I boots riley. Music, in particular right now, at that point for me, hiphop, is something that could be used as a rallying cry, as a people to understand the common necessity, a common feeling, a common emotion to get people to join movements. Amy all that and more, coming up. Welcome to democracy now , democracynow. Org, the war and peace report. Im amy goodman. As many as ten thousand people fleeing violence in their home countries are surging through the balkans in efforts to reach hungary before the country seals its border. Many of the people are fleeing wars in syria and afghanistan. They are traveling by busses, on foot, in wheelchair and wheelbarrows. Once people reach hungary, they can travel freely throughout most of the european union. The hungarian government has said it will completely seal its border by august 31. Meanwhile, in germany, a sports hall that has been converted into an emergency refugee shelter caught on fire this morning in the eastern town of nauen. The town has seen antiimmigrant protests by rightwing groups in recent days. The fire comes after rightwing protesters clashed with police during demonstrations against a newly opened migrant shelter in a small town outside of dresden over the weekend. German chancellor Angela Merkel denounced antiimmigrant violence by rightwing protesters on monday. There was an aggressive move that is in no way acceptable. It is repulsive to see how rightwing extremist and neonazis are voicing her hatred , but it is just as disgraceful to see how german citizens and even families with children are supporting this and marching along with them. Amy in news from financial markets, the chinese stock market has continued to drop, following a dramatic plunge yesterday dubbed black monday. The decline shook markets around the world. After the new york stock exchanges opening bell at 9 30 monday morning the dow jones , immediately plummeted more than 1000 points. It eventually closed down nearly 600 points. In china, the decline continued on tuesday, sparking fears that the worlds second largest economy may be much weaker than expected. I think it must be an omen of a coming Global Financial crisis. Not only is at the chinese stock market, but also europe and the United States stock markets dropped a lot yesterday. It is not only chinas business, it may be an omen of a coming financial crisis to the world so i think it is pretty serious. Im not optimistic about the future of the market. Amy over the last three days, the markets decline has erased nearly 3 trillion in value from stocks globally. In the u. S. , stock prices are expected to stabilize today. We will speak with economist Michael Hudson after the headlines. In news from the philippines, a u. S. Marine has testified in court that he choked a filipino transgender woman until she was unconscious, but he claims he did not kill her. U. S. Marine Joseph Scott Pemberton is on trial for the 2014 murder of 26yearold jennifer laude, who was found dead in a hotel room near a former American Naval base that still frequently hosts u. S. Ships. He testified monday that he punched and choked laude after learning she was transgender. The case has strained relations between the u. S. And the philippines, with some filipino lawmakers calling for changes to the rules permitting American Military forces in the country, which is a former u. S. Colony. North and south korea have reached an agreement to diffuse the rising tensions between the two countries, following an exchange of artillery fire and threats of increased military action last week. South korean leaders agreed early Tuesday Morning to shut off a loudspeaker that has been broadcasting antinorth korea propaganda near the border, while north korea indirectly acknowledged responsibility for planting landmines that recently killed two south korean soldiers. The south korean director of National Security announced the agreement. North korea expressed regret over lisette land recent land mine event in a deep militarized zone along the d formation line demarcation line. South korea agree to hold the propaganda broadcasts from 12 00 local time on august 25. North korea agreed to in the cause i state of war. A court in the netherlands has ordered russia to pay compensation for costs and damages after seizing the greenpeace ship the arctic sunrise and arresting its crew during a protest against Arctic Oil Drilling in 2013. The group of 28 activists and two journalists were jailed for two months for trying to stop russian oil drilling in the arctic. The Russian Foreign ministry rejected the courts authority. In news from washington, state, Officials Say the wildfires burning across more than one court of a millionaire errors acres in Central Washington are now the largest in the states history. More than 1000 Fire Fighters and 700 National Guardsmen are battling the blazes. Meanwhile, in eastern washington, fires have forced the School District on the spokane indian reservation to postpone the beginning of school due to poor air quality and firefighting on nearby roads. The wildfires comes as a new study links Climate Change to drier conditions that are helping fuel increasingly strong wildfires across the pacific northwest. Meanwhile at the end of the month, obama will visit the arctic or youll emphasize the impact of Climate Change. The visit comes on the heels of the obama administrations decision to issue the final permit clearing the way for Arctic Oil Drilling. Meanwhile, president obama