On restricted-focus government

One household in Canada

All the little economies

A recent poll determined that Canadians place higher priority on the economy than on crime. I don’t have access to the question asked by the poll, so it's difficult to decide whether or not it was a reasonable reflection of what the average Canadian is thinking.

 One thing I do know, though, is that asking anyone to rank items in a list like this is a of little value, the result obscuring more than it illuminates. The choice of items for the list, for instance, is in itself a manipulative enterprise in that it must—by its nature—exclude or choose items on it. Furthermore, the implication in this case is that the economy and crime are similar categories between which a choice can be made, or a choice that's already been made can be justified.

            The current government has decided that its focus on the economy is justified both by the results of the election and such polls, as well as by the economic instability around us. They have a point; economies must be tended thoughtfully and must distribute goods and services equitably and efficiently. Ranking this need as the Harper government has done, though, is dishonest. The economy is not separate from crime, or health, or highways, or education, or environment. Seems to me, a portion of our population has been lulled into the thinking that all must serve the economy, including environmental considerations.

            We know intuitively that building a house on a crumbly foundation is foolish, but in the world of politics in Canada today, are we still agreed on what is house and what is foundation? Surely if environment and economy were listed in a poll, most people would choose environment as fundamental, a foundation on which the economy is built. And yet, our government speeds up environmental hearings, pushes the polluting oil sands as if there were no problem there, all as if the economy were foundation and the environment must be built on top of it.

            Imagine a household run like our current government runs the country. “I'm sorry, children, but the most important thing around here is getting as much money as possible into this house, so food, clothing, music, education, recreation (being of less importance than finances by the latest poll) are on the back burner until further notice. And by the way, you've been slacking off so now you're all either getting paper routes, or your allowances will be cut!" (Think EI changes)

            If this metaphor seems out of place to anyone, just a reminder that the word, economy, derives from Greek words for household management and steward.         

A restricted-focus government is no proper householder at all.

What the Sam's Hill is going on??

So how are my stalks doing today?

I know numerous people who cultivate soil, seed vegetables or grain, nurture the crop they’ve planted and harvest the results. They trade their potatoes, tomatoes, wheat or canola for cash and the buyers are fed and the grower is able to feed and clothe his/her family. It’s a happy exchange. Everybody benefits. It’s how economies are supposed to look.

               I also know a few people who spend a great deal of time at their computers, following the current value of investment packages, hoping to enrich themselves by selling stocks, bonds, derivatives, gold, foreign currency etc. at a higher price than they paid for them. Their activity produces nothing useful to their neighbours while having the power—given any crisis that leads to panic sell-offs—to bring an economy to its knees, including the crippling of growers’ and consumers’ legitimate ability to trade for food in a workable manner. It’s what an economy should NOT look like.  

What the Sam's Hill is going on?!?

               Given the news of economic doom and gloom in the USA and Europe with which we’re being bombarded daily, I’ve tried to understand some of the underlying principles at work here. I began with derivatives, a word one hears constantly but only speculators generally understand. It works something like this:

               A farmer plants, say, 100 acres of lentils but he can’t be sure that hail, early frosts, pests or drought won’t mean that the crop will fail. So to reduce the risk of loss, he finds a speculator who agrees to pay him, say, $15,000 for that crop on October 1, whatever crop comes to fruition. They sign a paper to that effect.

Now suppose that this same speculator makes similar deals with 100 other farmers, betting that the canola crops will come in at a higher value than the derivative agreements he has made. The speculator is assuming an awesome risk; if the crops are all wiped out by disease, he’s bankrupt. If there’s a bumper crop, he’ll be an overnight millionaire, of course. To reduce HIS risk, he packages up the agreements and finds other speculators willing to bet on a good crop. He sells bundles of derivatives to these new speculators for the equivalent of, say, $16,000 per 100 acres so that should some of the crop fail, his losses will be minimized.

