Michael Hudson

8/14/2019 Michael Hudson

1/21

10/13/08 7:Michael Hudson: Rescue for the Few, Debt Slavery for the Many

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Today's Stories

October 13, 2008

Michael HudsonRescue for the Few, DebtSlavery for the Many

October 10 / 12, 2008

Alexander CockburnIs McCain a Lot SickerThan We Know?

Jeffrey St. Clair /Joshua FrankObama's NuclearAmbition

Douglas ValentineMission CREEP: FromJohn Mitchell to John

McCain

Noam ChomskyExposing the Un-Democratic Face ofCapitalism

Ralph NaderThe Derivatives Game

Syed Saleem Shahzad-

October 13, 2008

Congress Should Bail Out of the Bailout

Rescue for the Few, Debt Slavery for the Many

By MICHAEL HUDSON

We are now entering the financial End Time. Bailout Plan A (buythe junk mortgages) has failed, Plan B (buy ersatz stocks in thebanks to recapitalize them without wiping out current mismanagers) isfizzling, and the debts still cant be paid. That is the reality Wall Streetavoids confronting. First they ignore you, then they denounce you, andthen they say that they knew what you were saying all the time, saidGandhi. The same might be said of todays overhang of debts in excessof the economys ability to pay. First the policy makers pretend thatthey can be paid, then they denounce the pessimists as spreadingpanic, and then they say that of course students have been taught for

four thousand years now how the magic of compound interest keepson doubling and redoubling debts faster than the economy can squeezeout an economic surplus to pay.

What has ended is the idea that the magic of compound interest canmake economies rich without having to work and without industry. Ihope we have seen the end of derivatives formulae seeking to makemoney by playing in a zero-sum game. A debt overhang always endseither in foreclosure of the debtors property, or in a debt annulment topreserve the economys overall freedom and equity.

This means that the postmodern economy as we know it must end

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The Great Bailout Swindle

The brilliant economist Michael Hudson lays out the stupidity of Paulsons bailout

plan and the lead role in Congress of Democrats in the bankers plot. What

happened? What should be done? Read Hudson. PLUS the complete text of

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2/21



Winning

Patrick CockburnWar in the Time ofCholera

Paul Craig RobertsA Possible Solution to theEconomic Crisis

Mike WhitneyRun on the System

Peter MoriciThe Deficit and theDamage Done

Christopher KetchamThe End of the Economy

Stephen MartinShock and Awe inEconomic Warfare

Chellis Glendinning

Wireless Mind, GullibleMind

Saul LandauAll Guns, No Butter

Ahmad Faruqui21 Days to Baghdad

Adam TurlSheriff Tom Dart vs. theBanksters

Serge HalimiThe Battle for the West

Anthony DiMaggioMaking a Killing: theBusiness of Elections

John RossThe Sky is Falling onMexico, Too

Jos M. TiradoMeltdown in Iceland

Paul KrassnerBeat the Crowd inDenver: Cops and T-

Shirts

David MacarayAdventures in Unionism

Robert FantinaBankrupt and Belligerent

David YearsleyThe Playlist for Election2008

either in financial polarization and debt peonage to a new oligarchicelite, or in a debt cancellation, a Jubilee Year to rescue society. Butwhen the government says that it is reviewing all the options, thisreality is not one of them. Treasury Secretary Henry Paulsons firstoption was to buy packages of junk mortgages (collateralized debtobligations, CDOs) to save the wealthiest institutional investors fromhaving to take a loss on their bad bets. When this was not enough, hecame up with Plan B, to give money to banks. But whereas Britainand European countries talked of nationalizing banks or at least takinga controlling interest, Mr. Paulson gave in to his Wall Street cronies and

promised that the governments stock purchases would not be real.There would be no dilution of existing shareholders, and thegovernments investment would be non-voting. To cap the giveaway tohis cronies, Mr. Paulson even agreed not to ask executives to give uptheir golden parachutes, exorbitant annual bonuses or salaries.

Plan A (the $700 billion to buy mortgage-backed junk that the privatesector will not buy) failed partly because it let financial institutionsavoid putting a fair value on the debt packages they were selling.Instead of telling the truth about their financial position by markingassets to market prices), they can mark to model, Enron-style. Wehave seen the result: A solid week of plunging stock market prices. Thepublic media call this a panic, but there is nothing irrational about it.Who in their right mind would buy securities or buy into a bank withoutknowing what the securities were worth? Faith in junk mathematical

models has ended.

So we still await a public response to the problem of how to write downdebts. Whose economic interest will have to give: that of debtors, asincreasingly has been the case over the past eight centuries; or that ofcreditors, which have fought back to create a neoliberal economycontrolled by the FIRE sector?

It is not too late to decide which road to take, but Wall Street bankersand creditors have taken the lead in positioning themselves. Seeingwhich way the political winds were blowing, they moved to empty outthe Treasury before the November 3 elections much like medievalcitizens fleeing a horde of Mongolian raiders under Genghis Khan.

Were moving. Clean out the cupboards, much as Lehman Brothersemptied out their foreign bank accounts in Britain and elsewhere just

before declaring bankruptcy, taking what they could and steering it totheir best friends.

