Excited Delirium

Hi folks,

For those of you in the crowd who are MA in Economics, I’ll remind you that we’re just at the beginning of financial collapse.  Shoving your finger, gloves, basketballs, bumpers, old tires, bins full of clothes from Goodwill and even elephants won’t stop the damn from breaking.

I know … it’s a little gloomy, but I don’t feel like I’m being alarmist AT ALL.

This article outlines the facts that back up the notion that, as the song says, ‘we’ve only just begun’.

This is not gloom and doom…. This is reality and the truth. The financial system will not stabilize. It is being deliberately changed. The Treasury is crowding out corporate borrowers in their quest for liquidity, as corporations rush to raise what funds they can to allow them to keep functioning and so that they won’t be absorbed by an elitist mega-company of our new corporatist state. At the same time municipalities are raising all the money they can to keep from going under having far overextended themselves.

I think the punch line of the article is this:  by putting ourselves so substantially in hock to the organizations that will squueze every penny they can from us in terms of interest rates and tight credit, we are surrendering more and more of our freedom (yes, freedom) as we continue down the path of blindly bailing out this company after that.

Save up, pay off and walk away from temptation when you’re out shopping because the only people that will survive this are those who are not spending.

I know I’m a little stale with posting comment on this article (I’m trying to catch up on a number of things, blogging being one of them), but I still wanted to post this for the community that follow Excited Delirium.

I’m a visual person and I found this graphic (warning:  PDF) and summary of creditors and debtors to be the most compelling piece of information associated with this article.

Quickly, the list of debtors are the following:  North America, South America (except Venezuela), Central America, Australia, the Caribbean (except Trinidad & Tobago), Europe (except Luxembourg and Ireland), and most of Asia and Africa.  Summary:  most of the ‘developed’ countries of the world.

With the exemption of a couple of obvious lenders (eg. Luxembourg), the countries that are net creditors seem to fall into three categories:

• Social democracy (eg. Norway)
• Dictatorship
• Oil country (eg. UAE, Oman)

I’m not sure if I’m concerned or inspired by this information.

On one hand, it’s the socialist countries that seem to be doing the best job of pulling themselves out of the debt trap.  They’ve avoided making themselves whores to the lenders of the world, creating a sense of autonomy, and are making efforts to move forward into the future.

Those countries are few.

The more abundant lenders are unstable economies with leaders who have questionable ethics and moral centres.  Are these really the people we want to be indebted to?

The January 27 budget is leaking faster than a flatulent elephant after eating a tonne of beans.

More and more details come out every day, and yet the Conservatives don’t have the courage to present it in the House of Commons.

That said, we’ve seen many trial balloons about several topics and the one that we’ll probably have confirmed at the last minute will be a wide array of new tax cuts.

Just as a reminder, the last ones didn’t work.  I’m still waiting for my two cents from the GST cut and now we’re paying the bill for effectively transferring 2% of all transactions in this country to the pockets of corporations instead of our governments.

And the corporate tax cuts have lead to a whopping volume of new jobs, haven’t they?  Oh yeah … they haven’t .

You see … there’s a reason for this.  Canada is in large part a transplant, subsidiary economy.  We’re whores of our natural endownments, junkies for more investments in primary production and victims of our own resources.

We certainly have lots of manufacturing as well, a great percentage of which is controlled not by Canadians, but by Americans, Europeans and other international decision makers.  They say, we do.

And that gets me to my central thesis:  with so much foreign ownership of the Canadian economy, what’s the point in cutting corporate taxes?  When we cut corporate taxes, all we do is enrich the treasuries of other countries.  We need to find creative ways to fund our own economy and future, thank you very much.

If anything, we need to consider greater taxes for those companies that simply come here to extract and leave holes in the ground, swelling tailings ponds and an abundance of nuclear waste.

In the interest trying to avoid being blind to my own ideology, I could be convinced of tax provisions in one area:  those that protect small businesses.  Let’s say we have a tax exemption for any company in this country that employs 20 people or less and/or has revenues less than $1 million per year.