               There’s potentially no end to the ways derivatives can be repackaged and resold. What has been erected here, however, is a house of cards. Follow the bouncing ball: if all the canola crops in question should fail, the individual farmers will call in their $15,000 per 100 acre payments; but in order to meet that payment, the buyer of the farmers’ derivatives will need to collect from those to whom he has sold them and so on up the chain. But there is no crop for anyone to resell, and so the chance that payment will actually work its way down the chain to the farmyard is minimal, depending on the final holder of the derivatives.  No one up and down the chain is required to back up his purchases of derivatives with actual money! The house of cards collapses, naturally.

               In the USA, the “lentil crop” consisted of bundles of below-prime mortgage agreements that “got hailed out” because thousands upon thousands of mortgage holders defaulted. We all know what the fallout looked like: banks faced failure, companies dealing in the derivative market went belly up and taxpayers had to rescue American banking institutions lest the very core of the financial system should be forced into receivership.

               A real, smoothly-working economy would have eliminated speculation entirely, either by prohibiting it or taxing it to the point where it becomes uninviting.

               But it’s hard to imagine how that could happen. We are so attuned to the gambling temperament by now that eliminating the prospect of unearned, windfall rewards in the marketplace would kill investment outright and quickly. And once you’ve decided to live in a casino, you apparently have to play by the rules of the casino.

               Pity.

Slippery slope time - again

confluence/divergence

Feelings of frustration happen when circumstances block people’s ways to whatever goals they’d imagined. That many people should be living with mounting frustration at this time is not surprising, given the economic uncertainties. Prolonged frustration is like a cancer that eats away at the human spirit and when fed with a diet of bad news and very little prospect of change over time, it’s not surprising that frustration turns into rage. If frustration is the kitten, then rage is the tiger.



Frustration and rage can only live in a free-floating state for so long before they need to find some island on which to settle. In economically depressed, post WWI Germany, one island on which rage settled was Jewry, and we all know the end of that story. Once the cause of the frustration has been named and endorsed by a critical mass of others similarly frustrated, the running shoes are on and the stampede begins.


There’s plenty of frustration in the news these days. In North America (and to varying degrees, the rest of the world), a scary economic collapse in 2008 was bad enough, but followed by a period when little was heard except the good news of the recovery, the stagnation that turned out to be the fact pushed many people from frustration to rage. Demonstrations against government cuts to curb deficits got downright ugly in France and Greece particularly, and made us wonder if they were precursors to something really dangerous over here. 


Most of the media commentary on the economic situation here in Canada has been pretty cool and sane to this point. But there are signs that ideologues are working hard to point the rage of the masses toward certain targets. John Gormley is known for his right-wing views and in a recent column commenting on airport security, he couldn’t resist: Many of the people griping loudest about the imaging scanners and searches come from the new class of the special — those pampered, cherished, “ all about me” narcissists who continually star in their own movie and cling to the illusion that life really is all about them. (Saskatoon StarPhoenix, November 19, 2010, p.3) The labelling is clearly evident here; it points people toward a target against whom their rage would appropriately be directed.


In the USA, right-wing radio and television, the Tea Party phenomenon and all that goes with that have been much more clear about which targets people ought to blame for their frustrations. It’s the philosophical liberals in the country, represented by a) the Democrats, b) people who tolerate abortion, homosexuality and same-sex marriage and c) Muslims and anyone whose name sounds kind of Islamic. The fact that this is still a pretty big pond only means that the rhetoric is still waiting to find a clear focus. In a diatribe circulated on email networks called “I’m 63 and I’m Tired,” former contender for the Republican presidential nomination and a former district attorney on CSI Miami, Robert A. Hall names some of the islands on which the vultures of rage are invited to land. Here’s a sampling:


I'm tired of being told I must lower my living standard to fight global warming, which no one is allowed to debate. My wife and I live in a two-bedroom apartment and carpool together five miles to our jobs. We also own a three-bedroom condo where our daughter and granddaughter live. Our carbon footprint is about 5% of Al Gore's, and if you're greener than Gore, you're green enough.