The pretense was that a bailout was needed to restore confidence. Butthe ensuing week showed that the claims were false. It didnt turn thestock market around as promised. The Dow Jones Industrial Averagefell 2,200 points from Wednesday, October 1 through the followingFriday October 10 eight straight trading days, not even pausing forthe usual zigzags. Fridays plunge was 100 points a minute for the firstseven minutes a 690 point drop to under 8000. Each 100 points wasmore than a 1 percent drop, which was reflected on the NASDAQ.Nothing could withstand the pressure of so many Americans cashing intheir mutual funds overnight and so many foreigners in earlier timezones putting in sell-at-market orders.

Short sellers made one of the largest and quickest fortunes ever, andthen covered their positions by buying back the stocks they had pre-sold. This pushed prices up even into positive territory just before10:30 AM when George Bush began to speak. Half the financial stocksshowed gains a sign that the Plunge Protection Team had jumped in.But Mr. Bush said nothing helpful and stocks went back into freefall,ending down another 128 points despite the upcoming weekend G7meeting. There was no talk at all of reducing debt levels only ofgiving more money to banks, insurance companies and other moneymanagers, as if pushing on a string somehow would lead them tolend yet more to an already debt-ridden economy.

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3/21



Julian Clec'hThe Soap WashingThrough Saudi Arabia

Adam EngelSexual Healing ... for thePlanet

Phyllis PollackThe Rolling Stones Go

Home, Again

Missy BeattieGoing North: the ComingNation of Alaska

Poets' BasementLandau, Moser andHenson

Website of the DaySarah as Esther? NewVideo From Inside Palin'sChurch

October 9, 2008

Robert BryceFrom Enron to theCurrent Meltdown

David VestThe Great Rescue of2008: Could WhateverFollows Bush Be EvenWorse?

Winslow T. WheelerMeltdown at the Pentagon

Andy WorthingtonThe Ordeal of theWrongly ImprisonedUighurs

Anthony DiMaggioObama the Subhuman

Helga Serrano /Hector TamayoEcuador Charts the Way

Dave LindorffWhen Money Flies

Mats SvenssonAt the Checkpoint on theDay of Atonement

Rannie AmiriThe Time for MordechaiVanunu is Now

Website of the Day

If Congress really wanted to restore confidence, heres what it mighthave done: First, mark to market, not to model. Investors no longerbelieve Americas Enron-style accounting, debt rating agencies ormonoline risk insurers. They dont trust U.S. banks to be honest abouttheir financial positions. They worry about the fraud charges brought byattorneys general in eleven states against predatory lenders such asCountrywide and Wachovia that Citibank, JPMorgan Chase and Bank ofAmerica were so eager to buy.

So is it too late for Congress to change its mind and repeal the

giveaway? If the $700 billion handout didnt stabilize the unsalvageablefor small investors, pension funds and even the financial sector itself,what didit do?

What the Fed has been doing while the media have not been

looking?

Lets put the giveaway in perspective. While Senators and Congressmensubject to voters choice were debating $700 billion for the major WallStreet contributors to both parties (admittedly only for starters, Mr.Paulson explained), the Federal Reserve already had given even more,without any public discussion and without the major media noticing.Since Bear Stearns failed in March, the Federal Reserve has used thesmall print of its charter to go outside its normal customers (which aresupposed to be commercial banks), to give

investment banks, brokerage houses and nowlarge corporations almost indiscriminately some$875 billion in cash for trash swaps. (Thestatistics are released each week in the FedsH41 report.) Like Aladdin offering new lampsfor old, the Fed has exchanged Treasurysecurities for junk mortgages and othersecurities that brokerage houses andinvestment banks did not have time to pawnoff onto OPEC, Asian sovereign wealth funds orother investors.

The press lauds Mr. Bernanke as a student ofthe Great Depression. If he were, he shouldknow that what led to the 1929 collapse were

harsh U.S. Government creditor policies towardits World War I Allied governments. Thiscreated a situation where the Federal Reserve had to provide easycredit to hold interest rates artificially low so as to encourage U.S.investors to lend to Britain and Germany, which would use these dollarinflows to pay their Inter-Ally arms and reparations debts. Mr.Bernankes predecessor, Alan Greenspan, promoted easy credit simplyfor ideological reasons, to enrich Wall Street by enabling it to sell moredebt.

A student of the Great Depression would understand the conflicts ofinterest between retail commercial banking and wholesale investmentbanking and money management that led Congress to pass the Glass-Steagall Act in 1933 conflicts unleashed once again when Pres.Clinton backed then-Fed Chairman Alan Greenspan and Republican

leader (and McCain hero) Senator Phil Gramm in leading the repeal ofthis act, opening up the floodgates to todays financial double-dealingthat has cost the American economy so much.

If Mr. Bernanke does know this history, his behavior is simply that ofan opportunistic student of the art of political self-advancement,toadying to Wall Street in campaigning for one last great rip-off beforethe Bush Administration goes out of business. The Fed has given WallStreet newly minted Treasury bonds, added to the national debt out of

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4/21



The Palestine ChronicleNeeds (and Deserves)Your Support

October 8, 2008

Alexander CockburnImbecilic Tedium

Linn Washington, Jr.

