow the profit motive. An efficient and loyal-to-the-people state must be maintained in order to keep the corporations serving the people, or rather, the state goes in directly and manages the production themselves.

    This is why I don’t believe even if National Socialist Germany succeeds, it’s gonna last long, because the corporations would betray it just as the zaibatsu betray Japan. No, you need a state that not only negotiates or partner with corporations, but a state that CONTROLS the corporations.

    • Agree: Mefobills
    • Replies: @Mefobills
  167. Mefobills says:
    @Smith

    Interesting. Maybe also some sort of elect or guardians of civilization who are paid well and are forbidden from profit taking? The watchers who watch the watchers are an armed citizenry.

    When our (((friends))) invented corporations while in Amsterdamn, they threw a wrench into the works.

    • Replies: @Smith
  168. Smith says:
    @Mefobills

    Every organization on Earth can be corrupted, what you need is the general population realizing their interests are being fucked with and start protesting and striking.

    This should be the next time for America and Japan, a mass strike that shut things down. If the people stop working, you are gonna see some real changes.

    If they force people to work at gun point, you know the regime is no longer legitimate.

  169. antibeast says:
    @Mefobills

    It still remains that China is mercantile and recycles its dollars to buy TBills. Japan INC. did the same, especially after the petrodollar/Tbill system came into being in 1973.

    While it’s true that China copied the mercantilist policies of other East Asian export economies after joining the WTO in 2001 by ‘recyling’ export dollars to buy TBills, that changed after the GFC in 2008 when export demand collapsed forcing Chinese authorities to restructure the Chinese economy away from export industries to serving the domestic market. That ‘export processing’ trade lasted at most seven years from 2001 to 2008 when exports hit a peak of 38% of China’s GDP. But China’s export markets have since changed with the EU and ASEAN now surpassing the USA as China’s largest trading partners. Chinese exports to the USA have now declined to a mere 2% of its GDP, half of which consists of the ‘export processing’ trade which will likely relocate to lower-cost developing countries in the next few years.

    The fact that there are US multinationals still sourcing their products from or outsourcing their manufacturing to China does not imply that Chinese manufacturing industries are still dependent upon the US market which has become marginal to the Chinese economy. As a matter of fact, the Chinese retail market has surpassed the US market in 2019 with China’s ecommerce market now FOUR(4) times larger than the US ecommerce market. China now wants to balance its trade with the world by turning from the ‘factory of the world’ into becoming the ‘market of the world’.

    China played the ‘outsourcing’ game for a decade or two but that game is now over.

    • Replies: @Mefobills
  170. Mefobills says:
    @antibeast

    China played the ‘outsourcing’ game for a decade or two but that game is now over.

    YEP. China has climbed the industrial curve and can either turn on internal consumption, and/or use belt and road for acquiring raw materials and markets.

    The hubris and conceit of the atlanticists was that China could be supplied with raw materials via ship, and then the finished goods could be exported via ship.

    It worked for and Island country like Japan, and after all – China’s west coast is an island compared to the interior, which has little in the way of navigable riverine waterways.

    So, the atlantacists gambled that a country like the U.S. could lose its patrimony and help build up China, and then China would eventually succumb to the the liberal trading atlantacist system. And if China ever gets froggy, then the U.S. Navy could always bomb and interdict China’s west coast and choke off shipping traffic.

    The Atlantacists probably never figured that China would build internal rail-roads, airports and other overland connectors using the American System of Economy ideas.

    It is still true that America’s losing its patrimony is a generational theft. It only takes a short amount of time to transmit hard won knowledge and capability. Some inventors work their entire lives for small gains, which were on-sold to China for wage arbitrage. The millions of American laborers who worked for generations had their birthright sold off, a generational theft that is coming home to roost, as they can no longer produce goods as prices – they no longer earn the increment of production.

    So, it was a two step shuffle, and China did help the gambit along early on in the cycle. This was done with copy cat factories and induced transfer of intellectual property. I call it the wall-street/china gambit.

    You have to be impartial and take a third person view. There were bad actors on both sides. Although one could take the position that American labor let itself get conned by the agents of mammon. As if only monetary prices matter, and physical economy is a chimera.

    • Replies: @Mefobills
    , @antibeast
  171. Mefobills says:
    @Mefobills

    China’s east coast. Sorry. Navigable by the south china sea.

    Easily interdicted with outposts such as Taiwan and island hopping.

  172. antibeast says:
    @Mefobills

    YEP. China has climbed the industrial curve and can either turn on internal consumption, and/or use belt and road for acquiring raw materials and markets.

    What the ‘export processing’ trade did for China was to earn enough USD from its cheap exports with which to buy raw materials priced in USD from the world. That allowed China to build up its physical infrastructure and pay for its manufacturing industries which needed raw materials from developing countries as well as technology transfers from advanced countries. The BRI came out of the idea that China needed to invest in building up the physical infrastructure of developing countries to access their raw materials. But the BRI has since evolved into building up their industrial infrastructure to accommodate the manufacturing industries that will need to be relocated to BRI countries in the future.

    The hubris and conceit of the atlanticists was that China could be supplied with raw materials via ship, and then the finished goods could be exported via ship.

    It worked for and Island country like Japan, and after all – China’s west coast is an island compared to the interior, which has little in the way of navigable riverine waterways.

