Michael Hudson

Are Students an Economic Class?

Students usually don’t think of themselves as a class. They seem “pre-class,” because they have not yet entered the labor force. They can only hope to become part of the middle class after they graduate. And that means becoming a wage earner – what impolitely is called the working class.

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Developer Welfare: Trump’s Infrastructure Plan

While protestors and police were clashing on the inaugural parade route in Washington, D.C., the newly sworn-in president of the United States was lunching with the establishment in Washington—some of the very people he called out in his inaugural address.

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My Education as an Economist: How I Learned to Reject the Market Dogma That Dominates the Profession

I did not set out to be an economist. In college at the University of Chicago I never took a course in economics or went anywhere near its business school. My interest lay in music and the history of culture. When I left for New York City in 1961, it was to work in publishing along these lines. I had worked served as an assistant to Jerry Kaplan at the Free Press in Chicago, and thought of setting out on my own when the Hungarian literary critic George Lukacs assigned me the English-language rights to his writings. Then, in 1962 when Leon Trotsky’s widow, Natalia Sedova died, Max Shachtman, executor of her estate, assigned me the rights to Trotsky’s writings and archive. But I was unable to interest any house in backing their publication. My future turned out not to lie in publishing other peoples’ work.

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How the IMF Has Helped to Crush Greece

This autumn may see anti-austerity coalitions gain power in Portugal, Spain and Italy, while Marine le Pen’s National Front in France presses for outright withdrawal from the eurozone. These countries face a common problem: how to resist the economic devastation that the European Central Bank (ECB), European Council and International Monetary Fund (IMF) “troika” has inflicted on Greece and is now intending to do the same to southern Europe.

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Greece Called the Bluff of Europe's Biggest Bankers - A Big No to Austerity

Just after 7 PM Greek time on Sunday, I was told that the “No” vote (Gk. Oxi) was winning approximately 60/40. The “opinion polls” showing a dead heat evidently were wrong. Bookies across Europe are reported to be losing their shirts for betting that the financial right wing could fool most Greeks into voting against their self-interest. The margin of victory shows that Greek voters were immune to the mainstream media’s misrepresentation during the week-long run-up as to whether to accept the troika’s demand for austerity to be conducted on anti-labor lines. (James Galbraith summarizes the misrepresentation in “9 Myths About the Greek Crisis,” Politico.)

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The Greek Debt Crisis and Crashing Markets

Back in January upon coming into office, Syriza probably could not have won a referendum on whether to pay or not to pay. It didn’t have a full parliamentary majority, and had to rely on a nationalist party for Tsipras to become prime minister. (That party balked at cutting back Greek military spending, which was 3% of GDP, and which the troika had helpfully urged to be cut back in order to balance the government’s budget.)

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If You Think Ukraine's Border War with Russia Is Bad, Check Out Its Fight with International Lenders

The fate of Ukraine is now shifting from the military battlefield back to the arena that counts most: that of international finance. Kiev is broke, having depleted its foreign reserves on waging war that has destroyed its industrial export and coal mining capacity in the Donbass (especially vis-à-vis Russia, which normally has bought 38 percent of Ukraine’s exports). Deeply in debt (with €3 billion falling due on December 20 to Russia), Ukraine faces insolvency if the IMF and Europe do not release new loans next month to pay for new imports as well as Russian and foreign bondholders.

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How Wall Street and Its Democratic Allies Are Waging War Against Pension Funds

On the Senate’s last day in session in December, it approved the government’s $1.1 trillion budget for coming fiscal year.

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Western Media Trashed Russia at Every Opportunity During the Olympics, Distracting from a Big Success Story

The Sochi Olympics were the great success Russia hoped for. The opening ceremonies proved a radiant display drawing on Russia’s most compelling cultural assets.  This artful look back to Russia’s past greatness proved both a reminder and challenge to its own people to reprise their historical greatness going forward. Meanwhile, its closing ceremonies reprised these themes, reminding the viewer of Russia’s continued vibrancy in the arts.