Palin's Racist Remark

Mike WhitneyTo the Bunkers!

Deepak TripathiThe West is Broke

George C. WilsonButter Over Guns?McCain and Obama onDefense Issues

Andy WorthingtonSeized in Pakistan

Charles R. Larson"I'm John McCain and IApproved This Lie"

Patrick IrelanEcuador's Choice

Matthew KoehlerLog, Baby, Log: BailingOut the Timber Industry

Stanley HellerTime to Design a NewEconomy

Daniel GrossWorking Class Hero:Alexandra Svoboda

Kimberly HartkeRaw Milk and CivilLiberties

Website of the DayOlivia Wilde Does It Early

October 7, 2008

Patrick Cockburn

Obama and McCain'sGoofy Afghan Bluster

Gary LeuppSeven Years inAfghanistan:From "War on Terror" to"War of Terror"

n a r. as one s w ou ee ng any nee o ra ona ze ydrawing absurd public-relations pictures about how the governmentmay make a profit for taxpayers.

The Fed Chairman is not elected democratically. He traditionally isdesignated by the Wall Street financial sector that the Fed is supposedto regulate, acting as its lobbyist for creditor interests the top 10percent of the population against that of the indebted bottom 90percent. This independence of the central bank is trumpeted as ahallmark of democracy. But it is undemocratic, precisely by beingisolated from public control.

The Age of Oligarchy

Treasury Secretary Paulson has no such luxury. The Treasury issupposed to represent the national interest, not that of bankers eventhough its head these days is drawn from Wall Street and acts as itslobbyist. Mr. Paulson presented his almost totalitarian giveaway grufflyto Congress on a take-it-or-leave it basis, announcing that if Congressdid not save Wall Street from taking losses on its mountain of badloans, the banks were willing to crash the economy out of spite.

Please dont make us wreck the economy, he said in effect. AsMargaret Thatcher used to say while selling off the British governmentscrown jewels in the 1980s, TINA: There is no alternative.

In making this bold threat Mr. Paulson behaved as arrogantly asLehmans CEO Richard Fuld did when he tried to bluff Korea and otherprospective investors into paying the full, fictitiously high book valuefor his company. (His bluff failed and Lehman went bankrupt, wipingout its shareholders, including the employees and managers who held30 percent of its stock.) There turned out to be an alternative after all.Responding to the loudest public condemnation in memory, Congresscalled Mr. Paulsons bluff.

What made his $700 billion Troubled Asset Relief Program (TARP) somuch more visible to the media than the Feds actions is that Congressis involved, and this is an election year. The level of deception andfalse argument is therefore enormous along with a few tradeoffs andtax cuts to distract attention. Erstwhile Republican opponent Sen. JeffSessions of Alabama came right out and said that This bill has been

packaged with a lot of very popular things to give it even moremomentum, so that (as The New York Times explained), instead ofsiding with a $700 billion bailout, lawmakers could now say they votedfor increased protection for deposits at the neighborhood bank, incometax relief for middle-class taxpayers and aid for schools in rural areaswhere the federal government owns much of the land.

Left behind while Wall Streets believers in the rapture of free marketswere swept up to heaven by socialism for the rich have beenmortgage debtors, student-loan debtors, the Pension Benefit GuaranteeCorporation (PBGC, some $25 billion short), the Federal DepositInsurance Corporation (FDIC, about $40 billion short), as well as SocialSecurity which, we are warned, may run up a trillion dollar deficit thirtyor forty years down the line. Only the wealthiest have beenbeneficiaries, not voters, homeowners and other debtors.

Still, Congress was panicked into acting on Friday, October 3, becausea week earlier, September 26, stocks fell 777 points after Congressmenresponded to an unprecedented volume of voter protest against thebailout. This sucker could go down, Pres. Bush warned as WallStreets lobbyists blamed the market downturn to the failure ofCongress to preserve the monetary system, and specifically the banksand insurance companies that already had lost their net worth and

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5/21



Uri AvneryOlmert's Final DivorceFrom "All of Eretz Israel"

P. SainathThe Cop-Out ElectionMajor Candidates,Congress, Press, All Failin the Big Crisis

Peter MoriciThe Dow Tanks as BankBailout Fails to RestoreConfidence

Conn HallinanThe Great Game in theCaucasus:Bad Moves by Uncle Sam

Martha RosenbergTraining America's YouthToday a Pheasant,Tomorrow Osama

Binoy KampmarkLet's Talk AboutExtinction:CERN and Halo

October 6, 2008

Paul Craig RobertsA Futile Bailout asDarkness Falls onAmerica

Mike WhitneyStill on the Edge of theAbyss

Tariq AliGoodbye to GrosvenorSquare

Emily HorowitzHow People Tell CopsThey're Guilty Even WhenThey Aren't

Michael HudsonWhat Did Jesus Say?A Christian Perspective onthe Paulson Bank Bailout

Ron JacobsWinter Soldiers andWashington's Wars

October 3 - 5, 2008

Alexander CockburnCreatures of Capital

were plunging deeper into Negative Equity territory. Democratic leadersBarney Frank and House Speaker Nancy Pelosi said, in effect, Lookwhat youve done! You irresponsible politicians are grandstanding onprinciple, and wiping out peoples stock market savings and threateningtheir pension funds. If you dont give Wall Street firms enough moneyto cover their losses so that everyone wins, theyll kill the economyuntil they get their way. Well, they didnt quite say this, but that wasbasically their message. It certainly was Wall Streets message: WallStreet to Economy: Your money or your life.