    So, the atlantacists gambled that a country like the U.S. could lose its patrimony and help build up China, and then China would eventually succumb to the the liberal trading atlantacist system. And if China ever gets froggy, then the U.S. Navy could always bomb and interdict China’s west coast and choke off shipping traffic.

    The Atlantacists probably never figured that China would build internal rail-roads, airports and other overland connectors using the American System of Economy ideas.

    It’s fundamentally two very different geopolitical models: Atlanticist vs Eurasianist.

    The Atlanticists were wrong to assume that China would not be able to turn around its manufacturing industries to serve its own domestic market. In other words, China would be perpetually relegated to the ‘outsourcing’ business just like Mexico or Malaysia, unable to climb out of the so-called ‘middle-income’ trap. Also, the Atlanticists assumed that China’s export trade will always be oriented towards serving the US market which requires access to the transpacific shipping lanes guarded by the US Navy. They also assumed that China’s imports will always come from seaports located in the coastal cities of the Eastern Seaboard which face the East and South China Seas. That’s why the US Deep State ever since Obama’s ‘Pivot to East Asia’ has been ramping up its ‘FONOP’ strategy by deploying the US Navy more often to ‘patrol’ the East and South China Seas as a form of ‘gunboat’ diplomacy. That was also the rationale behind the US Deep State’s hand in forcing their Philippine Puppet Aquino to file the PCA legal case against China in the SCS Islands dispute.

    They forgot that China borders Russia which is the largest country in the Eurasian continent, spanning Eastern Europe from St. Petersburg to East Asia in Vladivostok. With the completion of pipelines from Russia, China is now sourcing its oil and gas imports from its northern neighbor which is also sought by Japan. China’s BRI attempts to circumvent the US Navy’s potential chokehold on the East and South China Seas as well as the Straits of Malacca via overland routes across Russia, Central Asia, Southeast Asia and South Asia.

    China’s BRI is based on the Eurasianist model which Putin also advocates with Russia’s EEU. Both are in response to the Atlanticist strategy of ‘containing’ China via the US Navy and Russia via NATO, respectively. Ironically, Imperial Germany also faced the same Atlanticist chokehold at the time of Bismarck and Wilhelm with the UK and France facing a rising Germany which had the misfortune of being in the wrong place at the wrong time. That’s the Thucydides Trap that Imperial Germany faced which both China and Russia now want to escape from.

    The weak spot is Eastern Europe with too many balkanized countries unable to get along with each other which the Atlanticists have destabilized in order to ‘contain’ Russia. The bright spot is the EU which has allowed its 27 EU member-states to live in peace, progress and prosperity since WWII.

    It is still true that America’s losing its patrimony is a generational theft. It only takes a short amount of time to transmit hard won knowledge and capability. Some inventors work their entire lives for small gains, which were on-sold to China for wage arbitrage. The millions of American laborers who worked for generations had their birthright sold off, a generational theft that is coming home to roost, as they can no longer produce goods as prices – they no longer earn the increment of production.

    Agree. But remember that China didn’t play the ‘outsourcing’ game until 2001 when the USA lifted Chinese sanctions imposed after Tiananmen. That ipso facto implies that America’s patrimony was already lost to Japan, South Korea, Taiwan, Singapore, HK, Malaysia, Mexico, etc. BEFORE China joined the ‘outsourcing’ game in 2001 as US manufacturing industries were already hallowed out by that time. In fact, the Asian contract manufacturers who own and operate factories all over Asia to serve US multinationals are mostly from HK, Taiwan, Singapore and Malaysia NOT from ‘Communist China’. While it’s true that the Chinese manufacturers learned the ‘outsourcing’ trade from their East Asian cousins who probably got their industrial technology from Germany, Japan or the USA, the Chinese manufacturers have since ‘graduated’ from the ‘export processing’ trade and have managed to create their own Chinese brands to serve the Chinese domestic market while their East Asian cousins are still doing the same ‘outsourcing’ trade they did for the past 70 years. A good example is the footwear industry where Chinese brands such as ANTA, 361, Telent, PEAK, Li-Ning, etc. have succeeded in building up their brands nationally to compete against Western brands such as Nike and Adidas while there are no equivalent HK, Taiwan, Singapore or Malaysian footwear brands in China.

    So blame the East Asians — not ‘Communist China’ — who beat the Americans at their own game.

    • Thanks: Mefobills
    • Replies: @Mefobills
  173. @Mefobills

    Not protected class but home owners that were paying more in property taxes than what they had originally paid for their homes. The power to tax is the power to destroy. Another plundering operation by the radical Jerry Brown and criminals in the Dem. party. The same policy continues today with socialist and Zionist operative Newsom.

    Half the people on welfare live in California while illegal aliens have flooded the state. These disastrous policies have lowered productivity and are responsible for most of the massive drug problem that the socialists keep throwing tax payer money into. Incredibly these same dead beat leaches are of course voting to raise taxes on the productive class while disenfranchising property owners.

    No wonder everyone (that is not on welfare) is trying to get out of the state. Not just whats left of the middle class but many large corporations such as Tesla, Kabota, Oracle, Hewlett Packard and many more. Hudson likes to talk a about the predatory class, he just fails to mention that it is mostly tied in with predatory government.

  174. @antibeast

    “The Cold War at the time dictated US foreign policy towards Japan INC which meant that US geopolitical interests took precedence over US economic interests until things became so bad that the US government forced Japan INC to accept the Plaza Accord in 1985. Shortly thereafter, Japan INC entered into its ‘Lost Decade’ which lasted from 1991 to 2001 due to excessive financial speculation causing the real-estate bubble to burst in 1991.”