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Inside the Fight to Prevent Billions in International Money Laundering and Tax Shelters

In June 2000, international groups rolled out blacklists targeting offshore refuges that shelter tax dodging and money laundering. Some observers predicted “the death of tax havens.” 

This spring U.K. Prime Minister David Cameron made headlines by promising to crack down on British-flagged havens that provide cover for tax cheats and other seekers of financial opacity. After a meeting in May at the White House with U.S. President Barack Obama, Cameron pledged to “tackle the scourge of tax evasion” and fight for a new era of financial openness.

This fall, after getting assurances from British overseas territories and Crown dependencies that they would change laws and practices, Cameron declared that it is now unfair to call them tax havens. They “have taken the necessary action and should get the backing for it,” Cameron said during a Parliamentary session.

Richard Murphy, a U.K. accountant who had been a leading advocate for change in Britain’s offshore empire, calls Cameron’s recent remarks “absurd.”

What Cameron is saying, Murphy says, is that the Caymans and others are no longer tax havens because “they made a vague commitment to take unspecified actions at an unspecified time in the future.”

A Cameron spokeswoman did not answer questions for this story, but pointed to a recent speech in which Cameron says he continues to work to “close the door” on “shadowy, corrupt, illegal practices once and for all.”

For their part, the Caymans and other U.K. overseas territories argue that they offer not secrecy but rather legitimate confidentiality. They praised Cameron’s remarks, saying in a joint statement that they are “well regulated, independent financial services jurisdictions” and will “continue to lead on meeting international standards of tax and transparency.”

Operation Red Spider

Questions about how well global standards are enforced arose earlier this year amid a banking scandal in India.

The case began when a man introducing himself as an operative for a corrupt politician visited dozens of bankers across India, explaining candidly that he was seeking to launder “black money” and turn it into “white money.”

Almost every banker he met, he later reported, was willing to help, with many offering to channel cash overseas and use shell companies to cover the trail.

Only later did the bankers learn the man’s real identity: he was a journalist doing a hidden-camera sting for Cobrapost, a muckraking Indian magazine that codenamed its undercover effort “Operation Red Spider.”

When the magazine announced its findings this spring, it asserted that “money laundering services are being offered practically as a standard product across the country.”

Government regulators did not share that assessment.

“Let us not unnecessarily downgrade ourself,” a deputy governor of the Reserve Bank of India, the nation’s central bank, told reporters. “Our system to prevent money laundering is perfect.”

Indian authorities got support from the Financial Action Task Force, a Paris-based intergovernmental body that developed nations have deputized as the main watchdog in the global fight against money laundering.

In June, FATF released a long-in-the-works evaluation that gave India’s systems for fighting money laundering the organization’s stamp of approval. India was doing so well, in fact, that FATF said it no longer needed to do regular follow-ups to check India’s technical compliance with international standards.

Ultimately, though, Indian officials had to acknowledge that the country’s anti-money laundering regime fell short of perfect. A review by the Reserve Bank in the wake of Cobrapost’s exposés found that 25 banks had indeed violated anti-money laundering rules. Among them were some of India’s largest banks.

Aniruddha Bahal, Cobrapost’s founder, says the episode suggests FATF is more interested in shuffling papers than in cracking down on money laundering.

The United Nations Office on Drugs and Crime estimates that just a fraction of 1 percent of money that’s laundered around the globe is intercepted and recovered.

Instead of focusing on paper compliance, Bahal says, FATF “should have people on the ground. You have to have a way for international organizations to do spot checks on banks.”

FAFT acknowledged in a prepared statement that its assessment focused on India’s on-paper compliance rather than on how well its anti-money laundering regime works. It says future reviews of India and other countries will shift the focus to their on-the-ground success in reducing the flow of dirty money.

Offshore wars

Concerns about the role of offshore havens in money laundering and tax evasion go back the better part of a century.

In 1921, the U.S. Congress raised questions about foreign subsidiaries that were used to “milk” their U.S. parent corporations, helping them cut tax bills. In 1937, U.S. Treasury Secretary Henry Morgenthau warned President Franklin D. Roosevelt that Americans were dodging taxes by setting up holding companies in the Bahamas, Newfoundland and elsewhere, resorting to “all manner of devices to prevent the acquisition of information regarding their companies.”

