Watching another stirring speech from President Obama I put on my old-guy hat. He was describing his new plan to save home owners threatened with foreclosure. Again I donned that sense of superiority that I have been there. It's deja vu all over again. There is nothing new about the crash in home values. There is nothing new ab0out people walking away from properties that are no longer worth as much as the mortgage against them. In the long-ago and best-forgotten time of absurd interest rates (over 20%) there was the Farm Gate Crisis. (Not to be confused with all the crises that are named "...gate" after Watergate.) These go back to the high interest times when farmers were abandoning their farms; when they were marching on Ottawa demanding some kind, any kind, of help.
All I say is that there is nothing new about the current mortgage crisis, a crisis peculiar to the United States where buccaneer lending has been rampant. (We shouldn't get too smug because with bad times many people here will be hard-pressed to pay their mortgages, but the situation is not the same as the one 9in the U.S.)
So, under the now-tired heading of "Been there Done That" I remember the housing slump of 1960-61, another in I think '82 and the last one in '92. Home values had risen meteorically. Everyomne was euphoric. Then the air went out of the balloon and we came back to earth. There was a saying that applied to business, but it applies equally to home ownership: "Who is the smartest person in business?" Ansewer: "The second last owner of a hotel in Nassau." (The Bahamas was, when the saying was current, a hotbed of investor speculation.)
So someone got rich while prices were on the rise. Someone, and there were many of them, got out before the crash. Many however, consumed by the idiotic notion that what went up would never come down but would continue to rise, got stung.
Obama hit the constrution nail on the head: too much supply and a dimishing number of buyers. The supply comes from the abundance of newly reposssessed houses being sold under "power of sale" for a fraction of their one-time value. (But you know all this.) The President clearly wants to reduce the supply by stopping the spiral of foreclosures.
Ask any retailer what happens to the market for his product when a competitor goes bankrupt and the receiver sells the stock through a liquidator. There is a sudden bargain-basement supply of the very product the retailer is trying to sell. In some cases the bank will not allow the liquidator to go in but will try to sell the bankrupt stock to other retailers in the sasme business, just to keep the prices from collapsing.
Nexr point: why do so many people equate success with home ownership? What is so wonderful about "owning." In a previous piece I wrote for this spae,I commented that the "owenershjip society" of George Bush helped bring about the rush to buy a home whether it made financial sense or not.
Simple question: the people who have been foreclosed on or who have simply upped and left - where are they living now? In the basement of their parents' home?
What has been done to use offer those foreclosed homes as rental properties? What moves have been made to tell the family that can no longer pay the mortgage, stay in the home and we'll rent it to you.
It may be a goofy idea, but something has to happen to oversupply in an under-demand economy. Millions of people delay purchases which further clogs the market with supply. But look out - all that pent up demand will have to go somewhere. When it does, the spiral will resume. Unless more people refuse to jump on the bandwagon of consumer insanity and actually "save" their money.
Wednesday, February 18, 2009
VANISHING NEWS MEDIA??
I nearly fell off my chair the other evening watching Global News make themselves look stupid. But I'll get to that later.
First: a day hardly goes by without some "wailing and gnashing of teeth" over the decline and demise of daily newspapers. The malaise has filtered down to TV network news, which is being battered(as are the newspapers) by the internet. Most of what is written about the decline is self-serving boilerplate. It wails about how corporate ownership cares nothing about journalism. It weeps over the loss of readers and viewers under the age of 40. Evidence of that decline is clear. Watch TV News, especially the U.S. networks. Almost all the commercials are for aches and pains and osteoporosis and erectile dysfunction - all "maladies" prevalent among older viewers.
Newspapers have for years lamented that their audience is dying of old age. The same is evident in attendance at jazz concerts (real jazz, not "fusion" which may be everything from rap to hip hop) classical music concerts - where the only younger people are probably music students. New York's Metropolitan Opera is in a deep hole. La Scala in Milan is kept going by government subsidies and tourists.