Another suggestion might be special terms (particularly with respect to property taxes and lease rates) for small businesses that establish themselves in downtown or central areas.  This would clearly favour the creative class, as we tend not to do much manufacturing in our cores.

A reduced tax burden for the people that make a difference in our day-to-day living.  I could live with that.

Hi everyone,

The Government of Ontario is about to write a massive blank cheque to the nuclear industry and we need to tell them no thank you.

Please spread the word about this effort.

60 Days to a new energy future
Do you think Ontarians should have a choice about how we spend $26 billion? Think there are better options than spending that enormous sum on new nuclear projects? Worried that you and your kids are going to end up paying the real costs of always late, always over-budget nuclear projects?
Help us distribute our great new pamphlet to people all across Ontario and get the word out about the need to stop another blank cheque for nuclear. You can order pamphlets from our website at no cost to distribute to your group, your friends, your workmates, and your community. Put them in your local library, community centre or drop in. Leave some in your favourite coffee shop or ask local retailers to put some on their counters (they will end up paying for nuclear cost overruns too).

We only have a couple of months left before Ontario makes a decision about signing another contract for nuclear power that will lock us into this expensive high-risk energy source for another 60 years. You know there are better alternatives. Let’s make it our New Year’s resolution to get off the nuclear treadmill — hit the streets with our new pamphlet instead!

If you’re in Toronto and love to walk, would you help us distribute our leaflets door-to-door in Toronto Centre, Energy Minister George Smitherman’s riding? Please attend one of our Volunteer Orientations and help us flip the off switch on new nuclear

Tues. Jan. 27, 6 – 8 p.m. OR Sat. Jan. 31, noon – 2 p.m. at 519 Church St. Community Centre
To rsvp, or for more info, contact Angela@cleanairalliance.org

Please pass this message on to your friends.
Thank you.
Jessica Fracassi, Communications & Membership Director
Ontario Clean Air Alliance
402-625 Church St, Toronto M4Y 2G1
Phone: 416-926-1907 ext. 245
Fax: 416-926-1601
Email: jessica@cleanairalliance.org
Website: www.cleanairalliance.org
Website: www.OntariosGreenFuture.ca
________________________________________
The Ontario Clean Air Alliance is a diverse, multi-stakeholder coalition of approximately 90 organizations including cities, health associations, environmental and public interest groups, corporations, public utilities, unions, faith communities and individuals. The OCAA’s short term goal is to achieve the complete phase out of Ontario’s four coal-fired power plants by 2010. Our long term goal is to ensure that all of our electricity needs are met by ecologically sustainable renewable sources. Our partner organizations represent more than six million Ontarians.

Interested in volunteering with the OCAA? Please contact Angela at Angela@cleanairalliance.org, 416-926-1907 ext. 246.

I’ve argued for a while that the notion of a draft in the US is illogical for two reasons:

1. It would generate unwanted competition to the $900 per day private contractors such as Blackwater
2. There’s no need for a draft when people are unemployed.

Unfortunately, I’m proven correct on the second reason, as can be seen with this NYT article .

As massive waves of people face unemployment, the number one employer in the US will likely become the military.  While this notion is in conflict with my first assessment, I doubt there will be too much conflict with the idea, since contractors will still be supplying armour, weapons and a host of other goodies for the unemployed.

Rex Murphy, host of the national CBC show called "Cross Country Checkup", is asking Canadians tonight where they should spend their money.

You can all hang up.  I have the top 10 answers.