It wasn’t until the late 1990s that world powers began their first coordinated attack on offshore shell games.

Two multinational groups counting the U.S., Japan and other powerful nations as members led the effort. The Financial Action Task Force targeted money laundering by criminals and terrorists. The Organization for Economic Cooperation and Development zeroed in on offshore-enabled tax evasion.

In 2000, FATF and the OECD announced blacklists for “non-cooperative” jurisdictions that, for example, failed to do much to help foreign authorities investigating tax and financial crimes.

The OECD listed 35 jurisdictions, including the Bahamas, the Cook Islands and Monaco. OECD members threatened economic sanctions against jurisdictions that didn’t change banking secrecy provisions and other practices that encouraged the flow of unreported cash.

The U.S. supported the OECD’s blacklist under the Clinton administration. American support didn’t hold, though, after the 2000 election put George W. Bush in the White House.

The Center for Freedom and Prosperity — a Washington, D.C.-based group associated with corporate-funded think tanks — launched an aggressive lobbying campaign against the OECD’s efforts.

The group painted the OECD, which like FATF is headquartered in Paris, as a band of European socialists bent on destroying free enterprise. Along with calling on anti-tax conservatives in the U.S. Congress, it also enlisted the support of the liberal-leaning Congressional Black Caucus, which voiced concern that the measures could hurt island nations’ fragile economies.

The lobbying paid off.

The Bush administration announced in May 2001 that it was withdrawing U.S. support for the OECD’s tax haven assault. Undercut by the U.S.’s reversal and bureaucratic infighting in other big countries, the OECD’s blacklist dwindled into “a mixture of cheerleading and scorekeeping,” the authoritative newsletter Tax Notes said.

Saint-Amans, who joined the OECD in 2007, says the organization’s early 2000s push was “not a great success” because it allowed offshore havens to escape its blacklist by making empty promises.

“They all committed, but did nothing,” he says.

By April 2002, all but seven of the 35 jurisdictions named by the OECD — Andorra, Liechtenstein, Liberia, Monaco, the Marshall Islands, Nauru and Vanuatu — had managed to get off the OECD’s blacklist. By 2009, no countries remained on the list.

Tough talk

The next big push to combat offshore secrecy began in 2008.

Acting on information from a whistleblower, U.S. authorities charged that Swiss banking giant UBS maintained some 17,000 undisclosed accounts for U.S. citizens. UBS eventually turned over the names of nearly 5,000 clients and paid a $780 million to settle charges that it had carried out a scheme to defraud the U.S.

As the UBS case was playing out, governments around the globe were becoming increasingly concerned about shrinking tax collections in the aftermath of the September 2008 financial crash.

In advance of the July 2009 Italian summit of the “Group of 8” club of rich nations, Cameron’s predecessor as U.K. Prime Minister, Gordon Brown, proclaimed: “The world should be in no doubt that the writing is on the wall for tax havens.”

Tough talk from Brown and other leaders produced modest reforms.

Rich nations moved to expand what financial transparency advocates say is a mostly ineffectual method of policing offshore transactions — agreements between countries in which they promise to honor requests from each other about specific individuals suspected of hiding assets.

If Spain, for example, wants information about assets a Spaniard has stashed in the Bahamas, it lodges a request with Bahamian authorities. The catch is Spanish authorities must already know the name and account details of the suspected tax dodger, or see the request rejected as a “fishing expedition.”

By 2010 “the tax havens were sort of relieved,” says Jason Sharman, an Australian political scientist and co-author of a forthcoming book on offshore issues, Global Shell Games. “They thought that they had had a near-death experience in 2009, but that their problems were behind them.”

Perfect storm

Over the next two years, policymakers and activists kept pushing for change, winning small victories but also hitting roadblocks.

