Finance Canada published its annual Tax Expenditure Report for 2011 and it shows that the cost of some of the most inequitable tax preferences and loopholes continues to rise.

For instance the stock option deduction, which allows CEOs and executives to pay tax at half the rate of ordinary working income, is estimated to cost the federal government $725 million last year.

We all know that the wages and compensation individuals receive in private competitive markets reflects their productivity, unless pesky unions and government regulations get in the way -- because Economics 101 (and Michael Hlinka) have told us so.

Corporate CEOs are worth every penny their "independent compensation committees" award in compensation and stock options them because they are "creating value" and hedge fund operators are worth the billions they made helping the world learn about the impact of financial crises. Meanwhile, minimum wage workers, union members and public sector workers must all be overpaid because regulations, unions with their monopsony power, accommodating politicians and labour laws have all interfered with the magic of the market.

The economy is terrible. Jobs are nowhere to be found. Wall Street bonuses are through the roof. But mainstream business journalism is still praising the con-men who created this mess, yet attacking anybody who takes real solutions -- like government spending to create jobs -- seriously.

Whatever corporate journalists say, the American economy will not recover until policymakers and the media acknowledge the mistakes of the past and move forward with a new economic agenda focused on middle-class prosperity, rather than financial evisceration by elites.

Creating jobs is key

By Zach Carter, Media Consortium blogger

Now that health care reform has finally been enacted, a host of critical economic issues are taking center stage, including financial reform, unemployment and deeply rooted economic inequality. But it’s important to note that with its health care vote, the U.S. House of Representatives actually approved a very important, and often overlooked financial reform: Student lending.

Pedro de la Torre III of Campus Progress explains the current student loan nightmare in an interview with The American Prospect’s Rebecca Delaney. For years, the U.S. government has paid massive subsidies to some of the worst-run companies in the country.

By Zach Carter, Media Consortium Blogger

Bailout pay czar Ken Feinberg raised a ruckus last week when he announced plans to slash cash payouts to executives at seven companies that have received massive levels of taxpayer support. While better oversight of the bailout barons is helpful, the best way to change Wall Street pay practices is to adopt a set of tough, comprehensive regulations that cover everything from the executive suite to the loan department. As is, many of the executives Feinberg cracked down on will still make millions this year from stocks and other perks, while the very banks that depend the most on bailout money are spending like mad to lobby against reform.

by Zach Carter, TMC MediaWire Blogger

Some of the largest U.S. banks may be on the ropes these days, but the disparity between the plight of financial executives and ordinary Americans has never been starker. Over the past two decades, the banking system has grown accustomed to scoring massive profits by preying on its own customers, making 2009's transition to pilfering taxpayer wallets an easy one. After burying the economy under a mountain of unaffordable debt, bank CEOs are now finding ways to subsidize their own paychecks with taxpayer bailout funds.