Demand side Economics
Why not articulate the refocussing of economics in Canada on switching from supply side economics to demand side?
The pushing of the cost of running a civilized society on to individuals is one of the main reaons for the lack of any recovery. Individuals have been squeezed so hard that they lack the ability to make any real choices in their consumption. They are forced to spend a large portion of their incomes on pure survival. While those with some left have to make choices between saving for retirement or their child's future education costs. This leaves little room for choice, discretionary spending or emergency savings.
Meanwhile supply side economics has lead to an oversupply in most markets causing job losses and further compounding individuals ability to make purchases beyond those needed to survive. Why aren't progressives calling for a reduction on the burden to individuals and stimulus for individuals, not large projects that just further enrich those that are already wealthy.
The Conservatives keep pushing their failed economic ideology with out any clear opposition to their plans. A small increase in taxes on the uber-rich and corporations will not stem this tide. There needs to be larger changes, reducing the load on people while increasing it on others. Shift the costs back to at minimum an equilibrium because the wealthy and corporations benefit from a orderly and civilized society. They should pay their portion of it.
I'm afraid it's been the propensity of corporations to take their little wagons elsewhere to find cheap labour and lower taxes that gives folks the idea that Conservatives know best. Of course, that's not true, but some way must be found to halt the exodus of employers to bring about confidence in the once magical increase of demand. That is going to mean knocking finance capital from its cat bird's seat, and that is gong to mean controlling the movement of pension funds (i.e.) beyond our borders. Even wee Jimmy Flaherty has come to that realization with his limiting bank expenditures/investments outside Canada. As John Ralston Saul has argued for years, globalization's time is nearly up.
As you say,"the wealthy and corporations benefit from a orderly and civilized society. They should pay their portion of it." But "they" are also "us" in these days of investment capital, and social democrats are only slowly coming around to the realization that all the old terms of endearment between workers and capital have become muddied.
They're having a difficult enough time convincing European bankers to take haircuts. There's just too much invested at this point to even consider globalization's demise anytime soon. Catastrophic mistakes are simply distilled down to tough luck investments where the insurers of first resort are national treasuries and infrastructure. In order to warm to this level of optimism, we'd have to start seeing trend reversals instead of the full steam ahead setting currently plotted.
You muust admit that the current "difficulties" in finance capital circles does not bode well for globalization (or us) in the long run. And Britain seems to be cutting and running. Of course, as Keynes said, in the long run we are all dead. Never trusted the elitist bastard after reading that. He never had kids himself...too busy entertaining the Bloomsbury crowd.
These are nothing but minor obstacles and teething problems. Every time Europe is brought closer to signing over the kitchen sink, Wall Street and The City enjoy their happy dance bounces. The problem with Britain is that it still thinks of itself as an Empire and as a rampart of an island onto itself. The incentives toward lowering themselves to European arrangements and subjecting the Crown to such continental vagaries as might be contrived in the lessor capitals, hasn't yet found a receptive audience within a national character that still produces it's imperialistic political class. They only remain adept at producing or contributing in partnership with today's marching orders, not so good at being on the receiving end.
The bulk of the funds in investment capital do not belong to people. Individual investment in capital markets minus the top 1% of earners is miniscule. One way to stop capital flight is to tax it to the point that it is not worth moving it. Put a tax on any foreign capital leaving the country that was invested prior to implementation of the tax. Set it at 99% and leave new investment the freedom to move. This should keep the capital that is here and not overly effect new capital from entering.
That stated, part of the probelem has been Canada's over reliance of foreign investment. Why can't we do it ourselves?
We built this nation on the idea that domestic investment was best for our developement, and used to force corporations to have a Canadian subsidry.
They are too busy shovelling natural resource profits and Canadians pension funds to U.S. and other markets. Meanwhile three dozen key sectors of Canadian economy are majority foreign-owned and controlled and mostly by rich Americans.
And then our fearless political leaders and captains of finance have the temerity to complain that there are few good places to invest in Canada anymore. They need cleaning out of Ottawa, and Bay Street bond salesmen should go the way of that character in Arthur Miller's play.
The bulk of the funds in investment capital do not belong to people. Individual investment in capital markets minus the top 1% of earners is miniscule. One way to stop capital flight is to tax it to the point that it is not worth moving it. Put a tax on any foreign capital leaving the country that was invested prior to implementation of the tax. Set it at 99% and leave new investment the freedom to move. This should keep the capital that is here and not overly effect new capital from entering.
That stated, part of the probelem has been Canada's over reliance of foreign investment. Why can't we do it ourselves?
We built this nation on the idea that domestic investment was best for our developement, and used to force corporations to have a Canadian subsidry.
Moe, you inhabit a world of your imagination. Every bloody dollar invested by "the worker" in a pension fund, RRSP, etc., is intended to bring greater returns at time of retirement as a result of market growth. You have no damned idea of the total amount involved, or its percentage of the total. But we can guess at the importance of healthy markets to the poor bastard who pins all hopes for dying in come knd of comfort on that goddam market.
Of course there should be a "Tobin tax," and of course "why can't we do it (finance our own industry and growth) ourselves." And the very instant that the formula is found, the finder will be crowned. Strange what greed/fear, the two dominant concerns in market circles, will do to people though. Tends to cause them to even forget the shit that they are putting in the backpacks of their own kids to carry.