In 2012, the European Union’s tax commissioner, Lithuanian economist Algirdas Semeta, found his efforts to fight cross-border tax evasion schemes frustrated by Austria and Luxembourg, two EU members with traditions of banking secrecy. “Tax havens give EU commissioner the runaround,” a headline in the independent EU Observer said.

Things were about to change. What Semeta called a “perfect storm” of events would soon transform tax politics in Europe, making it easier for him and like-minded officials around the world to put aggressive plans in motion.

These events included an offshore scandal in France involving President Hollande’s former budget minister and the rollout of a potent U.S. law, the Foreign Account Tax Compliance Act, which threatens to slap financial penalties on foreign banks that refuse to report accounts controlled by U.S. citizens.

The offshore issue reached a boiling point in April 2013 when the International Consortium of Investigative Journalists revealed a leak of 2.5 million secret tax-haven records, publishing stories in more than 40 news outlets, including France’s Le Monde, which added to the pressure on Hollande by exposing the offshore holdings of yet another confidant, his campaign manager.

ICIJ’s “Offshore Leaks” probe sparked official investigations in Greece, South Korea, the Philippines and other lands, and was credited with helping force Hollande to promise an end to tax havens. The EU’s Semeta called ICIJ’s disclosures “the most significant trigger” in the transformation of tax politics in Europe.

Days after the leak stories broke, France, Germany, Italy, Spain and the U.K. announced they had agreed to an expansive plan for swapping tax information across borders. Soon after, British tax havens in the English Channel and the Caribbean promised to share information on offshore bank accounts.

At a summit in September in Russia, the “Group of 20” club approved a historic plan for automatic sharing of tax information across borders — a big change from the previous one-off system of information sharing “on request.” More than 60 nations have agreed to join.

Under the plan, countries would regularly hand over data on financial activities of foreign citizens to the tax authorities in their home nations. The Netherlands, for example, would as a matter of course share information with Germany about Germans with accounts in Dutch banks.

The G20 says its members will begin automatic data exchange by 2015, and that the group will work to help developing nations “reap the benefits of a more transparent international tax system.”

In the shadows

How well the G20 plan will succeed may depend on the answer to this question: How good is the information that will be shared?

Anti-corruption activists worry that information-sharing efforts will be frustrated by the secrecy that pervades the offshore system. Few people who move assets offshore set up bank accounts in their own names. Instead, they hide behind layers of anonymous corporate structures that obscure the paper trails and the players.

A bank account in Switzerland might, for example, be controlled by a shell company in Belize that’s owned by a shadowy trust in the South Pacific’s Cook Islands and overseen, on paper, by a corporate director in Cyprus who is paid to know nothing about the company’s activities.

Most jurisdictions — offshore and onshore — don’t verify and collect the names of the real people behind companies created within their borders.

“If you don’t have a public register of who owns what companies, it defeats the purpose of having automatic exchange of information,” says Alvin Mosioma, the Kenya-based director of Tax Justice Network Africa, a non-governmental advocacy group.

Sharman, the Australian political scientist, believes automatic information sharing will limit middling tax dodgers in the EU and the U.S., but won’t do much to stop super-wealthy tax evaders who can afford to set up sophisticated offshore structures that either provide maximum secrecy or a “veneer of legality” created by accounting ingenuity.

Without transparency on company ownership, he says, “you’re only going to catch the real idiots who are maintaining bank accounts in their own names — the real small-timers.”

Around the world, shell companies are a key tool for hiding the flow of offshore money, according to a World Bank study of 150 “grand corruption cases” spanning more than three decades.

When James Ibori was governor of Nigeria’s oil-rich Delta State, for example, he and his cronies pocketed an estimated $250 million in government graft with the help of a web of companies based in Switzerland, Mauritius and elsewhere.

These companies provided cover that allowed him to shift millions of dollars through accounts at Citibank, Barclays and HSBC. He purchased a $20 million private jet, a fleet of armored Range Rovers and million-dollar homes in London, Houston and Washington, D.C.

Ibori was eventually brought to justice in London and sentenced to 13 years in prison, thanks in large measure to Scotland Yard’s discovery of two incriminating computer hard drives.