has announced new measures to promote solar energy including bolstering a federal program to help people switch to using rooftop solar panels to generate their electricity. Obamas speech at the National CleanEnergy Summit in las vegas monday came on the heels of the administrations announcement earlier this month of a plan to cut Carbon Emissions by an average of 32 . So were taking steps allow more americans to join this. Evolution with no money down you dont have to share my passion for fighting Climate Change. A lot of americans are going solar and becoming more energy efficient, not because of tree huggers come although, trees, you know, are important. Just want you to know. Ut because their cost cutters they like saving money. Saving all for consumers money. Because i means they can spend it on other stuff. Solar isnt just for the green crowd anymore. It is for the green eye shade crowd, too. Amy a judge in ferguson, missouri, has withdrawn as many as 10,000 arrest warrants as part of a series of changes to the court system announced monday. The der withdraws all municipal warrants issued before 2015. It also changes the conditions for pretrial release and creates a pathway for people to have drivers licenses reinstated if the suspension was due to failure to pay fines or show up to court. A Justice Department probe found ferguson has been targeting African Americans for arrests and then profiting off of their fines. The changes come after a year of widespread protests over the Police Killing of michael brown. And in california, members of a Womens Book Club say the Company Running a touristy tour a tour through the napa valley kicked them off the train because they are black. Ten of the 11 members of the book club are african american. They say they were ordered off the train on saturday because they were laughing too loudly. One of the women was 83 years old. The move immediately drew criticism for being racially motivated, and the hashtag laughingwhileblack began trending on twitter. And those are some of the headlines. This is democracy now , democracynow. Org, the war and peace report. Im amy goodman. Black monday. Thats how economists are describing yesterdays market turmoil which saw stock prices tumble across the globe from china to europe to the United States. Chinas stock indexes fell over 8 on monday and another 7 today. On wall street, the Dow Jones Industrial average initially fell a record 1100 points on monday before closing down nearly 600 points. The decline also caused oil prices to plunge to their lowest levels in almost six years. Joining us now to try to make sense of whats really behind the fluctuations in the market is economist Michael Hudson. President of the institute for the study of longterm Economic Trends, a wall street financial analyst, and distinguished Research Professor of economics at the university of missouri, kansas city. His latest book is, killing the host how financial parasites and debt bondage destroy the global economy. Welcome to democracy now it is great to have you with us. Professor hudson, talk about what happened in china and here in the United States. What happen in china doesnt have very much to do at all with what happened in the United States. Wall street would love to blame china, and the obama industry would love to blame china, and europe would love to blame china. The most of the chinese stocks went down because Small Chinese investors were borrowing from lets say the equivalent of payday loan lenders to buy stocks. There was a lot of small speculation in chinese stocks pushing it up. But this was an internal chinese phenomenon. China has a whole doesnt really of the problems. China the real problem is we are the aftermath of when the bubble burst in 2008 that all of the growth in the economy has only been in the Financial Sector, the monopolies, only for the 1 . It is as if there are two economies and the 99 has not grown. So the American Economy is still in a debt deflation. The real problem is, stocks have doubled in price since 2008 in the economy, for most people, certainly who listen to your show, hasnt grown at all. Finally, the stocks were inflated really by the central bank, by the fed creating an , 4. 5ous amount of money trillion to buy bonds that have pushed the yield down so high so low, to about 0. 1 for government bonds, Pension Funds and investors say, how can we make money . So they buy stocks. They borrowed at 1 to buy stocks that may be deal at 4 . Who are the largest people who buy the stocks . The companies themselves that of done stock buybacks. There the managers of the companies that have used their earnings essentially to push up stock prices so they get more bonuses. 