    Correct. And now they are hoping to use India and Vietnam in the same way…. The results would be the same (though I don’t think either can be as competitive as Japan was). Room was made for China – to make the most of China and the USSR having a tiff… But China wasn’t going to be willingly neutered like Japan.

    “the US Fed could print unlimited amounts of USD which fed the appetite of the US government as well as US citizens to borrow unlimited amounts of USD from the world. That’s how the USA achieved $60,000 GDP per capita which is 20% higher than Germany’s $50,000 GDP per capita and 50% higher than Japan’s $40,000 GDP per capita. It’s all DEBT!”

    Indeed… US citizens have much higher GDP per capita than citizens in Germany and Japan – but citizens in Germany and Japan have higher quality of life on average.

    • Replies: @Mark Tapley
    , @antibeast
  175. @showmethereal

    Yeah but Germany and Japan don’t have 900 military bases so that the Israeli Foreign Legion (U.S. Military) can make the world safe for “democracy” as Jewmerica fights the “War On Terror” for Greater Israel and the Zionist syndicate’s NWO.

  176. antibeast says:
    @showmethereal

    And now they are hoping to use India and Vietnam in the same way…. The results would be the same (though I don’t think either can be as competitive as Japan was). Room was made for China – to make the most of China and the USSR having a tiff… But China wasn’t going to be willingly neutered like Japan.

    The US Deep State is planning to prop up India as a way to ‘contain’ China as described in the ‘Indo-Pacific’ Strategy recently declassified by the Trump Administration in the same way that the US Deep State propped up Japan as a way to ‘contain’ the Soviet Union.

    US citizens have much higher GDP per capita than citizens in Germany and Japan – but citizens in Germany and Japan have higher quality of life on average.

    What I meant was: how can the USA GDP per capita be so much higher than Germany and Japan? The reason is that the USA GDP per capita of $60K is not real wealth because it’s all DEBT!!! That illusory wealth will disappear like a mirage once all those debts become due and payable.

    • Agree: showmethereal
    • Replies: @Mark Tapley
  177. @antibeast

    How did Jewmerica prop up Japan to “contain the Soviet Union? First of all the USSR was a wholly created entity by the U.S. and the Jew International bankers. Not only would this Jew run Hegelian Dialectic facade never have gotten a foothold in Russia without massive input from the Zionists using the contrived WW1 as a platform for the establishment of the “eastern Zionist empire” but also to gain the bridgehead in Palestine that is even more critical today. It still took about 8 years and massive aid from Jewmerica for the Bolsheviks (Jews) to consolidate the entire country.

    Once under Zionist control the USSR which originally was our great Allie and then was switched to our “deadly enemy” could only be kept from falling apart through massive non-stop agricultural, industrial and financial aid. in the 1950’s there were less automobiles in the USSR than in Spain which was noted for its backwardness. In 1989 the USSR produced less grain than Russia did under the Czar. The Zionist “official declassified propaganda” that you rely on never disclosed any of this. I remember when the whole propped up deception was finally allowed to collapse. What were the official Jew MSM and Kissinger telling everyone, do you remember? At the time of the collapse the goyim were all told that the Soviets were very powerful and there could be a nuclear war at any time. Big Jew Kissinger counseled the goys of Jewmerica that they had to get the best deal they could because the Soviets were so powerful. Thats how reliable your administration information is. Do you think the same criminals that contrive the wars, did 911, WMD’s and the fake virus are going to tell the truth about anything? You must even think the “riot at the capitol” was real.

    Japan would have “contained the Soviets” just as Germany would have if the Zionists had not intervened. The Japanese had occupied Manchuria for 50 years before WW2 and would have never allowed the communists to take over China. That is why (((Roosenvelt))) and his 52 Jew advisors contrived Pearl Harbor (Like 911 remember) and formulated the ten point planks to antagonize the Japanese. Some people just like to believe what the “official documents” by the Zionist liars want them to.

    • Replies: @Smith
  178. Smith says:
    @Mark Tapley

    Japan has been used as a weapon to attack Russia in the past, just like China was used as a weapon to destroy the USSR and harm Vietnam, and now USA is trying to use the same strategy to put Vietnam against China.

    Lenin said it correctly “the capitalists will sell you the ropes to hang them”, these greedy motherfuckers never want to dirty their hands (unless pushes come to shoves like in Korea and Vietnam and Iraq) and would back rival states to contain each other.

    China too has learned this strategy and use this in Pakistan vs. India and Cambodia vs. Vietnam.

    • Replies: @antibeast
  179. antibeast says:
    @Smith

    Japan has been used as a weapon to attack Russia in the past, just like China was used as a weapon to destroy the USSR and harm Vietnam, and now USA is trying to use the same strategy to put Vietnam against China.

    The Trump Administration was cool to the idea of using Vietnam against China as evidenced by its decision to impose 400% tariffs on steel imported from Vietnam and its last-minute attempt to impose tariffs on imported goods from Vietnam which was abandoned only after lobbying from US companies which had switched to Vietnamese factories to escape Chinese tariffs.

    China too has learned this strategy and use this in Pakistan vs. India and Cambodia vs. Vietnam.

    Nonsense. China is not trying to ‘contain’ anyone but only pursuing its own self-interest. In contrast, the USA backed Pakistan and Cambodia in Afghanistan and Vietnam, respectively, in order to ‘contain’ the Soviet Union.