Most investigations involving shell companies, however, come up empty.

In a case highlighted by a U.S. Senate probe, U.S. Homeland Security agents investigating nearly $150 million in suspect wire transfers uncovered a network of some 800 U.S. companies that were shifting money among themselves and out to offshore havens. U.S. Sen. Carl Levin of Michigan, who has campaigned against tax havens for decades, described this arrangement as a “massive financial shell game.”

None of the incorporation documents in various states listed the firms’ real owners. The paper trail on 200 Utah companies involved in the scheme led to a Delaware-based “company formation agent” who had been questioned in at least eight earlier investigations targeting suspected money laundering by U.S. shell companies, Levin said.

The incorporation agent said he didn’t know the identities of the real owners behind the companies he set up, because the law didn’t require him to collect that information. The investigation — like the eight previous investigations that had ended up at his door — “hit a dead end,” Levin said.

The case illustrates that the U.S. and other big nations aren’t simply victims of the offshore secrecy. Western countries play a role in the offshore system through laws that allow company owners to remain hidden and through the offshore activities of brand-name companies and banks.

Apple, Google and other U.S. multinationals have embraced offshore havens and complex shelters that allow them to avoid taxes. Big U.S. banks frequently provide access to money launderers and fraudsters, government investigations have found. Wachovia Bank, for example, paid $160 million to settle charges that it had allowed Mexican drug cartels to launder billions of dollars.

Many state governments across America, meanwhile, benefit from serving as tax and secrecy havens for corporations. Delaware collects hundreds of millions of dollars each year in taxes and fees from absentee corporations, about a quarter of the tiny state’s budget.

Offshore centers’ defenders often cite Delaware’s reputation as a haven for arms smugglers and con men as evidence of the U.S.’s failure to keep its own house clean. The Cayman Islands financial industry’s trade group calls Delaware “the biggest hypocrisy of all … Delaware continues to provide probably the best option to set up a corporation without proper disclosure.”

‘We can’t wait’

Legislation proposed in August by Sen. Levin would require states to identify the real owners of companies created within their borders.

The bill faces hurdles. Similar legislation has been repeatedly shot down in Congress in recent years, and the bill has some influential opponents, including the American Bankers Association, the American Bar Association and the U.S. Chamber of Commerce. The Chamber believes such legislation would hit  “every form of business, particularly small businesses, with new, costly and complex regulatory burdens.”

Global Financial Integrity, a leading anti-corruption group, notes that the U.S. and other Western nations have failed for a decade to live up to their pledges to meet even FATF’s less-than-stringent standards for transparency on company ownership.

The advocacy group wants a worldwide requirement that company ownership be verified and listed in public registries, so the information is open not only to government authorities but also to non-governmental organizations, media and citizens.

UK Prime Minister Cameron announced in October that Britain would open a public registry that names the true owners of British companies. But that decision doesn’t appear to apply yet to the country’s overseas territories and dependencies — and the EU and the U.S. have yet to follow suit.

Mosioma, the Kenya-based activist, says poor nations desperately need swift, global action on shell companies and other tools of the offshore trade.

Offshore secrecy, he argues, “lies at the heart” of corruption and poverty in Africa and other struggling regions, allowing corrupt officials and businesspeople to loot public treasuries and plunder oil and mineral wealth. Global Financial Integrity estimates Africa lost between $850 billion and $1.8 trillion in illicit financial transfers from 1970 to 2008.

“Rich nations have a reputation for making grand pronouncements and not keeping them. That for us is a reason for pessimism,” Mosioma says. “It’s also a reason to keep the pressure on. We can’t wait for another decade of talking about this.”

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Oligarchs of the New Feudal Order Have Big Plans for You: Buy the Pavement and Charge You to Walk

The Federal Reserve’s QE3 has flooded the stock and bond markets with low-interest liquidity that makes it profitable for speculators to borrow cheap and make arbitrage gains buying stocks and bonds yielding higher dividends or interest. In principle, one could borrow at 0.15 percent (one sixth of one percent) and buy up stocks, bonds and real estate throughout the world, collecting the yield differential as arbitrage. Nearly all the $800 billion of QE2 went abroad, mainly to the BRICS for high-yielding bonds (headed by Brazil’s 11% and Australia’s 5+%), with the currency inflow for this carry trade providing a foreign-exchange bonus as well.