So Congress gave in. Democrats ran like lemmings to save theeconomy. Yet the stock market fell a few hundred points, and kept onplunging all week long, much worse and much faster than had occurredright after Congress had initially defeated the bill.

The Reality Problem

What did the free market theory underlying the giveaway leave out ofaccount? For starters, the monetary system turns out to be aeuphemism for the fortunes of financial gamblers using junkmathematics (the Merton-Scholes derivatives formula) based on junkeconomics (blessed with Nobel Prizes) to buy, speculate and even toinsure junk mortgages, junk bonds and junk commercial paper andderivatives based on their relative prices. So what is left out first of allwas full knowledge of the value of what is being bought and sold.

Mark-to-market models leave the price up to the investment bankers.If trust existed and there really was honor among these thieves, agovernment bailout would not be necessary, because the marketcould clear.

Free market ideology assumes that each party will act in his or herself-interest. If this is so, why should foreign governments accumulatemore dollar claims on the U.S. Treasury, which already owes theircentral banks $4 trillion? When there hardly were enough Treasurysecurities to go around even as the United States ran unprecedentedfederal budget deficits, U.S. officials urged these banks and sovereignwealth funds to buy packaged mortgages yielding a higher rate ofreturn. And at least by buying these bonds, foreign governments wouldnot be accused of funding Americas war in Iraq that most of theirvoters opposed. But investors made a fatal mistake in believing U.S.

representations of the value of their junk-mortgage packages. Thistrust has now been lost, all the more so since the bailouts permissionto keep on marking to market.

Congress thought that its $700 billion would distract attention at leastuntil the November 4 election. But to no avail. Markets fell 157 pointson Giveaway Friday, and kept on going down another 800 points onMonday, October 6 (to about 9500) before bouncing 500 points off thefloor, only to fall even more through Friday. So the giveaway failed inits stated purpose to rescue stock market investors (peoplescapitalism) or their pension funds. But that was not its real purpose.The time simply had come to clear out and take whatever one could.

Making banks and insurers in the zero-sum derivative game whole, sothat winners can collect their bets while losers can sell their bad

investments to the Treasury, is supposed to re-inflate the creditpyramid. The idea is to solve the debt problem with yet more debt toprop up housing prices once again to unaffordable levels! This is not along-term solution, but it would give insiders enough time to arrange ado-over and get out of the game more quickly, to sell out their junkmortgages and junk bonds to the proverbial greater fool in thiscase, the greater fool of last resort, the U.S. Treasury, as long as itcan be run by Mr. Paulson or, under Mr. Obama, perhaps the formerGoldman-Sachs official Robert Rubin.

The banks are to earn their way out of their negative equity positionby selling more of their product credit to increase the economys
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6/21



Paul Craig RobertsWhy Paulson's Plan is aFraud

Saul LandauThe Chutzpah of HankPaulson

Jonathan CookThe Souring of a WestBank Romance: Israel'sArmy and Settlers FallOut

Andy WorthingtonThe Dark Heart of theGuantnamo Trials

Dave MarshBono (Himself) ChallengesMe to a Debate

Sasan FayazmaneshUsing the IAEA to Spy onIran

John RossMassacre in Morelia

Brian CloughleyThe Unacceptable Face ofCapitalism

Wajahat AliDueling Partners: anInterview with Tariq Alion Pakistan

Robert SchwartzA Serious Blow to theRights of U.S. Workers:NLRB Limits PoliticalStrikes

Alan NasserFDR's Response to thePlot to Overthrow Him: aParadigm for Today'sDemocrats?

David Ker ThomsonThe Case for DrunkDriving

Peter MoriciGone in 30 Days: U.S.Loses 159,000 Jobs inSeptember

William BlumWhen is a Holocaust Nota Holocaust?

William S. LindWar on Two Fronts:Without Railroads

debt levels and hence receive more interest payments. The problem isthat most families are already loaned up. They have no morediscretionary income to pledge to carry more debt. Without writingdown their debts, there will be no fresh lending, and hence no sourceof credit and purchasing power for new autos, appliances, goods andservices in general. Debt deflation is being imposed on the realeconomy. Creditors and speculators alone are to be made whole.

If no revenue was available for future Social Security, public healthcare and repair the nations depleted infrastructure before this

giveaway, think of how bare the cupboard must be now that thegovernment has run up the recent trillions of dollars in new debt ratherthan writing off a penny of the bad mortgage debts being blamed forcausing the debacle.

We can see where this is leading. The wealthiest 1 percent of thepopulation will come into possession of even more returns to wealththan the 57 percent that they are now taking. In contrast to the Statueof Libertys inscription give me your poor yearning to breathe free,the Fed and now the Treasury, with Congressional blessing istaking from the public purse and giving to Americas wealthiestinvestors and insiders. This Robin Hood in Reverse program is beingdone without strings, without asking banks to stop paying dividends,exorbitant executive salaries and golden parachutes, and without takingover banks with negative net worth of the kind that many homeowners

are experiencing.