The mourners are right. Interest in conventional news media is diminishing. The shrinkage is accelerated by the feckless rush toward making the media more youth-friendly. The rush to lure a younger demographic (see CBC Radio) has left thousands of listeners, viewers, readers stranded.
But there is another wide to it all. Many years ago when the Davey Commission on Media (Senator Keith Davey) met to examine the decline (this was almost 40 years ago!) of media, one of the pronouncements made by Senator Davey was that many people in the media (print and electronic) knew much less than their readers/listeners/viewers.
The word is: credibility. Of course you say, the New York Times or the Washington Post or the Globe and Mail present a high standard of journalism and, aside from differences of opinion) do not insult the intelligence of their readers.
But print media have suffered more than anywhere else, by a loss of revenue from the cash cow: classified advertising. It's virtually gone.
Back to the top of this item. Credibility. I have the greatest sympathy for the financial woes of Canwest Global TV. Yes their revenuea are down. Yes, they have cut staff. Yes, they made reckless acquisitions that haemmorhage money. But there is, lamentably, more. There is credibility.
Monday February 16th was Canada's new "Family Day." Along with President's Day in the U.S., both stock markets were closed. I watched Gobal National on that Monday evening. The news reader announced: "Here are today's financial numbers." Up on the screen pooped the index for TSX and the Dow. They were correct, except they were Friday's close! I waited patiently for the news reader to apologize for the gaffe. There was nothing. The next day I tuned in again, hoping for some recognition that they had goofed. Nothing. I EMailed my complaints. Response? Nothing.
What is worse - that the TV News people didn't recognize their mistake, or that the audience was compliant and said nothing?
Yes, there are problems for the media. But those problems are aggravated by a precipitous drop in credibility. And oh yes - one last jab: did anyone tell the august host Kevin Newman that there is no such word as "mis-cheev-ee-us."
First: a day hardly goes by without some "wailing and gnashing of teeth" over the decline and demise of daily newspapers. The malaise has filtered down to TV network news, which is being battered(as are the newspapers) by the internet. Most of what is written about the decline is self-serving boilerplate. It wails about how corporate ownership cares nothing about journalism. It weeps over the loss of readers and viewers under the age of 40. Evidence of that decline is clear. Watch TV News, especially the U.S. networks. Almost all the commercials are for aches and pains and osteoporosis and erectile dysfunction - all "maladies" prevalent among older viewers.
Newspapers have for years lamented that their audience is dying of old age. The same is evident in attendance at jazz concerts (real jazz, not "fusion" which may be everything from rap to hip hop) classical music concerts - where the only younger people are probably music students. New York's Metropolitan Opera is in a deep hole. La Scala in Milan is kept going by government subsidies and tourists.
The mourners are right. Interest in conventional news media is diminishing. The shrinkage is accelerated by the feckless rush toward making the media more youth-friendly. The rush to lure a younger demographic (see CBC Radio) has left thousands of listeners, viewers, readers stranded.
But there is another wide to it all. Many years ago when the Davey Commission on Media (Senator Keith Davey) met to examine the decline (this was almost 40 years ago!) of media, one of the pronouncements made by Senator Davey was that many people in the media (print and electronic) knew much less than their readers/listeners/viewers.
The word is: credibility. Of course you say, the New York Times or the Washington Post or the Globe and Mail present a high standard of journalism and, aside from differences of opinion) do not insult the intelligence of their readers.
But print media have suffered more than anywhere else, by a loss of revenue from the cash cow: classified advertising. It's virtually gone.
Back to the top of this item. Credibility. I have the greatest sympathy for the financial woes of Canwest Global TV. Yes their revenuea are down. Yes, they have cut staff. Yes, they made reckless acquisitions that haemmorhage money. But there is, lamentably, more. There is credibility.
Monday February 16th was Canada's new "Family Day." Along with President's Day in the U.S., both stock markets were closed. I watched Gobal National on that Monday evening. The news reader announced: "Here are today's financial numbers." Up on the screen pooped the index for TSX and the Dow. They were correct, except they were Friday's close! I waited patiently for the news reader to apologize for the gaffe. There was nothing. The next day I tuned in again, hoping for some recognition that they had goofed. Nothing. I EMailed my complaints. Response? Nothing.
