Home > Uncategorized > What they don’t teach in economics textbooks

What they don’t teach in economics textbooks

from Asad Zaman

This material is taken from first 15 minutes of 
Michael Hudson’s Webinar: a 4000-year perspective on economy, money and debt.
These are real-world economics lessons, not found in textbooks. 

Loans to 3rd World Meant for Control

Michael Hudson’s First Wall Street Job was at Chase-Manhattan Bank. He was asked to Evaluate the ability of Latin American Countries to pay back their loans. The goal was to make new multi-billion-dollar loans to countries.  After doing the analysis, he came to the conclusion that Latin American Countries have no capacity to repay foreign debts! If you add up all potential export earnings in dollars, and subtract dollar liabilities, you get a negative number. Any loans made to them simply cannot be paid back. When he reported this to senior management of Chase Manhattan, they responded as follows: We will loan them the money to pay back their loans! Our goal is to control the country. If government plays by our rules, they will get the loans required for payment. If not, we will topple the government by denying them credit.

Take any textbook of International Trade theory – you will not find any mention of this motive for lending.  read more

  1. August 2, 2021 at 9:40 pm

    This information has been in the lay literature since John Perkin’s wrote a series of books for general readers defining his previous roles as an “economic hitman. Also if one follows China, it is following this script with its BRI, much more problematic given the scope.

    It is also relevant to the other thread on the blog, Fullbrook’s econ 999 which was published in the RWER,96. It should be placed within the context of Jamie Galbraith’s article in the same RWER, 96 publication which is an in depth history of economics which points to the need to think economic education in a radically different manner making Fullbrook’s proposal distinctly problematic without changing the entire undergraduate (and maybe graduate) education differently than the equivalent of a movie set of store fronts.

  2. Edward Ross
    August 4, 2021 at 1:59 am

    having done further reading i certainly agree with the concept that of how Asad Zaman describes the way finance is rigged by and for the extreme wealthy holders of power. BUT my concern is that in spite of many very good conversations, there is still a need for a unified approach to the problem Ted.

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