Nobody is talking about a debt write-down or moratorium. Thesubprime mortgage problem could have been solved by writing down

just $1 or $2 trillion of the face value and interest rates of predatoryloans. Instead, the $10+ trillion in financial-sector damage in recentweeks reflects Wall Streets fraudulent packaging and sale of junkmortgages at unrealistically high prices, using junk mathematics tocalculate junk derivatives and sell them to gullible investors whobelieve that the pretenses these mathematics, credit ratings andprojected income have a basis in reality.

The amazing feature of todays crash is how many Wall Street firmsactually believed that the game of musical financial chairs could go onbefore they had to stop dancing and indeed, escape from the room. I

remember one day back in the 1970s when I warned Frank Zarb ofLazard Freres about the likelihood of Third World debt defaults, andsuggested that the firm should do an ability-to-pay analysis. We donthave to do any such thing, he replied. We have the schedule of whatthey owe right here in this IMF report. It was a thick printout of thescheduled debt service for an African country that soon becameinsolvent. But Wall Streets mentalit was that of Herbert Hoover onthe eve of the Great Depression: A debt is a debt, and that is that. Theresponse is to blame the victim, as if the irresponsibility lies withdebtors rather than creditors.

No reversal of the Bush tax cuts is offered to re-inflate the economy,no move toward more progressive taxation of Wall Street speculatorswho pay only a 15 percent capital gains tax rate instead of the muchhigher income-tax and FICA withholding rates that wage-earners pay.

(Wall Street has its own golden parachute program, so why should itpay for Social Security for the rest of society?) There is to be noreduction in the special tax benefits for real estate, whose taxfavoritism led to the crisis by freeing more income from the taxcollector to be pledged to mortgage bankers as interest. The BubbleEconomy is to be re-inflated by Fannie Mae, Freddie Mac and the FHAlending to help buyers bid up housing and commercial office pricesonce again to a rate that promises to impose debt peonage onhomeowners.

The budget deficit will soar, without any prosecution of tax evasionscams by UBS or KPMG. Instead of a fiscal or regulatory comet driving
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7/21



Michael DonnellyThe Ghost of Gen.McClellan

Thom RutledgeOn Presidential "Rule"

Manuel Garcia, Jr.Science and the 2008Presidential Elections: aSurvey of the Candidates

Dave LindorffCalling the Problem Early

Cindy Ellen HillWaging a SustainablePeace?

Paul KrassnerDying to Get High: theSide Effects of MedicalMarijuana

Daniel WhiteVietnam's Masterspy

Poets' BasementCorseri, Absher, Gibbonsand Jenkins

Website of the WeekendHow We Lost GlenCanyon: a LegalChronology

October 2, 2008

Paul Craig RobertsCan a Bailout Succeed?

Joe BageantSpeaking in the Tonguesof Brokers: the Bailout inPlain English

Ralph NaderSoulmates in Deregulation

Mike WhitneyWhy the Bailout Stinks

Madis SennerWhen Push Comes toPull: How a ForeignBanker Invasion Sent theMarkets Reeling

Winslow T. WheelerCongress as Usual:theCrisis Will Pass, But ThisBunch Will Remain theSame

William BlumA Boy's Game: theOrigins of the Financial

these dinosaurs to extinction, the climate has turned more conducive totheir proliferation. Our Age of Deception is to be locked in even moretightly. The Congressional bailouts suspension of mark-to-market rulesto rely on Wall Streets self-regulation should win a prize forOxymoron of 2008 as investors have no clue as to what financial assetsare worth. No wonder lending has dried up, especially to banksthemselves.

Just as financial victims fail to vote and support their self-interest,predators also turn out to pursue self-defeating free market

strategies. The financial sectors short-termism is the greatest enemyto its survival. It has translated its wealth into a fatal political control ofits legal climate, blocking [with the explicit support of Barack Obama,Editors] Congressional efforts to rewrite the oppressive bankruptcylaws that credit-card banks lobbied so hard to pass, [with vital helpfrom Joe Biden, the senior senator from credit card company HQ, thestate of Delaware, Editors] crucial. These hard bankruptcy termsprevent the courts from renegotiating homeowner debts to keepproperty occupied, accelerating the real estate price collapse. The resultis todays negative equity, posing the question of just who is to bearthe cost of bring debts back in line with the economys ability to pay.Will it be the financial institutions that sponsored asset-price inflationand lobbied for deregulation of lenders? Or, will it be the debtors whothought they were riding the wave to get an inflationary free lunch?

Instead of requiring creditors to absorb losses on the excess of debtsover what can be paid, the debts are being kept in place, not scaledback to what the economy can pay. The government is to makecreditors and computerized derivatives speculators whole and will actas collecting agent for the overhead of bad debts the economy has runup.

Today we can see the debt-fueled bubble of asset-price inflation thatAlan Greenspan trumpeted as real wealth creation for what it really is credit creation to bid up real estate, stock market and packaged-debtprices. Tangible capital formation has been left out of account, as ifpostindustrial economies no longer need it.

