Debt Parasitism And The Collapse Of Antiquity

michael-hudson  |  The Collapse of Antiquity, the sequel to Michael Hudson’s “…and forgive them their debts,” is the latest in his trilogy on the history of debt. It describes how the dynamics of interest-bearing debt led to the rise of rentier oligarchies in classical Greece and Rome. This caused economic polarization, widespread austerity, revolts, wars and ultimately the collapse of Rome into serfdom and feudalism. That collapse bequeathed to the subsequent Western civilization a pro-creditor legal philosophy that has led to today’s creditor oligarchies.

In telling this story, The Collapse of Antiquity reveals the eerie parallels between the collapsing Roman world and today’s debt-burdened Western economies. 

Endorsements

“In this monumental work, Michael Hudson overturns what most of us were taught about Athens and Sparta, Greece and Rome, Caesar and Cicero, indeed about kings and republics. He exposes the roots of modern debt peonage and crises in the greed and violence of antiquity’s oligarch-creditors, embedded in their laws, which in the end destroyed the civilizations of classical antiquity.”
James K. Galbraith, author of Welcome to the Poisoned Chalice: The Destruction of Greece and the Future of Europe.

“In this fascinating book, Hudson explores the rise of the predatory rentier oligarchies of classical Greece and Rome. He makes a fascinating and persuasive case that the trap of debt led to the destruction of the peasantry, the states and ultimately even these civilizations.”
Martin Wolf, Chief Economics Commentator, Financial Times.

“Michael Hudson is an old school, 19th-century classical economist who puts fact before theory. To read his new book, The Collapse of Antiquity, is to learn why and how it has come to pass that we live in a world in which the money owns the people, not the people who own the money. The clarity of Hudson’s thought is like water in a desert, his history lesson therefore a sad story that is a joy to read.”
Lewis Lapham, editor of Lapham’s Quarterly.

Scope

The Collapse of Antiquity is vast in its sweep, covering:
• the transmission of interest-bearing debt from the Ancient Near East to the Mediterranean world, but without the “safety valve” of periodic royal Clean Slate debt cancellations to restore economic balance and prevent the emergence of creditor oligarchies;
• the rise of creditor and landholding oligarchies in classical Greece and Rome;
• classical antiquity’s debt crises and revolts, and the suppression, assassination and ultimate failure of reformers;
• the role played by greed, money-lust (wealth-addiction) and hubris, as analysed by Socrates, Plato, Aristotle and other ancient writers;
• Rome’s “End Time” collapse into serfdom and pro-creditor oligarchic legacy that continues to shape the West;
• the transformation of Christianity as it became Rome’s state religion, supporting the oligarchy, dropping the revolutionary early Christian calls for debt cancellation and changing the meaning of the Lord’s Prayer and “sin,” from a focus on the economic sphere to the personal sphere of individual egotism;
• how pro-creditor ideology distorts recent economic interpretations of antiquity, showing increasing sympathy with Rome’s oligarchic policies.

Backcover

Rome’s collapse was the forerunner of the debt crises, economic polarization and austerity caused by subsequent Western oligarchies. The West’s pro-creditor laws and ideology inherited from Rome make inevitable repeated debt crises, transferring control of property and government to financial oligarchies.

Classical antiquity’s great transition to the modern world lay in replacing kingship not with democracies but with oligarchies having a pro-creditor legal philosophy. That philosophy permits creditors to draw wealth, and thereby political power, into their own hands, without regard for restoring economic balance and long-term viability as occurred in the Ancient Near East through Clean Slates.

Rome’s legacy to subsequent Western civilization is thus the structure of creditor oligarchies, not democracy in the sense of social structures and policies promoting widespread prosperity.

 

CBDC Will Enable Bankster Transformation To Permanent Endoparasitism

ineteconomics  |  Fast forward to the period of low inflation and low growth after 2001. The real estate boom set in, and that’s when you really had the financialization of everything. Up to then, the practice had normally been that banks would make mortgage loans and either keep them on their own books or, even if they sold them, they would sell the whole mortgage to Freddie Mac, Fannie Mae, or to the private sector. Then someone came up with the idea that if you carve the loans into tranches and sell the tranches separately, you might receive more money than if you sold the whole thing.

It worked out for a while that way and that’s why everyone did it. That opened the door to the financialization of everything.

LP: What does this concept, the “financialization of everything,” entail?

WT: That’s when you start treating everything like it could be a bank liability — auto loans, credit card loans, and the like. You treat them the same way as the new mortgage credit – carving them up into tranches with different levels of credit risk and interest rates attached and selling them off as chunks instead of altogether as one block.

A New York securities lawyer friend and I used to speculate that we could even securitize and sell air rights in New York. That way you would be selling the blue sky itself! Obviously an absurd concept, but I assure you that people likely gave serious thought to it.

LP: How is the current banking crisis an outcome of the process of financialization?

WT: In several ways. Going back to the ‘70s and ‘80s, Walter Wriston at Citibank introduced the concept of “brokered deposits,” certificates of deposit that could be negotiated in the secondary market and resold. Nobody ever thought of doing that before. Traditionally, you took out a deposit in the bank, a CD account, and you kept it. That was that. You could borrow against it at the bank, but you didn’t go try to sell that to somebody else.

Thanks to that process of creating brokered deposits, the liability side of the bank’s balance sheet became financialized. The FDIC eventually put limits on the percentage of deposits that one bank could have that were brokered deposits because they were viewed as non-core deposits, quick-to-flee money, money that won’t be there in time of need, etc. That’s very much like what we’re seeing today.

On the asset side, banks like Silicon Valley and Signature were loaded up with things like mortgage-backed securities and also long-term Treasuries. They were doing that just to have the appearance of liquidity, the appearance of risk-free assets while ignoring so-called duration risks, that is, exposure to interest rate problems the longer the term of the bond or other obligation that you’re holding. By ignoring these issues, banks like Silicon Valley, First Republic, and Signature painted themselves into a corner. They have brokered deposits chasing the highest yield funding assets that have embedded risk that is not recognized in the kind of accounting they wanted to see.

It's About The Social Order...,

zacharydcarter |  So why all the vitriol over student debt? When we argue about student debt, we aren't really debating credit policy, inflation, growth or the separation of powers under the U.S. Constitution. All of these avenues of discussion are elaborate detours around the central issue: the structure of the American social order.  