 I'm tired of being told that drug addicts have a disease, and I must help support and treat them, and pay for the damage they do. Did a giant germ rush out of a dark alley, grab them, and stuff white powder up their noses while they tried to fight it off? I damn sure think druggies chose to take drugs. And I'm tired of harassment from cool people treating me like a freak when I tell them I never tried marijuana.


I'm tired of illegal aliens being called "undocumented workers," especially the ones who aren't working, but are living on welfare or crime. What's next? Calling drug dealers, "Undocumented Pharmacists"? And, no, I’m not against Hispanics. Most of them are Catholic, and it's been a few hundred years since Catholics wanted to kill me for my religion. I'm willing to fast track for citizenship any Hispanic person, who can speak English, doesn't have a criminal record and who is self-supporting without family on welfare, or who serves honorably for three years in our military.... Those are the citizens we need.


Again, the pond is still pretty big, and as much as Hall may protest that, for instance, he is “not against Hispanics,” just being mentioned in this vitriolic dissertation is signal enough for some people.


I guess there is such a thing as being angry at oneself, but we don’t readily raise our hands and admit that, “I’m sorry; I did it.” Seems to me the economic morass is a direct consequence of far too many people - right, left, gay, straight, liberal, conservative - giving basic greed free rein for too long.


Be wary of people who name an enemy that doesn’t include themselves; we’re on a slippery slope here, folks.

Welcome to the next recession

Autumn that was

Who made this mess? (copyright reserved)


By George Epp

Are you puzzled by the current economic misery gripping people-with-money these days? Are you confused by the fact that—although the economic landscape in your neck of the woods appears much as it did yesterday—all the news on the international front is insisting that we’re in for difficult times?

In the most recent issue of The Christian Century (October 21, 2008) Economics teacher at Wheaton College, James Halteman, explains what has happened nationally in the US to cause this international economic influenza. In summary, US financial institutions have been selling bond issues backed by mortgages with sub-prime interest rates, which mortgage brokers have been peddling like magic hula hoops. Inevitably, buyers of homes with far-too-generous conditions have had to walk away from their purchases, flooding the market with unsaleable homes, driving down the values of real estate, subsequently driving down the value of the bond issues, decimating the cash flow through the various lending institutions, consequently making it nearly impossible for many developers, manufacturers and exporters/importers to do business. The resultant state of panic has decimated the value of stocks and bonds, and has resulted in widespread selling-out behaviour, the curtailing of consumer confidence and the long skid down the recession slope.

Halteman’s conclusion: “Regulation of the financial markets needs to be updated—something that has been hindered by an anti-regulatory political climate.” That may be the understatement of the week.

I was told yesterday about a well-to-do Christian who is in a blue funk these days because the economic collapse has cost him massively. One presumes that his investments have tanked and the loss is on paper and might be regained if he holds on for the long term. But I have to wonder: What is an active Christian doing in the stock market anyway? The poorly-regulated way in which those institutions function these days means that they are less about acquiring an interest in the economic engines of the country in order to further common goals, and more about getting rich through non-productive, speculative behaviour. Take derivatives, for instance, buying and selling of futures, etc. This behaviour wouldn’t be so reprehensible if it weren’t for the fact that it “bets” with the common currency that you and I depend on to feed our families and further worthwhile goals, like schools, hospitals, art galleries.

I read on my currency that it is the property of the people of Canada through the Bank of Canada. How is it that we allow the misuse of our common currency by shysters who demand the right to unregulated speculation with it?

It’s time for big changes. Halteman is right. Trouble is, we’ve just re-elected a government that is congenitally gun-shy when it comes to market regulation. Let’s see what this whole mess leads to; with any luck we’ll come out smarter on the other side.