Category Archives: Finance

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[This is the last of a series of essays on debt, prompted by recent revelations about how the issue was handled in ancient Mesopotamia.]

According to Michael Hudson’s new book Forgive Us Our Debts, the efforts of the rising moneyed classes in the ancient world to stamp out the long standing tradition of periodic debt amnesties were awe-inspiring in their tenacity.

For example: the historical record has convinced Hudson that Jesus Christ’s core mission was to restore Clean Slate Amnesties, or Jubilee. In his very first sermon, at the age of 15, Jesus said;

“…the Lord has anointed me; he has sent me to bring good news to the meek, to bind up the brokenhearted, to proclaim liberty to the captives, and to set the spiritual prisoners free; to proclaim the year of God’s favor and the day of our God’s reckoning.”

All of which can be interpreted figuratively, to say God wants everybody to be happy, or literally: God wants all the debts cancelled. Continue reading →

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[This is the third of a series of essays on debt, prompted by recent revelations about how the issue was handled in ancient Mesopotamia.]

When the kings and potentates of Bronze Age Mesopotamia realized that interest-bearing debt was a cancer that would inevitably destroy first the lower classes and then the entire kingdom (or empire, or whatever form of government they were using at the time) they reacted, forcefully and logically. They cancelled all debts, periodically.

Not merely once every 49 years, as the Bible would later recommend, but every once in a while — when a new king took the throne, on an anniversary of the empire, or because it was Thursday (the seven-day week was first defined by the Babylonians). Every esoteric language used in the region for more than 2,000 years has a term for the practice, as Dr. Michael Hudson explains in his new book And Forgive Them Their Debts: Lending, Foreclosure, and Redemption from Bronze Age Finance to the Jubilee Year (ISLET 2018).  As Dr. Hudson translates it, the term is “Clean Slate Amnesty.”    Continue reading →

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[This is the second of a series of essays on debt, prompted by recent revelations about how the issue was handled in ancient Mesopotamia.]

Western civilization began to flourish about 6,000 years ago, not long after agriculture replaced hunting-and-gathering as the occupation of most humans, on the fertile ground between the Tigris and Euphrates Rivers. The region is known in history as Mesopotamia, a cradle of civilization, and is known today, with terrible irony, as Iraq and Syria, war-ravaged graveyards of civilization.

One of the earliest systems of writing (cuneiform) began here, the wheel was invented here, the Semitic languages — Hebrew and Arabic — arose here, metalworking — the Bronze Age — began here, as did mathematics, astronomy and codified law. These were smart, creative people, who among many other things experimented with forms of government: city-states, kingdoms, elements of democracy, empires.

Very early on, shortly after it was invented, they all seem to have recognized the toxicity of debt. Modern historians discovered this only recently, because of breakthroughs in the decoding of ancient languages. For some time the revelations about debt were particular to some time frame or ruler being studied, but a few scholars began to see and pursue a wider pattern. The foremost among them, Dr. Michael Hudson of the University of Missouri, has spent 30 years fleshing out this pattern, with mind-blowing results. Continue reading →

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[This is the first of a series of essays on debt, prompted by recent revelations about how the issue was handled in ancient Mesopotamia.]

Debt is a growing cancer on our private lives, our governments and corporations, on civilization itself. It is as implacable as it is insidious, offering us the Faustian bargain of immediate pleasures in exchange for eternally increasing pain. Let us examine and define this problem, and then take a look at it from the perspective of a  brand new discovery about our ancient past — one that offers a solution, one that has been proven to work, but has been suppressed by 28 centuries of fake news.

A friend of mine once defined state-run lotteries as “a tax on the mathematically illiterate.” Debt is like that, except that it is a far more onerous burden. Buying too many lottery tickets may deprive you of a few pricey coffees, or a pack of cigarettes, or whatever your discretionary spending includes. But debt will deprive you of your freedom. One sees frequent references in the media to today’s “debt slaves,” and we understand that to be figurative, but for much of human history, debt has led quickly and surely to literal slavery. [More on that later in this series.]   Continue reading →

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This is what it looks like when investment companies take over your ship. Except that in reality, it’s often more brutal.

They do not wear eye patches, or wooden legs, or carry parrots on their shoulders. Their uniforms are suits of a dark color, they travel in private jets, and rather than bury their plunder in oaken chests they wire it to an offshore account. But they are pirates, make no mistake, who attack the vessels of commerce built by other people, take them over, plunder them, and leave them ghost ships drifting aimlessly, the crew gone and the lives of many thousands in ruins.

Consider just two examples of their work. Continue reading →

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Using a fire hose to give water to thirsty people doesn’t work. Hosing down a few people with abundant cash doesn’t do the society any good, either.