In the United States, a college degree is about much more than securing a higher wage. People without college degrees aren't just excluded from a lot of jobs that pay well. They're more likely to be laid off and less likely to be hired during recessions. They're less likely to have health insurance, and more likely to have a disability (the causal arrow there probably points both ways, but the combination is particularly cruel). People who do not graduate from college even have shorter life expectancies than people who do. Higher education is perhaps the single most important factor in determining who has access to a financially secure lifestyle and the leisure to pursue intellectually interesting activities. A college degree confers respect and prestige. 

In a better world, the simple fact of being human would command equal respect for everyone. That is not our world, but we can imagine such a place and work toward realizing it. Prestige, by contrast, is inherently exclusive. The less there is to go around, the better it is for the people who have it. And so the more people we exclude from higher education, the more secure people with college degrees will feel about their place in society.

The recent student debt freak-out reminds me a lot of God and Man at Yale -- the 1951 memoir that launched William F. Buckley into the conservative intellectual stratosphere. It's remarkably bad for a book that has a reputation as a political classic -- a wealthy conservative Catholic goes to Yale and is horrified to find Protestants and Keynesians. What, pray, can the Board of Trustees do to save our dear, beloved Yale? The ideological material is generic McCarthyism, the writing is flat (Buckley would get better at that), and the entire project is preoccupied with weird provincial details. At one point he even complains about the vending machines. The literary establishment basically laughed at it, with both The New York Times and The Atlantic running devastating reviews.

But God and Man at Yale became a publishing sensation. After World War II, millions of new college students arrived on campuses around the country to receive an education funded by the G.I. Bill. Suddenly, an experience that had once been restricted almost exclusively to the very rich became open to infantrymen. And though the vast majority of colleges and universities continued to exclude Black students, millions of white people who had never dreamed of going to college eventually earned degrees. For many prior graduates, this step toward democratization was threatening. Their credential was being diluted. Buckley's book about the waywardness of newfangled university life spoke to this new and unexpected status anxiety among the American upper-class, and so it flew off the shelves.

The Warm Salty Golden Shower Of Biden's Student Loan Forgiveness...,

BAR  |  Senator Joe Biden played a role in creating these terrible conditions. In 2005 he and 17 other democrats joined republicans in voting for the Bankruptcy Act, which made it all but impossible to discharge student loan debt in bankruptcy. The Delaware senator was beholden to the consumer credit industry, like all of that state’s elected officials. They were the drivers in ensuring that filing for bankruptcy for any reason would become very difficult and they were always among Biden’s biggest campaign contributors.

Of course Biden knows what people need and want. During his campaign he said , “I propose to forgive all undergraduate tuition-related federal student debt from two- and four-year public colleges and universities for debt-holders earning up to $125,000.” At other times he included Historically Black Colleges and Universities (HBCUs) in this debt forgiveness plan.

It is easy to point out the discrepancy between what he promised and what he now proposes, but the problem is bigger than the laundry list of Biden campaign lies. There is great confusion among Black people about student loan debt relief, what it will really accomplish, and what is actually needed.

Biden promised well heeled democratic fundraisers that “nothing would fundamentally change.” Forgiving student loans or any of the other forms of debt peonage is the last thing that the U.S. oligarchy wants to see. The increasingly predatory capitalist system demands that Biden does little more than give lip service instead of meeting the people’s needs. That is why the oddly named Inflation Reduction Act will negotiate Medicare drug prices but not until 2026 and then only for ten drugs. Even if Biden cared he wouldn’t be allowed to do anything more for senior citizens, student loan debtors or anyone else.

Of course the Black political class can be counted on to aid in the subterfuges that are used to keep the people quiet. Congresswoman Ayanna Pressley falsely proclaimed , “President Joe Biden just canceled student debt.” Her assigned role at this juncture is to get Black voters to the polls in November and she can’t do that without lying about Biden. Getting voter buy-in for neo-liberal policies is Pressley’s problem. No one else has to go along with the inevitable falsehoods that come with the territory of holding elective office.

She and others may call themselves “progressives” but in the end they are no better than Senator Biden when he worsened the student debt crisis. They are all little more than errand boys and girls for the kleptocrats and all of them are compromised.

It Was A Sign Of Things To Come When Brandon Made Student Debt Undischargeable In Bankruptcy

nakedcapitalism |  The greatest challenge facing societies has always been how to conduct trade and credit without letting merchants and creditors make money by exploiting their customers and debtors. All antiquity recognized that the drive to acquire money is addictive and indeed tends to be exploitative and hence socially injurious. The moral values of most societies opposed selfishness, above all in the form of avarice and wealth addiction, which the Greeks called philarguria– love of money, silver-mania. Individuals and families indulging in conspicuous consumption tended to be ostracized, because it was recognized that wealth often was obtained at the expense of others, especially the weak.

The Greek concept of hubrisinvolved egotistic behavior causing injury to others. Avarice and greed were to be punished by the justice goddess Nemesis, who had many Near Eastern antecedents, such as Nanshe of Lagash in Sumer, protecting the weak against the powerful, the debtor against the creditor.

That protection is what rulers were expected to provide in serving the gods.That is why rulers were imbued with enough power to protect the population from being reduced to debt dependency and clientage. Chieftains, kings and temples were in charge of allocating credit and crop-land to enable smallholders to serve in the army and provide corvée labor. Rulers who behaved selfishly were liable to be unseated, or their subjects might run away, or support rebel leaders or foreign attackers promising to cancel debts and redistribute land more equitably.

The most basic function of Near Eastern kingship was to proclaim “economic order,” misharumand andurarumclean slate debt cancellations, echoed in Judaism’s Jubilee Year. There was no “democracy” in the sense of citizens electing their leaders and administrators, but “divine kingship” was obliged to achieve the implicit economic aim of democracy: “protecting the weak from the powerful.”

Royal power was backed by temples and ethical or religious systems. The major religions that emerged in the mid-first millennium BC, those of Buddha, Lao-Tzu and Zoroaster, held that personal drives should be subordinate to the promotion of overall welfare and mutual aid.

What did notseem likely 2500 years ago was that a warlord aristocracy would conquer the Western world. In creating what became the Roman Empire, an oligarchy took control of the land and, in due course, the political system. It abolished royal or civic authority, shifted the fiscal burden onto the lower classes, and ran the population and industry into debt.

This was done on a purely opportunistic basis. There was no attempt to defend this ideologically. There was no hint of an archaic Milton Friedman emerging to popularize a radical new moral order celebrating avarice by claiming that greed is what drives economies forward, not backward, convincing society to leave the distribution of land and money to “the market” controlled by private corporations and money-lenders instead of communalistic regulation by palace rulers and temples – or by extension, today’s socialism. Palaces, temples and civic governments were creditors. They were not forced to borrow to function, and so were not subjected to the policy demands of a private creditor class.