Will voters see the asymmetry in Congresss failure to offer debt relieffor homeowners as real estate prices plunge below the mortgages that

are owed? Will its members be blamed for not rewriting the nationsbankruptcy laws to free families from debt peonage and free housingmarkets from the price declines that result from todays proliferation offoreclosure sales? For that matter, will there be no relief forcorporations having to cut back investment in order to service their

junk bonds and other debts with which Wall Streets corporate raidersand shareholder activists have loaded then down?

Evidently not.

Michael Hudson is a former Wall Street economist specializing in thebalance of payments and real estate at the Chase Manhattan Bank(now JPMorgan Chase & Co.), Arthur Anderson, and later at the HudsonInstitute (no relation). In 1990 he helped established the worlds firstsovereign debt fund for Scudder Stevens & Clark. Dr. Hudson was

Dennis Kucinichs Chief Economic Advisor in the recent Democraticprimary presidential campaign, and has advised the U.S., Canadian,Mexican and Latvian governments, as well as the United NationsInstitute for Training and Research (UNITAR). A Distinguished ResearchProfessor at University of Missouri, Kansas City (UMKC), he is theauthor of many books, including Super Imperialism: The EconomicStrategy of American Empire (new ed., Pluto Press, 2002) He can bereached via his website, [email protected]

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8/21



C r s s

P. SainathWall Street TransformsPresidential Race

Website of the DayMcCain's Meltdown in DesMoines

October 1 , 2008

Glen FordThe Last Hold Up

Steven ConnTrashing Sarah Palin: theBoomerang Effect

Alan Maass / Lee SustarWhy Not a Bailout for theRest of Us?

Kenneth CouesboucThe Blame Game: WhenWall Street Pigs SproutWings

Stan GoffHow the Republicans CanWin (And Deserve It)

Adolfo GillyRacism, Domination andBolivia

Rannie AmiriBombs in the Levant

Ismael Hossein-ZadehThe Recurring Myth ofPeak Oil

Adam W. ParsonsFood and Markets

Dave LindorffBums' Rush to theBailout: Where are theHearings?

Douglas ValentineThe Bush Continuity Plan?

Adrien Rain BurkeThe Party's Over: anOpen Letter to NancyPelosi

Website of the DaySarah Palin's BeautyPageant

September 30, 2008

The Occupation

by Patrick Cockburn
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9/21



Pam MartensWhat Wall Street Hopedto Win

Chris FloydThe Shadow of thePitchfork: Elite Panic onWall Street

Stephen Martin

A Biological Walk DownWall Street

Deepak TripathiA Bitter Harvest inAfghanistan

Mark EnglerBad Money

Jonathan CookThe Attack on ZeevSternhell: Has IsraelBecome a BreedingGround for Jewish Settler

Terrorism?

Dave LindorffThe Power of No

Manuel Garcia, Jr.Time for a GeneralStrike?

Ahmad FaruquiIn Cold Blood: BuriedAlive in Pakistan

John ChuckmanWill the Bride Wear

White? As Rome Burns,Bristol Palin Prepares toTie the Knot with Mr."Sex on Skates"

David MacarayBlaming the Labor Unions

Fatemeh KeshavarzWhat Obama Could HaveSaid

Website of the Day538: a Cognitive Map ofAmerican Politics

Humanitarian ImperialismBy Jean Bricmont
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10/21



September 29, 2008

Mike WhitneyBlack Monday

Jeff Gibbs"Just Say No!" to ReverseRobin Hood

Paul Craig Roberts

Why America ShouldListen to Ahmadinejad

Peter MoriciThe Bailout and theEconomy

Tim WiseRacism as Reflex

John WalshSarah Palin is a RottenMom

Uri Avnery

Israeli Fascism: Yes, ItCan Happen Here

Alan FaragoHell to Pay: the FinancialCollapse and the HousingMarket

Andy WorthingtonIs Khalid SheikhMohammed Running the9/11 Trials?

David Michael GreenWhere's the Repudiation?

Carl FinamoreCapitalism on Steroids;Labor on Tranquilizers

Iris KeltzPostcards from the DNC

Bill HatchTake This Shrimp Slayer!

Website of the DayTina Fey as Palin, RoundTwo

September 27 / 28, 2008

Alexander CockburnHow McCain Blew It

Linn Washington, Jr.Alaska's Blacks and Palin:a Strained Relationship

Christopher KetchamAn Israeli Trojan Horse
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11/21



Mike WhitneyThe People vs. theBanksters

Kevin Alexander GrayRace in the Race: IsObama Shining Us On?

