This week, the US Federal Reserve released a “snapshot” of the American economy. To make a long story short, it does not look good. Millions of jobs were lost last year, and millions more will be lost this year.
In Canada, Finance Minister Jim Flaherty is predicting a similar situation.
It’s clear that the worldwide economic crisis is directly related to the free-spending easy-credit ways of the past decade. It’s equally clear that years of tax-cutting in both Canada and the US have left governments in a weak fiscal position, with little spare cash to address the very real suffering of people who lost just about everything when the great bubble burst.
No fear, the Powers that Be have a solution, and soon the crisis will be well in hand. All we need is more free spending, more easy money, and deeper tax cuts. Just to get things started, the Fed has cut US interest rates almost to zero, and the Bank of Canada has followed suit.
In November, the US government announced an 0-billion package “to encourage more consumer lending in the form of auto loans, credit cards and mortgages.” President Elect Obama promises to deliver a complete stimulus package as soon as he takes office, at least 40 per cent of which will take the form of a tax cut. Flaherty is “hinting” at tax cuts in his upcoming budget.
What a fantastic machine is the world economy, that can repair itself by following the same steps that led to it breaking down. Imagine if your car could do the same. Neglected your maintenance, gunned your motor, drove too fast and ripped your muffler off jumping the curb? No problem, just do a lot more of the same and all will come out right.
A reasonable observer might ask, where do governments get these zany ideas?
The answer is, they get them from the people who made a killing out of the easy-money decade, and who stand to make even more if we stay on track. Flaherty, for instance, has appointed an advisory body of millionaires and billionaires to tell him exactly what he wants to hear, that tax cuts are the answer to every problem.
Flaherty’s Economic Advisory Council is a collection of some of the richest Canadians. The list includes Powercorp president Paul Desmarais, widely considered one of the most influential men in Canadian politics, regardless of which of the big-money parties are in power, and J.D Irving of Irving Oil, the second-richest man in the country.
There is not one single member of the panel who could not be considered wealthy, influential, and conservative. No one represents labour, the environment, aboriginals, social justice, or indeed any point of view besides that of the rich and powerful.
In short, at a time when Canada, like the rest of the world, needs a major change in course, we are to be led out of disaster by the same group of damn-the-torpedoes captains of industry that led us into it, steering the same old ship in the same old direction.
The international economy is bleeding and it doesn’t need a Band-Aid. Its problem is that it’s the wrong kind of economy altogether. It encourages gross inequalities, absurd wealth, unbearable poverty, rapacious resource extraction, war, famine, species extinction, and ultimately global environmental meltdown.
The year 2008 was a year of crises, from the sudden and frightening loss of arctic ice to the near collapse of the world’s food supply to the great debt panic. There are no simple answers to any of these, but one thing is for sure, they are all exacerbated, if not caused, by an out-of-control economic system.
Canada’s billionaires want across the board tax cuts to help them preserve and enhance their already outrageous wealth. But Canada needs exactly the opposite. We need to collect taxes and spend money on sadly neglected social programs and infrastructure. We need to spend less on war and more on environmental reclamation and sustainable development.
The Economic Advisory Council is not an advisory body at all, it is a government appointed lobby group for the filthy rich.
The sooner we are rid of it and the cynical party that appointed it, the better chance we will have of addressing the economy’s real problems.
Al Pope won the 2002 Ma Murray Award for Best Columnist in BC/Yukon. His novel, Bad Latitudes, is available in bookstores.