2011-03-19

Hudson överträffar sig själv

Lysande artikel av Michael Hudson, en grundlig kritik av det nyliberala ekonomiska vansinnet. En analys av den nyliberala ekonomin som går långt utöver vad titeln anger. En stenhård kritik som slår hårt inte minst mot den politik som förts här i landet de senaste decennierna.


Norway’s Sovereign Wealth Risk Vortex

While investing at home to improve their quality of life, China, Singapore and other nations manage their Sovereign Wealth Funds with an eye to shaping their economies for the next twenty, thirty or even fifty years. They are buying control of the key foreign technologies and raw materials deemed most critical to their long-term growth. This broad scope invests export earnings directly to make their economies more competitive while raising living standards.

This frame of reference goes beyond the purely financial scope of deciding simply what foreign stocks and bonds to buy, or what real estate to take a risk on. It shows that finance is too important to be left to financial managers

Norway has produced and exported millions of tons of oil and employed a substantial portion of its labor force to build up its Oil Fund. This oil often is treated as a “gift of nature,” but entire towns have been involved in the construction of oil platforms and related capital infrastructure that has made Norway a world leader in deep-sea drilling. So the Oil Fund is a product of labor and industry as well as nature. Understandably, many Norwegians are asking what their economy should get out of all this resource depletion, labor and capital investment to extract and ship North Sea oil. As matters stand, foreign countries not only have got Norway’s oil, their financial markets also have received its $500+ billion in savings as a capital inflow.

These savings have helped pump up U.S. and European stock and bond prices, and are now being used to help revive their real estate markets as well. In fact, it is largely the Sovereign Wealth Funds of Norway and other oil exporters – along with pension funds throughout the world – that have bid up stock and bond prices over the past few decades
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The scope is global. China and Singapore, for example, start by asking what their economies will need over the next half-century to upgrade their productivity, technology, educational levels and living standards. The aim is to improve their competitive advantage, not accept present conditions as a “given.” Toward this end they are investing in resources and technology that future generations will need to control. China has bought majority ownership of mineral resources (including silica mines in Norway and Iceland). In the financial sphere, it has bought into the partnerships of major U.S. hedge funds. Singapore’s Central Provident Fund, TEMASEK, invests in Australia and neighboring countries, and Singapore Power controls Australian power systems.
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[och i den lilla randstaten ska vår ”brilliante” finansminister som inte ens vet hur vårt penningsystem fungerar sälja våra reala tillgångar för att betala av en obefintlig offentlig skuld
Dessa enfaldiga nyliberaler är blindgalna, bortom sans och förnuft och inte nåbara för förnuftsargument
]

Just as Norway’s climate is threatened by global warming caused by carbon pollution, so its savings (and those of other countries as well) are threatened by free credit and debt pollution as the financial climate has changed radically from when the Oil Fund was established in 1990. Having built up this fund to over $500 billion mainly by adding new export revenues each year, Norwegians naturally think of it as the product of oil and gas sales and the efforts of the thousands of workers employed in the oil sector over the past fifteen years or so. But an even larger sum of $600 billion recently was created simply on computer keyboards electronically, by the U.S. Federal Reserve Board as part of Chairman Ben Bernanke’s Quantitative Easing policy (QE2). This liquidity was provided to banks at only 0.25% – one quarter of 1 percent. Its aim was to enable U.S. banks to earn their way out of the losses suffered from their bad mortgage loans and other gambles during the 2001-08 bubble.
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Why go to the effort of working and saving, when you can borrow at so low a cost? One no longer needs to save in order to invest. A speculator or corporate raider can go to a bank and ask it for a loan to bet on which way interest rates, exchange rates and bond or stock prices will move. The bank credits the customer’s account, in exchange for an IOU. (So loans create deposits, not the other way around.) This credit creation reduces Norway’s Oil Fund savings to the same plane as the bank credit now flooding the world in search of investment opportunities.
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In the United States, Alaska and Wyoming pay their residents a “citizens’ dividend” out of their resource rent receipts. Alaska’s Senators Stevens and Murkowski, as well as its Governor Sarah Palin, did not believe that it is proper for government to upgrade, educate and provide the population with social services. So Alaska has used its oil revenue to pay each resident a few thousand dollars – and to abolish property taxes. This policy leaves Alaska among the lowest-ranking states in terms of literacy, education, support for the arts and technology, while avoiding progressive taxation.[3]

