Cartoon by Greg Perry.
As discipline waned and jobs fled, the rich flaunted mindless greed as their natural right.
There are many reasons for riots and many, over time, were watershed moments for the advancement of liberty, free speech or what have you. The riots in Vancouver after the Stanley Cup loss and the recent ones in Europe and Great Britain were not spawned by lofty principles, but anger. Society would be wise to look at some of the causes. But why did hundreds of young people without any obvious cause join in the “fun”?
Many things have happened since I — and I daresay a lot of you — were growing up.
Discipline as we knew it has vanished. Not just physical discipline, but the discipline that was part of the typical nuclear family. Then, Mom went to work to make ends meet, which begat the “latch-key” child who had to fend for himself, having lost the full time presence of at least one parent.
“The pill” came along, and sexual discipline gave way to promiscuity — what was to fear now that pregnancy could so easily be avoided? When sex was so prevalent, how could a girl (or boy) refuse? I don’t say that the pill was a bad thing. I wish it were available when I was a young man. I’m simply noting that suddenly kids could easily partake in what traditionally was supposed to be postponed until marriage.
Another factor: We can’t forget that alcohol is a drug, and a dangerous one. To kids, whose role models worked all day then smashed a few back at home, it seemed hypocritical when they told them not to do the latest fashion in recreational drugs. And they were hypocritical.
Into this dangerous scenario came the biggest problem of all — how to qualify for and get a job.
When the economy was generous
When I graduated from law school, as long as I didn’t steal (or get caught stealing), I was assured of a good living. This promise is now an apparition. But even more importantly, those without training could once get work, lots of it. Now it’s not there. And it’s not there permanently, so that many young people haven’t got even the dream of prosperity.
There are lots of reasons. Automation keeps rambling on, to the point where we have machines making machines that make machines. Even for those who do find work, wages have declined in real terms — one reason being the near death of the union movement in the private sector. Even where there are unions, they have been emasculated by the availability of offshore labour.
NAFTA (North American Free Trade Association) has been and is being blamed, but in reality the contracting out of labour came not because of NAFTA but what computers made it possible to do. It’s rather like the old saw: Why does a dog lick his balls? Because he can.
It’s a vicious circle, where technology drives out jobs for a cheaper product no one can afford except the well-off. Earnings for all but the wealthy have gone down over the past 20 years, and keep going down. No one knows how many are unemployed, because so many have quit looking.
A global Ponzi scheme
We can’t afford the welfare state anymore, so we wring our hands as healthcare suffers and is no longer affordable. A large part of that problem is the high cost of saving people who would otherwise have died. There is nothing we can do, we’re told. But, there are things we can do.
The “left” has an unerring ability to come up with ideas too early or too late; too early was the Tobin tax, a simple sales tax on currency trades across borders — a tiny impost capable of yielding billions. Naturally, the wealthy pled that this would impede the proper flow of blah, blah, blah, and that since they were the engines that run society, blah, blah, blah, etc., etc., etc.
Now we have seen what this engine has been all about — get rich schemes for those on the inside. When you think about it, the stock exchanges are “Ponzi” schemes writ large, indistinguishable from a chain letter (last in and you lose). Knowing when to get in and out is the name of the game, and for the most part, knowledge comes from stockbrokers who make money no matter what the market does. When a broker says that his company is very high on Canadian Mooseturds Inc., that’s because it underwrote the stock issue, taking stock back for payment, stock they are now flogging to their clients.
These choking regulations companies complained so bitterly about, when removed, led to robbery on the highest scale ever known to man. In my days as Consumer and Corporate Affairs minister in charge of securities, three piece suits begged me to get rid of the Superintendent of Brokers and allow them to police their own business.
An anecdote to demonstrate my point. In 1978, a high flyer development company called Abacus wanted to issue some stocks, and the superintendent of brokers refused because he couldn’t understand what it was all about. The principals asked for a meeting with me, the superintendent and my deputy.
After an hour, I said “gentlemen, the superintendent — my deputy, who is a lawyer — and I as a lawyer, can’t make heads or tails of what you’re selling and if we can’t understand, how can the public be expected to?”
A few days later, while flying to Ottawa, by an amazing coincidence, Abacus’ lawyer was my seat mate and spent the next six hours pleading his employer’s case. I refused to budge, and a few weeks later the bank pulled the plug on Abacus, and it quickly went down the drain. It was a lesson about capitalism I never forgot.
Wealth way out of whack
Now to the meat of the matter.