But running the population, industry and even governments into debt to an oligarchic elite is precisely what has occurred in the West, which is now trying to impose the modern variant of this debt-based economic regime – U.S.-centered neoliberal finance capitalism – on the entire world. That is what today’s New Cold War is all about.

By the traditional morality of early societies, the West – starting in classical Greece and Italy around the 8^thcentury BC – was barbarian. The West was indeed on the periphery of the ancient world when Syrian and Phoenician traders brought the idea of interest-bearing debt from the Near East to societies that had no royal tradition of periodic debt cancellations. The absence of a strong palace power and temple administration enabled creditor oligarchies to emerge throughout the Mediterranean world.

Greece ended up being conquered first by oligarchic Sparta, then by Macedonia and finally by Rome. It is the latter’s avaricious pro-creditor legal system that has shaped subsequent Western civilization. Today, a financialized system of oligarchic control whose roots lead back to Rome is being supported and indeed imposed by U.S. New Cold War diplomacy, military force and economic sanctions on countries seeking to resist it.

21st Century Slavery Looks A Lot Like 19th Century Slavery

motherjones |  When I first came to the Dominican Republic 30 years ago evidence of forced labor in the sugar harvest was glaringly obvious: Men with shotguns guarded locked gates to trap workers in the cane fields. But the International Labor Organization’s indicators of forced labor include more subtle abuses like the hazardous working conditions, low pay, and other issues cane workers regularly describe today.

“We’re talking about coercive forces that are psychological, coercive forces that are driven by debt,” said Duncan Jepson, managing director of the international anti-trafficking group Liberty Shared. “And that’s slightly more subtle than methods of violence.”

One Sunday morning, Euclides and I went to a batey for an Evangelical church service, under a patchwork of red and blue tarps affixed to wooden poles. We’d been invited by a couple I’ll call Efrain and Noni. Noni paced back and forth before the congregation, microphone in her hand, leaning back, giving it everything.

In contrast to his wife, Efrain sat quietly in a folding chair. He’s a “mixer,” part of a team of fumigators who sometimes use sticks ripped from trees to stir chemicals in open 55-gallon drums. Despite Central Romana’s promises to provide health care to workers, Efrain told us he has to pay for much of it himself, which has pushed him into spiraling debt. Together with expenses caused by his brother’s thrombosis, he now owes 30,000 pesos—about $600, or nearly three months’ pay. The lender charges 10 percent per week, Efrain explains: “If you borrow 1,000 pesos, you have to give this person 100 pesos per week in interest.” Yearly, that adds up to 520 percent interest.

More than two dozen cane workers told us their salaries are so low that they’ve turned to money lenders in nearby towns. A municipal firefighter who has a side business making loans to cane workers explained that while Central Romana doesn’t operate the loan shark rings, the company’s low wages leave workers desperate and willing to pay exorbitant rates. One of the ILO’s elements of forced labor is “fraudulent debt from which workers cannot escape.”

It’s a brutal cycle, Efrain tells us. The canecutters are in debt until they die.

Sugar is not the only thing that’s made the Fanjuls so rich. Their profits are sweetened thanks to the politics of the United States. Not only does Central Romana benefit from a tariff program under which the Dominican Republic gets a greater share than any other sugar-exporting nation—with the company filling nearly two-thirds of that quota—but it also profits from a congressionally authorized federal price-support program that inflates the value of each pound by about 10 cents. Vincent Smith, an agricultural economist and critic of the program, estimates the Fanjul family is “getting at least $150 million a year” in net benefits from the program, with another $25 million going to Central Romana’s imports. “That’s a very substantial concentration of benefits on a very small number of folks,” Smith says.

Some of that money goes back to seed the American political system. Over the last 20 years, Big Sugar has spent more than $220 million on campaign contributions and lobbying to sustain the price-supports and oppose stricter dietary guidelines, with 40 percent of that, according to OpenSecrets, coming from Fanjul-affiliated companies and lobbying groups. Smith, citing Federal Election Commission data, points out that the Fanjul empire and allied sugar organizations spend 10 million every year on lobbying and campaign contributions. “They’re not doing this out of the goodness of their hearts,” says Sheila Krumholz, OpenSecrets’ executive director. “It’s a very good investment.”

 

Relax, Just Let It Happen...,

libertyblitzkrieg |  It didn’t take long for the most opportunistic, nefarious and corrupt actors in the U.S. to turn a pandemic crisis into another massive power grab attempt. We’ve seen it before; after 9/11 and also throughout the response to the financial crisis a decade ago. The irredeemable sociopaths who always make the big, important decisions used those crises to consolidate wealth and power. They’re going for it again.

There are many examples, but let me list a few:

– The EARN IT bill, by which senators are attempting to destroy widespread public use of encryption, i.e. private communications. (EFF)

– The White House and the CDC are asking Facebook, Google and other tech giants to give them greater access to Americans’ smartphone location data. (CNBC)

– The Justice Department has quietly asked Congress for the ability to ask chief judges to detain people indefinitely without trial during emergencies. (Politico)

– U.S. Senators are attempting to use the crisis as an opportunity to pull off a gigantic corporate coup. (Matt Stoller, BIG)

We often get distracted debating the implications of Fed actions, and in the process lose sight of the bigger picture. The real question we need to be asking is why do we allow a handful of unelected banker welfare agents the right to shape our entire world? It’s a crazy system, and until we start questioning the underlying premises of everything about our world, we’ll remain confused and subjugated.

Elites Conspiring to Create A Permanent Underclass Who'll Work For Peanuts

unz |  This is the contempt these people have for you and me and everyone else who isn’t a part of their elitist gaggle of reprobates. Here’s a clip from another article at the WSJ that helps to show how the financial media is pushing this gigantic handout to corporate America:.

