Impaled on the Horns of a Dilemma

Here is an excellent interview with Michael Hudson, an economist who is bitterly opposed to the Wall Street interests.

Hudson presents the problem as a dilemma: the government can "save the economy" or they can they can "save the creditors who made the bad loans".

Gee... that doesn't sound like a dilemma to me. It's pretty obvious that you want to "save the economy". But wait... he explains why governments find themselves in a dilemma: The largest contributor to the politicall parties is the financial sector.

Watch this, something I never thought I would see... a modern economist calling for a return of the ancient "Jubilee" where debts were cancelled:



His conclusion: Until the government saves the economy and writes down the debts to the ability to pay there is not going to be a recovery from this recession. Amazing. Here is an economist telling us that the economists surrounding Obama are captives of Wall Street and are more interested in creating a keptocracy than in working for a democracy.

Personally, I think this guy is over the top. But I think he is useful. His arguments should put some fear into the Wall Street lobby and hopefully will get Obama to take a long look at the economists he has surrounded himself with. It is becoming more and more obvious that these economists are captives of Wall Street.

Hudson is useful because he separates the (1) social change Obama stands for from the (2) regressive pro-Wall Street tendencies of the Obama camp. It is helpful to recognize that in the real world people do not wear white hats vs. black hats. In fact, instruments of change such as Obama may in fact harbour regressive tendencies. Knowing this innoculates you from adulatory worship and keeps you critical of those in power.