What is worse - that the TV News people didn't recognize their mistake, or that the audience was compliant and said nothing?
Yes, there are problems for the media. But those problems are aggravated by a precipitous drop in credibility. And oh yes - one last jab: did anyone tell the august host Kevin Newman that there is no such word as "mis-cheev-ee-us."
Sunday, February 8, 2009
PARDON ME FOR PREACHING
You don’t go to the movies to learn. You go to be entertained either to be giddy from comedy or moved by drama, but the effect is ephemeral, transitory, unsubstantial.
Even when I see a film that has moved me, I get over it. By the time I arrive home we are talking about other things. That’s most of the time- but just once, it didn't worked that way.
I love movies. I always have. I learned about what I thought was life, life from movies. My earliest heroes were movie heroes. Errol Flynn as Robin Hood, sweeping Olivia de Havilland as Maid Marion, off her feet. In fact, I once thought I would write a book about it. I had the title” Errol Flynn Was My Favourite Actor.” It was to be a book about how an entire generation was socialized by films. We learned to woo like Flynn, smirking, knowing, sexy. or to kiss like Gable or strut like Cagney. They were life lessons.
The book I planned would describe how an entire generation was fueled by what happened on the screen. How to kiss. How to phone for a date. How to dance provocatively. How to hitchhike like Claudette Colbert in "It Happened One Night." The performers were models. The book never got written, although I did write a short column using the Errol Flynn title.
Even pictures that move you Like “Schindler’s List,” where the audience sat numb and speechless when it ended, do not make a lasting impression.
But today I learned something. For years I have tracked my own feelings about gambling, about the thrill of being a high roller at Vegas, about the compulsives who throw away their lives on dice or horses, and even about the apparent ethnic bent reflecting how the otherwise industrious Chinese, seem to be historically drawn to gambling.
Then I saw “21.” The story was not new tome. I had seen the original, a documentary about n MIT professor who trained a group of very bright students to “count” at blackjack and win.
The movie crystallized all my antipathy toward gambling because it focused on the one element (obvious perhaps to you) that had always eluded me: corruption.
Many of the people I know head for Vegas because they love the action. Harmless they say and a lot of fun.
I have always seen it as a far more sinister intrusion on values, values that are discarded at the door of some grotesque imitation of Venice, or Paris, or Egypt. But that is too moralistic because it makes me sound like a holier-than-thou critic.
When I watch the “Ocean” series, what always impresses me is how “cool” the people are. They are in a class of their own, total cool, total luxury, total knowing, total winning. They are the guys who run things.
But it was “21” that exposed for me the underlying tragedy of the Casino culture: corruption. Yes, many of the people who got rich in the beginning of Las Vegas development were innately corrupt – gangsters, hoods, killers, gunsels, and “wise guys.”
But Vegas today, along with every other casino from Monaco (super cool James Bond cool) to Niagara Falls to Atlantic City – exemplify the depths of corruption. Human caring is corrupted. Human resources are corrupted. Minds and hearts are corrupted.
In fact, what I see everywhere around me is gambling. TV commercials by the hundreds selling the “virtue” of getting what you want with a lottery ticket, or leaping joyfully in the air at Casino Rama.
We have created an entire generation of people who have grown up with sanitized, acceptable, socially acclaimed gambling. We have even made winning poker players into rock stars, exalting their “achievement” on world poker tournaments being featured by TV sports channels! When did poker become an athletic competition? We have made it legitimate, like getting a degree in engineering or medicine..
But, as in that movie, one of the only movies I have even seen that left me thinking, I see the corruption. It is a corruption that goes far beyond greed. It is a corruption that goes far beyond entertainment.
It is the height of cool. Everyone wears $2,000 suits. All the woman have huge breasts, All the cars are new and either sporty or stretched, and all the fountains do a dance that makes Versailles fountains look like they dance the polka.
It used to be that it was “If you can make it here – you can make it anywhere.” That referred to New York, where the prize was Pulitzer or Emmy. But corruption has changed the location to Vegas. And “making it” has nothing to do with achievement or brains or hard work.
