MICHAEL HUDSON: It’s not a straw man argument it’s deliberate ignorance. So what do you make of Krugman’s arguments? So his argument is that it’s not going to happen, but even if it did happen, it wouldn’t be important, because look what happened in Britain the British pound was the international global reserve currency, and yet it no longer is, and Britain still is a significant economy, he argues. But that said, it’s really hard to see that happening in the first place”. And he said, this is a quote from his article, he says, “In sum, there’s no reason to be terrified of the consequences if the dollar should lose its special international status. He also compared the dollar to the British pound. So he essentially says that if you don’t believe that the US dollar will stay dominant, you believe that it’s going to become toilet paper. He refers to these people as “Weimarists”, referring to Weimar Germany, where there was hyperinflation in the 1920s. He has this very dismissive tone in this, saying that it’s “madness”.Īnd essentially in this article, he creates a straw man, where he says that if you think that the dominance of the US dollar is in decline, that you think that there’s going to be hyperinflation in the United States. Michael, I’m going to start with the article that Paul Krugman published in April, called “ International Money Madness Strikes Again“. We’re going to look at two articles that Krugman wrote, one in April and the other in May. Specifically, I wanted to bring on Michael today to respond to articles that were published in the New York Times by the economist Paul Krugman, arguing against de-dollarization, arguing in defense of the US dollar system. Michael and Radhika just did a series on the decline in the US dollar system and the move by countries around the world to seek alternatives to the dominance of the US dollar. Today we’re going to be talking about de-dollarization. I’m joined by the economist Michael Hudson, a friend of the show, a brilliant economist, the author of many books, and also the co-host of the program Geopolitical Economy Hour here with Radhika Desai. (The following is a lightly edited transcript.)īEN NORTON: Hi everyone, I’m Ben Norton and this is Geopolitical Economy Report. Hudson also discussed the ongoing US banking crisis and collapse of four banks in two months in another interview available here. In this conversation with Geopolitical Economy Report editor Ben Norton, economist Michael Hudson responds to the misleading arguments against de-dollarization that New York Times columnist Paul Krugman made in his attempt to defend US hegemony and the dollar system.
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