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The Fictitious Economy, Part 1, An Interview With Dr. Michael Hudson
BF: Your new book the Fictitious Economy; How Finance is Destroying Industrial Capitalism, and Paving the New Road to Serfdom, details many fictitious aspects of the economy today, fictitious incomes, costs, capital, savings, statistics, theories and ideologies. What do you mean by fictitious?
MH: Something that's unreal, something that's pretend, for instance pretend earnings of companies that really aren't earned, or pretended values for mortgages that were given by Wall Street banks, and their affiliates when there's no underlying value there, or fictitious costs. Most economic theory today justifies fictitious costs, for example the Federal Reserve came up with a method of assessing land values that almost seems to come up negative in some years, because it treats buildings as steadily rising in value as their reproduction costs grow, leaving land as a residual, this understating the value of land and overstating the value of buildings <link to article here>.
Transcript of a Guns And Butter Radio Interview by Bonnie Faulkner originally broadcast on KPFA radio June 25, 2008
There is a rising sense of alarm in the United States, as tangible effects of the economic crisis of empire are unmistakably apparent at every hand. BF: Your new book the Fictitious Economy; How Finance is Destroying Industrial Capitalism, and Paving the New Road to Serfdom, details many fictitious aspects of the economy today, fictitious incomes, costs, capital, savings, statistics, theories and ideologies. What do you mean by fictitious?
MH: Something that's unreal, something that's pretend, for instance pretend earnings of companies that really aren't earned, or pretended values for mortgages that were given by Wall Street banks, and their affiliates when there's no underlying value there, or fictitious costs. Most economic theory today justifies fictitious costs, for example the Federal Reserve came up with a method of assessing land values that almost seems to come up negative in some years, because it treats buildings as steadily rising in value as their reproduction costs grow, leaving land as a residual, this understating the value of land and overstating the value of buildings <link to article here>.