Debt Rattle March 18 2017
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Andreas Feininger Production B-17 heavy bomber at Boeing plant, Seattle 1942 • How Bankers Became The Top Exploiters Of The Economy (Michael Hu
[See the full post at: Debt Rattle March 18 2017]I sure hope that the majority of the Automatic Earth contributors and founders do not believe the same way that Mr. Hudson espouses.
He talks about landlords as though we are all part of the 1% who should be taxed of all our income for the greater public good. He seems to believe that the landlord does not contribute to society or the general welfare of a society since they do not “work” for their money from the rental. He seems to believe that the “State” is the only justified landowner / landlord. I guess he doesn’t want those who read his works and are too gullible to ask hard questions to know about the failures of the Communist societies that provided housing based upon your willingness to bribe public officials and live among the rats and raw sewage in state owned buildings. Buildings often built by the contractors who would pay the biggest kickbacks to the Government stooges or connected to the halls of the Government officials who were appointed by a Dictator, not elected by the citizens.
He claims that the rent paid to landlords is “wasted” from society and is not reflected in GDP or other methods of measuring output and productivity. What about all the work that it took to get the money to buy the rental? Not everyone inherits a rental from their family, many are bought as first homes then rented out after the financial ability of the buyer improves. What about the goods and services bought with the money the landlord “earns” from his or her rental? Does he think they squirrel it away under a rock? I imagine most of it is turned back into circulation to buy things such as education for their children or goods for their households. Even the uber-rich buy things and employ people. They don’t live in a tent in the park and bury their money in coffee cans.
What about the money that went into the tax coffers when the property was bought? The real estate agents and brokers that complete the documents, the Title company that checks to be sure the property can be legally sold? The property inspectors, the government inspections and recordings? The contractors who come in and renovate a run down property back from the brink of demolition so a family can live in it safely? What about the property management companies that assist absentee owners properly manage and maintain the property and collect the rents, which are often overdue?
All of these things cost money and create jobs. Money that is paid for by the owner of the property, often at a loss for the first several years while the debts from fixing up the property which is often ready to be condemned, are paid. These things all add jobs to the community, pay taxes that provide for public infrastructure and public jobs like school teachers, police and firefighters. They also give money to public universities where many of the “Commie” academia enjoy lives of ease with paychecks that put them very near the top 2-5% of the population.
He talks about bankers as though they are responsible for all of society’s problems. This is definitely a two-way street. Bankers only exist because people want to buy things they cannot afford. Buyers make the choice of financing things. They don’t have to spend money on new cars, fancy clothes, new appliances or vacations. These are often choices they make to feel good, or have luxuries not to survive.
People can choose to live frugally and pay cash. That’s how things were once. I can agree with him that real estate values are ridiculous based upon cheap financing and the gullible people that buy more than they will ever be able to pay back on the hope that they will get rich but that is the way our system works. If you don’t like it, you don’t have to participate in many of the debts that society piles up and you don’t have to live where real estate prices are ridiculously high.
I can agree that the Capitalist society we live in where the Government has been meddling in the free market and screwing things up is bad but one look only as far as the purges of citizens into mass graves under Stalin and Mao to understand our system, no matter its flaws is far superior to the one where the State gets to decide if you live or die at the end of a machine gun.
I sure hope more people wake up to the truth about Socialism and Communism because there are enough of us out here that will not allow it to happen here that blood will run in the streets if they try to pull the same thing here that Mao did in his country. That is why our Founders established the 1st and 2nd amendments to our Constitution. They believed strongly that the power of the citizens to choose their own destiny should never be hindered by a Government that would take away the basic human rights based upon the whims of unelected despots.
Will F.
You are so lost in the weeds of propaganda and corrupted history; it would be impossible to know where to start to answer your ignorance.
Thanks to Ilargi for including the Hudson interview. He is certainly one of the top coherent commentators on the political economic scene today, one who I am sure most AE readers agree with and respect.
seychelles
Indeed; Hudson, Keene, and Bill Black rock, when it comes to economic policies.
U.S. style capitalism is akin to the mafia controlled enterprise…Will F, Private property is a good thing, but it needs to be accompanied by tax policy to prevent overconcentration of wealth. Tax policy makes it extremely difficult to accumulate $1 Million because it taxes the hell our of wages, but makes it a lot easier to accumulate the second million, and then the third, and so forth. That’s because once you get over the hump you can live on the labor of others. That’s what needs to change.
I would agree with regulation of the real estate ownership situation that would limit or prevent overseas investors from purchasing anything related to residential real estate and limit the holdings of large investment funds or banks from buying residential real estate but I absolutely do not support any ownership of residential housing by the “State.” I also adamantly oppose instituting a total taxation of rental income for the better good to redistribute that wealth to the poor or to make land ownership for rentals so onerous and costly that nobody wants to do it anymore.
Although I have not read any of the books mentioned int he article, I would agree if they support regulation to prevent monopolization. Competition breeds efficiency and innovation but it cannot be government subsidized competition since that relies upon the money of the citizens to attack the rights those same citizens are entitled to.