The state’s neoliberal anti-tax, anti-government ideology condemns its residents to send their children out to work rather than educating them and investing in their improvement
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The excuse for this economic negligence, Mr. Primakov noted, was a neoliberal “fear of inflation,” above all the fear that wage levels and living standards would rise – as if this were a bad thing! “They said that inflation would soar if what had been built up began to be spent. At one of the representative conferences, I asked: ‘What kind of inflation can there be in building roads? The work would just spur on production of concrete, cement, and metal…’ But our financial experts have a monetarist view of inflation. They are afraid of releasing an additional money supply into circulation.” The problem, he concluded, was that “If the ministries are given the assignment of reducing expenditures at their discretion, the first thing they sacrifice is scientific research and experimental design development. However, research and development should be classified as protected articles of any budget.”

What Mr. Primakov is criticizing the same logic that Prime Minister Jens Stoltenberg uses to claim that Norway should “build up reserves” for bad times to come.[6] To import capital goods or technology, he warned, would involve inflationary domestic spending – which would make Norway less competitive, threatening its long-term employment.
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At issue is the idea that capital investment is inherently private in character. The national income and product accounts do not recognize government investment even in infrastructure, to say nothing of subsidies for the research and development that led to much space and aeronautics technology, information-processing and the internet, pharmaceuticals, DNA biology and other sectors that enabled private companies to make hundreds of billions of dollars.

Simon Patten, the first professor of economics at the nation’s first business school – the Wharton School at the University of Pennsylvania – explained that the return to public investment should not take the form of maximizing user fees. The aim was not to make a profit, but just the reverse: Unlike military levies (a pure burden to taxpayers), “in an industrial society the object of taxation is to increase industrial prosperity”[7] by lowering the cost of doing business, thus making the economy more competitive. Market transactions meanwhile would be regulated to keep prices in line with actual production costs so as to prevent financial operators from extracting “fictitious” watered costs – what the classical economists defined as unearned income (“economic rent”).

The U.S. Government increased prosperity by infrastructure investment in canals and railroads, a postal service and public education as a “fourth” factor of production alongside labor, land and capital. Taxes would be “burdenless,” Patten explained, if invested in public investment in internal improvements, headed by transportation infrastructure.

“The Erie Canal keeps down railroad rates, and takes from local producers in the East their rent of situation. Notice, for example, the fall in the price of [upstate New York] farms through western competition” making low-priced crops available from the West.[8] Likewise, public urban transport would minimize property prices (and hence economic rents) in the center of cities relative to their outlying periphery.

Under a regime of “burdenless taxation” the return on public investment would aim at lowering the economy’s overall price structure to “promote general prosperity.” This meant that governments should operate natural monopolies directly, or at least regulate them. “Parks, sewers and schools improve the health and intelligence of all classes of producers, and thus enable them to produce more cheaply, and to compete more successfully in other markets.” Patten concluded: “If the courts, post office, parks, gas and water works, street, river and harbor improvements, and other public works do not increase the prosperity of society they should not be conducted by the State. Like all private enterprises they should yield a surplus” for the overall economy, but not be treated as what today is called a profit center (loc. cit.).

Public infrastructure represents the largest capital expenditure in almost every country, yet little trace of its economic role appears in today’s national income and product accounts. Free market ideology treats public spending as deadweight, and counts infrastructure spending as part of the deficit, not as productive capital investment. The only returns recognized are user fees, not what is saved from private operators incurring interest charges, dividends, other financial fees, as well as high executive salaries.

As Patten showed, the relatively narrow scope of “free market” marginal productivity models applies only to private-sector industrial investment, not to public investment. (What would the “product” be?) The virtue of this line of analysis is to point out that the alternative is to promote a rentier “tollbooth” economy enabling private owners of infrastructure or other monopolies to charge more than the “marginal product” actually costs. Stock and bond markets increasingly aim at extracting economic rent rather than earning profits by investing in tangible capital formation to employ labor to increase output, not to speak of rising living standards.

