Smoke and Mirrors

Click here if you wish to access the transcript of this interview with Michael Hudson conducted by the Real News Network and posted on Hudson's website.

So the problem is in the real economy, not the financial economy. But Lawrence Summers and the Federal Reserve all of a sudden say look, we don’t care about the real economy. We care about the stock market. And what you’ve seen in the last few years, two years I’d say, of the stock run-up, is something unique. For the first time the central banks of America, even Switzerland and Europe, are talking about the role of the central bank is to inflate asset prices. Well, the traditional reason for central banks that they gave is to stop inflation. And yet now they’re trying to inflate the stock market. The Federal Reserve has been trying to push up the stock market purely by financial engineering, by making this low interest rate and quantitative easing.

Hudson made the startling claim that Summers and the Fed don't care about the real economy (or the society in which it is embedded) and that they just want to make easy money gambling at their casinos.  But wait...haven't we been told by all kinds of authority figures in schools, media, entertainment--actually everywhere--that when capitalists make money, we all benefit? Could it be that all these honorable, upright people were stupid or even lying? (sarcasm)

You may also be interested in a longer interview with Hudson on the Democracy Now! show in which he made similar comments about the recent Wall Street stock slump and touched on other subjects such as China's economy and political candidates running in US elections. Hudson in the last paragraph suggests that capitalists (he refers to them as financiers) control our government, that elections don't matter. Shocking! (sarcasm)

...you have Wall Street people basically running politics, whether they’re the actual politicians—Obama didn’t work on Wall Street, but he worked with the real estate families. No matter who the president is, they’re going to appoint Treasury heads and Fed, Federal Reserve, heads from Wall Street. Wall Street has a veto power on all the major Cabinet positions, and so, essentially, the economy is being run by the financial sector for the financial sector. That’s the problem with politics in America today.