Hudson: we have a problem.
Now, when one economist named Micheal Hudson, starts to warn us of impending woes, we should be concerned.
But when there are two Micheal Hudsons handing out warnings, then we really ought to sit up and listen!
After initially falling for the confusion myself, I was delighted to stumble across this recent piece where the clarification is laid to rest as the two Hudsons exchange views, putting across the rationale for our current economic woes in plain simple language:
Michael W. Hudson, reporter, and author of The Monster (release date today 6/12/10):
“Getting people to load up on debt required not only crooked tactics, but also changing their attitudes about debt. First, the finance industry stopped calling it debt. Debt meant you were in the hole. You owed. Calling it credit removed the stigma of going into deficit and instead replaced it with a sense that you were being conferred an admirable distinction.”
Michael Hudson, (veteran) economist and author of SuperImperialism:
“Your articles showed how the mortgage brokers and other pilot fish for Wall Street increased debt pyramiding by outright fraud. These sleight-of-hand lending practices at the local level were enabled by junk economics at the highest level.
This wealth creation really was debt creation. That’s what was bidding up real estate prices — just as was the case with leveraged buyouts bidding up stock prices during the takeover wave. And a rising proportion of this debt was ’empty’ debt, without any corresponding real value.”