The rich, corporate and individual, do not pay their share of taxes, not by a long shot. Anytime someone says that, they holler foul and tell us how they create jobs, and the money they save on tax goes to create more jobs. Milton Friedman and the Fraser Institute have sold Campbell/Clark the bilge that the extra money the rich save “trickles down” to the masses.
The economist John Kenneth Galbraith dealt with this theory, saying, “If you feed enough oats to the horse, some will pass through to feed the sparrows.”
The gap between rich and poor steadily expands and our government, always mindful of what it owes to corporate donors, clucks its tongue but does nothing.
There are, we’re told, some 1,200 billionaires in the world, the richest being the Mexican Carlos Slim Helú with $67 billion.
How the hell does anyone get that kind of money? Bill Gates is a piker at about $50 billion, making one feel that we should have a tag day for poor old Jimmy Pattison who only has $5.3 billion.
A billion — take a deep breath — is 1,000 million dollars. If citizens in a town of 60,000 had $67 billion, every man, woman and child plus their dogs and cats would be millionaires.
They get this loot through tax loopholes, and the marvel of their success is that they did it after paying all those tax lawyers.
How to make taxes fair
The notion that no CEO can be found that’s any good unless he makes $20 million a year or so is rubbish. CEOs have the most successful union in the world.
I say, start taxing at 90 per cent after $2 million in income, and see how many executives quit. They’ll howl and call governments communists, but that’s it. Do that and you will see a trickle down, as the taxes go into badly-needed public spending. In the Second World War, we had an excess profits tax, and there was no visible hardship amongst the rich. I say this: “Mr. CEO, try very hard, and I’ll bet you can get by on $2 million a year.”
What’s happened to kindly old Uncle Rafe? Has he become a socialist or even a communist in his declining years?
The answer is that I’ve felt this way for many years. I’ve always been very leery of both big business and big labour.
I’ve always been a free enterpriser who believes in the free market. But my free market has policemen enforcing fair rules and a taxing authority that is just.
No, the rich haven’t caused the riots, but they have created a system where the rich are rewarded far beyond their contributions to society, creating the poisoned atmosphere we live in.
On another topic: Saving BC Hydro
Readers of this paper and The Common Sense Canadian will not be surprised at the statement of Dave Cobb, president of BC Hydro, that private power is coating 100s of millions for power they can’t use.
This government is the gang that couldn’t shoot straight… and can’t give a straight answer to a straight question.
Now what, Madame Premier?
There is no question that Rafe Mair is a socialist. At least he admits it now.
What people like this miss, when it comes to distributing “wealth” more “fairly”, is that the plain truth is it does not work. His confiscate the wealth mantra has never worked and never will. War time is different. There are makers and there are takers in this world. The makers need some incentive to put the time and energy into making. It is not perfect but the 90% tax rate would be insane, pure and simple.
The only way to achieve this is for government to be totalitarian. That is what is needed to confiscate wealth and income, because the makers will just hit the road and go somewhere else. So, Rafe Mair would construct an iron curtain around the country to achieve his goal of just giving money away, as if that ever worked. And, that is always what socialists get to-confiscating wealth until of course they run out of other people’s money, which is happening now.
It is the politics of envy and the culture of entitlement that is at fault, not the economic system that offers rewards for those who work hard. The “I hate big business but like small business” line I hear is a con game. Most small business people want to be bigger-too many of them are effectively gerbils working to feed other people and not getting enough for themselves.
It is not Christy Clark who is the problem. It is government that is the problem. Get out of the way and people will be better off. Those who have faith in government use the same excuse the communists used-they system works we just had the wrong people. No, the system does not work and we will be forced to accept that soon anyway.
It is the corruption of the politicians in the government, that has caused many country’s to fail. BC is one damned good example of, how Campbell’s corruption destroyed this province.
Politicians CHOOSE to be corrupt, thieve, deceive, use dirty tactics and cheat to win. The government didn’t tell the politicians, to do their dastardly deeds. They chose greed over common sense, and to hell with the people, that have to pay for that corruption.
I can’t commit a theft and say, my government told me to do it, and get away with it. I can’t drink and drive and get away with that. I don’t get a special prosecutor, to get me out of the crime either.
There is a two tiered judicial system in BC. One for corrupt, thieving politicians, for police, public figures and the elite. Campbell’s theft and corrupt sale of the BCR, is a fine example of justice in BC. Tried in a corrupt court, by a corrupt judge, who condoned a brain dead witness. The other system is for the everyday citizens who would do time if, we pulled that same crap.