    • Replies: @Smith
  180. Smith says:
    @antibeast

    Oh please, China’s self interests is to keep its powerful rivals in check (India, Korea, Vietnam, Japan, Russia).

    You can say USA’s self-interest is to combat China too because it’s eating into the pies of the American empire.

    And China itself also backed Afghanistan AND Cambodian rebels along with the USA, with the goal to destroy the USSR. Was that China’s self interest too?

    • Replies: @antibeast
  181. antibeast says:
    @Smith

    Oh please, China’s self interests is to keep its powerful rivals in check (India, Korea, Vietnam, Japan, Russia).

    Not true at all. China historically had good relationships with powerful Empires in India and Persia, as well as various Southeast Asian States including powerful ones like the Srivijaya and Majapahit Empires. China also had close cultural and economic ties to Korea and Japan.

    And China itself also backed Afghanistan AND Cambodian rebels along with the USA, with the goal to destroy the USSR. Was that China’s self interest too?

    The USSR became hostile to China after the Sino-Soviet split in 1960. Nixon (and Kissinger) later decided to approach China and offered Mao a deal which Deng accepted. So yea, China was acting in its self-interest by aligning itself with the USA against the Soviet Union. And no, China didn’t want to destroy the Soviet Union which imploded on its own.

    • Agree: showmethereal
  182. Mefobills says:
    @antibeast

    The artic route being pioneered by nuclear ice breakers adds another dimension to your thesis.

  183. Smith says:

    Not true at all. China historically had good relationships with powerful Empires in India and Persia, as well as various Southeast Asian States including powerful ones like the Srivijaya and Majapahit Empires. China also had close cultural and economic ties to Korea and Japan.

    Persia has been too far from China’s grasp, but China has had spats or outright wars with these specific countries: India, Vietnam, Korea, Japan, Russia, and some more that China absorbed, historically.

    The USSR became hostile to China after the Sino-Soviet split in 1960.

    When did USSR attack China? Reality shows it’s more like Mao who was getting senile and power-hungry that he thought up conspiracies that US and USSR collaborated with each other, then did the collaboration himself by inviting in Nixon and Kissenger, LOL

    So yea, China was acting in its self-interest by aligning itself with the USA against the Soviet Union. And no, China didn’t want to destroy the Soviet Union which imploded on its own.

    So it IS China’s self-interest to keep its rival (the USSR) in check. And yeah, I’m sure the 10 years of China activity in Cambodia and the factionalization of the 2nd world didn’t contribute greatly to the downfall of the USSR, no. And surprise, the downfall of the USSR actually plays greatly into China’s hands, I’m sure it’s all a regretful coincidence.

    • Replies: @antibeast
  184. antibeast says:
    @Smith

    Persia has been too far from China’s grasp, but China has had spats or outright wars with these specific countries: India, Vietnam, Korea, Japan, Russia, and some more that China absorbed, historically.

    Since when did China fight wars against India, Korea, Japan and Russia? The Mongols tried but failed to invade Japan while Korea became a Chinese protectorate due to the threat of Japanese invasion. The Manchus fought the Russians which ended with the Treaty of Nerchinsk. China hardly fought any wars against the Muslim Empires in Central Asia nor invaded any Southeast Asian country.

    When did USSR attack China? Reality shows it’s more like Mao who was getting senile and power-hungry that he thought up conspiracies that US and USSR collaborated with each other, then did the collaboration himself by inviting in Nixon and Kissenger, LOL.

    Mao had a falling out with the Soviet Union after 1960 when the USSR started provoking unrest amongst the Muslim Uyghurs in Xinjiang. Nixon wanted to drive a wedge between the USSR and China which Mao welcomed as a way to defend China against the Soviet Union. The USSR then became ‘expansionist’ and later invaded Afghanistan in 1979. That’s when Deng cemented his deal with the USA to support the Muslim rebels in Afghanistan.

    So it IS China’s self-interest to keep its rival (the USSR) in check. And yeah, I’m sure the 10 years of China activity in Cambodia and the factionalization of the 2nd world didn’t contribute greatly to the downfall of the USSR, no. And surprise, the downfall of the USSR actually plays greatly into China’s hands, I’m sure it’s all a regretful coincidence.

    China’s rivalry with the USSR had nothing to do with Cambodia which China had long supported when Sihanouk established diplomatic ties with the PRC in 1965. And no, China had nothing to do with Soviet expansionism which saw the USSR invading Afghanistan. Nor did China had anything to do with Gorbachev who began promoting ‘glasnost’ and ‘perestroika’ in the 80s, leading to the downfall of the USSR in 1990. That was not the fault of Deng who ordered the crackdown on student protestors in Tiananmen precisely to avoid the political instability that afflicted the USSR after Gorbachev’s political liberalization. The CCP didn’t want the USSR to collapse at all and to this day does everything to avoid political liberalization which ultimately doomed the Soviet Union.

    • Replies: @Smith
  185. Smith says:
    @antibeast

    This is reading exactly like that guy, Deep Thought, is this is the “official history” taught in Chinese history book? Let’s go over it then.

    Since when did China fight wars against India, Korea, Japan and Russia?