“The Federal Reserve, Treasury Department and banking regulators deserve congratulations for their bold, necessary actions to provide liquidity to the U.S. financial system amid the coronavirus crisis. But more remains to be done. We thus recommend: (1) immediate congressional action …. to authorize the Treasury to use the Exchange Stabilization Fund to guarantee prime money-market funds, (2) regulatory action to effect temporary reductions in bank capital and liquidity requirements… (NOTE–So now the banks don’t need to hold capital against their loans?) .. additional Fed lending to banks and nonbanks….(Note -by “nonbanks”, does the author mean underwater hedge funds?)…

We recommend that the Fed take further actions as lender of last resort. First, it should re-establish the Term Auction Facility, used in the 2008 crisis, allowing depository institutions to borrow against a broad range of collateral at an auction price (Note–They want to drop the requirement for good Triple A collateral.) … Second, it should consider further exercising its Section 13(3) authority to provide additional liquidity to nonbanks, potentially including purchases of corporate debt through a special-purpose vehicle” (“Do More to Avert a Liquidity Crisis”, Wall Street Journal )

This isn’t a bailout, it’s a joke, and there’s no way Congress should approve these measures, particularly the merging of the US Treasury with the cutthroat Fed. That’s a prescription for disaster! The Fed needs to be abolished not embraced as a state institution. It’s madness!

And look how the author wants to set up an special-purpose vehicle (SPV) so the accounting chicanery can be kept off the books which means the public won’t know how much money is being flushed down the toilet trying to resuscitate these insolvent corporations whose executives are still living high on the hog on the money they stole from credulous investors. This whole scam stinks to high heaven!

Meanwhile America’s working people will get a whopping $1,000 bucks to tide them over until the debts pile up to the rafters and they’re forced to rob the neighborhood 7-11 to feed the kids. How fair is that?

And don’t kid yourself: This isn’t a bailout, it’s the elitist’s political agenda aimed at creating a permanent underclass who’ll work for peanuts just to eek out a living.

Democratic Factionalization in the Context of American Property Supremacy

theatlantic |  Madison and Hamilton believed that Athenian citizens had been swayed by crude and ambitious politicians who had played on their emotions. The demagogue Cleon was said to have seduced the assembly into being more hawkish toward Athens’s opponents in the Peloponnesian War, and even the reformer Solon canceled debts and debased the currency. In Madison’s view, history seemed to be repeating itself in America. After the Revolutionary War, he had observed in Massachusetts “a rage for paper money, for abolition of debts, for an equal division of property.” That populist rage had led to Shays’s Rebellion, which pitted a band of debtors against their creditors.

Madison referred to impetuous mobs as factions, which he defined in “Federalist No. 10” as a group “united and actuated by some common impulse of passion, or of interest, adversed to the rights of other citizens, or to the permanent and aggregate interests of the community.” Factions arise, he believed, when public opinion forms and spreads quickly. But they can dissolve if the public is given time and space to consider long-term interests rather than short-term gratification.

To prevent factions from distorting public policy and threatening liberty, Madison resolved to exclude the people from a direct role in government. “A pure democracy, by which I mean a society consisting of a small number of citizens, who assemble and administer the government in person, can admit of no cure for the mischiefs of faction,” Madison wrote in “Federalist No. 10.” The Framers designed the American constitutional system not as a direct democracy but as a representative republic, where enlightened delegates of the people would serve the public good. They also built into the Constitution a series of cooling mechanisms intended to inhibit the formulation of passionate factions, to ensure that reasonable majorities would prevail.

The people would directly elect the members of the House of Representatives, but the popular passions of the House would cool in the “Senatorial saucer,” as George Washington purportedly called it: The Senate would comprise natural aristocrats chosen by state legislators rather than elected by the people. And rather than directly electing the chief executive, the people would vote for wise electors—that is, propertied white men—who would ultimately choose a president of the highest character and most discerning judgment. The separation of powers, meanwhile, would prevent any one branch of government from acquiring too much authority. The further division of power between the federal and state governments would ensure that none of the three branches of government could claim that it alone represented the people.

According to classical theory, republics could exist only in relatively small territories, where citizens knew one another personally and could assemble face-to-face. Plato would have capped the number of citizens capable of self-government at 5,040. Madison, however, thought Plato’s small-republic thesis was wrong. He believed that the ease of communication in small republics was precisely what had allowed hastily formed majorities to oppress minorities. “Extend the sphere” of a territory, Madison wrote, “and you take in a greater variety of parties and interests; you make it less probable that a majority of the whole will have a common motive to invade the rights of other citizens; or if such a common motive exists, it will be more difficult for all who feel it to discover their own strength, and to act in unison with each other.” Madison predicted that America’s vast geography and large population would prevent passionate mobs from mobilizing. Their dangerous energy would burn out before it could inflame others.

Bet You Didn't Know That Predatory Eviction Is An American Business Model

NYTimes |  Before the first hearings on the morning docket, the line starts to clog the lobby of the John Marshall Courthouse. No cellphones are allowed inside, but many of the people who’ve been summoned don’t learn that until they arrive. “Put it in your car,” the sheriff’s deputies suggest at the metal detector. That advice is no help to renters who have come by bus. To make it inside, some tuck their phones in the bushes nearby.

This courthouse handles every eviction in Richmond, a city with one of the highest eviction rates in the country, according to new data covering dozens of states and compiled by a team led by the Princeton sociologist Matthew Desmond.

Two years ago, Mr. Desmond turned eviction into a national topic of conversation with “Evicted,” a book that chronicled how poor families who lost their homes in Milwaukee sank ever deeper into poverty. It became a favorite among civic groups and on college campuses, some here in Richmond. Bill Gates and former President Obama named it among the best books they had read in 2017, and it was awarded a Pulitzer Prize.

But for all the attention the problem began to draw, even Mr. Desmond could not say how widespread it was. Surveys of renters have tried to gauge displacement, but there is no government data tracking all eviction cases in America. Now that Mr. Desmond has been mining court records across the country to build a database of millions of evictions, it’s clear even in his incomplete national picture that they are more rampant in many places than what he saw in Milwaukee.

The Real Thought Police In Higher Ed

zeroanthropology  |  The “views” of the university are a mercantile fiction, a falsehood designed to mislead the public and to caress donors and politicians, the kinds of individuals who are apparently empty and infantile enough to believe that the winning arguments are those that are advanced in the absence of criticism. What if we taught our students that the best way to learn is to ignore whatever they do not like to hear? That is indeed what is being pushed, ironically under the signs of “tolerance” and “inclusion,” the usual neoliberal claptrap.  Thus we witness the university turned into a mere echo chamber for the comfortable, a safe space for moneyed elites to flatter themselves, creating a virtual world of unrivalled ideological purity, contrived harmony, and eternal hegemony.