Nothing more clearly emphasis and puts capital letters on Something For Nothing.
By the way, when I was eight years old and, courtesy of my stars-in-her-eyes mother, attended acting classes, people would ask me what I wanted to be when I grew up. Answer: a movie star!
Even when I see a film that has moved me, I get over it. By the time I arrive home we are talking about other things. That’s most of the time- but just once, it didn't worked that way.
I love movies. I always have. I learned about what I thought was life, life from movies. My earliest heroes were movie heroes. Errol Flynn as Robin Hood, sweeping Olivia de Havilland as Maid Marion, off her feet. In fact, I once thought I would write a book about it. I had the title” Errol Flynn Was My Favourite Actor.” It was to be a book about how an entire generation was socialized by films. We learned to woo like Flynn, smirking, knowing, sexy. or to kiss like Gable or strut like Cagney. They were life lessons.
The book I planned would describe how an entire generation was fueled by what happened on the screen. How to kiss. How to phone for a date. How to dance provocatively. How to hitchhike like Claudette Colbert in "It Happened One Night." The performers were models. The book never got written, although I did write a short column using the Errol Flynn title.
Even pictures that move you Like “Schindler’s List,” where the audience sat numb and speechless when it ended, do not make a lasting impression.
But today I learned something. For years I have tracked my own feelings about gambling, about the thrill of being a high roller at Vegas, about the compulsives who throw away their lives on dice or horses, and even about the apparent ethnic bent reflecting how the otherwise industrious Chinese, seem to be historically drawn to gambling.
Then I saw “21.” The story was not new tome. I had seen the original, a documentary about n MIT professor who trained a group of very bright students to “count” at blackjack and win.
The movie crystallized all my antipathy toward gambling because it focused on the one element (obvious perhaps to you) that had always eluded me: corruption.
Many of the people I know head for Vegas because they love the action. Harmless they say and a lot of fun.
I have always seen it as a far more sinister intrusion on values, values that are discarded at the door of some grotesque imitation of Venice, or Paris, or Egypt. But that is too moralistic because it makes me sound like a holier-than-thou critic.
When I watch the “Ocean” series, what always impresses me is how “cool” the people are. They are in a class of their own, total cool, total luxury, total knowing, total winning. They are the guys who run things.
But it was “21” that exposed for me the underlying tragedy of the Casino culture: corruption. Yes, many of the people who got rich in the beginning of Las Vegas development were innately corrupt – gangsters, hoods, killers, gunsels, and “wise guys.”
But Vegas today, along with every other casino from Monaco (super cool James Bond cool) to Niagara Falls to Atlantic City – exemplify the depths of corruption. Human caring is corrupted. Human resources are corrupted. Minds and hearts are corrupted.
In fact, what I see everywhere around me is gambling. TV commercials by the hundreds selling the “virtue” of getting what you want with a lottery ticket, or leaping joyfully in the air at Casino Rama.
We have created an entire generation of people who have grown up with sanitized, acceptable, socially acclaimed gambling. We have even made winning poker players into rock stars, exalting their “achievement” on world poker tournaments being featured by TV sports channels! When did poker become an athletic competition? We have made it legitimate, like getting a degree in engineering or medicine..
But, as in that movie, one of the only movies I have even seen that left me thinking, I see the corruption. It is a corruption that goes far beyond greed. It is a corruption that goes far beyond entertainment.
It is the height of cool. Everyone wears $2,000 suits. All the woman have huge breasts, All the cars are new and either sporty or stretched, and all the fountains do a dance that makes Versailles fountains look like they dance the polka.
It used to be that it was “If you can make it here – you can make it anywhere.” That referred to New York, where the prize was Pulitzer or Emmy. But corruption has changed the location to Vegas. And “making it” has nothing to do with achievement or brains or hard work.
Nothing more clearly emphasis and puts capital letters on Something For Nothing.
By the way, when I was eight years old and, courtesy of my stars-in-her-eyes mother, attended acting classes, people would ask me what I wanted to be when I grew up. Answer: a movie star!