The problem is, politicians don’t have to do time, for their corruption and thieving from the citizens. All of this is because politicians choose to be corrupt. There are very few politicians, worth the powder to blow them to hell. Our BC media are propaganda machines, who support the corrupt politicians. They too choose, to spread the politicians lies. They are a disgrace to their professions. None of the decent people, trust politicians or the media. The entire lot of them are scum.
It is too bad people such as Julie cannot produce one piece of evidence as to the corruption of any BC politician, Liberal or NDP. These charges of corruption are easy to make because no proof is needed for people who believe that it happens anyway. That Campbell did not get more harsh punishment on Maui has nothing to do with the BC government.
The unhappiness reflected in the previous posting is always going to be the result of putting too much faith in politicians. They are not corrupt, they are unable. Most of them are in way over their heads.
The absence of evidence doesn’t stop the conspiracy theorists. In fact, the lack of evidence is for them proof of how widespread the corruption is. “They are all in on it”. Hardly-the problem with corruption where too many people are in the loop is that the truth slips out-it is just the way people are. Even Glen Clark, for whom I had little use politically, was destroyed by little more than rumour-and probably managed in the background by others in the NDP.
So, if Julie could point us in the direction of evidence (not theories and innuendo) as to where theft has taken place, who took the money, how much, where is it, etc, it would be very helpful indeed. I am not holding my breath.
Please jartann, for the sake of us all, please, please do hold your breath.
I am a conservative who supported deregulation of the banking industry. Now I think deregulation was a huge mistake and the Glass-Steagall Act should be restored and hedge funds should be more regulated. Glass-Steagall prevented banks from owning securities firms and expanding to multiple states. While I once thought this law was anti-business and outdated, I now realize regulation is necessary to keep the banking industry safe by keeping banks from growing too big. Glass-Steagall is a proven law that protected the American financial industry well for 70 years and needs to be brought back immediately.
The financial crisis of 2008 and the current economic problems are partly due to the repeal of Glass-Steagall and the failure to regulate hedge funds. I am certain the world economy cannot risk another meltdown now. There is simply not enough money to bail out governments and banks of the world again.
The Dodd-Frank Act was enacted as replacement for Glass-Stegall, but I believe this new law is weak and doesn’t go far enough to prevent banks from owning investment companies, controlling banks from growing too big, and regulating derivatives enough. Bank of America, a bank, now owns Merrill Lynch, a brokerage firm, for example. Merrill Lynch recently moved $75 trillion of derivatives to the FDIC insured Bank of America side. If these derivatives fail, Bank of America will be affected, and how will the US government bail them out? The derivatives market is $600 trillion, but the economy of the ENTIRE world is only $74 trillion. One doesn’t need to be a rocket scientist to see the dangers of having government insured banks owning investment firms that buy risky hedge funds.
http://www.bloomberg.com/news/2011-10-18/bofa-said-to-split-regulators-over-moving-merrill-derivatives-to-bank-unit.html
http://articles.boston.com/2010-03-12/business/29329389_1_derivatives-gary-gensler-regulator
https://www.cia.gov/library/publications/the-world-factbook/geos/countrytemplate_xx.html
Billionaire Warren Buffet called derivatives “weapons of mass destruction” and Newt Gingrich thinks repealing Glass-Steagall was a big mistake.
http://www.reuters.com/article/2008/09/18/us-derivatives-credit-idUSN1837154020080918
http://news.yahoo.com/newts-15-seconds-sun-094500280.html
Normally I am an optimist who doesn’t go around saying the sky is falling like a paranoid Chicken Little, but from my reading from trusted mainstream sources I have become quite worried about the economy. If I had understood the risks of derivatives and debt in 2007 and had said something then, no one would have believed me. Now I hope people will listen when experts say the government needs to better regulate the financial industry.
Businesses and banks may say that regulation slows the economy, but I think that if the Glass-Steagall Act is not restored and hedge funds are not more closely regulated, there will soon be no economy at all. While I realize restoring Glass-Steagall and regulating derivatives is complex and difficult, I believe making a law is easier than repealing one.
I suggest reading “The Big Short” by Michael Lewis for a readable introduction to the financial crisis and why the banking industry needs to be regulated.
Restoring Glass-Steagall and regulating derivatives is a urgent problem and is not a issue that can wait to be fixed. I cannot stress this enough. Write to your elected officials, talk with your friends, and contact the media urging the government to make Glass-Steagall a law again and ask legislators to better regulate hedge funds.
“Too big to fail” is simply too big.