    Sikh-Qing conflict in Tibet: https://en.wikipedia.org/wiki/Dogra%E2%80%93Tibetan_War
    Qing invasion of Joseon: https://en.wikipedia.org/wiki/Qing_invasion_of_Joseon
    Yuan invasion of Japan: https://en.wikipedia.org/wiki/Mongol_invasions_of_Japan
    Japan invasion of Korea with Ming intervention: https://en.wikipedia.org/wiki/Japanese_invasions_of_Korea_(1592%E2%80%931598)
    Russian invasion of China: https://en.wikipedia.org/wiki/Russian_invasion_of_Manchuria

    China hardly fought any wars against the Muslim Empires in Central Asia nor invaded any Southeast Asian country.

    Qing re-conquest of Xinjiang: https://en.wikipedia.org/wiki/Qing_reconquest_of_Xinjiang
    Various Chinese invasion/occupation of Vietnam: https://en.wikipedia.org/wiki/Vietnam_under_Chinese_rule

    Mao had a falling out with the Soviet Union after 1960 when the USSR started provoking unrest amongst the Muslim Uyghurs in Xinjiang.

    No, Mao had falling with the USSR before that, he was humiliated by Stalin in 1949, when Stalin is gone, he pretended to praise Stalin to dish Kruschev, then later he dished Stalin altogether. But the reason why Mao goes against Soviet so much is because many chinese were pro-Soviet, such as Peng Dehai, the hero of the Korean war. This, Mao cannot forgive, thus in the Cultural Revolution, he sent lackeys to humiliate and torture many, even Peng.
    A more detailed reason can be found in this thread Quora thread: https://www.quora.com/Why-did-the-Sino-Soviet-split-happen
    It has both chinese and Russian perspective, and we can see the contradictions on the chinese side.

    [MORE]

    The USSR then became ‘expansionist’ and later invaded Afghanistan in 1979. That’s when Deng cemented his deal with the USA to support the Muslim rebels in Afghanistan.

    So the CPC thought the USSR’s intervention with the plea of help from the Afghanistan government as “expansionism” and turned around to shake hands with American and fund muslim terrorists despite they themselves wanting to fight muslim uprising in Xinjiang, nope, I don’t think so. The real dirty reason is that China wanted to contain the USSR.

    China’s rivalry with the USSR had nothing to do with Cambodia which China had long supported when Sihanouk established diplomatic ties with the PRC in 1965. And no, China had nothing to do with Soviet expansionism which saw the USSR invading Afghanistan.

    China’s rivalry with the USSR resulted in the disastrous invasion of Vietnam in 1979 to “teach Vietnam a lesson” and promptly scurried back at the border.
    China’s rivalry with the USSR resulted in China funding Pol Pot along with CIA in Thailand borders to destabilize the new government in Cambodia for 10 years.
    China’s rivalry with the USSR resulted in China, ASEAN and America sanctioning Vietnam and Cambodia for 10 years for removing Pol Pot and his genocidal banditry ass.
    No, China’s rivalry with the USSR has everything to do with the Vietnam-Cambodia conflict at the time.

    And no, China had nothing to do with Soviet expansionism which saw the USSR invading Afghanistan. Nor did China had anything to do with Gorbachev who began promoting ‘glasnost’ and ‘perestroika’ in the 80s, leading to the downfall of the USSR in 1990.

    Why does China fund muslims terrorists in Afghanistan with the USA then? Why does China invade Vietnam and then along with the USA, sanction Vietnam & Cambodia, forcing the USSR and the eastern bloc to divert aid to help Vietnam?
    These are the knives that twist and bleed the USSR, it did not kill, but it leads to Gorbachev.

    The CCP didn’t want the USSR to collapse at all and to this day does everything to avoid political liberalization which ultimately doomed the Soviet Union.

    The CCP has already done economic liberalization, which is why we have billionaire CPC party members.

    • Replies: @antibeast
  186. antibeast says:
    @Smith

    Sikh-Qing conflict in Tibet, Qing invasion of Joseon, Yuan invasion of Japan, Japan invasion of Korea with Ming intervention, Russian invasion of China.

    That’s all you can come up with in 2,200+ years of Chinese history? Both the Mongols and Manchus were foreign invaders who conquered and ruled China by setting up the Yuan and Qing Dynasties respectively. China was indeed ‘expansionist’ but under foreign rulers during the Yuan and Qing Dynasties. The Russian invasion of Manchuria had to do with the First Sino-Japanese War when Japan invaded China. That has nothing do with your claim that China invaded Japan.

    No, Mao had falling with the USSR before that, he was humiliated by Stalin in 1949, when Stalin is gone, he pretended to praise Stalin to dish Kruschev, then later he dished Stalin altogether. But the reason why Mao goes against Soviet so much is because many chinese were pro-Soviet, such as Peng Dehai, the hero of the Korean war. This, Mao cannot forgive, thus in the Cultural Revolution, he sent lackeys to humiliate and torture many, even Peng.

    No, Mao barely dealt with Stalin who died in 1953 shortly after the Korean War. China still had good relations with the USSR at the time but Mao had a falling out with the erratic Khrushchev whose visit to the USA in 1959 raised suspicions in China regarding the USSR’s strategic intent. Mao treated Khrushchev coldly thereafter. The Cultural Revolution had nothing to with the USSR while Peng Dehuai lost Mao’s trust after criticizing the Great Leap Forward.

    So the CPC thought the USSR’s intervention with the plea of help from the Afghanistan government as “expansionism” and turned around to shake hands with American and fund muslim terrorists despite they themselves wanting to fight muslim uprising in Xinjiang, nope, I don’t think so. The real dirty reason is that China wanted to contain the USSR.

