When listening to the State of the Union speech, one should ask just which economy Mr. Obama means when he talks about recovery. Most wage earners and taxpayers will think of the “real” economy of production and consumption. But Mr. Obama believes that this “Economy #1” is dependent on that of Wall Street. His major campaign contributors and “wealth creators” are in the FIRE sector – Economy #2, wrapped around the “real” Economy #1.
Economy #2 is the “balance sheet” economy of property and debt. The wealthiest 10% lend out their savings to become debts owed by the bottom 90%. A rising share of gains are made in extractive ways, by charging rent and interest, by financial speculation (“capital gains”), and by shifting taxes off itself onto the “real” Economy #1.
in the time remaining, to help us understand how the man-made system of capitalism will lead to the extinction of our human species, and so many others.
Wednesday, January 27, 2010
State of the Union Junk Economics, 2010 (Pt. 2): Obama's State of the Union Rhetoric
by Michael Hudson from Global Research website.