This financial engineering is not your typical bubble. The key to the post-2000 bubble was real estate. It is true that the past year and a half has seen some recovery in property prices for residential and commercial property. But something remarkable has occurred. So in this new debt-strapped low-interest environment, Hedge funds and buyout funds are doing something that has not been seen in nearly a century: They are buying up property for all cash, starting with the inventory of foreclosed properties that banks are selling off at distress prices.

Ever since World War II, the operating principle of real estate investors is never to use their own money – or at least, to use as little of their own as possible. Debt leveraging leaves the rental income paid to the banks as interest. The absentee owner is after the capital gain at the end of the bubble’s rainbow. That is what a bubble economy is all about. But the only way that investors can obtain current returns above today’s miniscule rates is to buy assets directly for cash.

In a bubble economy, falling interest rates (e.g., from 1980 to today) almost guarantee capital gains. But today’s near-zero interest rates cannot fall any further. They can only rise, threatening capital losses. That is what is panicking today’s bond and stock markets as the Fed talks about ending QE3’s near-zero interest rate regime. So there is little incentive for bond buying. Once interest rates rise, we are in an “anti-bubble” economy. Instead of capital gains driving “wealth creation” Alan Greenspan style, we have asset-price deflation.

In the bubble economy, families became convinced that the way to build up their wealth was to borrow as much as they could to buy the most expensive home they could, and ride the wave of asset-price inflation. But since 2008, consumers have paid down about $5 trillion of personal debt. This has meant using their wages and other income to pay down mortgages, student debt, auto debt, credit-card debt and other bank loans. This leaves only about a quarter of the typical family’s paychecks to spend on goods and services after paying the Finance, Insurance and Real Estate (FIRE) sector and the taxes shifted onto wage earners and consumers. The outlook looks dim for corporate sales and hence earnings. So instead of debt-leveraged inflation of asset prices, we have debt deflation of the overall economy.

To put this in perspective, from 1945 until interest rates rose to their peak in 1980, there was an almost steady 35-year downturn in bond prices. The Bubble Economy was fueled by interest rates being rolled back down to their 1945 levels and even lower. Credit flowed into the financial markets to buy stocks, peaking in the dot.com bubble in 2000, and then to inflate the 2001-2008 real estate bubble.

So we are now in is the Bubble Economy’s legacy. We can think of this as Phase 2: repayment time, along with foreclosure time. That is what happens in debt deflation. The Obama Administration has broken its 2008 campaign promises to Congress and to voters to write down mortgage debt to the ability to pay or to market prices reflecting realistic rental values. The debt legacy has been kept in place, not written down.

Carrying this debt overhead has caused a fiscal crisis. The financial and real estate bubble helped keep state and local finances solvent by providing capital gains taxes. These are now gone – and properties in default or foreclosure are not paying taxes. And whereas public pension funds assumed an 8+% rate of return, they now are making less than 1%. This has left pensions underfunded, and prompted some municipalities to engage in desperate gambles on derivatives. But the Wall Street casino always wins, and most cities have lost heavily to the investment banking sharpies advising them.

In place of a new bubble, financial elites are demanding privatization sell-offs from debt-strapped governments. Pressure is being brought to bear on Detroit to sell off its most valuable paintings and statues from its art museums. The idea is to sell their artworks for tycoons to buy as trophies, with the money being used to pay bondholders.

The same dynamic is occurring in Europe. The European Union and European Central Bank are demanding that Greece sell off its prime tourist land, ports, transport systems and other assets in the public domain – perhaps even the Parthenon. So we are seeing a neo-rentier grab for basic infrastructure as part of the overall asset stripping.

