Popular Resistance has the post Michael Hudson: US Dollar Hegemony Ended Abruptly Last Wednesday.

On Wednesday, March 23, 2022, the United States announced that it would freeze Russia’s access to its gold. Russia has the fifth highest amount of gold in the world. Economist Michael Hudson explains that this action, which follows the US seizing Venezuela and Afghanistan’s gold and assets, has effectively ended dollar hegemony, which has been in decline in recent years, and the free ride that the US has enjoyed abroad.

The Michael Hudson part starts at 28 minutes into the audio. As a follower of Modern Monetary Theory, I am pleased that Michael Hudson straightened out the seeming paradox between what Hudson wrote in this book “Super imperialism” and the rest of his writings about MMT.

Where the financing of USA deficits comes in is in our foreign trade. The deficit does not finance domestic trade. Except for Michael Hudson and Fadhel Kaboub, most MMT proponents have not talked about the foreign trade implications of MMT.

Naked Capitalism has the post NATO-Russia Proxy War: Revealing Signs of a Fading America: Michael Hudson. You can read the transcript here or listen to the interview at the Global Research post NATO-Russia Proxy War: Revealing Signs of a Fading America: Scott Ritter, Michael Hudson. At Global Research, the Michael Hudson part is in the second half hour.

Here is the opening salvo from Michael Hudson.

MH: I think it’s just the opposite of what you said. The war isn’t against Russia. The war isn’t against Ukraine. The war is against Europe and Germany. The purpose of the sanctions is to prevent Europe and other allies from increasing their trade and investment with Russia and China, because the United States saw that the centre of world growth is not in America now that it’s deindustrializing. Following neoliberal policies since the 1980s has ended up hollowing out the US economy. And how on earth can the United States maintain prosperity if it’s lost the ability to do wealth creation?

I have never heard Michael Hudson lay it out quite so bluntly as he did in this interview. If more people could hear this, they might change their mind about what is actually happening with Russia/USA/Ukraine.

Naked Capitalism has the article (with transcript) Michael Hudson Discusses Russia Sanctions Blowback on the Renegade.

Michael Hudson gives another talk on the broader implications of US sanctions against Russia for the American economy, the dollar, and China.

I am no longer placing any bets who who has a better prediction of the future. We are just going to have to watch it play out.

Naked Capitalism has the post Michael Hudson: America’s Real Adversaries Are Its European and Other Allies.

The success of China’s industrial policy with a mixed economy and state control of the monetary and credit system has led U.S. strategists to fear that Western European and Asian economies may find their advantage to lie in integrating more closely with China and Russia. The U.S. seems to have no response to such a global rapprochement with China and Russia leverage except economic sanctions and military belligerence. That New Cold War stance is expensive, and other countries are balking at bearing the cost of a conflict that has no benefit for themselves and indeed, threatens to destabilize their own economic growth and political independence.

Cutting back that spending, and indeed recovering industrial self-reliance and competitive economic power, would require a transformation of American politics. Such a change seems unlikely, but without it, how long can America’s post-industrial rentier economy manage to force other countries to provide it with the economic affluence (literally a flowing-in) that it is no longer producing at home?

Finally, an explanation of the USA and Russian motivations.

Naked Capitalism has published a transcript of the interview Economist Michael Hudson explains inflation crisis and Fed’s secretive $4.5 trillion bank bailout. I started reading the transcript, and finished by watching the video.

Economist Michael Hudson discusses what is causing the global inflation crisis, and also how the US Federal Reserve quietly bailed out big banks in September 2019 with $4.5 trillion of emergency repo loans that appear to have blatantly violated the law.

You couldn’t ask for a more complete coverage of all things economic and diplomatic.

Naked Capitalism has republished this interview Michael Hudson on Truth Jihad Radio Discussing Super Imperialism, Rentierism, and the American Political Duopoly.

Michael Hudson has posted this on his web site as Falling into Line: Turning Endless Deficits into a Power Base.

I like Naked Capitalism’s title better than Michael Hudson’s title. The transcript is the same in both places.

Here he starts to explain that there are two opposing ways to go about the investment in infrastructure

Michael Hudson: There are two kinds of infrastructure spending. The United States in the late 19th century developed the whole philosophy of infrastructure spending. And Simon Patton, who was the first economics professor in the United States at a business school—he was a business school professor at Wharton School—said: “Infrastructure is a fourth factor of production alongside labor, land and capital. But the purpose of infrastructure isn’t to make a profit, it’s for the government to invest and provide low cost essential needs education, transportation, communication and to provide low cost infrastructure so that the American industrialists can employ labor that doesn’t have to pay a high cost for education, doesn’t have to pay a high cost for health care, doesn’t have to pay a high cost for communications or cable TV or telephones or anything else.” Well, all this changed after the 1980s with the neoliberalism of Margaret Thatcher and Reagan and Bill Clinton.

