Deconsumption has rather unofficially closed its doors, and its readers scattered to the wind.
But as I'm still paying to host the past several years of material here, and with various sources still directing some 400 hits here each day, I figured I might as well take a couple moments to link-promote this fantastic interview with investment advisor Michael Hudson which appeared in this month's (March '08) Acres magazine.
Debtor Nation: The Highjacking of America's Economy (.pdf file)
We're long-time subscribers to Acres (the "voice for eco-agriculture"), but I can't help being floored that they're so thematically open-minded as to scoop such a high-quality (and extensive) interview. I literally read it twice. A former investment analyst myself, I've long accepted that the American political and economic systems have become almost entirely closed-doors processes, and as such that there are a myriad details and answers which we might vaguely discern from without, but which can only clearly be grasped by those within. This interview provides a refreshing view from someone who has spent time acting behind that proscenium. So while it generally only reinforces much of what I've been exploring on this weblog the past few years, at the same time it proves stimulating and refreshing enough to warrant promoting here.
Now I know most readers won't be all that interested at delving into an interview with an investment/economic advisor, so I should state that I myself have generally detested the willful ignorance and denial so prevalent throughout our dysfunctional financial industry this past decade. In fact I've long stated here at Deconsumption that the reason I left the investment industry was because I couldn't see anymore how the benefits of publically-traded vehicles (with the cautious exception of short-term treasuries and select CDs, money markets, and foreign currencies) could overcome the frightening risks inherent within the system itself. For me it was no longer a question of simply how to allocate funds based around a pessimistic world-outlook. Rather I became convinced that there could be no safe haven whatsoever when it's the system itself that is losing its structural integrity.
I mean, the real betrayal that should be acknowledged publically is that there is nothing happening now that wasn't entirely forseeable several years ago. And yet, where were the economists and money managers then? Forget clowns like that Cramer guy saying you should hold onto your Bear Stearns, nobody with history in this business has payed any real attention to CNBC since the late '90's. And clearly the majority of professionals, no matter what the industry, are little better than 'intitutionalized' thinkers. But what about a street smart guy like, say, uber-bond-guru Bill Gross? Head-and-tails smarter by far than myself, far more experienced, infinitely better connected.... He was probably the earliest of the large asset managers to start grumbling about economic "mismanagement" in America, and that was little better than a year ago. Of course he never went so far as to say "get your money out of higher-yield bonds while you can". He yet he clearly must have known what was in the cards even 5 years ago. It wasn't like there was any baseless speculation involved -- the writing was on the wall as clear as day. I even sat down and outlined what turned out to be a remarkably cogent attempt at defining coming events for myself (Timeline for Unfolding Crisis), which has been one of the more enduringly popular posts from here. In fact, Deconsumption itself was really only an ongoing attempt at grappling with how to prepare for the various themes I'd presaged then.
And the fact is, I ain't smarter than the best and brightest at our nation's investment houses. The only difference is that I left the industry. As such I didn't have to lie to people any longer, to pretend that what was already beginning to happen wasn't going to happen.
Anyway, to wind my way back around to the subject of this post, I suspect Hudson may be cut from a similarly jaded cloth, and I was certainly encouraged to hear he has an affiliation with the American Monetary Institute -- which I believe is easily the most well-credentialled and determined monetary reform organization in America (I've long linked to the AMI website over on the right).
In one fell swoop Hudson explains....
...the failure of the modern US agricultural system (the wealth created by increased productivity went entirely to the bankers who convinced hapless farmers they had to "get big or get out")
...how the runaway Caribbean off-shore industry was originally established to launder drug-money
...why countries like Panama and Liberia are really "anti-countries", established by American oil interests to avoid paying taxes
...how the University of Chicago economists espoused the torture and murder of everyone who didn't support free market thinking in Latin America
...how to steal your nation's resources using taxpayer money
....and in one of my personal favorite sections, Hudson speculates on the most bewildering aspect of contemporary economics -- why is it that so many foreign economies continue to embrace and support a patently homicidal/suicidal US Dollar-economy:
"HUDSON. ...Because [countries like China and Germany] don’t seem to care about their internal economies, except to go on waging the old class war. That is how mainstream economics is taught these days — and why I stopped teaching academic economics for many years. Many people have tried to explain why European central bankers are so idiotic when it comes to this system. One suggestion is the “Stockholm Syndrome”: When somebody is kidnapped, the victim tends to identify with the kidnapper, the victimizer — and there is an idea in Germany, in England, and other countries that no matter what, they have to do whatever the U.S. government recommends. It’s a passive mentality.
But for Europe and Asia to behave in this way violates every theory of how international relations are supposed to work. In theory, every nation is supposed to act in its own self-interest. But in today’s world
it seems that only the U.S. government is acting in this way. It is understandable why the United States would love to pay paper dollars and get foreign resources for nothing. It’s not understandable why foreign
countries go along....Europe is senile from the vantage point of how to conduct international diplomacy and domestic economic growth. It imagines that it is getting a benefit by exporting goods to American buyers rather than providing for its own population.
ACRES U.S.A. Why this disregard for their own internal economies?
HUDSON. The only reason I can think of is that the one thing central bankers feel passionate about is class warfare. They are trained as financial planners to hate labor so much that they will give everything to America for free if it will hurt their own labor force. That anti-labor ideology is a precondition for getting a job at the central bank in today’s world."
