Outlaw US Empire at Optimum: Hudson Explains

In his recent podcast chat with Nima on Dialog Works, Dr. Michael Hudson was asked the following:

Michael, let’s get started with the economic key to 2025. What would that be, in your opinion?

Hudson: Well, I’ve been thinking what a good title for the show should be, and I think it should be, “Today’s world economy is as good as it gets.”

Now that forecast without any further explanation will shock most people as it did me for just a nano-second as he immediately continued to explain his reasoning:

I think the United States, Europe, and the Near Eastern economic and political situation is, obviously, it’s unstable. And almost any specific forecast we make is likely to be wrong because there are so many variables at work and competing interests at play. But actually, this is what mathematicians call an optimum position. That may sound optimistic, and I’m never one to be optimistic, but an optimum position is technically one that, wherever you move, it’s going to be worse.

This is mathematically as good as it is. And that’s pretty much the situation you have today. You could say we’re now in the best of all possible worlds, given the policies that have led to the conflicts that we’re seeing: the conflict of national interest, the conflict of domestic interest, the conflict between the United States and Europe, and the United States against all the rest of the world. And I think that this year is going to be more than just change. I think that chaos is now official US policy. And that’s what you do when you’re trying to stop the world from moving in a direction that’s not in your interest.

All that the America can do is have chaos from the Near East to Europe and to the rest of the economy to stop the BRICS countries from trying to pursue their own national self-interest. So I think there’s going to be a number of clashes, and I can tell you what the clashes will be, but there’s no way of telling you now how they’re going to be resolved. First of all, you have Trump’s war against Europe is going to collapse the European economy further. There’s a clash between Turkey and the Near East. Who’s going to control the Near East? Is it going to be a new Ottoman Empire? And what’s the relationship between Turkey and Israel going to be? And at home here, right now, all of the newspapers are about the clash between President Trump and Congress regarding America’s military policy against the rest of the world.

Congress is dead set on continuing the war against Russia and not letting President Trump make any kind of a deal that will slow the antagonism that is driving U.S. interests against Europe, against the global South countries, debtors that are affecting the dollar’s exchange rate and the domestic inflation here. So that’s what optimum means. And the basic aim of the U.S. policy is to keep an optimum position from changing by creating such chaos that there’s not going to be an alternative. So we’re back with what Margaret Thatcher said, “there is no alternative” as far as the U.S. policy is concerned. And the attempt not to create an alternative is driving other countries to force some kind of an alternative that really doesn’t have a roadmap at present. [My Emphasis]

Quite a provocative opening statement, that gets more detailed as the chat continues, which I very strenuously suggest be completely read or watched. As the Outlaw US Empire continues its slow decline, every day will be an optimum because the Empire will be slightly weaker than the day before as the financial situation it’s made for itself is designed to be parasitic and thus weaken the state, not promote it. And there’re a host of related problems/realities that perform a similar function. For example, hydrocarbon reserves are being exploited at a very fast rate instead of being husbanded for future use. Proven Natural Gas reserves for the Empire at the current rate of extraction will only last for another 18 years. A similar situation exists with Proven Oil reserves with only 15 years remaining at current extraction rates. Yes, lots of oil and gas remain to be extracted globally, but there’s no price signal being sent to Empire residents to conserve. Thus, every day begins with less in the tank. Yes, there’s chicanery by Big Oil regarding their reserves which impact their stock price, with the categories of marginal and unproven reserves often being upgraded to proven to maintain stock price. Hudson talks about the domestic political and geopolitical sides of the energy dilemma, which also relates to the big problem inflation poses for the Empire, while a stronger dollar hurts all those having dollar denominated debts that can’t simply print them.

And that brings us to the last emphasized sentence above:

And the attempt not to create an alternative is driving other countries to force some kind of an alternative that really doesn’t have a roadmap at present.

It’s hard to disagree with that statement because the BRICS and SCO are very young associations that need to deal with a well-entrenched Empire that’s existed for 400+ years—some would say more. The global trade and financial systems have been under Imperial control since the Colonial Age began with the most recent iterations being in-place since 1945. Instead of doing direct battle with that system, BRICS has opted to erect a parallel system that will be more democratic and less costly for those who choose to use it, but implementation is proving to be more complex than many thought at first. And through its myriad illegal sanctions and illegal use of extraterritoriality, the Empire can continue to foment chaos, although that chaos also exacts a price on the Empire, but that cost is accepted because its optimal. There’s also a debate about the BRICS needing its own military organization to mirror NATO. IMO, that won’t be needed as we watch NATO slowly implode along with the EU. The Outlaw US Empire’s colonization of the EU via its control of NATO and excessive soft power control over the current European governments and their misleaders is what will drive those two entities to dissolution, which we are watching occur at a somewhat quickening pace.