Here is more of the explanation of infarstructure.

Michael Hudson: So that’s part of the system. Infrastructure as the Democratic Party sees it is a travesty of what American infrastructure was a century ago. And they don’t realize that the way infrastructure is financed, and what it’s priced for, is the key. Of course, Bernie Sanders said, “look, American companies won’t have to pay their employees so much money if the government pays for all of their medical costs.” Right now, eight percent of America’s GDP goes for health insurance and health care. That’s higher than any other country, and the health care is much worse because it’s all done for profit and done as cheaply as possible, and it’s been financialized.

Here he makes a point I have been trying to convey in several articles on my blog (which you are reading). I have been castigating the MMT experts for not hammering on this enough.

This quantitative easing has created trillions and trillions of dollars, but it’s all been used to buy stocks and bonds and package mortgages. It hasn’t been used to spend into the economy, which is what Stephanie wants. So the question is: if the government’s going to create money, is it going to be spending into the economy, which is what the MMT group that I’m a member of is advocating? Or is it going to be given to Wall Street just to support stock and bond prices and promote financialization? That’s really the the great issue financially in economic policy today.

The above excerpt was Michael Hudosn’s answer to these misconceptions expressed by the interviewer. I decided to show you the right answer before I showed you the wrong question.

Kevin Barrett: Ellen Brown has been on the show many times, talking about the need to make banking a public utility. And I recently read Stephanie Shelton’s[sic] The Deficit Myth. She argues that we can fix all kinds of problems and bring back full employment and have all sorts of goodies simply by having the government spend more money. This is the modern monetary theory position. And maybe that is true to a certain extent in the U.S. due to these privileges that you describe in Super Imperialism. I doubt if it’s nearly as true anywhere else, for all these reasons that you’ve been describing. Do you think that if the U.S. ever does opt for more of a Bernie Sanders style modern monetary theory approach, would they quickly run into the limits of spending money due to these international factors?

The interviewer, Kevin Barrett, introduced this interview by claiming to have been a follower of Michael Hudson for years. Even people who think they understand MMT can sometimes get it so wrong that I almost want to cry. How could he have been reading Michael Hudson, and get this basic stuff so wrong?

I just realized that I know the answer to my last question. The interviewer said he has had Ellen Brown on his podcasts. Ellen Brown poses as an expert, but she gets a lot of this stuff very wrong. Having listened to Ellen brown myself, I tend to stay away from listening to her anymore.

By the way, the name is Stephanie Kelton.

The Grayzone has a video Economist Michael Hudson on new cold war, Super Imperialism, China & Russia, dedollarization.

Max Blumenthal and Ben Norton of Moderate Rebels discuss with world-renowned economist Michael Hudson his concept of US “Super Imperialism,” the new cold war on China and Russia, and the potential end to the dollar as the global reserve currency.

Naked Capitalism includes this in their post Michael Hudson on American as Absentee Landlord on The Greyzone[sic]: Biden Administration, New Cold War, Super Imperialism, Dollar Weaponization. They have a slight dissent before the link to the video.

I commented on Naked Capitalism:

Grayzone with an “a”.

Max Keiser is so insistent on selling bitcoin, that I finally could not stand it anymore. I seldom watch the Keiser Report unless someone brings a particular episode to my attention.

What the video talked about China’s methodology at the end is what I have labelled “What Worksism”. I call myself a “what worksist”. If there is a niche in our society where a particular ism would work to make life better, I am for it. Industrial Capitalism in its proper place, Government Socialism in its proper place, and whatever other ism can be thought up.

What the Grayzone does not understand about Modern Money Theory could fill an ocean. Michael Hudson didn’t spend a lot of time trying to straighten them out. Modern Money Theory does not limit itself to governments with sovereign currency. It does explain the additional economic options that come with having a Sovereign currency and debts denominated in that currency. It is worth listening to Fadhel Kaboub talk about the range of sovereignty a country can have.

On Facebook I commented:

Great discussion. At the end they talk about my favorite ism “what worksism”, but they don’t use that term. What the Gray Zone does not understand about Modern Money Theory could fill an ocean, but Michael Hudson doesn’t waste too much time trying to correct them. Michael Hudson’s discussion about Max Keiser was very enlightening even if it went way over the heads of Ben Norton and Max Blumenthal.

