J.K. Galbraith: Inequality and Instability

An analysis of the economic and political context prior to the initiation of the should-have-been-expected recession in 2008, in which the global community continues to find itself and will continue to do so for quite some time. A no growth, relative residual* global economy is the best we can expect until a full infrastructural move to sustainable local economies will be thrust upon us by the exigencies of our decreasing energy sources. No government and very few economists seem to have fully recognized the reality of a no growth overall global economy.

*By relative residual, I mean an unstable pattern of up one month, down the next, up in one region, down in another but with an overall effect of static growth. 

The Assault on the OAS is the Beginning of an Attempt to Strengthen Neoliberal Principles

Yesterday on CTV Question Period, Dan Gardner's argued that it a was good thing to raise the entry level for the OAS by at least two years because everybody else has done it. Well, Dan, just because everyone else has done it doesn't make it right, especially when the reasons for doing so are the same old neoliberal ones that are always an implicit assault on social programs. It would seem, old chap, you got sucked in by the sustainability spin.


Do a little research, Danny boy, and you'll see that beginning around 2020 OAS gross funding will begin to decline when babyboomers begin dying off - a decreasing trend that will rapidly accelerate in 2030. In other words, this is not the problem the Harper Regime has made it out to be, and in fact the percentage of increased funding is a mere 5.6% per year over this time period, and the ratio of expenditures to GDP will increase from 2.4% to to a mere 3.2% - hardly the catastrophic amount Harper pretends it is. Of course lying has always been a political tactic for the Harper Regime, so we really shouldn't be surprised to discover the reality beneath the spin once again. 


Bob Fyfe was right when he said on yesterday's QP show that the Harper Regime's agenda is not a social one, but an economic one. What he didn't say is that the basis of this economic agenda is a concentrated effort to strengthen the already established Harper Regime's neoliberal principles through the usual neoclassical economic tools. We can see only the beginning of this process now, but the coming changes will amount to the destruction of a socio-economic foundation on which we have sat for 50 years or so. They may be impossible to reverse in four to ten years' time.

A Simple Solution for the Deficit that Might Please Both Progressives and Neo-classical Economists

Given the record profits of and incentives paid out in Cdn banks recently, there is no credible argument that says they can't afford a financial service transaction tax, and, as we know, it is the financial sector that is largely responsible for the economic mess in which we find ourselves.  It seems only fitting, then, that the revenue from this tax be used to pay down the almighty deficit about which neoclassical economists dream frettfully every night. This is a simple, easily doable solution, but one, alas, never mentioned in a Canadian context in public economic discourse for fear of upsetting our sacrosanct banks, who will claim, yeah, okay, we'll absorb your tax but you can count on us to pass it on to investors. 


Of course paying down this debt would do nothing directly for ordinary households which are leveraged at a 150% ratio to income and approximately $26,000 in debt over and above mortgage obligations.  But it will allow those poor neoclassical economists to get some sleep at night.

Pathological Commitment to the Ideology of Austerity Brings Only Economic Stagnation

The curse of austerity - thestar.com

This is a very insightful analysis of our current situation. Here's a bit of a gloss on it:

Neither the private sector nor consummer spending seems to be able to stimulate growth in the economy. This is the real issue. Only public spending can do that, but a pathological commitment to the ideology of austerity on the part of so many Western countries - bred by the tenacity of neo-classical economic theory and neo-liberalism politics - has created nothing but economic stagnation. We are beginning to see the real results in Canada now even without the full launch of cuts next year. Imagine that disastrous scenario.

This is not a simple economic or fiscal issue. It's a political issue - a question of the political brain trust actually understanding the real crisis. If they don't, we can certainly look forward to a lot more social and political unrest as they continue their misdirected austerity programs - implemented of course really to please the investor class - for it is real people who suffer, as always, from the pathologically inflicted leadership of the Western world. In Canada, we can only hope Harper pays a price for his blindness.