    Your timeline is wrong because your order of events is reversed. The USSR began fomenting Muslim extremists in Xinjiang in the 60s BEFORE the USA decided to support Muslim extremists in Afghanistan in the 70s. China didn’t do anything for the Muslim extremists in Afghanistan until after Deng struck a ‘quid-pro-quo‘ with the Americans during his visit to the USA in 1979.

    China’s rivalry with the USSR resulted in the disastrous invasion of Vietnam in 1979 to “teach Vietnam a lesson”.
    China’s rivalry with the USSR resulted in China funding Pol Pot along with CIA in Thailand borders to destabilize the new government in Cambodia for 10 years.
    China’s rivalry with the USSR resulted in China, ASEAN and America sanctioning Vietnam and Cambodia for 10 years for removing Pol Pot and his genocidal banditry ass.

    Replacing ‘China’ with ‘USA’ in all your statements above would make them more accurate.

    China’s rivalry with the USSR has everything to do with the Vietnam-Cambodia conflict at the time.

    Dude, the Vietnam-Cambodia conflict had everything to do with Vietnam’s rivalry with Cambodia. Nothing to do with China. Nor the USSR.

    Why does China fund Muslim terrorists in Afghanistan with the USA then? Why does China invade Vietnam and then along with the USA, sanction Vietnam & Cambodia, forcing the USSR and the eastern bloc to divert aid to help Vietnam? These are the knives that twist and bleed the USSR, it did not kill, but it leads to Gorbachev.

    The USA funded the Muslim terrorists in Afghanistan and then sanctioned Vietnam after the invasion of Cambodia. Nothing to do with China.

    • Replies: @Smith
  187. Smith says:
    @antibeast

    That’s all you can come up with in 2,200+ years of Chinese history? Both the Mongols and Manchus were foreign invaders who conquered and ruled China by setting up the Yuan and Qing Dynasties respectively. China was indeed ‘expansionist’ but under foreign rulers during the Yuan and Qing Dynasties.

    Wait I thought China is a multiethnic society with no race, only culture? Why is Manchu-ruled China not China? Why is Mongol-ruled China not China? Both dynasties are recognized as Chinese dynasties by even chinese history book. In fact, modern China bases its territorial claims on Qing dynasty, if you reject that Qing is China, please calmly remove yourselves from Tibet and Xinjiang.

    [MORE]

    No, Mao barely dealt with Stalin who died in 1953 shortly after the Korean War. China still had good relations with the USSR at the time but Mao had a falling out with the erratic Khrushchev whose visit to the USA in 1959 raised suspicions in China regarding the USSR’s strategic intent.

    Mao had a direct conversation with Stalin in policies in 1949, and he was humiliated badly due to Stalin’s regard him as lesser. This was the seed to fall, Krushchev himself tried many times to visit China to negotiate, but the catalyst that changed the relationship forever was the Cultural Revolution.

    The USSR began fomenting Muslim extremists in Xinjiang in the 60s BEFORE the USA decided to support Muslim extremists in Afghanistan in the 70s. China didn’t do anything for the Muslim extremists in Afghanistan until after Deng struck a ‘quid-pro-quo‘ with the Americans during his visit to the USA in 1979.

    It’s not reverse, you accused USSR of formenting Xinjiang unrest in the 60s (which I have not seen proof of), meanwhile China collaborated with the USA and sending small arms to support muslims terrorists in Afghanistan.

    Replacing ‘China’ with ‘USA’ in all your statements above would make them more accurate.

    Why not both? China and USA team up to do both.

    Dude, the Vietnam-Cambodia conflict had everything to do with Vietnam’s rivalry with Cambodia. Nothing to do with China. Nor the USSR.

    Pol Pot sending letter to China asking for help against Vietnamese (and USSR aggression): https://www.marxists.org/archive/pol-pot/1978/00001.htm
    Pol Pot own speech accusing Vietnam and USSR and Warsaw pact as imperialists: https://www.marxists.org/history/erol/periodicals/class-struggle-us/cs-11-pol-pot.pdf
    Pol Pot getting support from China while massacring ethnic chinese in Cambodia: https://english.cambodiadaily.com/features/unpunished-purge-118960/

    The USA funded the Muslim terrorists in Afghanistan and then sanctioned Vietnam after the invasion of Cambodia. Nothing to do with China.

    China’s involvement in Afghanistan, along with the US, Pakistan and Saudi Arabia: https://nsarchive2.gwu.edu//coldwar/interviews/episode-17/brzezinski2.html
    China’s sanction of Vietnam BEFORE 1979: https://www.cambridge.org/core/journals/china-quarterly/article/abs/chinas-economic-sanctions-against-vietnam-19751978/B463487B0B13C2AC6F708FB2495CE4C4

    • Replies: @antibeast
  188. antibeast says:
    @Smith

    Wait I thought China is a multiethnic society with no race, only culture? Why is Manchu-ruled China not China? Why is Mongol-ruled China not China? Both dynasties are recognized as Chinese dynasties by even chinese history book. In fact, modern China bases its territorial claims on Qing dynasty, if you reject that Qing is China, please calmly remove yourselves from Tibet and Xinjiang.

    Yes, the Yuan and Qing Dynasties are considered ‘Chinese’ by Chinese historians because the Mongols and Manchus who conquered and ruled China later became ‘Chinese’. The Mongols and Manchus recruited Tibetans and Uyghurs who were their allies to help run China where they adopted and promoted Tibetan Buddhism. That’s the reason for the Qing’s military campaigns against the Sikhs in Tibet as well as their military conquests against the Oirat Mongols in Xinjiang. The Hans themselves had little to do with those military conquests.