REMEMBERING ALVIN TOFFLER
The 60s were probably best defined by Alvin Toffler's best-selling "Future Shock." It was the most notable book among a rash of "futurist" books, i.e. books that looked at where we are headed and what tomorrow will bring.
We didn't respond. Oh we read the book all right, but we plodded ahead as if nothing had changed. Neither Canada or the U.S. had any really forward-looking economic policy. We were (and still are) even worse, simply because we are spoiled by the natural riches we are endowed with. As long as we could dig out iron ore and gold and copper and coal and wheat and potash, we would be fine. Economists railed against government (all of them) that seemed content to allow us to be hewers of wood and drawers of water. That is not to say that we failed in all ways to create "added value" to our exports. But for the most part we exported (and still do) raw iron ore, unprocessed wheat, and raw logs. The bounties of nature have made us lazy.
(How did we ever came up with the Ottawa-based hi tech industry or the wealth of techies in the Kitchener-Waterloo area? In Ottawa it was ex-pat Brit Terry Mathews who led the charge. In K-W it was another immigrant who created the beloved Blackberry. And there is still a guy here, he seems forgotten, who works to sell his high efficiency battery for electric cars.)
Those are my caveats. They are few and far between. But - back to Toffler.
Ten years after "Future Shock" came "The Third Wave." What it said essentially was that the the Indutrial Revolution was over and that the Information Age was upon us.
That was nearly 30 years ago!!
So today as we (and the U.S.) languish in the clutches of a horrible recession, we seem stuck in a dying age: industrial jobs. I am not advocating that we abandon production, that would be not only bitter medicine, it would be an economic catastrophe. So we will be obliged to defend, subsidize, and resuscitate what is left of our auto industry. The efforts, especially In Ontario, to re-train obsolete workers, will not succeed if for no other reason than that laid off workers cannot suddenly be propelled into hi-tech because they are educationallly disadvantaged.
The retraining will put the accent, not on I.T. or other highly skilled service jobs, but on trades - plumbing, carpenty, electrical, diesel mechanics. All good stuff, but hardly the weapons of massive recovery and regeneration.
The question therefore is: can we re-invent the past? Can we make change retroactive? Can stimulus packages do more than prime the pump? We all know the answers to those questions. The real question is: will there be long term plans to re-create the way we function? Obama is sniffing at the truth by planning to pour billions into education. But are we going to return to the 60s when we promised (with scant results) to educate our children in sciences that we already being dominated by the oriental Pacific Rim and by the South Asians?
Spoiled we are. It can't matter to me at my age. But it will matter to my grandchildren.
There will be those who say that we all have to pay for oour past failures; that we will all have to lower our expectations; that we will all have to tighten our belts. Unfortunately, as I have said many times, belt-tightening affects the ones who have little room to tighten. The affluent (who must share responsibility for our policies) will hunker down and wait things out, getting another year out of their BMWs.
We didn't respond. Oh we read the book all right, but we plodded ahead as if nothing had changed. Neither Canada or the U.S. had any really forward-looking economic policy. We were (and still are) even worse, simply because we are spoiled by the natural riches we are endowed with. As long as we could dig out iron ore and gold and copper and coal and wheat and potash, we would be fine. Economists railed against government (all of them) that seemed content to allow us to be hewers of wood and drawers of water. That is not to say that we failed in all ways to create "added value" to our exports. But for the most part we exported (and still do) raw iron ore, unprocessed wheat, and raw logs. The bounties of nature have made us lazy.
(How did we ever came up with the Ottawa-based hi tech industry or the wealth of techies in the Kitchener-Waterloo area? In Ottawa it was ex-pat Brit Terry Mathews who led the charge. In K-W it was another immigrant who created the beloved Blackberry. And there is still a guy here, he seems forgotten, who works to sell his high efficiency battery for electric cars.)
Those are my caveats. They are few and far between. But - back to Toffler.
Ten years after "Future Shock" came "The Third Wave." What it said essentially was that the the Indutrial Revolution was over and that the Information Age was upon us.