The Bible needs an update: love of money has been far surpassed as the root of evil in our world by the simple possession of unearned money. Unearned wealth is that which has been inherited, conned, won at gambling in the great casino otherwise known as the stock market, conveyed by a grateful company for hanging out in the executive suite, or otherwise assembled by the manipulation of paper tokens and computer cursors. Great tsunamis of this bogus lucre are sloshing around the world in search of more lucre, devastating not only companies but whole economies, crushing the lives and hopes of ordinary people.

The damage is not just financial, it is psychological and social. People who come into great wealth without earning it, often rot out at the core. One reason is that they are perpetually surrounded by sycophants telling them how smart they are while promoting yet another scheme for ever more enrichment. The self-esteem of the super-rich becomes bloated even as their intellects and their ethics atrophy, and that’s just in the first generation. The sons and daughters of these inheritors tend to be several steps back down the evolutionary scale toward pond scum. Continue reading →

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There are times in your life when you just want to believe there’s a safety net under you. This is one of them.

When I first saw a reference to the Plunge Protection Team, I of course assumed it was a suicide-prevention program for bankers who work in skyscrapers. As our president often says, who knew that it would be so complicated? Or, as he also often says, who cares?

Here’s why it’s interesting. There is no apparent, rational explanation for why the stock market continues to fly so high. No standard valuation of shares — not growth, not profitability, not return on investment, not the price/earnings ratio, not anything — can remotely justify the prices being paid for paper in this crazed casino, populated by riverboat gamblers playing fast and loose with OPM (other peoples’ money), chasing the chimera of 20 per cent returns. Continue reading →

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The flag maker got it wrong: It was supposed to say, “Don’t lend to me.” (Wikipedia Image)

In September, the national debt of the United States passed $20 trillion for the first time in history. Three months later, it  passed $20.6 trillion. That’s $600 billion in debt added in three months. The tax cuts just passed by Congress will shortly add another $1.5 trillion.

In the past two years, corporate debt in America has increased by over $568 billion (pikers — Congress did that in three months!).  And all the lines on all the graphs charting the borrowing of money are pointing at the sky.

In September, the total debt owed by American consumers approached $13 trillion. Consumer debt set a record in the third quarter of 2008 and has topped the record every quarter since. The world economy crashed and burned in 2009, but consumer debt never went down. Now, household debt is rising 60 percent faster than incomes are rising. Laissez les bons temps rouler. Continue reading →

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This is the Song of Polly Anna, as sung by the “Don’t Worry, Be Happy” Chorus, or whistled while passing graveyards:

When the fat lady finishes singing the Song of Polly Anna, it’s over.

Verse #1: “Unemployment is down to 4.1 percent, lowest in 17 years. 1.5 million new jobs created since I took office.” (Contributed by the Tweeter in Chief.)

“Don’t be fooled by low unemployment numbers,” says The Hill, not exactly a fringe publication, of the latest report. Candidate Trump actually had it right when he ridiculed the government reports as lipstick on a pig, or, perhaps more to the point, cosmetics on a corpse. The numbers are curried and combed, annualized, seasonally adjusted, revised and updated not to reflect reality, but to replace reality with a shimmering vision of 1950.

Case in point: the latest report estimates that just last month, 968,000 American workers left the workforce. While some of these people are elderly, students or disabled, their numbers have been swelled by people who could be working, who want to work, but have given up looking for work. Thus it is true that the number crunchers somehow massaged the unemployment rate to a 17-year low, primarily by counting as unemployed only those people actively looking for work. Meanwhile the number of people not in the work force, and thus not counted in the calculation, has reached 95 million, its highest level in 40 years.   Continue reading →

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[Irony Alert: The following news is not fake. It is true, just not factual.]

The New York Stock Exchange announced today that according to its key indicator, the Dow Jones Industrial Average, the stock market has attained escape velocity, has left Earth’s atmosphere and is, as a spokesman said, “on its way to the stars.” Having set a new record high of over 23,000 on October 17, a spokesman said the Dow is expected to broach 1,000,000 by the end of the year. “We’re in warp drive now,” the spokesman said.

Asked how stock prices could be so high when corporations are struggling with enormous debt, anemic profits, poor sales and sagging prospects, the spokesman laughed heartily. “See, that right there is thinking that is so 1929. The era of stock prices being tied down to the actual value of anything, or to business performance, is long over. Now it’s all about expectations and psychology. Facebook isn’t valued at half a trillion dollars because of what it owns or because it’s advertising works. [See: “Digital Advertising: The Rise and Fall of Crappy Crap”] It has that valuation because it is blindingly popular.” Continue reading →