Finally, messages from university administrators along the lines of “this does not represent the views of the university,” might serve an additional function, but I am just speculating. This might be a polite way of telling rabid members of the public to lay off. We heard you, yes it’s all quite disconcerting, and here is our little statement, now move along. Had universities with their bloated administrations and overt political leanings not wished to enhance their public profiles and represent themselves as quasi-media outlets, they would spare themselves such unnecessary exercises. In the end, pronouncements about “the views of the university” end up multiplying the damage to the university, both as a self-inflicted wounds within the university, and as a sign of intellectual cowardice in the face of bullies. A university administration that engages in such conduct has failed its first and most basic function: to administer university resources in order to facilitate teaching and learning.

Ol'Stankazz Crypto-Bishes...., De-Dollarize Deeze Nutz!!!

Strategic-Culture |  It is probably too early for the common man to understand what is happening, but in fact the dollar is depreciating in relation to some more tangible assets. But gold continues to be corralled by parallel financial mechanisms and other financial instruments created for the sole purpose of manipulating the financial markets on which the common man depends in search of modest gains. As with others, the gold market suffers from the combine power of the US dollar, centralized financial institutions and market manipulation. Entities such as the FED (and their owners), criminally colluding and working with private banks, hedge funds, rating agencies and audit companies, have made immense wealth by driving the world into a debt scam that has stripped normal citizens of their future.

What is happening in the cryptocurrency markets in not only occurring in parallel with the spread of the Internet, smartphones and the increasing ability to operate in the digital world, but is also seen as a safe haven from centralized financial regulators and central banks; in other words, from the dollar and fiat currencies in general. Whether bitcoin will prove to be a wise long-term investment is yet to be seen, but the concept of cryptocurrencies is here to stay. The technology behind the idea, the blockchain, is a definitive model for decentralized economic transactions without any intermediary that can manipulate and distort the market at will. It is the antidote to the debt virus that is killing our society and spreading chaos around the world.

Washington is now left to deal with the consequences of its demented actions against its geopolitical adversaries. The decision to remove Iran from the SWIFT system, and the ongoing economic war against Russia and Venezuela, have pushed the People's Republic of China to obviate any direct attacks on its financial system by creating an alternative economic system. The goal is to warn the United States and her allies that an economic alternative exists and is already operational, ready to be opposed to the Euro-American system if necessary. Washington does not seem to want to renounce the role of manipulator and ruler of world speculative finance, and the obvious result of this is the creation of a financial system that is slowly working against the current one. Lack of anonymity and the centrality of systems seem to be the two fundamental elements of the current financial system that orbits around London and Washington. An anonymous, decentralized and technologically reliable system could be exactly what Washington's geopolitical adversaries have been looking for to end the US-Dollar hegemony.

Money As Tool, Money As Drug: The Biological Psychology of a Strong Incentive

nih.gov |  Why are people interested in money? Specifically, what could be the biological basis for the extraordinary incentive and reinforcing power of money, which seems to be unique to the human species? We identify two ways in which a commodity which is of no biological significance in itself can become a strong motivator. The first is if it is used as a tool, and by a metaphorical extension this is often applied to money: it is used instrumentally, in order to obtain biologically relevant incentives. Second, substances can be strong motivators because they imitate the action of natural incentives but do not produce the fitness gains for which those incentives are instinctively sought. The classic examples of this process are psychoactive drugs, but we argue that the drug concept can also be extended metaphorically to provide an account of money motivation. From a review of theoretical and empirical literature about money, we conclude that (i) there are a number of phenomena that cannot be accounted for by a pure Tool Theory of money motivation; (ii) supplementing Tool Theory with a Drug Theory enables the anomalous phenomena to be explained; and (iii) the human instincts that, according to a Drug Theory, money parasitizes include trading (derived from reciprocal altruism) and object play.

America's Puerto Rican Municipalities

zerohedge |  We harp on the massive, unsustainable, yet largely unnoticed, debt burdens of American cities, counties and states fairly regularly because, well, it's a frightening issue if you spend just a little time to understand the math and ultimate consequences.  Here is some of our recent posts on the topic:

• America's Pension Bomb: Illinois Is Just the Start
• Stanford Says Soaring Public Pension Costs Devastating Budgets For Education And Social Services
• Pension Consultant Offers Dire Outlook For Kentucky: Freeze Pension And Slash Benefits Or Else

Luckily, for those looking to escape the trauma of being taxed into oblivion by their failing cities/counties/states, JP Morgan has provided a comprehensive guide on which municipalities haven't the slightest hope of surviving their multi-decade debt binge and lavish public pension awards.  

If you live in any of the 'red' cities above, it just might be time to start looking for another home...

wikipedia |   Chapter 9, Title 11, United States Code is a chapter of the United States Bankruptcy Code, available exclusively to municipalities and assisting them in the restructuring of their debt. On July 18, 2013, Detroit, Michigan became the largest city in the history of the United States to file for Chapter 9 Bankruptcy protection. Jefferson County, Alabama, in 2011 and Orange County, California, in 1994 are also notable examples. "The term 'municipality' denotes a political subdivision or public agency or instrumentality of a State."^[1]

From 1937 to 2008 there were fewer than 600 municipal bankruptcies.^[2] As of June 2012 the total was around 640.^[3] In 2012 there were twelve chapter 9 bankruptcies in the United States, and five petitions have been filed in 2013.^[4] Since 2010, 61 petitions have been filed.^[5]

Previous to the creation of Chapter 9 bankruptcy, the only remedy when a municipality was unable to pay its creditors was for the creditors to pursue an action of mandamus, and compel the municipality to raise taxes.^[6] During the Great Depression, this approach proved impossible, so in 1934, the Bankruptcy Act was amended to extend to municipalities.^[7][8] The 1934 Amendment was declared unconstitutional in Ashton v. Cameron County Water District.^[9]

wikipedia |  Mandamus ("We command") is a judicial remedy in the form of an order from a superior court,^[1] to any government subordinate court, corporation, or public authority, to do (or forbear from doing) some specific act which that body is obliged under law to do (or refrain from doing), and which is in the nature of public duty, and in certain cases one of a statutory duty. It cannot be issued to compel an authority to do something against statutory provision. For example, it cannot be used to force a lower court to reject or authorize applications that have been made, but if the court refuses to rule one way or the other then a mandamus can be used to order the court to rule on the applications.

Mandamus may be a command to do an administrative action or not to take a particular action, and it is supplemented by legal rights. In the American legal system it must be a judicially enforceable and legally protected right before one suffering a grievance can ask for a mandamus. A person can be said to be aggrieved only when he is denied a legal right by someone who has a legal duty to do something and abstains from doing it.

