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Michael Hudson is a Distinguished Research Professor of Economics at the University of Missouri, Kansas City. He is the author of The Bubble and Beyond and Finance Capitalism and its Discontents. His most recent book is titled Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy.
ANTON WORONCZUK, TRNN PRODUCER: Welcome to The Real News Network. I'm Anton Woronczuk in Baltimore. And welcome to another edition of The Hudson Report. Now joining us is Michael Hudson. He's a distinguished research professor of economics at the University of Missouri-Kansas City. His two newest books are The Bubble and Beyond and Finance Capitalism and Its Discontents. Thanks for joining us, Michael.MICHAEL HUDSON, PROF. ECONOMICS, UMKC: Good to be here, Anton.WORONCZUK: So what do you have for us this week?HUDSON: I think what I'd like to talk about is the victory of David Brat in the Virginia primary last week and the connection between the Tea Party here, and a very similar victory of the nationalist right-wing parties in Europe in the parliamentary elections last month. In both cases, the critics have said, well, that's just the Tea Party, and they're ignorant and they're anti-immigrant, and this is the poor people voting against each other and blaming each other. The Tea Party's been blamed for an immigration--anti-immigrant platform. And the same thing has been happening with Le Pen's party in France and the Dutch parties. But that's actually not what David Brat said in his campaign, and it's not what the right-wing parties in Europe are saying. Brat made it very clear that what he was opposing was the fact that the conservative Republicans, as well as the Democrats in Congress, have both joined to support Wall Street. He said that on his opponent Cantor's Rolodex were all the names of the big Wall Street contributors, the same contributors that are on Obama's Rolodex. So he made it very clear that the protest that he was looking for, the vote, was still the anger against the bailouts in 2008, the way the bailouts were handled. And similarly in Europe, the accusation is that supporting the eurozone and the European Central Bank and European unity gives the bankers the ability to take control of the European government and to use them against the people to impose austerity, debt deflation, and a whole set of bank rules that is essentially causing the same kind of unemployment and poverty in Europe that it's causing here in the United States.WORONCZUK: So why do you think that the right-wing parties in Europe and the U.S. have been so successful in channeling the legitimate rage of its citizens against their governments?HUDSON: You've almost said it in the question. They've been successful because they are the only people talking about this problem. Amazingly enough, where is the left at all this? In Europe, the socialist parties and the labor parties have moved to the right wing of the political spectrum. It was a socialist party in Greece that supported austerity and the privatization selloffs. It was the Labour Party in England that out-Thatcherized Margaret Thatcher in privatizing the transportation system. And it's the Democrats here who took control of the bailout over the Republican opposition. It was the Democrats and the Obama administration that has been blocking bankruptcy reform and blocking debt write-downs over the Republican Congress saying, hey, this--the bailout and your pro-Wall Street is all you. So the left-wing, who's essentially moved so far to the right that the traditional right-wing parties, like the tea parties that are controlled essentially by the rich to steer them against government, essentially the right-wing parties have made a left-wing move around the Democratic Party in the United States.So it's very much like The Hound of the Baskervilles: why didn't the dog bark? Where is the left in coming forth with the same kind of proposals that it had at the beginning of the 20th century--progressive taxation, taxation against economic rent, government spending taking the lead in infrastructure? Why has the left in America come to support privatization, free trade, and the Trans-Pacific Partnership and essentially the giveaway to Wall Street? This is--somehow it's been muted and it's been de-toothed. And it's the absence of a left-wing party here, a left-wing alternative to the Obama administration and to Clinton that has enabled the Tea Party to somehow gather the labor vote, the anti-Washington vote, the anti-bank vote, the anti-bailout vote that normally would have gone to the left politics or the way it used to be.WORONCZUK: So, Michael, let me propose a hypothetical situation. Let's say we can put you in charge of the economic policy of the Left Progressive Party. What kinds of policies would you suggest that this party adopt in order to court citizens?HUDSON: Well, pretty much the same policies that Dennis Kucinich was trying to push within the Democratic Party under the Obama administration.For starters, we would have done health care as a single-payer the same way that Medicare and Medicaid has done. We wouldn't have made the Obamacare into a giveaway to the health insurance industry. We wouldn't have bailed out the banks. We would have done what Sheila Bair and Neil Barofsky said: let Citibank go under, let the other bad banks like Bank of America go under. You'd make banking a public option. Also a public option should be student loans: instead of giving a giveaway to the bank at guaranteed markup rates, the government should be making the loan. So what you need is what there used to be the whole center of the left: a public utility for banking. Essentially, you would increase the bankruptcy rules to what they were before the 2004 rollback of the bankruptcy. You'd let underwater home debtors roll their mortgages back to the normal market price of the property for collateral. You'd let underwater homeowners walk away from the property [incompr.] and just turn the property back to the banks if the banks were so irresponsible to make loans way in advantage--in excess of the property's value, like liar's loans and the massive fraud. And most of all, you'd throw the crooked bankers in jail if they broke the law, instead of giving them more bailout money and letting them break the law even more, which is exactly what the Treasury Department is continuing to do now. The Justice Department has still refused to throw a single banker in jail. So you have a government that's been taken over by the financial sector, taken over by Wall Street. And, of course, in this situation the right-wing is going to say government's bad itself. Well, it's not that government's bad; it's that the government's been taken over by Wall Street. And what you need are a set of rules--progressive taxation, taxing economic rent, anti-monopoly regulation like we used to have----to restore some degree of equity and to stop the economic polarization that's occurring in the United States.WORONCZUK: Okay. Michael Hudson, thank you so much for that report.HUDSON: Thank you, Anton.WORONCZUK: And thank you for joining us on The Real News Network.
DISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.
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