• Categories

  • The Golden Rule

    “That which is hateful to you do not do to another ... the rest (of the Torah) is all commentary, now go study.”

    - Rabbi Hillel
  • Enter your email address to follow this blog and receive notifications of new posts by email. Remember to click "manage" to set your preferences, such as daily or immediate and the time of delivery.

  • Subscribe Via Email

  • Blog Stats

  • Note on Older Videos

    Videos posted between 2008 and 2010 are not showing up because the coding used to embed the videos no longer work. Lockerz (who bought Vodpod) has shut down. If anyone has the time to look up the coding (youtube url) and put that link in the comment section of the post, I'd appreciate it. Thanks for understanding. More info: Note on Older Videos Posted on Dandelion Salad by Lo
  • Lists of posts and videos

    Dandelion Salad Videos

    Dandelion Salad Posts

    Don’t Enlist, But Don’t Just Take My Word For It by Lo
    Please pass this on to anyone you know who may be considering enlisting as a soldier (mercenary).

  • Amendment I

    Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.
  • Disclaimer:

    The views and/or opinions posted on all the blog posts and in the comment sections are of their respective authors, not necessarily those of Dandelion Salad.

    All content has been used with permission from the copyright owners, who reserve all rights, and that for uses outside of fair use (an excerpt), permission must be obtained from the respective copyright owner.

  • Proud Member of The Internet Defense League

    The Internet Defense League

  • US Deaths in Afghanistan: Obama vs Bush. Click here to learn more.

J is for Jubilee, K for Kleptocrats by Michael Hudson

letter J

Image by Leo Reynolds via Flickr

by Michael Hudson
Writer, Dandelion Salad
December 6, 2013

Parts J & K in the .

Jubilee Year: In Judaic Law (Leviticus 25) a Clean Slate to be proclaimed every 50 years annulling personal and agrarian debts, liberating bond-servants to rejoin their families, and returning lands that had been alienated under economic duress. Long thought to have been merely a literary religious ideal, the policy has now been traced back to royal proclamations issued as a matter of course in Sumer and Babylonia in the third and second millennia BC. (See Bronze Age.)

Junk bonds: High-interest bonds, developed in the 1980s primarily by Michael Milken at Drexel Burnham to finance corporate takeovers. Mr. Milken was sent to jail for securities fraud and Drexel was disbanded as a result of insider trading scandals, for which Ivan Boesky was convicted. The damage caused by junk bonds included widespread bankruptcies of savings-and-loan associations (S&Ls) and other creditors who bought such bonds.

The fiscal ruling that made junk bonds possible was that interest-payments to bondholders and bankers were tax-exempt, whereas stock dividends had to be paid after first paying income taxes. At a 50% income-tax rate, this meant that companies could pay out twice as much pre-tax income as interest than they could pay as dividends. The government lost an equivalent amount of taxes, contributing to the sharp rise in U.S. public debt in the 1980s, as high interest charges left little or no revenue left to declare as profits.

Junk bonds were economically destructive for a number of reasons. Bondholders were paid off not so much by operating companies more efficiently as by downsizing the labor force, outsourcing it, and breaking up the company and selling its parts off piecemeal. Even companies that were not taken over suffered, as prospective target companies were obliged to resort to poison pills, loading themselves down with debt (or undertaking mergers on their own) to make it uneconomic for raiders to take them over.

Junk science: A theory or postulated relationship pretending to be scientific but sponsored by a special interest group to divert analysis away from reality. (See Factoid, Neoclassical Economics, Neoliberal, Neoconservative, Monetarism, Parasitism, Social Market, Science of Assumptions, Washington Consensus and Wrong Turn.)


Image by chrisinplymouth via Flickr

Keynes, John Maynard (1883-1946): In the 1920s, Keynes became the major critic of the World War I legacy of international Inter-Ally debts and German reparations. Against the monetarist ideology that market prices and incomes would fall in debtor countries, supposedly enabling them to pay virtually any given level of debt, Keynes explained that there were structural limits on the ability to service debts. Accusing Europe’s arms and reparations debts of exceeding these limits, Keynes provided the logic for debt write-offs based on the ability to pay.

Keynes’s Treatise on Money (1930) developed a theory of money and credit as debt, and in 1936 as the Great Depression spread throughout the world, published his best-known work, his General Theory of Employment, Interest and Prices, which pointed out that Say’s Law had ceased to operate as savings were not spent, diverting payments away from markets for goods and services. Yet this book’s theorizing about saving did not address the tendency for debts to grow exponentially, in chronic excess of the economy’s ability to carry this financial overhead. He came to view savings simply as non-spending on goods and services, not as increasing the economy’s debt overhead by being lent out.

Kleptocrats: Members of Russian President Boris Yeltsin’s “family” and other biznezmen typically government bureaucrats or other insiders who stole public-sector assets for themselves after the demise of the Soviet state in 1991, simply by registering these assets in their own names or those of banks and other corporate shells they created with government acquiescence. (See Free Market, Privatization, Reformers and Washington Consensus.)

Michael Hudson is a former Wall Street economist. A Distinguished Research Professor at University of Missouri, Kansas City (UMKC), he is the author of many books, including Super Imperialism: The Economic Strategy of American Empire (new ed., Pluto Press, 2002) and Trade, Development and Foreign Debt: A History of Theories of Polarization v. Convergence in the World Economy. His book summarizing his economic theories, The Bubble and Beyond, is now available. His latest book is Finance Capitalism and Its Discontents. He can be reached via his website, mh@michael-hudson.com.


The Insider’s Economic Dictionary – Part A by Michael Hudson

About these ads

2 Responses

  1. […] J is for Jubilee, K for Kleptocrats by Michael Hudson […]

  2. […] J is for Jubilee, K for Kleptocrats by Michael Hudson […]

Please add to the conversation.

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s