Trump Off-Script On Bankster Bondage of Puerto Rico

nakedcapitalism  |  And speaking of Goldman, notice that Trump takes an explicit swipe at the investment bank turned Beltway heavyweight. He must be chafing at have been leashed and collared by the generals and the Goldmanites.

From Reuters:

President Donald Trump said on Tuesday while on a trip to Puerto Rico to observe hurricane recovery efforts that the island’s massive debt will have to be wiped out.
“They owe a lot of money to your friends on Wall Street and we’re going to have to wipe that out. You’re going to say goodbye to that, I don’t know if it’s Goldman Sachs but whoever it is you can wave goodbye to that,” Trump said in an interview with Fox News.

CNBC picked up on the Reuters story quickly and highlighted the bleak fundamentals:

Even before the storm brought Puerto Rico to a near standstill, the government there already struggled with an economy in shambles and a default on billions of dollars of public debt.
Today, the U.S. territory has nearly $70 billion in debt, an unemployment rate 2.5 times the U.S. average, a 45 percent poverty rate, nearly insolvent pension systems and a chronically underfunded Medicaid insurance program for the poor.
Puerto Rico’s job base continues to shrink, taking its economy along with it. Since the recession ended, a lack of job prospects has sent many Puerto Ricans fleeing to the mainland, where the job market is much stronger.

However, it is unlikely that Goldman would suffer much, if at all, in a Puerto Rico bankruptcy. It might hold some bonds in its trading inventory, but its big exposure would come via funds it manages. On those, under the Volcker Rule, Goldman is limited to owning a small percentage of the equity investment in the fund (3% is the nominal amount, although there may be some tricks of the trade for increasing the exposure). 

But David Dayen has found one of the big owners of Puerto Rico debt, as reported in a new story at the Intercept. If you read the article in full, tracking down the who was behind the shell company used to hide the ultimate owners is very reminiscent of the sort of gumshoe work that Richard Smith does chasing international scammers.

Putin Must Be Punished for Blocking the Bankster Rape of Russia

therealnews |  But why is so much of the American foreign policy establishment, the political class, the military leadership, the vast majority of that whole stratum wants to maintain a very antagonistic position towards Russia, and why?

ROBERT ENGLISH: You know, four or five reasons that all come together, pushing in this Russophobic direction. We've always had sort of unreconstructed Cold Warriors, people who never were easy with the new Russia, right? Zbigniew Brzezinski and people of that ilk, who wanted to just push Russia in a corner, take advantage of its weakness, never give it a chance. Then you have people in the military-industrial complex, for lack of a better term, whose vested interests lie in a continued rivalry, and continued arms-racing, and continued threat inflation. You have other people who normally would be liberal progressive, but they're so angry at Hillary Clinton's loss, they're so uncomprehending of how someone they see as vulgar and unqualified as Trump could get elected, that they're naturally unwilling to let go of this "the Russians hacked our election, the Russians got Trump elected" theme, and therefore, Russia is even bigger enemy than they would be otherwise. These and other strains all come together in a strange way. Some of this is the hard right, all right? Some of it is from the left, some is from the center. And across the board, we have ignorance. Ignorance of Russia.

PAUL JAY: Now, in an article you wrote recently, you went through some of the history, and we're going to do another segment that digs into this history more in depth, but when you look at the history of the '90s, and Yeltsin, and the whole role of the United States in helping bring down the Soviet Union, the whole point of bringing down the Soviet Union, and standing Yeltsin up, and interfering in Russian elections to make sure Yeltsin wins, and so on, was to open Russia for privatization for American oligarchs. I don't think the idea was to do it for Russian oligarchs, but that's how it turned out. Is that part of what is making this section of the American oligarchs so angry about it all?

ROBERT ENGLISH: You know, when people look at Russia today, they try to explain it in terms of one evil man, Putin, and that sort of conceals an assumption that if we could just get rid of Putin, everything would be better, and that Putin is the way he is — anti-American — because he's from the KGB. You don't need to go back to his youth or his time in intelligence to understand why he's very skeptical, why we have bad relations with Putin and all those around him. You don't have to go back to the '50s or '40s. You can go back just to the '90s, when we interfered in Russia, when we foisted dysfunctional economic policies on them, when we meddled in their elections repeatedly, and basically for an entire decade, we were handmaidens to a catastrophe — economic, political, social — that sowed the seeds of this resentment that continues to this day. It's a-

PAUL JAY: Yeah, you mention in your article that the consequences of the '90s depression in Russia far surpassed anything in the '07-'08 recession in the United States.

ROBERT ENGLISH: They far surpassed that. They even far surpassed anything in our own Great Depression of the early 1930s, of '29, '30, '31 — you know, the Great Depression, under Hoover and then Roosevelt. At that time, our economy contracted by about a quarter, and the slump lasted about three years before growth resumed. Russia's economy contracted almost by half, and the slump lasted an entire decade, and it resulted not just in widespread poverty, but millions of excess deaths, of suicides, of people dying of despair, of heart disease, of treatable illnesses caused by the strains, the ... This deep, unbelievable misery of that decade. It's no wonder that there is deep resentment towards the US, and this underlies a lot of the Putin elites' attitudes towards us. It's not something pathological, Putin being a bad guy. If you got rid of Putin tomorrow, the next guy who came along, the person most Russians would probably elect in democratic elections, wouldn't be so different. It wouldn't be another Yeltsin or pro-Western liberal, believe me.

PAUL JAY: Well, even if everything they say about Putin is true, and I doubt and ... Quite sure not everything is true. If he is such a dictator, United States foreign policy has never had any trouble with dictators, as long as they're our dictators, so the thing drips with hypocrisy.