First, we have to get real.
Table 1: Percentage of Market Value Held by Five Major Categories forAll Corporate Stock in the United States197519851994Households (privately held)57%51%48%Personal Bank Trust Funds11%7%3%Mutual Funds4%5%12%Corporate Pension Funds13%20%18%Public Pension Funds3%5%8%Total for These Five Categories88%88%89%
Source: Margaret M. Blair, Ownership and Control (Washington, D.C.: The Brookings Institution, 1995), p. 46, Table 2.1
Note: The percentages do not add up to 100 because the holdings of commercial banks, savings and loans, insurance companies, closed-end funds, brokers and dealers, and foreign groups are not included.
Table 1: Percentage of Market Value Held by Five Major Categories forAll Corporate Stock in the United States197519851994Households (privately held)57%51%48%Personal Bank Trust Funds11%7%3%Mutual Funds4%5%12%Corporate Pension Funds13%20%18%Public Pension Funds3%5%8%Total for These Five Categories88%88%89%
Source: Margaret M. Blair, Ownership and Control (Washington, D.C.: The Brookings Institution, 1995), p. 46, Table 2.1
Note: The percentages do not add up to 100 because the holdings of commercial banks, savings and loans, insurance companies, closed-end funds, brokers and dealers, and foreign groups are not included.
You'll have to explain to me how these figures support your case, Moe - even if you somehow assumed that the pension funds of households represented the only savings of workers. Or that the 18 per cent corporate pensions meant that these were not worker pensions, etc.
Corporations like insurance companies and banks handle the savings of folks, who have to trust their knowledge/honesty. A tiny percentage of working people play the game from their homes. Your statement : "The bulk of the funds in investment capital do not belong to people. Individual investment in capital markets minus the top 1% of earners is miniscule," says the invested capital "does not belong to the people," which of course is not the reality. You are talking about the people who invest for them, and skim off the earnings, i.e. trust fund fees, while making investments that threaten investors and system.
Regardless of the amount that the average individual has invested in the markets, which is still far less then 1/2. The fact is, if the status quo prevails, the chances are the mony will not exist anyways. So either we keep the status quo and watch pensions disappear and continue to push the cost of society onto people or we change it and take a chance. One assures us of ending up with nothing, and the other has a chance of it.
I'll roll the dice.
You'll be very lonely in that crapshoot, Moe.
and coming up 7s every time.
The thing that gets me is that the most prosperous economic times have been times of demand side economics. People. corporations and the wealthy all do better. It seems corporation and the wealthy are willing to do with a little less to ensure that the rest do with alot less. The continuation of supply side economic policy will kill the goose (consumers) that lay the golden egg (profits).
Because it doesn't empower labour?
Before capitalism, there were markets for consumer goods and services as well as for raw materials. Then arose labour markets and capital markets. Today's mainstream "supply siders" focus on what's good for capital first. None of them focus on what's good for labour first, and what's good for consumer confidence and demand doesn't coincide with what's good for labour.
I'm stepping up here to be a proud supply-sider... for labour. Consumer confidence and demand can go by the wayside, and capital interests be damned:
http://rabble.ca/babble/labour-and-consumption/supply-side-political-eco...
I would think that giving individuals more money to spend would have, and has in the past, a greater effect on labour and wages then nationalizing employment. Greater demand requires greater production and more labour. This reduces the available labour pool putting pressure on wages in an upward motion. Further increasing demand and so on.
Business is more likely to balk, and leave, at being told whom to hire then from paying a slightly higher tax rate. IMO
Part of the NEW trouble is, the stuff being bought wasn't made here, and after a while, our exports of commodities are not enough to pay for all the incoming, even if government cranked up the printing presses. Peter is being beggared to pay old Paul.
And that's why we have to return to a nationalist positin in defence of sovereignty. Then the old formula that you extol will work much better.
Maybe we do need more history lessons after all.
At the end of his work, The General Theory..., Keynes also called for financial disarmament around the western world. And he called for euthanizing of rentierism, the parasitic appendage of European financial oligarchy that attached itself to various world empires for the last 1000 years.
The warfiteers and central planners need to create the illusion of a democracy in order for creditors to continue financing the over-bloated militaries. Even parasitic financiers and free lunch capitalists demand some semblance of democracy and ability to repay debts. They are losing confidence in the corrupt empire of today. Money is loyal to no country.
When a policy has not been tried because it offends particular elite interests, what do you expect regarding "effectiveness"? Social-democratic demand-side same-olds have been, thankfully, found wanting.
But what is demand? I might like to buy something, but can't because I don't have the money. Handouts are too inflationary, so instead go for upward pressure on wages to go in hand with productivity increases. This upward pressure then grows its own demand because now, I have money to buy certain things I couldn't buy before.
They're not making any peeps at all about all the private temp agency firms, other than the obvious increased labour costs that aren't passed as added wages.
When a policy has not been tried because it offends particular elite interests, what do you expect regarding "effectiveness"? Social-democratic demand-side same-olds have been, thankfully, found wanting.
Wanting because they have produced the best results in dealing with income gaps?
Demand side policies to put pressure on wages and there are many ways to deal with inflation. Such as realistic interest rates that encourage savings.
Because it lowers their wage costs, not increases them.