That was nearly 30 years ago!!
So today as we (and the U.S.) languish in the clutches of a horrible recession, we seem stuck in a dying age: industrial jobs. I am not advocating that we abandon production, that would be not only bitter medicine, it would be an economic catastrophe. So we will be obliged to defend, subsidize, and resuscitate what is left of our auto industry. The efforts, especially In Ontario, to re-train obsolete workers, will not succeed if for no other reason than that laid off workers cannot suddenly be propelled into hi-tech because they are educationallly disadvantaged.
The retraining will put the accent, not on I.T. or other highly skilled service jobs, but on trades - plumbing, carpenty, electrical, diesel mechanics. All good stuff, but hardly the weapons of massive recovery and regeneration.
The question therefore is: can we re-invent the past? Can we make change retroactive? Can stimulus packages do more than prime the pump? We all know the answers to those questions. The real question is: will there be long term plans to re-create the way we function? Obama is sniffing at the truth by planning to pour billions into education. But are we going to return to the 60s when we promised (with scant results) to educate our children in sciences that we already being dominated by the oriental Pacific Rim and by the South Asians?
Spoiled we are. It can't matter to me at my age. But it will matter to my grandchildren.
There will be those who say that we all have to pay for oour past failures; that we will all have to lower our expectations; that we will all have to tighten our belts. Unfortunately, as I have said many times, belt-tightening affects the ones who have little room to tighten. The affluent (who must share responsibility for our policies) will hunker down and wait things out, getting another year out of their BMWs.
Friday, February 6, 2009
KEYNES IS BACK
After years of languishing, John Maynard Keynes is back. Not the way he wanted, but in a warped kind of even-though-I-still-believe-in-a-market-economy point of view.
One of the joys of growing old, (and I have said this before) is that your "hindsight" is not based on historic text but on having "been-there-done-that."
Those of us who grew up long before the now-disgraced Alan Greenspan arrived to save the world with monetarism, remember a kinder, gentler, more realistic kind of economics. It was "The Great Communicator" Ronald Reagan, who ennobled Greenspan, gave him the Fed, and promised that "trickle-down" economics would right all economic wrongs. So bizarre that his former opponent for the presidential nomination George Bush senior referred to the principle as "voodoo economics."
Meanwhile, history, and the Republican spin doctors have created the Reagan myth, elevated that bumbling fool to the rank of Savior. Those who believe the current economic chaos harks back to the last eight years of "W" should take a much longer look at the Reagan years when national debt and deficit spending reached all-time highs. Now all the pundits in America, including Paul Krugman, Nobel laureate in economics and Op Ed contributor in the New York Times, are exploding the myth of Reaganomics. There is a new book on the market that proclaims how the Republican brain trust helped make Reagan the most popular president since Roosevelt. It was all spin. The realities are otherwise.
From my youth I remember Keynes. From that same youth I remember the biblical admonition about seven years of plenty followed by seven years of famine. We all remember the Aesop fable about the grasshopper and the ant. The ants were busy storing food while the grasshopper chirped happ0ily in the sunshine and did nothing.
Enough fables. We have corrupted government by corrupting ourselves.
Explanation: governments have discovered that the best way to stay in poower is to give people what they want, or better still, to say they are giving people what they say they want What do George Bush and Stephen Harper have in common? It is the counterfeit populism of statements like: "We believe the average person knows far better what to do with is money that any government." Sounds really good. So the ordinary citizen is given tax cuts. I say "ordinary" with tongue-in-cheek because the tax cuts fall more lavishly on those who need them the least. And the wacky theory that their lavish spending will trickle down has been disgraced. As President Obama said" "We tried that - it didn't work."
Instead of lavishing money on voters during good times then "tightening our belts" during bad times - we should have bveen doing precisely the opposite. I have mentioned this before, that "belt-tightening" always falls to those who can least afford it. Which harks back to what Paul Martrin did to restore fiscal responsibility. He choked those least able to afford it. Which is what Mike Harris did in Ontario, to enthusiastic applause.