ROBERT ENGLISH: Hypocrisy and double standards all around are what Russians see, okay? I mean, where do you begin? Look at the recent ... The vote, the referendum in Crimea to secede from Ukraine, and of course, then Russia annexed it into Russian territory, and we find that outrageous, a violation of international law, and the Russians say, "Yeah, and what did you engineer in Kosovo? You yanked Kosovo out of Serbia, you caused Kosovo to secede from Serbia with no referendum, no international law. How is that different? Right? When it's your client state it's okay, but when it's ours, it's not?" And of course the list is a long one; we could spend all afternoon going through them. So the first thing we need to do is stop the sanctimony, and deal with Russia as an equal great power. But, you know, can I say one more thing about the '90s that connect it with what's going on today? In 1991, we had George Herbert Walker Bush in the White House. It was still the Soviet Union, Gorbachev was still in power for the rest of the year, and a warning came from our ambassador in Moscow, Jack Matlock, which was passed on to the White House. He had inside information from sources, from confidential sources, that a coup attempt was being planned. And, by the way, of course it happened in August of that year. That information came from our Ambassador Matlock, from his sources in Moscow, to the White House. George Bush had been instructed that this was highly sensitive, do not reveal the source of the information, keep it confidential. Bush fouled up, and within hours, he got on the phone to Moscow, a line that was open, monitored by the KGB, trying to reach Gorbachev, and he revealed the information, and he revealed the source, which went straight to the KGB. This was an unbelievable breach of confidentiality, dangerous, potentially deadly results, and the greatest irony is that George Herbert Walker Bush had been Director of the CIA before. Now, why am I telling this story? Obviously, my first point is, presidents have fouled up, and have declassified unwittingly, or sometimes for political purposes, highly sensitive information all the time. I'm not excusing what Trump did — it looks like he was very sloppy — but the first thing to note is it's not unusual, this happens a lot. The second thing, and let's talk about this, is sharing information intelligence with the Russians. Guys, we've been doing this for nearly 20 years. After 9/11, the Russians offered us valuable intelligence on the Taliban, on Afghanistan, to help us fight back against bin Laden, and we've been exchanging intelligence on terrorists ever since. A lot of people wish we'd exchange more information; we might have prevented the Boston bombing. So this hysteria about sharing intelligence with our adversary, no, we are cooperating with Russia because we have a common enemy.

PAUL JAY: Now, I said in the beginning that I thought we should separate Trump's intent from a policy, which seems more rational, not to treat Russia as such an adversary, and try to work both in Syria and other places, negotiate more things out. But when you do look at the side of intent, I don't think you can negate or forget about the kind of historic ties that Trump has with Russian oligarchs. Some people suggest Russian Mafia. Tillerson's energy play, they would love sanctions lifted on Russia, and I'm not suggesting they shouldn't be lifted, but the motive here is they want to do a massive play in the energy sector. So it's not ... I don't think we should forget about what drives Trump and his circle around him, which is they have a very big fossil fuel agenda and a money-making agenda. On the other hand, that doesn't mean the policy towards Russia isn't rational. I mean, what do you ... I don't know if you agree or not.

Those Controlling the Technology and Those Carrying Out the Tasks...,

opendemocracy |  Vulnerable employment, with workers experiencing high levels of precariousness, is a global phenomenon. The ILO projects global growth in vulnerable forms of employment to grow by 11 million a year. The impacts of this are being felt across developed, emerging and developing countries.

In the UK, much concern about the changing labour market has been framed in terms of the shift in risk that has occurred between employers and individuals. The gig economy is often used to epitomise the imbalance in power between those controlling the technology, and those carrying out the tasks: 

However, this shift of risk reaches far beyond Uber drivers and millennials on bicycles. It can be seen in the use of contracted, agency and temporary staff and in the unpredictability of zero and minimum hours contracts of those working for supermarkets, in warehouses, in social care and in universities. 

The impact of this on people’s lives is exacerbated by a parallel transfer of risk in the systems set up to support those who are unemployed or in low paid work. At the same time as work has become less predictable, the safety net has become less springy and with bigger holes. 

This shift can be seen in cuts to social security, in the changes and increasing conditionality that universal credit brings, in the way jobs are measured and impact on poverty is not. It is seen in adult learning and the introduction of adult learner loans. It is also seen in a childcare sector that does not have the capacity to offer care to those with unpredictable or non-standard hours, even though those are the jobs increasingly likely to be available for those on low pay. 

Healthcare Service Costs Depend on How Much the Provider Can Extract From You

kunstler |  If you seek to know why this country is in so much trouble, check out the lead reports about the health care reform bill in today’s New York Times, WashPo, and CNN. You will find there is no intelligible discussion in any of them as to what’s actually ailing US health care. All you get is play-by-play commentary about which political tag-team is “winning,” as if this were a pro wrestling match — with an overlay of gloat that the Republicans fell oafishly out of the ring in the early rounds.

Of course, an issue even larger than the health care fiasco is this society’s tragic and astounding inability to discuss anything coherently in the public arena, and that might possibly be traced to the failures of education in our time and its effects on the current crop of editors and news producers — people who grew up hearing that reality was just a constructed “narrative” and that one narrative was as good as another.

So, you would surmise from reading the papers (or their web editions) that the health care problem was simply a matter of apportioning insurance coverage. That is what the stage magicians call misdirection. Any way you cut the dynamics of health insurance, as practiced in the USA these days, it is nothing but racketeering, literally a conspiracy between informed players to swindle uninformed “patients.” The debate in congress (and the news media) is just about who gets to be swindled.

This is almost entirely due to the hocus-pocus of pricing for services. For an excellent dissection of all this, I urge you to read Karl Denninger’s comprehensive manifesto, How To Permanently Fix Health Care For All, which he posted one month ago. You have to wonder whether anybody in congress happened to read this, because the debate has been devoid of any of the crucial points that it addresses.

The way it works now, the so-called “providers” (doctors, hospitals) refuse to post the cost of any service, and then charge whatever they feel they can extract, subject to an abstruse and dishonest ceremonial “negotiation” with the insurance company. The result: hospital and insurance executives get paid multi-million dollar salaries, doctors get to drive fine German cars, and the patient gets financially ass-raped, kicked to the curb, and eventually stuffed into the bankruptcy courts.

Student Loans and Healthcare Costs are Ticking Time Bombs

libertyblitzkrieg |  Healthcare costs are obscene, something I’ve become intimately aware of since getting on individual plans several years ago. Even worse, it seems the predatory behavior continues to get worse and worse with each passing year. Which brings me to a MarketWatch post I became aware of yesterday titled, This Hidden Fee is Becoming Increasingly Common — and It’s a Nasty Surprise on Medical Bills.

Here are a few excerpts:

When Jackie Thennes decided to switch doctors earlier this year, the hospital system in her Chicago, Il. suburb seemed like the natural choice. She’d been to the immediate care facility multiple times before for screenings, and the doctor was in-network.

But Thennes, who is 50 and looking for work, got a nasty surprise when the bill arrived in the mail: along with an anticipated charge for the doctor’s visit, she was also charged a “facility fee.” At $235, the fee was slightly more than the doctor’s visit itself.

Thennes tried to contest the charge with the hospital system, but to no avail. And while she said she won’t go to the facility again, she worries about getting hit with the same fee somewhere else.

