Monthly Archives: January 2009

Rex Murphy: Where to Spend?

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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!

Bailouts Filling a Bottomless Pit?

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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 .

Two “Laws” of Economics We Need to Break

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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.

US Military Warns of Potential Mexico ‘Collapse’

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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!

Tar Sands & Tankers

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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 .

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