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Geopolitical Economy Report

The dollar system's contradictions after de-linking from gold, with Radhika Desai & Michael Hudson

Mar 11, 2023
Economists Radhika Desai and Michael Hudson discuss the consequences of the dollar system after de-linking from gold, including dollar hegemony, quantitative easing, and the euro. They also explore the impacts of Volcker, Reaganomics, and financialization on the US economy, as well as the effects of deindustrialization and leveraged buyouts. Additionally, they discuss the shift to finance capitalism, the 2008 crisis, and the role of the dollar system in it.
01:39:08

Podcast summary created with Snipd AI

Quick takeaways

  • The shift from industrial production to financialization in the US has led to increasing wealth inequality.
  • The financialization trend in the US was mirrored in Japan, contributing to systemic risks and economic challenges.

Deep dives

The Volcker Shock and Financialization

The Volcker shock in the late 1970s induced a recession and accelerated the decline of US industry. High interest rates during this period strangled US industry and led to the financialization of many productive American corporations. Financialization became a more profitable strategy than industrial production, leading to the dismantling of the manufacturing sector. This shift in focus from production to finance transformed the character of US capitalism, contributing to increasing wealth inequality. The wealth generated by financialization benefitted a small percentage of the population, while the majority faced rising debt and stagnant incomes.

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