This is a different kind of inflation than one finds from strictly financial bubbles. It is creating a new neo-feudal rentier class eager to buy roads to turn into toll roads, to buy parking-meter rights (as in Chicago’s notorious deal), to buy prisons, schools and other basic infrastructure. The aim is to build financial charges and tollbooth rents into the prices charged for access to these essential, hitherto public services. Prices are rising not because costs and wages are rising, but because of monopoly rents and other rent-extraction activities.

This post-bubble environment of debt-strapped austerity is empowering the financial sector to become an oligarchy much like landlords in the 19th century. It is making its gains not by lending money – as the economy is now “loaned up” – but by direct ownership and charging economic rent. So we are in the “economic collapse” stage of the financialized bubble economy. Coping with this legacy and financial power grab will be the great political fight for the remainder of the 21st century.

*Michael Hudson’s book summarizing his economic theories, “The Bubble and Beyond,” is available on Amazon. His latest book is Finance Capitalism and Its Discontents.  He is a contributor to Hopeless: Barack Obama and the Politics of Illusion, published by AK Press. He can be reached via his website, mh@michael-hudson.com

This article was originally published by World Economic Association.

Big Banks Are Knee-Deep in the Dirty Money-Laundering Business

Money-laundering issues at U.S. and UK financial firms shed light on role of rich nations and elite banks in the offshore world.

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Margaret Thatcher Was a Privatization Pioneer, and This Is the Story of How Her Agenda Did Nothing But Make Life Worse for Millions of People

As in Chile, privatization in Britain was a victory for Chicago monetarism. This time it was implemented democratically. In fact, voters endorsed Margaret Thatcher’s selloff of public industries so strongly that by 1991, when she was replaced as prime minister by her own party’s John Major, only 35 percent of Britain’s voters supported the Labour Party – half the proportion registered in 1945. The Conservatives sold off public monopolies, used the proceeds to cut taxes, and put the privatized firms on a profit-making basis. Their stock prices rose sharply, making capital gains for investors whose ranks included millions of Britons who had been employees and/or customers of these enterprises.

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Secrecy for Sale: Inside the Global Offshore Money Maze

A cache of 2.5 million files has cracked open the secrets of more than 120,000 offshore companies and trusts, exposing hidden dealings of politicians, con men and the mega-rich the world over.

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Editor's Note: These remarks were made by by Prof. Michael Hudson at The Atlantic’s Economy Summit, Washington DC, Wednesday, March 13, 2013.

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How the Public Can Win the New Financial War

When World War I broke out in August 1914, economists on both sides forecast that hostilities could not last more than about six months. Wars had grown so expensive that governments quickly would run out of money. It seemed that if Germany could not defeat France by springtime, the Allied and Central Powers would run out of savings and reach what today is called a fiscal cliff and be forced to negotiate a peace agreement.

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The Finance Industry Has Pried into Every Sector of the Economy, and Has Ended Up Running the Whole Show

Today’s economic warfare is not the kind waged a century ago between labor and its industrial employers. Finance has moved to capture the economy at large, industry and mining, public infrastructure (via privatization) and now even the educational system. (At over $1 trillion, U.S. student loan debt came to exceed credit-card debt in 2012.) The weapon in this financial warfare is no larger military force. The tactic is to load economies (governments, companies and families) with debt, siphon off their income as debt service and then foreclose when debtors lack the means to pay. Indebting government gives creditors a lever to pry away land, public infrastructure and other property in the public domain. Indebting companies enables creditors to seize employee pension savings. And indebting labor means that it no longer is necessary to hire strikebreakers to attack union organizers and strikers.

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Will the Democrats Continue Their Rightward Turn or Start Working for the 99%?

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Wall St.'s Next Profit Scheme -- Buying Up Every Piece of Your Home Town

The pace of Wall Street’s war against the 99% is quickening in preparation for the kill. Having demonized public employees for being scheduled to receive pensions on their lifetime employment service, bondholders are insisting on getting the money instead. It is the same austerity philosophy that has been forced on Greece and Spain – and the same that is prompting President Obama and Mitt Romney to urge scaling back Social Security and Medicare.

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