Norway’s leading economists half a century ago held views quite similar to that of Patten.
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Läs hela, det är artikeln värd, Michael Hudson överträffar sig själv denna gång. Klicka på rubriklänken för att komma till Hudsons sida och artikeln.
Michael Hudson
(born in 1939, Chicago, Illinois, USA) is research professor of Economics at University of Missouri, Kansas City (UMKC) and a research associate at the Levy Economics Institute of Bard College. He is also a Wall Street analyst and consultant as well as president of The Institute for the Study of Long-term Economic Trends (ISLET) and a founding member of International Scholars Conference on Ancient Near Eastern Economies (ISCANEE).

Hudson is a former balance-of-payments economist for Chase Manhattan Bank and Arthur Andersen, and economic futurist for the Hudson Institute (no relation). For Scudder, Stevens & Clark in 1990, he established the world’s first Third World sovereign debt fund, which became the second best performing international fund in 1991

He has written for the Journal of International Affairs, Commonweal, Bible Review, International Economy, New York Times op-eds, Financial Times opinion, and has often contributed editorials in leading Latvian, Polish and Arabic business papers. His trade books are translated into Japanese, Chinese, Spanish and Russian.
Hudson's April 2006 Harper's cover story, “The $4.7 Trillion Pyramid: Why Social Security Won’t Be Enough to Save Wall Street,” helped defeat the Bush administration’s attempt to privatize Social Security by showing its aim of steering wage withholding into the stock market to reflate stock market prices for the benefit of insiders and speculators – and to sell to the pension funds. His May 2006 Harper's cover story, “The New Road to Serfdom: An illustrated guide to the coming real estate collapse,” was the first major national article forecasting - in precise chart form - the bursting of the real estate bubble and its consequences for homeowners and state and local government solvency.

2 comments:

Jan Wiklund sa...

Bindgalna var ordet sa Bull.

Emellertid gör han det lite för lätt för sig genom att anta att offentliga investeringar alltid är bra. Här måste man ju använda sitt omdöme också, vilket med gällande ekonomisk logik är omöjligt ("all ekonomisk verksamhet är lika bra"). Exempelvis finns det ju en klar överinvestering i transportapparater som leder till ett osunt transporterande i onödan vilket står för 30-40% av koldioxidutsläppen.

Men mer än så: Endast denna offentliga överinvestering i transportapparater har gjort det möjligt att glesa ut våra städer så att vi idag använder mer tid till att transportera oss själva än man gjorde på 1800-talet. Det sänker rimligen inte produktionskostnaderna men måste rimligen leda till en sorts "skatt" på produktion, av samma slag som ekonomernas "protection rent" som går till militären eller lokala beskyddarligor.

Utbildning/kunskap är däremot säkert alltid bra att ha. Även om det inte där heller finns någon självklar proportionalitet mellan kostnad och kvalitet.

Björn Nilsson sa...

Det skall bli intressant om det sker någon liten uppryckning i socialdemokraternas ekonomiska politik när Östros kickas från högsta ledningen. Som pessimist/realist säger jag att det nog inte är så troligt. Om nu Hudson överträffar sig själv så kommer S-politikerna och nyliberalerna att fortsätta att underträffa tidigare lågvattensmärken.

Länder som Sverige och Norge, med goda tillgångar, kunde ju passa på medan det är köpläge att tok-handla "bra att ha-resurser" från utlandet för att försöka stärka vår framtid. Jag antar att Hästsvansen och hans gäng tycker att man skall göra tvärtom. Och ansvaret för att tokpolitiken kan fortsätta vilar tungt på de som började den, nämligen socialdemokraterna. Med andra ord är läget för förändringar inom SAP ganska dåligt. Det innebär ju att de måste kritisera sig själv, och det har man ganska svårt för tror jag.

Medborgarlön är intressant. Om man dolde detta under andra rubriker, som sänkt pensionsålder eller olika typer av aktivitetsbidrag, kanske det skulle kunna gå att få igenom?

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