Anthony DiMaggioThe Unspoken War:

Pakistan, the Media andNuclear Weapons

Mary Lynn CramerTheir Assets; Our Debts:How Economic Crises AreOvercome

Marc Levy /Susan EronyWar Jokes Wanted: NoLaughing Matter

Stan CoxLivestock of Mass

Destruction: Germ Labs inthe Heartland

Saul LandauElection Drizzle

Ali KhanMeltdown in AmericanMarkets: an IslamicPerspective

David RosenThe Great Fear: theSexual Politics of SarahPalin

Todd Alan PriceBailing Out the Foes ofPublic Eduction

Matts SvenssonThe Red and White Birdin Gaza

Ron JacobsPakistan Through theEyes of a Native Son

Robert FantinaMcCain and the Economy

Richard RhamesHank-ering for a Bailout

David KriegerThe U.S.-India NuclearProliferation Deal

Seth SandronskyRethinking CharterSchools
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12/21



Charles R. LarsonDear Mrs. Abacha: aNigerian Email Romance

Kim NicoliniSadism in the Desert

Poets' BasementLa Morticella, Holt, Moser

and Buknatski

Website of the DayThe Great Schlep

September 26, 2008

Moshe AdlerBailing Out Wall StreetWon't Save Main Street

Bill QuigleyThe U.S. War onUnarmed WorkingMothers

Jonathan CookWhen ArchaeologyBecomes a Curse

Manuel Garcia, Jr.Visions of PinpointControl: the Romance ofLaser Weapons

Madis SennerWhy the Bailout will Fail

Brian CloughleyUS Raids in Pakistan:

Violations of Sovereignty

Niranjan RamakrishnanOh, Henry!

Joanne MarinerPassport Fraud andTorture

Dan La BotzThe Financial Crisis: aView from the Left

David MacarayRalph's Management

Indicted by Federal GrandJury

Website of the DayNader and Obama Girl atthe Office

September 25, 2008

Michael Hudson
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13/21



Billion Giveaway

Sharon SmithDemocrats and CorporateBailouts

Ralph NaderWho Will Show SomeBackbone Against theBailout?

Christopher KetchamThe Economy of DeadSperm (or What ILearned From My Race-Car Grandpa Who Had NoBankers)

Eric ToussaintIs Another Third WorldDebt Crisis in the Offing?

Robert WeissmanGetting Wall Street PayReform Right

David EstabrookA Better Bailout Plan

Nikolas KozloffThe Voyage of the SSPeter the Great

Steve EarlyThe High Price of PurpleDissent

Judith ScherrBlue Helmets in Haiti

Laray PolkSouth Ossetia andAbkhazia: Notes from theInside

Website of the DayLetterman Spanks McCain

September 24, 2008

Paul Craig RobertsThe Bitter Fruits ofDeregulation

Nikolas Kozloff

Palin at the UN: aTutorial from Uribe

Robert Weissman

CITY BEAUTIFULBy Tennessee Reed
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14/21



and Why Congress ShouldPlay for Time

Andy WorthingtonThe Guantnamo Trials:Govt. Says Six Years NotLong Enough to PrepareEvidence

Steve Conn

Will Nader's Warning beAcknowledged in thePresidential Debates?

Karyn StricklerThe $700,000,000,000Power Punch

Diane FarsettaStealth Marketers GoneWild

Dennis LooPoisoned Legacy

John HalleWealth Tax Now!

Khalil NakhlehPalestinians Under theOccupation

Website of the DayNader: Debate Crasher

September 23, 2008

Rev. Jesse Jackson, Sr.Bail Out on This Bailout

Michael HudsonHenry Paulson and theNew Yazoo Land Scandal

Tariq AliWhy was the MarriottTargeted?

Patrick DyerA Death Row Visit withTroy A. Davis

Franklin LambHezbollah and thePalestinians

Joshua FrankOppose Barack Obama?How Dare Thee!

Alan FaragoPushing the Referees:How the Financial CrisisOccurred

Dave Lindorff
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15/21



The Bailout Will Kill theDollar

Tanya M. Kerssen /Roger BurbachBolivia's Popular Upheaval

Harvey WassermanNuclear Power LiabilitiesDwarf Bush's Wall Street

Bailout

Website of the DayHammered by the Irish:the Video

September 22, 2008

Michael HudsonThe Paulson-BernankeBank Bailout Plan: Willthe Cure be Worse Thanthe Crisis?

Mike Whitney

Mushroom Clouds OverWall Street

Christopher KetchamLet It Collapse!

Ron JacobsThe Predators' Bailout

Anne-Marie McManusLost in the Rhetoric ofCrisis

Robert WeitzelThe Twin Terrors of the

Holy Land: a SexyFundamentalist and aWhite-Haired Zionist

Wajahat AliAn Interview with HowardDean

John RossA New Cold War Comesto Latin America

Steve BreymanDoes the U.S. ReallyNeed Cluster Bombs?

Patrick Bond
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16/21



Uri AvneryFly, Tzipora, Fly

Carl J. MayerAn Open Letter to MichaelMoore (AKA God's PenPal): Whatever Happenedto Voting YourConscience?

Website of the DayStop the Execution ofTroy Anthony Davis

September 20 / 21, 2008

Alexander CockburnIs This the Stake ThroughNeoliberalism's Heart?