1. Stop spending any more money on fossil fuels or things that burn fossil fuels.  It’s stupid.
2. Understand that we have an opportunity to institute structural change:  invest in green and invest lots.  Renewable fuels & energy.  Solar retrofits & geothermal installs.
3. Infrastructure, but think in terms of "downtown" and the future.  Light rail transit.  Bike lanes in green spaces.  Fewer roads outside of the core.  And for the city of London (where I am), several over/underpasses so the city doesn’t get choked off by trains.
4. Cut spending on defense to balance any potential deficit spending.  The $500 billion that is planned by the Harper government has never come into question and should.  Why do we spend that money on enterprises that, in large part, aren’t even Canadian?  Because we’re stupid and we’ve bought into the ‘feat factory’.
5. Spend a minimum fixed dollar amount on every single city with a population that’s greater than 100,000 people.  I suggest $100,000,000. Those that have been spending their money wisely can invest in new projects or reducing property taxes.  Those that don’t can at least avoid slashing desparately needed social programs and public infrastructure.
6. Spend a pro-rata amount for cities larger than 100,000 people.  The more people, particularly that are in your downtown core, the more money you get.
7. Stop insisting that projects be given to the private sector first.  It’s a sure way to add 20-30% to the bottom line and cost of new projects and it’s a waste of public money.
8. Make a massive public investment in the communications network.  Bell Canada is doing a very poor job of running it, so Canada should have a new and exceptionally efficient public pipe that anyone can use without being throttled or facing lack of net neutrality.
9. Create a massive public investment in co-ops, non-profits and socially responsible organizations that are committed to the future of this planet.  If it’s not part of their mandate, they don’t get a cent!
10. Fire at least 18 Senators.

There.  Easy.  Now go to it, Jim!

Financial bailouts are doing nothing to remedy a global economy that is facing a structural reckoning.

As evidenced by the Government Accounting Office (GAO) of the United States, massive amounts of the bailout funds are simply being funnelled to offshore locations. Full story here .

One day, people will wake up and say "why are we giving more money to the people who are creating the problem?"

That said, the people who have created the economic crisis are still calling out for more tax cuts and more favourable policies towards corporations.  Not paying their fair share isn’t enough.  They don’t want to pay anything .

OK … they’re not really laws, but they are justifications that the world of economists have used for decades to explain the woes of the world away.

For those of you who haven’t taken a 101 course, here they are:

1. Other things being equal ("ceteris paribus")
2. There are no externalities

We MUST recognize that these ‘rules’ can no longer be discarded.

The first rule is laughable, at best.  ‘Other things being equal’ is a basic requirement that while I’m doing my funky little econometric equations over here, the rest of you 6 billion or so people aren’t allowed to do anything.  The world stops spinning.  People stop aging.  Debt levels don’t change with bailouts.  And so on.

It’s because of this ‘rule’ that companies like Bear Stearns wound up with some of their leveraged assets being leveraged 25 to 35 times the acceptable norm, ignoring for a brief moment the insatiable greed that Wall Streeters collectively exhibit these days (see … I’m making the exception myself and excusing one argument as I make another!).

It’s human nature to want to do things in a vacuum, but guess what:  you can’t.

Now let’s look at number 2:  no externalities.  This is how economists defend equations that allow for manufacturing to grow unimpeded ad infinitum, commodity prices to stay stable over the decades and consumers to just keep ‘moving along with nothing to see here’, despite massive tailings dumps at the Tar Sands, millions of homes expropriated in China for the Ganges Dam project and so on.

There are externalities with everything that we do in life.  If I drive to pick up my family, I create carbon emissions.  If I walk, I wear down my shoes.  However, in the vast great equations of economists, these issues are discarded like a Timmies cup that won’t decompose on the street.

I don’t know what the answer is yet, but I know this:  using these two laws to put the universe on hold while Federal Reserve economists, IMF lawyers and Bank of Canada policy analysts simply won’t work any more.

Things have to change.

Is it me, or are more and more headlines about economies and countries ‘collapsing’?  I know it’s there bread and butter to whip people into panic, but this is starting to feel a little over the top.

Mexico is the most recent victim .

Now, you wouldn’t catch me going to Mexico, given all of the press we’ve had about crime, druglords, kidnappings, etc but is it worth saying that the country is about to be sucked into oblivion or washed out into the Pacific?

I guess this is what happens when neo-Cons take over:  the ‘free’ market swoops in to save the day!

With apologies to the original poster, I believe I got this original story from ProgBlog, but if I’m not giving proper credit to the source, my apologies!

The rest of the series can be found here .