In Greece, for instance, said Dr Michael Hudson, research professor of Economics, if Greece were to leave the eurozone and adopt the drachma and devalue, its foreign debts are in hard currency so it would have to pay more in drachma to pay its euro debts and dollar debts and other foreign currency debts.According to Hudson´s interviewed on Guns N Butter it would have to continue to pay world prices for all of its basic inputs but Greek labor would be devalued relative to foreign currency. So the idea is to lower the cost of labor on the theory that it’s labor costs that determine international prices.
A hundred years ago people thought well, according to Hudson, right now we have the big corporations, heavy industry, the steel companies, the railroads doing the planning. We think government should be doing the planning. That was the socialist planning. But now you don’t have government doing the planning, you don’t have industry doing the planning, you have Wall Street and the financial sector doing the planning.
Nobody a hundred years ago expected anything like this so you have essentially a new class, a new bureaucracy – not the bureaucracy that Hayek warned about in The Road to Serfdom doing the planning, but a much more centralized planning bureaucracy on Wall Street in America, the city of London in England, the Bourse in France, Frankfurt in Germany, Shanghai in China.
You have financial interests that are somehow centralizing all of the planning power and all of the economic surplus in their own hands in a way that’s impoverishing the rest of society. This is something entirely new and the political system has not come to terms with it.
And it will be basically wrong, I think.
And then still one fragment:
The aim of the government today is what it was under the Carter administration – to create a food crisis to starve out third World countries and make them more dependent on the United States so the United States government can say,
we will give you more food but you have to sell off your raw materials to American firms, you have to get rid of your democracy and put in a government that we appointment ....And Hudson adds that’s how the Americans basically are impoverishing the Third World countries, by insisting – for instance through the World bank and IMF – that they will only give loans if other countries do not feed themselves and depend on American grain. Now that America’s using the grain to make alcohol and gasoline there’s no more grain available to feed these people so the result is African starvation as official American policy.
Photo citation: “real-life” american beauty poster.
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