The alternative is forming. Its core nations have a high degree of solidarity as they all agree that their major foe is the Outlaw US Empire. China and Russia with their emphasis on equality, harmony and focus on human wellbeing as both political and economic values are being joined by the many nations that share those values and see them as their focus on the path to prosperity. The cultural soft power of Russia and China is becoming very apparent as they sponsor thousands of students to attend their universities, interact with other cultural exchanges that emphasize region-to-region contacts, promote sporting events, and other projects that all promote the importance of equality and harmony in mutual relations. China’s Shared Future for Humanity is strong medicine. The SCO is performing the same function within Eurasia and networks with other Eurasian organizations. IMO, one of its great accomplishments so far is the diffusion of longstanding tensions/animosities between China, India and Pakistan—a disharmony the Empire sought to further exploit. Just as important is Iran’s inclusion. Twenty years ago, the future of Eurasia looked bleak as the Empire was ensconced in Afghanistan and Iraq, and it looked like the Former Soviet Stans were on the verge of being swept from Russia’s orbit. Fortunately, the CSTO was founded in 2002 just after the Empire’s invasion of Afghanistan and was able to provide some cohesion. Then along with the economic rise of China and Russia, the Stans began to benefit. Then ten years ago in 2015, the Eurasian Economic Union was founded that together with the SCO has greatly contributed to the economic improvement of the Stans which has resulted in a vast lessening of social tensions and greater political stability. So, the alternatives are working and making progress to becoming independent of the Empire.

Towards the end of their chat, Nima asks Dr. Hudson his opinion of the “leading aims of BRICS countries,” to which he reinforces his above observation that they haven’t really been explicit about their aims. He provides a very long answer which is abridged as follows:

Well, you’ve put your finger on the problem. They haven’t spelled out the aims at all. They haven’t spelled out what is a policy? And how are you going to have a policy for BRICS just by saying we want prosperity? Okay. We want our economic independence and sovereignty. But what are the aims going to be specifically? And how are you going to get a widely politically diverse set of countries to have a common set of aims?

Well, it’s pretty obvious to see just empirically what the aims logically would be. The first aim is you need to cope with the foreign debt problem. There is no way that the BRICS countries can grow and at the same time pay the foreign debts that they’ve been saddled with for the last 100 years and especially since 1945 by the neoliberal philosophy that’s been pushed by the United States and the International Monetary Fund and the World Bank….

They [the bonds] were all bought in Argentina, Buenos Aires, and Brazil by the client elite of these countries, the central bankers, the president’s administrations, all the elites. And the fact is that the people that hold these dollar bonds are client oligarchies who don’t want to hold their own currencies because the global south countries and their oligarchies realize the debts can’t be paid. The European investors realize the debts can’t be paid. They’re selling to the vulture funds, basically. And this is a problem for the BRICS countries. On the one hand, the BRICS countries, in order to grow, have to write down their debts.

But on the other hand, the money of the holders of the debts and supporting of the dollar and opposing de-dollarization are their own vested interests. So the vested interests in many of the BRICS countries are not favoring the national interests. That’s the big conflict you have between the fact that these countries are bifurcated between a U.S.-centered elite and the country as a whole. Well, that’s one of the two issues that the BRICS will have. The second is what are you going to do about the fact that as a result of the debt crisis, these countries have been driven by the World Bank and the International Monetary Fund and U.S. policy to sell off their oil, mineral rights, their natural resources, their natural monopolies of public infrastructure to foreign investors.

How on earth can they grow if all of their national patrimony and all of the revenue, the land rent, the raw materials rents, the monopoly rents from this national patrimony is paid to foreigners? Well, you could look at the BRICS countries in very much the same way as Russia under the kleptocrats. Russia did have a solution to the kleptocrats. And that solution was a rent tax. Suppose that you take the kleptocrats who bought the nickel, Norilsk nickel, or Gazprom, Russia could have recovered all the revenue from nickel, oil and the other raw materials, diamonds, the other raw materials being sold off to say, well, we’re going to let you make profits on your capital investment. I think their capital investment was maybe 100 rubles, maybe a couple of dollars, and you’ve got billions.

So you can make profit on that, but all of the natural resource rent, that’s going to be taxed away. [My Emphasis]

Hudson explained why Argentina refused its invitation to join BRICS and also explained the problem that exists in Brazil, who is BRICS 2025 President. And yes, most of the new BRICS members and partners all share the above problems. The solution seems simple enough, but for such legislation to be enacted, the domestic parasites need to be dealt with. So, the BRICS can erect a new international trade and finance structure, but to really solve the core issues inhibiting their development, they all need to act individually, and you can be certain the Empire will ally with the local parasites to foment chaos and regime change if possible as its terror and chaos causing weapons are all it really has remaining to retain its optimum position.

The chat with Hudson closes with his explaining what ought to be BRICS third aim: developing a people centered political-economy where all natural monopolies are owned and managed by government—the people—especially banking, finance and their related entities. The problem with enacting such a system is the same as passing legislation to tax away all economic rent. Fortunately, there are a few nations that are a tabula rasa relative to their political-economic organization and its philosophy where it would be somewhat easier to begin and is similar to communal norms. In Latin America, such a system is similar to the Ejido but extends to all public goods, not just land tenure.

The Global Majority’s goal for 2025 ought to be to deny the Empire any chance at optimum, to parry Trump’s moves so they further Imperial decline, to make the ancien regime that composes the Deep State to sweat and worrisome stress that will lead to making mistakes. And since Trump doesn’t want to keep the status quo, it’s a safe bet that the optimum of the moment will be short-lived.

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