Naked Capitalism has the post with transcript of the lecture Michael Hudson – Changes in Super Imperialism

This is another meaty talk with Michael Hudson, this time focusing on his classic Super Imperialism. Hudson has an updated and expanded version set to go to print soon.

I didn’t expect this video to be as enlightening as it is. I foolishly thought that I knew most of what Michael Hudson has explained over the years. There is just so much history that he knows (and participated in) that I have not heard before. He also talked about the history making work that he is now doing. On both ends of the history spectrum, he clarifies so much that I didn’t realize of how we got where we are and how the rest of the world will move on without us.

Naked Capitalism has posted the article Michael Hudson: Finance Capitalism vs. Industrial Capitalism – The Rentier Resurgence and Takeover. Here is the original article on Michael Hudson’s Web site.

This explains so much of what I have been trying to explain by this whole blog that I have been writing for 15 years. It goes way beyond the mechanics of Modern Money Theory. This is a long article, so I have tried to extract some of key points. Even that makes a long post.

The economy as a whole has suffered. Debt-fueled housing costs in the United States are so high that if all Americans were given their physical consumer goods for free – their food, clothing and so forth – they still could not compete with workers in China or most other countries. That is a major reason why the U.S. economy is de-industrializing. So this policy of “creating wealth” by financialization undercuts the logic of industrial capitalism.
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Another reason for deindustrialization is the rising cost of living stemming from conversion of public infrastructure into privatized monopolies. As the United States and Germany overtook British industrial capitalism, a major key to industrial advantage was recognized to be public investment in roads, railroads and other transportation, education, public health, communications and other basic infrastructure. Simon Patten, the first professor of economics at America’s first business school, the Wharton School at the University of Pennsylvania, defined public infrastructure as a “fourth factor of production,” in addition to labor, capital and land. But unlike capital, Patten explained, its aim was not to make a profit. It was to minimize the cost of living and doing business by providing low-price basic services to make the private sector more competitive.
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Under a regime of “burdenless taxation” the return on public investment does not take the form of profit but aims at lowering the economy’s overall price structure to “promote general prosperity.” This means that governments should operate natural monopolies directly, or at least regulate them. “Parks, sewers and schools improve the health and intelligence of all classes of producers, and thus enable them to produce more cheaply, and to compete more successfully in other markets.”Patten concluded: “If the courts, post office, parks, gas and water works, street, river and harbor improvements, and other public works do not increase the prosperity of society they should not be conducted by the State.” But this prosperity for the overall economy was not obtained by treating public enterprises as what today is called a profit center.
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For a century, public investment helped the United States pursue an Economy of High Wages policy, providing education, food and health standards to make its labor more productive and thus able to undersell low-wage “pauper” labor. The aim was to create a positive feedback between rising wages and increasing labor productivity.

That is in sharp contrast to today’s business plan of finance capitalism – to cut wages, and also cut back long-term capital investment, research and development while privatizing public infrastructure. The neoliberal onslaught by Ronald Reagan in the United States and Margaret Thatcher in Britain in the 1980s was backed by IMF demands that debtor economies balance their budgets by selling off such public enterprises and cutting back social spending. Infrastructure services were privatized as natural monopolies, sharply raising the cost structure of such economies, but creating enormous financial underwriting commissions and stock-market gains for Wall Street and London.
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Even if China and other Asian countries didn’t exist, there is no way that America can regain its export markets or even its internal market with its current debt overhead and its privatized and financialized education, health care, transportation and other basic infrastructure.

Found this article “Creating Wealth” through Debt: The West’s Finance-Capitalist Road – Michael Hudson, Peking University, School of Marxist Studies, May 5-6, 2018. This is what can be taught in Chinese Universities by USA scholars that cannot be taught in the USA.

Naked Capitalism has posted a transcript and a video of A Hard Look at Rent and Rent Seeking with Michael Hudson & Pepe Escobar.

Yves here. Another belated Christmas offering, a second talk by Michael Hudson, this one with the trenchant Pepe Escobar. Get a cup of coffee, because this is a meaty talk, and Michael provides extensive detail on the operation of rents and rentiers, with detail on who did what when. For instance, early in the conversation, Hudson gives a back-of-the-envelope of how little the average worker has left after paying for essentials like rent, medical care, and taxes. Also forgive the occasional typo; it took a lot of effort to transcribe a talk of this length.

An interactive discussion on wealth inequality and the “Great Game” on the control of natural resources.