18 February 2009

America will never be the same ~ Depression's here.

Earlier, Michael Hudson summed in up in a way that resonated strongly:

"The financial “wealth creation” game is over. Economies emerged from World War II relatively free of debt, but the 60-year global run-up has run its course. Finance capitalism is in a state of collapse, and marginal palliatives cannot revive it. The U.S. economy cannot “inflate its way out of debt,” because this would collapse the dollar and end its dreams of global empire by forcing foreign countries to go their own way. There is too little manufacturing to make the economy more “competitive,” given its high housing costs, transportation, debt and tax overhead. A quarter to a third of U.S. real estate has fallen into negative equity, so no banks will lend to them. The economy has hit a debt wall and is falling into negative equity, where it may remain for as far as the eye can see until there is a debt write-down."

And even earlier than that, Hudson said:

If people have to pay the amount of debt that they have now, there won’t be any money to buy goods and services, companies will not sell as much, they’ll invest less, they’ll hire less, and they’ll continue to downsize. (Which) is why (in) every economic chart you see, there will be a gradual rise and then a sudden collapse. Everything is turned into a vertical fall. Prices, international shipping, employment, profits, they’ve all hit a wall. And there’s no way that the economy can recover when people have to pay interest and amortization instead of buying goods and services, or companies will have to pay their junk bond holders instead of investing in new equipment.

So, Hudson asks: Is America a Failed Economy? (but, you already know the answer to that)

It may be time to ask whether neoliberal pro-rentier "Zombienomics"economics has turned America and the West into a Failed Economy.

...Free-market economists pretend that prices can be brought into line most efficiently with technologically necessary costs of production under capitalism, and indeed, under finance capitalism. The banks and stock market are supposed to allocate resources most efficiency. That at least is the dream of self-regulating markets. But today it looks like only a myth, public relations patter talk to get a generation of increasingly indebted voters not to act in their own self-interest.

I like Hudson, but he don't talk clearly, like Davidowitz. And as a great orator, Davidowitz leaves Obama in dah dust!

Hudson link: http://www.counterpunch.org/

Davidowitz nails it...

Davidowitz link: http://www.cnbc.com/id/15840232?video=1037869511&play=1

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