If V. Arnold wants to educate me, then feel free. There is no propaganda in my thinking, it is all born of hard work and making good decisions. I don’t subscribe to the theories of the rich trickling money down when it comes to many aspects of society but I also realize that Communism and the other ism’s all espouse destroying personal freedoms and inalienable rights for the greater good of the “Party” meaning those who control the Police and the Military, if there is even a distinction between them in most totalitarian nations.
The history of Russia and China are very good teachers when it comes to the success you get when the State takes over the markets. You get rationing, in some cases mass starvation, occasionally genocide, and in the case of Russia and China, the totally unnecessary destruction of the environment.
I have lived through enough and studied enough to know that Communism doesn’t work. It is based upon the false premise that only the Government can be perfect. I have family and friends that have lived under a military state rule and know all to well how that works out for people who don’t live on the right end of the machine gun.
Rather than have a nation of hard working entrepreneurs who reach for the limits of their potential, you get a population of mediocrity and equal poverty among all where hard work and knowledge are often punished. Have you all forgotten the burning and outlawing of books and speech that does not conform to the Party line that come with totalitarianism? What about the Gulag’s and the death camps? The bread lines? Are they o.k. because they would be applied only to those in America that you do not like? The “unwashed masses” who still believe in personal freedom and those who cannot afford to attend your University?
As far as the “intelligent” ones that are part of academia, do you really believe the Universities will be allowed to continue under Communism? I believe history has some pretty good stories of the purges of intellectuals that various Governments held once they took over and the takeover of learning institutions that became subservient to the various government personnel who oversaw them.
I will be glad to listen to your responses, I always welcome a differing point of view, right up until you try to force me at the end of a rope or gun to accept your viewpoint.
Will F. Okay if the financial aspects of Mr Hudsons ideas don’t resonate could you explain to me how capitalism is nurturing the environment. All costs are externalities for poor assholes to wear like the Somali’s and their rich fishing grounds being a e-waste dump to name just one of many many arguments. Also if people do not have access to their own land and rent it – where do they get their food from? They get it from Monsanto serfs who also smash the land and soil to pieces to pay their fucking rents until they can’t and then they get aggregated into giant biosphere destroying farming entities. There are just so many arguments against the financial rentier vampire squid that I can’t begin.
You worked hard and made good decisions but I think we are talking about an order of magnitude here.
Having said that I respect your point of view.oxymoron
Yes, it is indeed an order of magnitude; and that is what Will F doesn’t understand. It may also explain his defensive-ness about being a landlord.
Will F; below is an article by Michael Hudson which I would recommend you read;
https://www.truthdig.com/arts_culture/item/how_the_rentier_class_cannibalizes_the_economy_20130111
He goes into great detail about the rentier class; and I seriously doubt you are a part of those rentiers’.Will F; “They also give money to public universities where many of the “Commie” academia enjoy lives of ease with paychecks that put them very near the top 2-5% of the population.”
That is factually wrong by a wide margin. And, you do not know that for a fact (“Commie” academia); you just read it somewhere and it jived with your preconceived beliefs. You have many other “gleaming generalities” that make constructive criticism extremely difficult and if you are really “open to” other POV’s; then start by reading alternative news sources instead of the U.S. MSM.What a fascinating idea! You know, you’re right: those who don’t do actual work shouldn’t get paid, and we should implement this immediately.
No more Idiot Trust Fund Kids. No more subsidized industries. No more Capital gains. No more inherited wealth. No more annuities. No more pension funds.
No more Social Security. Stop it today! No more State retirement funds. No more Medicare. No prescriptions, no free health care. No more free food and housing.
I mean, if it’s unjust to receive money for doing the work of capital accumulation and investing to fund new projects and ideas, then certainly it must be unjust to receive money for doing nothing whatsoever.
Unless you mean that we should still give all those things for doing no work, and should not give any money to those who ARE doing work. In which case, who do you think is going to do all the work you’re giving away? Me? I don’t think so, and history has proven this out 1,000 times.
Will F won’t be renting to you, and I won’t build your house. Neither will you build it yourself as the hammer salesman won’t sell you nails, since that requires someone to own a nail-making machine and someone to own an iron-digging and iron-transport machines which are paid back at capital depreciation. But hey, if you want take down trees with the burn-and-scrape method and use a deer hip-bone you killed yourself to hoe your garden in the woods, you’re welcome to. Because that’s all you’ll have. You may think 5% interest on a borrowed axe cheap then, but I doubt it. If Venezuela’s taught us anything, it’s that people will die by the millions before they change their minds.
I called him Commie Academia because the article is about a Communist academic and in my experience, there are a lot of them out there. I have friends and family in the College system in California and in parts east. California, especially Berkely is so far left that I begin to wonder if Stalin would be greeted as a hero, or if they would condemn him for being a sellout.
I will read your link. I like to learn new things and perspectives, often finding that I agree with the message but not the methodology to get there, nor do I agree with the politics they want to push. I don’t know about the Somali’s and their hardships but I do believe they live under a variation of a fuedal system where the warlord with the most guns and the most drugged up soldiers gets to make the rules; unless I am mistaken.
I do try to read news that is outside of the U.S. media arena but some of the best are in languages that I do not read and the interpretation often leaves something to be desired.
I generalize because those are my life experiences. If you want to talk about professors starving, they are not where I live. The University up the road from me pays such ridiculous sums that they have priced themselves out of the reach of many in the working classes and they are considered affordable.
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