All hands on deck

The Dow closed down 500 points or so today as Italy’s debt problem emerged on the market, got added to the US debt ceiling disaster, then was spun around by the teeny US growth numbers – which are really a contraction – and took a final plunge on fears of a fourth straight increase in the US unemployment numbers due to be released tomorrow.

Does anyone still think neo-Liberal economics are working?

Business has been running the show for the last thirty or so years in this country and others around the world.  They’ve delivered lower real wages for many, static real wages for many more, high unemployment, higher prices and economic growth concentrated in the top ten per cent.

The problem, contrary to the Republican majority in the House of Congress, isn’t government debt.  Too few are participating in economic growth and that’s just going to get worse in a low growth economy that still drives benefits to the few at the expense of everyone else.

Credit cards are maxed out.  Houses are over-mortgaged.  And what spare cash people have is being used to reduce debt, not create new consumer based problems.  A June CNN poll found that almost 50% of Americans expect a great depression.  These people aren’t spending now, and they won’t be spending any time soon.

What’s the answer?

Not more of the same.  The Harper government (commodities, Canada’s bread and butter were hit particularly hard today) is still planning to take money out of the economy to reduce the deficit.  It’s the wrong thing at the wrong time and recessions and depressions are all about both timing and the right policy instruments.

And business, having pushed wages down pretty well, has shifted to scaring workers about pensions and future income as if grabbing all the profits from the workplace for the last thirty years wasn’t enough.

That’s a sure fire way to get average people out on a shopping spree.

The answer is that the majority of people who are now extraordinarily worse off than the top ten per cent need to start reaping some rewards:  Jobs, more money in their pockets, pensions for those who lack them, a break on user fees, higher wages.


Until that starts to happen – and who can expect change soon –  the risk of the double dip will be there.

A couple of sites I’ve been reading on this stuff:  Paul Krugman‘s analysis is proving useful and correct, much to the consternation of the right (see Neil Reynold’s attack in Thursday’s Globe).

And John Lanchester in the London Review of Books on the Euro debt crisis, how it works and why it matters.


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7 Responses to All hands on deck

  1. Canadian Canary says:

    Way to go Ian! Just keep telling it like it is, not like the media goons tell us.

    People need to wake up and smell the rot that has permeated our society thanks to our “mis-leaders” and the corporate greeders roaming the globe slavering after yet more to conquer and pillage.

    Greed, authoritarianism and betrayal of the common good by the richest 2 per cent will eventually be met by chaos and anarchy. Shakespeare was right, we need to … (pick your favourite quote).

  2. spartikus says:

    Group blog Crooked Timber (John Quiggin, Michael Berube, etc) is also quite good on such topics.

  3. Julie says:

    I read, Harper gives a speech, at the council of Foreign Relations, in New York, Sept. 25/2007. Harper made his agenda, abundantly clear.

    Harper isn’t in this, for the Canadian people. Harper is in this for Harper. He desperately wants, to be an energy giant. He wants to bask in that, power and the glory.

    You had better believe, he will stomp on anyone who gets in his way. Harper and Campbell worked together, to force the Enbridge pipeline, and China’s dirty oil tankers, onto this province and the people. Now, Campbell must peddle the, dirty oil sands to England. That’s why Campbell was given the job as, High Commissioner to England.

  4. Dan Schubart says:

    I just finished Mike Nickerson’s book called Life, Money, and Illusion which neatly encapsulates the train wreck we’re riding, its causes and proposes some solutions, though, like Lester Brown and others, the solutions part implies that there will be an uprising of some sort, preferably peaceful and constructive, as people come to see what’s been done to them and how our lack of vigilance and perception has allowed us to sell ourselves out, and be sold out. Thankfully, I feel less impatient than I did a decade ago, but time is short and the work to be done is enormous. Thanks for being a part of making us aware.

  5. BC Mary says:

    Y’know, what intrigues me about the media circus surrounding the U.S. debt crisis is the fact that the name of George W. Bush is never mentioned … the guy who launched two (2) cripplingly expensive wars and brought on the debt crisis.

    Seems to be all the fault of Obama now.

    Is this the reliable kind of info. we need? Nope.

  6. Norm Farrell says:

    “the solutions part implies that there will be an uprising of some sort, ”

    It is time now for an uprising but it should be in the form of political action. People must participate in public dialogue as we do in the blogosphere. Encourage others to join and do the same. Talk to friends and neighbours, communicate directly with politicians, demonstrate on the streets. Join an opposition political party, boycott mainstream media and other businesses that put big business interests ahead of people. (Boycotts have been powerful weapons before.) Lend financial support to alternative news sites such as the Common Sense Canadian, The Tyee, Public Eye Online or whichever one that you find appropriate.

    Canadians don’t need to resort to violence. Instead, we must inform and convince fellow citizens about values and actions that will sustain Canada as place of freedom, tolerance and opportunity.

  7. Natalie says:

    Great post, and Norm Farrell had a great comment:

    “Canadians don’t need to resort to violence. Instead, we must inform and convince fellow citizens about values and actions that will sustain Canada as place of freedom, tolerance and opportunity.”

    I wish all Canadians would follow that advice.

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