Michael HudsonAmerica's OwnKleptocracy

Pam MartensThe Wall Street Model:Unintelligent Design

Lila RajivaPutting Lipstick on an AIG

Mike WhitneyFull-Spectrum Breakdown

Richard RhamesA Bailout to Nowhere

Bill Moyers /Michael Winship

The NY Yankees and theU.S. Economy

Bill and KathleenChristisonThe Making of RecentU.S. Middle East Policies:a New Study of NeoconInfluence

Susan BlockPalin as Venus in Furs:the Dominatrix Politics ofDrilling and Killing

Robert FantinaRepublicans andSubpoenas: Never theTwain Shall Meet
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17/21



Heidi WaltersHung Up on Route 36: an18-Wheeler and a NuclearCask

David YearsleyGermany's Lost Organs:When Bigger Was Better

Raymond J. Lawrence

The Politics of Tribulation:Sarah Palin and theRapture

David RosenOne Billion Pills Later:Viagra at 10

David Michael GreenLiving in Sarah Palin'sAmerica

Anthony PapaImprisoned Voters andthe Elections

Niranjan RamakrishnanFreddie, Fannie, Daddy,Nanny

Howard LisnoffWhen We Notice theHomeless

John GoeklerLeaving Every ChildBehind

Missy BeattieImpalement

Dave ZirinLeave Josh Howard Alone

Charles R. LarsonHolden Caulfield, Rest inPeace

Tim MatsonToo Big for His Birches:Woodlot Economics

Susie DayAttack of the Angry Fetus

Poets' BasementCorseri, Gibbons, Jenkinsand Ford

Website of the WeekendDylan & Baez: Deportees
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18/21



September 19, 2008

Steven T. BankoMcCain's Passion Play

Mike WhitneyThe Point of No Return

Michael HudsonThe Dow Jones'

Wonderfully CheesyAddition

William KaufmanShattering the Glass-Steagall Act: the Bi-Partisan Origins of theFinancial Crisis

Brenda NorrellThe Fall of Lehman Bros.:Blowback for Black Mesa?

Keeanga-Yamatta TaylorThe New Rhetoric of

Racism: Why Won'tObama Call It Out?

Clifton RossBolivia: Cleaning Up theBull Ring

Dave LindorffHang On to Your Wallets:the Government's Aboutto Rescue Us!

Cynthia McKinneySeize the Time!

Susan HurlichStorm Survivors: aDispatch from Cuba

Michael DonnellyLet's Hand It All Over tothe Democrats (TheyHelped Create This Mess)

Website of the DayThe Crisis Explained
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19/21



September 18, 2008

Benjamin DanglThe Machine Gun and theMeeting Table

Harvey WassermanThe Senate's Drill, Drill,Drill Scam

Susan AbulhawaThe Lobby Has Spoken:Biden and Israel

Robert WeissmanAfter the Fall: theFinancial Re-RegulatoryAgenda

Anne-Marie McManusMcCain's Cinderella: theFetishization of SarahPalin

Corey D. B. Walker

The Poverty of 21stCentury Progressivism

William S. LindSenator O'Bush: WhyObama is Wrong on Iranand Afghanistan

Ron JacobsWashington's False Logicof Torture

Dave LindorffAmerican and China:Joined at the Hip

Binoy KampmarkHow Damien Hirst GotAway With It

Website of the DayAn Invisible Army

September 17, 2008

Stephen ConnPalin and the Politics ofBig Oil

Forrest Hylton

Reactionary Rampage inBolivia

Patrick CockburnPetraeus Leaves Iraq

Gregory ElichInside North Korea

Ralph NaderHow the U.S. AutoIndustry Wrecked Itself
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20/21



Franklin LambThe Palestinians ofShabra-Shatila

Pam MartensThe Gang's All Here:Bush, McCain and the OldIran/Contra Team

Dave LindorffThe End of the Blue ChipEconomy

Peter MoriciThe Damage Deepens

Stanley HellerThe Killing of Count FolkeBernadotte

Douglas ValentineRambling David FosterWallace

Website of the DayFree Cindy McCain!

September 16, 2008

Paul Craig RobertsUS Economy: Rudderlessand Reeling from DirectHits

Tiphaine DicksonCitizen Palin: Why SarahPalin Quoted WestbrookPegler

Stan GoffAmerica is Now Rome: anOpen Letter to ChristianTroops in Iraq andAfghanistan

Uri AvneryTzipi's Choice

Michael WinshipLipstick on Polar Bears

Jeff HalperWarehousing Palestinians

Patrick IrelanBolivia Versus the Empire

Oscar GonzalezWho's Dumber? Ike'sRefugees or WallStreet's?

Binoy KampmarkCheney and His Records

Fatemeh Keshavarz
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21/21


Muslims are at Peace withYou

Sen. Russ FeingoldRestoring the Rule of Law

Website of the DayThe Next Great RockBand?

September 15, 2008

Mike WhitneyThe Tumbrils Roll atDawn

Peter MoriciToxic Lehman

Patrick CockburnTake Another Look at theSurge

Charles R. LarsonThe Maverick Has No

Clothes

Jonathan CookThe Expulsion ofPalestinians from Jaffa

Nikolas KozloffRacist Rhetoric in Bolivia

Roger BurbachMorales Confronts theInsurrection: Bolivia andthe Echoes of Allende

Helen Redmond

Where's the Health CareBailout?

David Michael GreenThe Democrats Do Poland

David MacarayThe Boeing Strike

Ralph NaderRemembering PeterCamejo

Website of the DayThe Ballad of Sarah Palin
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Michael Hudson

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