    Mao had a direct conversation with Stalin in policies in 1949, and he was humiliated badly due to Stalin’s regard him as lesser. This was the seed to fall, himself tried many times to visit China to negotiate, but the catalyst that changed the relationship forever was the Cultural Revolution.

    Nonsense. Stalin didn’t want to back Mao during the Chinese Civil War due to the state of the Soviet Union after WWII. But after Mao won against Chiang in 1949, Stalin acknowledged Mao by recognizing the PRC right away. One year later, Stalin had to implore Mao to support Kim who decided to invade South Korea, thereby igniting the Korean War which China was reluctant to support. The Cultural Revolution started in 1966, six years after the Sino-Soviet split in 1960 which happened due to the erratic policies of Krushchev, not due to Stalin who died in 1953!!!

    It’s not reverse, you accused USSR of formenting Xinjiang unrest in the 60s (which I have not seen proof of), meanwhile China collaborated with the USA and sending small arms to support muslims terrorists in Afghanistan.

    China started supporting the Muslims in Afghanistan after the Soviet invasion in 1979. The USSR was already fomenting the Muslims in Xinjiang after the Sino-Soviet split in 1960, at least two decades before the Deng started supporting the Muslims in Afghanistan which was a payback against the USSR’s support for the Muslims in Xinjiang.

    [MORE]

    Why not both? China and USA team up to do both.

    No, China didn’t impose sanctions against anyone because it was isolated from the world economy. Don’t confuse China with the USA which did impose sanctions against Vietnam (after the invasion of Cambodia) and also against China (after Tiananmen).

    Pol Pot getting support from China while massacring ethnic chinese in Cambodia.

    You’re confused. The CCP considered the ethnic Chinese in Cambodia as ‘Cambodians’ just as the CCP considers the ethnic Chinese in Singapore as ‘Singaporeans’. Nobody knew that Pol Pot would slaughter his own people — whether native Cambodians or ethnic Chinese — but please don’t blame the crimes of the Pol Pot regime on China.

    You’re just grasping at straws here, trying to blame everything on China. The geopolitical realities of the Cold War at the time necessitated China’s conduct of its foreign policy. The USA had already fought two wars in Korea and Vietnam without winning either. So Nixon wanted to break the ice with Mao while Deng agreed to the Kissinger deal. The USSR (as well as its allies such as Vietnam) were too ossified by the Cold War, unable to adjust to the new geopolitical realities. Instead, Gorbachev made the fatal mistake of ceding too much to the USA while allowing the Soviet Union to wither away, finally imploding in 1989. Deng was wise enough not to make the same mistake, ignoring Western demands for political liberalization after he ordered the crackdown on student protestors in Tiananmen.

    The rest, as they say, is history.

    • Replies: @Smith
  189. Smith says:
    @antibeast

    I’m not seeing any single proof of what you are saying there.

    You are admitting Yuan and Qing empires were Chinese dynasties, thus they bear the responsibilities of their various conquests, the Han who said these empires weren’t chinese-ruled actually used territorial claims from Qing for their dispute, showing their dishonesty.

    [MORE]

    The Cultural Revolution started in 1966, six years after the Sino-Soviet split in 1960 which happened due to the erratic policies of Krushchev, not due to Stalin who died in 1953!!!

    This is crucial, you were harping this fact, but the most redline part of the Sino-Soviet split was the Sino-Soviet border conflict, which happens in 1969, and within the Cultural Revolution started in 1966 AND AFTER Kruschev is removed (1964):
    https://en.wikipedia.org/wiki/Sino-Soviet_border_conflict

    In 1960, there were wars of words, but wars of words were already starting as soon as 1949 (with Stalin’s dismissal tone of Mao’s interests), but it is 1969 that is actual war, and that is no coincidence!

    I have provided proof that China sanctioned Vietnam, Cambodia, and funded muslims terrorists and banditry in Afghanistan and Cambodia respectively, you were saying this is a necessity and I don’t agree. I have yet to see proof that USSR formenting trouble in Xinjiang (did they transfer small arms like the China did to the Mujahiden?)

    You are in fact legitimizing funding terrorism to contain rivals, just like the USA did as a political necessity (in fact, China DIDN’T have to do that). China chose to isolate itself by stopping trade with the USSR, the Eastern bloc and Vietnam and then shook hands with the USA in hope to get back Taiwan, it is pure opportunism, and you don’t have anything to counter that.

    • Replies: @antibeast
  190. antibeast says:
    @Smith

    You are admitting Yuan and Qing empires were Chinese dynasties, thus they bear the responsibilities of their various conquests, the Han who said these empires weren’t chinese-ruled actually used territorial claims from Qing for their dispute, showing their dishonesty.

    Just the opposite. I was trying to explain to you why the Yuan and Qing Dynasties were ‘expansionist’ which was out of character to the Song and Ming Dynasties. That part of Chinese history is indeed recognized as ‘Chinese’ but the impetus behind those military conquests was due to the propensity of the Mongols and Manchus for waging imperialist wars which dissipated after they had settled down and later assimilated to the Han Confucian culture. Admiral Zheng He’s overseas voyages during the Ming Dynasty proves the peaceful co-existence that the Chinese Empire practiced which was replaced by the ‘expansionist’ policies of the Manchu rulers of the Qing Dynasty.