90 of all the earnings of the Biggest Companies in america in the last five years have gone for stock buybacks and dividends. It is not being invested, not building new factories, not employing more people. So the real problem is that we are in a nonrecovery in america and europe is in an absolute class war of austerity that is what the euro zones, and austerity zone. That is not growing. That is what is happening. All that you saw on monday was sort of like a tectonic shift as people realizing, the game is up, time to get out. And once a few people want to get out, everybody sees the game is up. Amy and china . China, largely a small borrowers who have borrowed from intermediate lenders that have borrowed from the big banks. So a lot of individuals in china that tried to get rich fast by writing the stock market, all of a sudden find out they have a lot of debt to intermediate nonbank lenders insiders, it who banks will into is like the british banks winning to real estate speculators to lend out to homebuyers. It is essentially the attempt to get rich by writing the stock market in china went way overboard. Chinese stocks are still above what they were at the beginning of the year. This is not a crisis. This is not very much, it is just the artificial increase in some ofet has now ended the artificial push up, and it is so artificial and will still go down some more. Amy unsurprised you say what happen in china and the United States are not related. They are related in a way, but the u. S. Funds have not invested very much in the chinese stocks. Most of the china fund stocks are in hsbc. Which lends to china, the bank. Break first happen in china, but the break itself was within china and this showed investors, this is a symptom. That what happened in china is going to happen in europe and going to happen in the United States. Worldalk about chinas second largest economy, and what you think would be the healthiest relationship between china and the United States. The economy is not the stock market. Chinas economy had to acumen late large amount of foreign reserves just to withstand the kind of American Financial war that brought the asia crisis of 1997. So china acted defensively. It exported a lot. It developed Huge International reserves to make itself independent of the west. And now, it is in the middle of shifting away from an export economy to begin to reduce for its own people. Why should china Chinese Workers spent all of their lives making goods for walmart to sell in the United States and europe, why go they make goods for themselves to raise the own standard of living . That is what china is doing and that means china doesnt have to export more, and theres really nowhere to export to. If europe and u. S. Consumers are not spending, obviously, the attempt is to make china itself grow, but the chinese took the money instead of consumer goods, they bought stocks. Amy as markets in china plunged monday, former u. S. Treasury secretary and president emeritus of harvard, Larry Summers tweeted this dire prediction , as in august 1997, 1998, 2007 and 2008 we could be in the early stage of a very serious situation. Is he overstating whats going on here . Cook the question is, what does he mean by situation . When he says situation, he means his constituency, the 1 . He doesnt mean the economy as a whole, the 99 . He is been wrong on almost everything he has told. What he is calling for now is you have to cut taxes on the 1 more. You have to give the 1 more money and it will trickle down. This is part of his talk time to support his usual rightwing position. You have to be very careful when you listen to Larry Summers. Amy Michael Hudson, your book is titled, killing the host how finanacial parasites and debt bondage destroy the global economy. Explain what you mean. Most people think of parasites as taking money from the economy and the 1 is sort of sucking up all the income from the 99 . But in nature, what parasites do, they dont simply take, in order to take the have to take over the brain of the host. Aonomists it is for foreign country that lets american investors in. Smart parasites help the host grow, but the parasite come a first of all, has to make the host believe that the intruder is actually part of the body. To be nurtured and taking care of. And that is what has happened in National Income accounting in america and in other countries. Media,spapers and the not your show, but most of the media, treat the Financial Sector as if that is really in economy. When the stock market goes up, the economy is going up. But the economy is not going up at all. Somehowncial sector defeats itself as the brains of the economy and it would like to replace government. What Larry Summers said is what governments have to pay their debts by privatizing more, essentially, by doing what Margaret Thatcher did in england. That is his solution. All the governments have to do is balance the budget, selecting to wall street on credit, and we wont have any more problem. That is basically the Financial Sector is almost at war not only against labor, as most of the socialist talk about, but against government and against industry. It is a cannibalizing industry. So now most of the corporations in america are using their income not to do what industrial capitalism did a century ago, not to build more factories and employ more people and make more profits, theyre just using it, as i said, to push it to pay dividends and buybacks their shares and a somehow manipulate the Financial Sector in the stock prices, not the economy as a whole. There is been a divergence between the real economy and what i call what economists call the Financial Sector. Theyre going in separate directions. Amy you have been an advisor to the city syriza party in greece. Your friend of the former finance minister yanis varoufakis. Can you talk about what is happening now and what that votes for the economy, not only in greece, but in europe, maybe even here . The story begins about four years ago when greece had very large foreign debt taken on basically by the military government and what followed. Theas obvious as soon as socialist party came in, they said, look, the debt is much larger than we thought, we cant pay it. And they were going to write it down. Th