Keynes echoed the Biblical admonition. He said that in good times govrnments should accumnulate surplusses so that there will be money to spoend during bad times. It is what came to be called "saving for a rainy day." But that kind of think gets governments voted out and new tax-cut governments voted in.
To some people, clinging to the remnants of market-based reality, my talk is nothing but left-wing heresy. But now,surprise, surprise, the light is dawning everywhere. American politicians are h9olding their noses and voting for bank takeovers, government instrusion into the econonmy, and spending billions to put people back to work.
Simple Keynes: good times = surplus. Bad Times = deficits. And when Jim Flaherty jumps on that bandwagon it is delicious irony - unless, unless you believe that the same government that won power with tax breaks tries to maintain power by spending us into deficits.
The plain fact will always be: it costs money to live in a great country. Someone has to pick up the tab. Even Ronald Reagan was heard to say (as he raised taxes) "There is no such thing as a free ride."
One of the joys of growing old, (and I have said this before) is that your "hindsight" is not based on historic text but on having "been-there-done-that."
Those of us who grew up long before the now-disgraced Alan Greenspan arrived to save the world with monetarism, remember a kinder, gentler, more realistic kind of economics. It was "The Great Communicator" Ronald Reagan, who ennobled Greenspan, gave him the Fed, and promised that "trickle-down" economics would right all economic wrongs. So bizarre that his former opponent for the presidential nomination George Bush senior referred to the principle as "voodoo economics."
Meanwhile, history, and the Republican spin doctors have created the Reagan myth, elevated that bumbling fool to the rank of Savior. Those who believe the current economic chaos harks back to the last eight years of "W" should take a much longer look at the Reagan years when national debt and deficit spending reached all-time highs. Now all the pundits in America, including Paul Krugman, Nobel laureate in economics and Op Ed contributor in the New York Times, are exploding the myth of Reaganomics. There is a new book on the market that proclaims how the Republican brain trust helped make Reagan the most popular president since Roosevelt. It was all spin. The realities are otherwise.
From my youth I remember Keynes. From that same youth I remember the biblical admonition about seven years of plenty followed by seven years of famine. We all remember the Aesop fable about the grasshopper and the ant. The ants were busy storing food while the grasshopper chirped happ0ily in the sunshine and did nothing.
Enough fables. We have corrupted government by corrupting ourselves.
Explanation: governments have discovered that the best way to stay in poower is to give people what they want, or better still, to say they are giving people what they say they want What do George Bush and Stephen Harper have in common? It is the counterfeit populism of statements like: "We believe the average person knows far better what to do with is money that any government." Sounds really good. So the ordinary citizen is given tax cuts. I say "ordinary" with tongue-in-cheek because the tax cuts fall more lavishly on those who need them the least. And the wacky theory that their lavish spending will trickle down has been disgraced. As President Obama said" "We tried that - it didn't work."
Instead of lavishing money on voters during good times then "tightening our belts" during bad times - we should have bveen doing precisely the opposite. I have mentioned this before, that "belt-tightening" always falls to those who can least afford it. Which harks back to what Paul Martrin did to restore fiscal responsibility. He choked those least able to afford it. Which is what Mike Harris did in Ontario, to enthusiastic applause.
Keynes echoed the Biblical admonition. He said that in good times govrnments should accumnulate surplusses so that there will be money to spoend during bad times. It is what came to be called "saving for a rainy day." But that kind of think gets governments voted out and new tax-cut governments voted in.
To some people, clinging to the remnants of market-based reality, my talk is nothing but left-wing heresy. But now,surprise, surprise, the light is dawning everywhere. American politicians are h9olding their noses and voting for bank takeovers, government instrusion into the econonmy, and spending billions to put people back to work.
Simple Keynes: good times = surplus. Bad Times = deficits. And when Jim Flaherty jumps on that bandwagon it is delicious irony - unless, unless you believe that the same government that won power with tax breaks tries to maintain power by spending us into deficits.
The plain fact will always be: it costs money to live in a great country. Someone has to pick up the tab. Even Ronald Reagan was heard to say (as he raised taxes) "There is no such thing as a free ride."
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