    This is crucial, you were harping this fact, but the most redline part of the Sino-Soviet split was the Sino-Soviet border conflict, which happens in 1969, and within the Cultural Revolution started in 1966 AND AFTER Kruschev is removed (1964).

    In 1960, there were wars of words, but wars of words were already starting as soon as 1949 (with Stalin’s dismissal tone of Mao’s interests), but it is 1969 that is actual war, and that is no coincidence!

    No, you were trying to insinuate that Stalin’s relationship with Mao in 1949 had something to do with the Sino-Soviet split in 1960 which you somehow implied was what motivated Mao to launch the Cultural Revolution in 1966. Stalin who died in 1953 had nothing to do with the Sino-Soviet split in 1960 when Mao became suspicious of Khrushchev whose visit to the USA in 1959 resulted in the cancelation of the ‘nuke-for-grains’ deal that the USSR had agreed to in 1957. That was the real reason behind the Sino-Soviet split not because of Stalin’s ambivalent relationship with Mao nor with the Cultural Revolution.

    The Sino-Soviet border conflict in 1969 proves that China’s relations with the USSR had deteriorated to the point of armed conflict which influenced Mao’s decision to welcome Nixon’s overtures in 1971. Deng later visited the USA in 1979, the year the Soviet Union invaded Afghanistan. Both China and Pakistan then allied themselves with the USA in countering Soviet ‘expansionism’ in Afghanistan by supporting the Mujahideen in the 80s.

    This will be my last post on this topic as you have a strange view of the geopolitics and history of the Cold War era. China was playing ‘defensive’ moves to protect its national interests while the Soviet Union became ‘expansionist’ by invading Afghanistan. And no, China didn’t want to see the Soviet Union collapse at all as proven by the Sino-Soviet rapprochement between 1985-1989:

    https://digitalarchive.wilsoncenter.org/collection/183/sino-soviet-rapprochement-1985-1989

    • Replies: @Smith
  191. Alanna says: • Website
    @Scotist

    Hudson was saying that the Chinese people have greater purchasing capacity because the Chinese government provides more public goods to the people whereas the USA is using tax dollars for big military and to give subsidies to corporations who pay little or no taxes moreso than to programs that benefit the people.

  192. Smith says:
    @antibeast

    Just the opposite. I was trying to explain to you why the Yuan and Qing Dynasties were ‘expansionist’ which was out of character to the Song and Ming Dynasties.

    Han dynasty:
    Invasion of Vietnam: https://en.m.wikipedia.org/wiki/First_Era_of_Northern_Domination
    Invasion of Korea: https://en.wikipedia.org/wiki/Han_conquest_of_Gojoseon
    Invasion and annexation of Xiongnu: https://en.wikipedia.org/wiki/Han%E2%80%93Xiongnu_War

    [MORE]

    That part of Chinese history is indeed recognized as ‘Chinese’ but the impetus behind those military conquests was due to the propensity of the Mongols and Manchus for waging imperialist wars which dissipated after they had settled down and later assimilated to the Han Confucian culture.

    To this day, “Han chinese” still believe that the territories conquered by the “imperialist” Yuan and Qing dynasties belonging to them, and still yearn for “lost territories” (Russia Far East, South East Asia sea) so saying their Confucianism values do not expand is a bold lie.

    No, you were trying to insinuate that Stalin’s relationship with Mao in 1949 had something to do with the Sino-Soviet split in 1960 which you somehow implied was what motivated Mao to launch the Cultural Revolution in 1966. Stalin who died in 1953 had nothing to do with the Sino-Soviet split in 1960

    How and why? I said that even in 1949, the crack between Mao and Stalin was forming, and this cultimates in the split when Stalin died, the wars of word already started in the 1950s, NOT 1960. You were blaming Kruschev even when Kruschev tried to make peace with Mao. The Cultural Revolution was made with purpose of with mass purging of Soviet-friendly chinese like Peng Dehai and general dissidents, which fits perfectly into the time frame and not a coincidence at all.

    That was the real reason behind the Sino-Soviet split not because of Stalin’s ambivalent relationship with Mao nor with the Cultural Revolution.

    Please provide proof that this is the “real reason”. Is this in the chinese history book, along with the USSR “formenting unrest” in Xinjiang? There’s a multitude of reasons behind the Sino-Soviet split, and it almost always starts with Chinese’s opportunism (hate the USSR for co-existing with USA, then turn to shake hands with the USA). The removal of Kruschev, the so-called lynchpid in your theory, actually results in the Cultural Revolution (1966) and the China-USSR border skirmish (1969).

    This will be my last post on this topic as you have a strange view of the geopolitics and history of the Cold War era. China was playing ‘defensive’ moves to protect its national interests while the Soviet Union became ‘expansionist’ by invading Afghanistan.

    So did China do “defensive” moves when it attacks the USSR in their borders in 1969, and then attacks Vietnam in 1979?
    The USSR intervened in Afghanistan from the official request of the Afghan government, did China receive any Vietnam approval for its invasion in 1979?

    And no, China didn’t want to see the Soviet Union collapse at all as proven by the Sino-Soviet rapprochement between 1985-1989:

    During this exact timeframe, China was still sanctioning the USSR and Vietnam-Cambodia.

    You are wrong about history, you deny (Han) China’s imperialism, and you deny the PRC’s own opportunism and aggression. You are just another China sycophant.

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