Monday, September 7, 2015

Michael Hudson: Wall Street Parasites Have Devoured Your Retirement Plan and the U.S. Economy



 
Michael Hudson: Wall Street
Parasites Have Devoured Your Retirement Plan and the U.S.
Economy



By Pam Marten
September 01, 2015
"
Information Clearing
House
" - "WSOP" -  The riveting writer, Michael Hudson, has read our
collective minds and the simmering anger in our hearts. Millions of
American have long suspected that their inability to get financially ahead
is an intentional construct of Wall Street’s central planners. Now Hudson,
in an elegant but lethal indictment of the system, confirms that your
ongoing struggle to make ends meet is not a reflection of your lack of
talent or drive but the only possible outcome of having a blood-sucking
financial leech affixed to your body, your retirement plan, and your
economic future.
In his new book, “Killing the Host,” Hudson
hones an exquisitely gripping journey from Wall Street’s original role as
capital allocator to its present-day parasitism that has replaced U.S.
capitalism as an entrenched, politically-enforced economic model across
America.
This book is a must-read for anyone hoping
to escape the most corrupt era in American history with a shirt still on
his parasite-riddled back.

Hudson writes from his most powerful
perch in chapters describing how these financial parasites have tricked
our society into accepting them as a normal, productive part of our
economy. (Since we write about these thousands of diabolical tricks four
days a week at Wall Street On Parade, poignant examples came
springing to mind with every turn of the page in “Killing the Host.” From
the
well-placed articles in the
Wall Street Journal to
a front group’s pleas for more Wall Street
handouts
in a New York Times OpEd, to the dirty backroom manner in
which corporate speech was placed on a par with human speech in the
Supreme Court’s Citizens United decision, to
Wall Street’s private justice system and the Koch brothers’ multi-million dollar machinations to
instill Ayn Rand’s brand of “greed is good”
in
university economic departments across America — America has become a
finely tuned kleptocracy with a sprawling, sophisticated public-relations
base.)
How else to explain, other than
kleptocracy, the fact that Wall Street’s richest mega banks collect the
life insurance proceeds and tax benefits
on the untimely deaths of their
workers
– all codified into law by the U.S.
Congress – making death a profit center on Wall Street. Or,
as Frontline revealed, that
two-thirds of your 401(k) plan over a working lifetime is likely to be
lost to financial fees.
Hudson writes: “A parasite’s
toolkit includes behavior-modifying enzymes to make the host protect and
nurture it. Financial intruders into a host economy use Junk Economics to
rationalize rentier parasitism as if it makes a productive contribution,
as if the tumor they create is part of the host’s own body, not an
overgrowth living off the economy. A harmony of interests is depicted
between finance and industry, Wall Street and Main Street, and even
between creditors and debtors, monopolists and their
customers.”
What has evolved, says Hudson, is that
Wall Street banks have “become the economy’s central planners, and their
plan is for industry and labor to serve finance, not the other way
around.” [Up until this point the private central bankers (Rothschild
Moneychangers) have been successful beyond the wildest nightmares of the
plethora of debt-slaves worldwide – Image Below]

Jacob Rothschild
To gloss over the collapse of this
depraved economic model in 2008, Hudson says these Wall Street central
planners simply depict “any adverse ‘disturbance’ as being
self-correcting, not a structural defect leading economies to fall further
out of balance. Any given development crisis is said to be a natural
product of market forces, so that there is no need to regulate and tax the
rentiers.”
Similarly, when citizens rise up
en masse to demand a realignment of their economy, as happened
with the Occupy Wall Street movement, first the public-relations
masterminds dismiss them as an unhinged gathering of smelly hippies
[conspiracy theorists – ALL!], followed by
their violent eviction in the
middle of the night, with military precision, by the Praetorian Guard of
the kleptocracy. In Manhattan, the Praetorian Guard (NYPD) has a high-tech
surveillance center mutually staffed by cops and Wall Street personnel –
and
mainstream media find nothing unusual about
this
.
Hudson correctly calls 2008 a “dress
rehearsal,” writing that “Wall Street convinced Congress that the economy
could not survive without bailing out bankers and bondholders, whose
solvency was deemed a precondition for the ‘real’ economy to function. The
banks were saved, not the economy.” Hudson adds that the “debt tumor” was
left in place. (This is the nightmare we are presently watching
unfold.)

