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.
MAX BLUMENTHAL: It's what we call a "public-private partnership" or something.
MICHAEL HUDSON: Right.
MAX BLUMENTHAL: Just really quickly, and maybe we can kind of transition after this, but you mentioned Blackstone. I think this is one of the key components of the bailout. They own so much stake in so many of the companies getting bailed out. Can you just describe their role and what they are?
(33:38)
MICHAEL HUDSON: It's appropriate that they were put in charge of bailout. So if they're the largest company buying up defaulted real estate and buying, picking up the weak it's called moving assets from the weak hands to the strong then they might as well be put in charge, because they're going to be the company doing all the grabbing. So of course they're in charge of it.
It's called grabitization. That was their word for privatization in the 1990s. So grabitization is I think a better word than public-private partnership. It's not really a partner; it's sort of a one-way partnership; there's one subsidiary partner. It's really financialization and grabitization.
MAX BLUMENTHAL: Right, just the looting of state assets.
BEN NORTON: Going back one step here, Michael, you were talking about the way that people should think about how the economy actually works. And I mentioned MMT. Can you kind of just walk through that again? Because you were talking about how actually, when the Fed creates I mean really to me, as someone, I'm definitely not an economics expert, I just don't understand really how this whole process works, because to me it just seems simply like, they're literally just creating money and just giving it to banks, and corporate elites, and rich people.
I mean maybe that's what it is. But I don't understand, this is like the biggest scheme I can imagine, where the Federal Reserve is creating all of this money, printing they're physically printing money is my understanding. And then they're just giving it to these banks, to bondholders. And then, but you said that what does is, instead of actually creating inflation, all that does is, if I understood correctly, it boosts the value of assets like real estate, while at the same time deflating wages and commodity prices.
So if that's the case, then how should people who are advocating for socialized programs like Medicare for All, free public education, and maternity leave, and childcare, and all of these programs that the Bernie Sanders campaign and movement have been advocating for, how should we talk about the way to pay for all of those programs, if the reality of the economy is that the Fed is printing trillions of dollars, and then just giving that cash to banks?
(36:11)
MICHAEL HUDSON: Well I think the reason you're having trouble understanding MMT is because what you described is what's happening, but you think, "But that's unfair!" And there's a tendency to think, if it's unfair
MAX BLUMENTHAL: It's not just unfair. It's the biggest scheme I can imagine. There's no other word other than just a con scheme.
MICHAEL HUDSON: Yes, and the brain recoils from thinking, "Can the government really be doing that to us?" Well, yes it can.
And just think of when, in the debates with Bernie, Sanders during the spring, you had Biden, and Klobuchar keep saying, 'What we're paying for Medicare-for-All will be $1 trillion over 10 years.' Well here the Fed can create $1.5 trillion in one week just to buy stocks.
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