One of the entertaining characteristics of Ronald Reagan's first cabinet was that most of its members wore a tie bearing a cameo profile of Adam Smith. The new team had a clear vision: it was time to replace the statist capitalism theorized by John Maynard Keynes with the free market capitalism espoused by An Inquiry into the Nature and Causes of the Wealth of Nations.

When it comes to Canada's lousy record in productivity and innovation, the standard prescription of economists is both clear and predictable. They believe unregulated markets are the best way to allocate resources and determine the composition of output. Therefore, to improve efficiency and innovation, simply improve markets: Eliminate "distorting" taxes. Eliminate regulations. Sign more free-trade agreements. Cut "red tape." That will unleash the full potential of the private sector to innovate and optimize, and Canada will become a northern tiger.

You may have noticed that the Globe and Mail invented charity last weekend in response to various irritations: economic chaos, rage-inducing social inequality, declining living standards, loss of hope. Their answer is the New Philanthropy though, in fact, it isn't really new and isn't philanthropy either. I'll get to that.

The people who manage millions of U.S. investment dollars are frightened. For good reason. The so-called debt ceiling deal agreed to by the White House and the American Congress leaves the American government with no room to create jobs, or boost incomes. U.S. incomes are down by about 13 per cent since the 2007 recession began; the real U.S. unemployment rate (including part-time employees seeking full-time work, and discouraged workers) is 16.2 percent. American business depends on consumer spending, but consumers are broke, in debt, and jobs are hard to come by.

Common sense tells us it's wrong that hedge fund manager John Paulson made $3.7 billion in 2007, while a typical nurse earned about $45,000.

Paulson made his billions by betting against the subprime mortgage market, helping trigger the 2008 financial collapse. In what moral universe is he worth as much as a single nurse -- let alone 82,000 nurses?