The result of the systemic disabling
of regulations on Wall Street has resulted in the following, says Hudson:
“…the wealthiest One Percent have captured nearly all the growth in income
since the 2008 crash. Holding the rest of society in debt to themselves,
they have used their wealth and creditor claims to gain control of the
election process and governments by supporting lawmakers who un-tax them,
and judges or court systems that refrain from prosecuting them.
Obliterating the logic that led society to regulate and tax rentiers in
the first place, think tanks and business schools favor economists who
portray rentier takings as a contribution to the economy rather than as a
subtrahend from it.” (But, of course,
those business schools are financially incentivized
to think that way
.)
The outgrowth of these tricks to make
parasites [Rothschild Moneychangers] appear to be a natural appendage to a
well-functioning economy results in a “veritable Stockholm Syndrome.”
Hudson explains:
“Popular
morality blames victims for going into debt – not only individuals, but
also national governments. The trick in this ideological war is to
convince debtors to imagine that general prosperity depends on paying
bankers and making bondholders rich – a veritable Stockholm Syndrome in
which debtors identify with their financial captors.”
Hudson has much to say on the perversity
of corporations buying back their own stock. In one chapter, Hudson
writes:
“In Nature,
parasites tend to kill hosts that are dying, using their substance as food
for the intruder’s own progeny. The economic analogy takes hold when
financial managers use depreciation allowances for stock buybacks or to
pay out as dividends instead of replenishing and updating their plant and
equipment. Tangible capital investment, research and development and
employment are cut back to provide purely financial returns.”
On the timely debate over wealth and
income inequality, Hudson writes that “Asset-price inflation is the
primary dynamic explaining today’s polarization of wealth and income. Yet
most newscasts applaud daily rises in the stock averages as if the wealth
of the One Percent, who own the great bulk of stocks and other financial
assets, is a proxy for how well the economy is doing. What actually occurs
is that financing corporate buyouts on credit factors interest payments
and fees into the prices that companies must charge for their
products.”
Where this leads, says Hudson, is that
“Paying these financial charges leaves less available to invest or hire
more labor. Likewise for the overall economy, the effect of a
debt-leveraged real estate bubble and asset-price inflation is that
interest payments and fees to bankers and bondholders leave less available
to spend on goods and services. The financial overhead rises, squeezing
the ‘real’ economy and slowing new investment and hiring.”
Hudson is clearly on to something. The
U.S. seems to be crashing like clockwork every 8 years with the crashes
gaining in intensity. The 2000 dot.com crash wiped $4 trillion out of
investment accounts while, 8 years later, the 2008 crash brought down the
whole financial system, the U.S. and global economy, and it’s still
producing a dead weight on economic growth. Next year will mark the eighth
year since the 2008 crash and if last week’s market convulsions were any
indication, we’re in for some very rough sledding.
Chapter 8 of “Killing the Host” begins
with this quotation from John Maynard Keynes: “When the capital
development of a country becomes a by-product of the activities of a
casino, the job is likely to be ill-done.” Hudson expands
further:

“Instead of
warning against turning the stock market into a predatory financial system
that is de-industrializing the economy, [business schools] have jumped on
the bandwagon of debt leveraging and stock buybacks. Financial wealth is
the aim, not industrial wealth creation or overall prosperity. The result
is that while raiders and activist shareholders have debt-leveraged
companies from the outside, their internal management has followed the
post-modern business school philosophy viewing ‘wealth creation’ narrowly
in terms of a company’s share price. The result is financial engineering
that links the remuneration of managers to how much they can increase the
stock price, and by rewarding them with stock options. This gives managers
an incentive to buy up company shares and even to borrow to finance such
buybacks instead of to invest in expanding production and
markets.”
The net result of this, says Hudson, is an
effective “debt-financed takeover from within.”

Hudson writes about the revealing
September 2014
Harvard Business Review article by William Lazonick, who noted:

“Consider the
449 companies in the S&P 500 index that were publicly listed from 2003
through 2012. During that period those companies used 54% of their
earnings—a total of $2.4 trillion—to buy back their own stock, almost all
through purchases on the open market. Dividends absorbed an additional 37%
of their earnings.”
“This management strategy created
financial wealth by elevating the stock price,” writes Hudson,  “not
by producing more goods. Earnings per share rose not because companies
actually earned more, but because there were fewer shares outstanding
among which to spread the earnings. Many of the companies downsized and
outsourced their employment and production. The immediate beneficiaries
were corporate officers exercising their stock options.”
Hudson quotes another prolific writer on
the subject of our bankster-controlled society, Paul Craig Roberts, who
has noted the following about corporations buying back their own stock:
“The debt incurred will have to be serviced by future earnings. This is
not a picture of capitalism that is driving the economy by
investment.”
Hudson says that what is happening today
in corporate America is very different from the corporate raiders of the
1980s who used leveraged buyouts to gobble up companies. Today, says
Hudson, “corporate executives raid their own company’s revenue stream.
They are backed by self-proclaimed shareholder activists. The result is
financial short-termism by managers who take the money and run. The
management philosophy is extractive, not productive in the sense of adding
to society’s means of production or living standards.”
Make no mistake about it: this is a
dangerous book to the status quo. It is truth-telling at its finest in
America’s darkest age of entrenched lies. Michael Hudson has clanged the
alarm bells over more continuity government from the likes of Hillary
Clinton and her fellow Wall Street Democrats. He’s also scuttled the
chances that Donald Trump will be able to reengineer America from “Give me
your tired, your poor, your huddled masses yearning to breathe free” to
the evil fortress that kicks out infants by directing hatred and blame for
America’s woes to impoverished immigrants running from their own
leeches.
Hudson’s masterful book comes at the
perfect juncture of stock market convulsions and an early election season
when Americans are turning out by the tens of thousands to hear what the
candidates for the Oval Office plan to do to return the wealth and the
soul of America to the people.
“Killing the Host” is available as an e-book at CounterPunch
and in print at
Amazon.com.
© 2015 Wall Street On
Parade
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