This is “going to deter me from getting the medical attention I need,” she said. “I’m going to get sick just worrying about it.”

These kinds of facility fees are common at hospitals, where they help pay the hospital system’s overhead costs. But as doctors’ offices increasingly are being bought up by big hospital systems, patients are being charged facility fees of up to hundreds of dollars out-of-pocket without warning and without the ability to contest them.

The rate of hospital-employed doctors increased by almost 50% between July 2012 and July 2015, according to an analysis conducted by the nonprofit Avalere Health for the Physicians Advocacy Institute. By July 2015, nearly 40% of doctors were employed by hospitals, the analysis found. The trend occurred across the country but was especially prominent in the Midwest.

It’s hard for patients to research which doctors charge facility fees, since there’s no comprehensive resource to track it, said Chuck Bell, programs director for Consumers Union, the policy and mobilization arm of Consumer Reports.

There is one foolproof option, though, Bell said: ask pre-emptively.

Still, “why should patients have to do this?” Bell said. “Health care has become this outlier bad, terrible customer experience. Even a mechanic has to tell you up-front what the estimate is for working on your car.”

Moving along, let’s take a look at a very disturbing trends happening with regard to student loans, which as you know are almost impossible to get rid of, even in bankruptcy. They essentially follow you to the grave.

Also from MarketWatch:

Sens. Ron Wyden (D-Ore.) and Sherrod Brown (D-Ohio) introduced a bill with several prominent co-sponsors last week that would prohibit the government from garnishing borrowers’ Social Security disability and retirement checks to pay for defaulted student loans. This marks the second time the Senators have tried to curb this practice; they introduced a similar bill in 2015 was never enacted into law. And given today’s highly partisan lawmaking environment, getting the bill through this time may not be much easier.

“It’s a challenge,” Brown told MarketWatch. Still, he said he’s hopeful lawmakers will respond to growing concern on this topic from constituents. “Senators and House members are hearing about this problem more and more. We’re hearing all kinds of people calling us surprised that [the government] can do this.”

And indeed, the government can. The federal student loan program provides many options borrowers can use to manage their debts, but once borrowers default, the government has extraordinary powers to get its money back, including garnishing tax refunds, Social Security checks and wages.

A growing number of borrowers are losing out on a portion of their Social Security checks to pay back student loans. The number of borrowers over 65 facing this predicament jumped 540% between 2002 and 2015, according to a report released by the Government Accountability Office in December.

Multiple factors explain that spike. For one, over the past several years we’ve witnessed rapid growth in the number of students going to college or returning to school during their career. But perhaps more important, rising college costs over the past few decades means that it’s more likely that an older adult would have taken on a student debt either to pay for their own schooling or that of a child.

The challenges these older or disabled borrowers face paying back their loans is increasingly pushing them toward the financial brink. The 1996 law that allows the feds to garnish Social Security benefits over student loans requires that they leave the borrower with a minimum of $750 in benefits. But that floor hasn’t been adjusted since the 1990s to account for the rising cost of living. In 2015, about 67,300 borrowers over 50 had their benefits garnished below the poverty line from just 8,300 borrowers in 2004.

Student loans and healthcare are both ticking time bombs and I see no real effort underway to tackle them at the macro level where they need to be addressed. Watch these two issues closely going forward, as I think fury at both will be the main driver behind the next populist wave.

Replacing Delusional Economics With a Reality-Based System

Counterpunch |  Keen’s “Minsky” model traces this to what he has called “endogenous money creation,” that is, bank credit mainly to buyers of real estate, companies and other assets. He recently suggested a more catchy moniker: “Bank Originated Money and Debt” (BOMD). That seems easier to remember.

The concept is more accessible than the dry academic terminology usually coined. It is simple enough to show that the mathematics of compound interest lead the volume of debt to exceed the rate of GDP growth, thereby diverting more and more income to the financial sector as debt service. Keen traces this view back to Irving Fisher’s famous 1933 article on debt deflation – the residue from unpaid debt. Such payments to creditors leave less available to spend on goods and services.

In explaining the mathematical dynamics underlying his “Minsky” model, Keen links financial dynamics to employment. If private debt grows faster than GDP, the debt/GDP ratio will rise. This stifles markets, and hence employment. Wages fall as a share of GDP.

This is precisely what is happening. But mainstream models ignore the overgrowth of debt, as if the economy operates on a barter basis. Keen calls this “the barter illusion,” and reviews his wonderful exchange with Paul Krugman (who plays the role of an intellectual Bambi to Keen’s Godzilla), who insists that banks do not create credit but merely recycle savings – as if they are savings banks, not commercial banks. It is the old logic that debt doesn’t matter because “we” owe the debt to “ourselves.”

The “We” are the 99%, the “ourselves” are the 1%. Krugman calls them “patient” savers vs “impatient” borrowers, blaming the malstructured economy on personal psychology of indebted victims having to work for a living and spend their working lives paying off the debt needed to obtain debt-leveraged homes of their own, debt-leveraged education and other basic living costs.

By being so compact, this book is able to concentrate attention on the easy-to-understand mathematical principles that underlie the “junk economics” mainstream. Keen explains why, mathematically, the Great Moderation leading up to the 2008 crash was not an anomaly, but is inherent in a basic principle: Economies can prolong the debt-financed boom and delay a crash simply by providing more and more credit, Australia-style. The effect is to make the ensuing crash worse, more long-lasting and more difficult to extricate. For this, he blames mainly Margaret Thatcher and Alan Greenspan as, in effect, bank lobbyists. But behind them is the whole edifice of neoliberal economic brainwashing.

Keen attacks this “neoclassical” methodology by pointing that the logical fallacy of trying to explain society by looking only at “the individual.” That approach and its related “series of plausible but false propositions” blinds economics graduates from seeing the obvious. Their discipline is the product of ideological desire not to blame banks or creditors, wrapped in a libertarian antagonism toward government’s role as economic regulator, money creator, and financer of basic infrastructure.

Keen’s exposition undercuts the most basic and fundamental assumptions of neoclassical (that is, anti-government, anti-socialist) economics by showing that instead of personifying economic classes as “individuals” (Krugman’s “prudent” individuals with their inherited fortunes and insider dealings vs. spendthrift individuals too economically squeezed to afford to buy houses free of mortgage debt) it is easier to start with basic economic categories – creditors, wage earners, employers, governments running deficits (to provide the economy with money) or surpluses (to suck out money and force reliance on commercial banks).