Was de financiële crisis van 2008 te voorzien, en werd dat gedaan? Econoom Michael Hudson over de deficiënties van het economie-onderwijs en onderliggende waarheden.

With every major financial recovery since the second World War beginning in a place of greater debt than the one before it, how could we not have foreseen the financial crisis of 2008? In this episode of Meet the Renegades, economics professor and author, Michael Hudson argues we did.

How could an economy that created so much debt also save the banks rather than the economy itself after 2008? Michael discusses the phenomenon of debt deflation and how the economic curriculum should change in education.

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Vanwege copyright issues is het interview alleen hier te zien. Duur: 30:07 Hieronder vindt u een eerste deel van de volledige transcriptie.

Michael Hudson: I’m Michael Hudson. I’m a professor of economics at the University of Missouri, Kansas City and Peking University. My focus is on the distinction between the financial economy and the real economy at large. I treat the financial sector and debt as an economic overhead, so my focus is on how society can deal with the debt and to explain why society cannot recover from the current depression until it writes down the debts to what can be paid.

Ross Ashcroft: Michael, we’re almost a decade on since 2008 and we sit here now in the developed west and we look at the global economy. To even an untrained eye, things aren’t still right and haven’t been right for some time. Where are we and what’s your view on why we’re here?

MH: We’re in a permanent debt deflation. To make it brief, people think in terms of business cycles – as if whenever things go down, they automatically recover. But every business recovery since World War II has taken place with a higher level of debt – higher and higher and higher. Finally, by 2008, the volume of debt was so high that it was absorbing all the economic growth. At that point the stock markets plunged, especially when it became apparent that the business plan of the large banks was economic fraud and junk mortgages.

People say when Queen Elizabeth asked “Why didn’t anybody foresee it?” The fact is, everybody foresaw that there was going to be a crash. That’s why they used the term “junk mortgage.” That’s why they coined the term NINJA: No income, No job, no assets. All this terminology was widely used. The FBI in 2004 explained that there was the largest wave of financial bank fraud in history, but George Bush shifted the investigators out of the FBI into national security, so nothing was done.

When President Obama ran for election, he promised to write down mortgage debts to the real value of property, not the junk mortgages in excess of the value. The terms that Congress set for the bailout of the banks, the Troubled Asset Relief Program or TARP, were that banks would rewrite the mortgages so that homeowners who could not pay the nominal mortgage would simply pay what the rental value of their property was.