Interview with Michael Hudson
(Excerpts by herymakow.com)
Let's talk about who's not bailed out.
Who's not bailed out are the small business owners, the restaurants, the companies that you walk down the street in New York or other cities, and they're all shuttered with closed signs. Their rent is accumulating, month after month.
Restaurants, gyms and stores are small-markup businesses, small-margin businesses, where, once you have no sales for maybe three months and rent accruing for three months, they're not going to have enough money to earn the profits to pay the rents that have mounted up for the last three months.
The other people that are not being bailed out are the workers -- especially the people they call the prime necessary workers, which is their euphemism for minimum-wage workers without any job security. There have been huge layoffs of minimum-wage labor, manual labor, all sorts of labor.
They're not getting income, but their rents are accruing. And their utility bills are accruing. Their student loans are accruing. And their credit card debts are mounting up at interest and penalty rates, which are even larger than the interest rates. So all of these debts are accruing.
The real explosion is going to come in three months, when all of a sudden, this money falls due. ...
And states and municipalities are left broke. Imagine New York City and other states. Most states and cities, have balanced budget constitutional restrictions. That means they're not allowed to run a deficit.
Now if these states and cities have to pay unemployment insurance, and have to pay carrying charges on the schools and public services, but are not getting the sales taxes, not getting the income taxes, from the restaurants and all the businesses that are closed, or from the workers that are laid off, they're going to be left with a huge deficit.
Nothing is done about that. There has been no attempt to save them. So three months from now, you're going to have broke states, broke municipalities, labor that cannot, whose savings was wiped out....
It's not a bailout -- it's a huge giveaway that makes them richer than they ever were before.
So the Federal Reserve has been pumping trillions and trillions of dollars into the stock market. That's what's been pushing up the stock market, the Federal Reserve. The bailout has gone to the stock market. As if the stock market got coronavirus! Stocks don't get coronavirus! They don't get sick on the virus! And yet it's the stock market that's going up through the Federal Reserve.
There's also another $2 trillion dollars, $2 to $4 trillion that the US government has, over and above the $2 trillion that's going to the people. So most of the calculations that have been published cite it as a $10 trillion bailout. Of which the newspapers, to avoid embarrassing Mr. Trump, only refer to the money given to the the wage earners. And they're sort of embarrassed that the vast majority are given to the financial sector that doesn't need a bailout, but that doesn't want to lose a single penny from the virus.
So when you see the stock market recovered almost to what it was before the virus, while the economy is going down, you realize, wait a minute they're saving the 1 percent, or the 10 percent of the population that own 85 percent of the stocks and bonds. They're saving the banks. They're not saving the people, and they're not saving the economy; they're not saving industry; and they're not saving small businesses.
So it's an amazing hypocrisy that the mainstream press is not discussing, which is why your show is so important.
So what's going to happen? You're going to have a bonanza for private equity capital. The liquid, the 1 percent that have access to bank credit and have their own equity capital are going to come in and pick up a lot of real estate that's going to be defaulted on -- just like they did after Obama evicted his constituency, the mob with pitchforks, and evicted them. Blackstone will pick up more real estate. Big companies are going to pick up small companies. You're going to emerge with a highly monopolized economy, much more centralized....
So we're going to have a much more centrally planned by a coalition of monopolies and the government. In the 1930s, that was called fascism. --- The idea that only the rich should be allowed to print money for themselves, but the government should not be allowed to print money for any public purpose, any social purpose -- not for medicine, not for schools, not for personal budgets, not for full employment -- but only to give to the 1 percent.