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From the desk of David Suzuki

David Suzuki

What’s up with this economy stuff?

By David Suzuki - 21 months ago

I’m not an economist, so when I read the news these days, I find myself going crazy because I just don’t understand what’s going on. For years, two great superpowers, America and the Soviet Union, went head-to-head, one advocating free-enterprise capitalism, the other communism – and the good guys won.

For decades, North Americans have been told that anything smacking of socialism was bad. Indeed, in the U.S. some even feel government itself is an enemy of the people. So government regulation is bad. Socialized medicine is bad. Welfare is bad. Regulation is bad. Trust the free market, we are told.

So what I see is a free market where the main players’ sole function is to make money, and not to provide employment, not to create wealth to provide social services, just to make money, and the more and faster, the better. And boy, it works. Remember Enron?

And now it seems these bright boys in banks had a great idea that I’m too stupid to understand. They believed that the price of real estate will inevitably rise. It was a truth like the second law of thermodynamics. So they arranged mortgages for people with no money and no collateral (some call this NINA, for “no income, no assets”) and then bundled up these mortgages and sold them on the stock market. I’m kinda lost here. And guess what? Property prices faltered, and when the banks came calling, people couldn’t make payments and had to forfeit their property, and the whole house of cards collapsed. But we have a global economy, and this pernicious setup reverberates around the world, so these great scions of free enterprise are now begging the government for taxpayers’ money. Isn’t that welfare? Isn’t that what they tried to stamp out? I just don’t get it.

Another thing: After the oil crisis of 1973 when OPEC flexed its muscles with an embargo, there was huge pressure on Detroit to increase the fuel efficiency of cars. The automakers fought any regulations tooth and nail, but the imposed standards worked, and fuel efficiency rose steadily. But then Detroit found if they put an auto body on a truck chassis, their emissions standards could be those of trucks. SUVs were a money fountain and boy, did they make a lot of money. But then, California politicians decided their pollution problem needed laws to require higher fuel-efficiency standards. What happened? The big automakers, including Toyota, sued California. They’re still suing the state. But now the big three Detroit companies are tanking as gas prices change consumers’ choices. And guess what? The Detroit automakers are begging Washington for money so they can build fuel-efficient cars! I just don’t get it. Would someone please explain it to me?

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Post #1
Mike Barnard Mike Barnard - 21 months ago

...so these great scions of free enterprise are now begging the government for taxpayers’ money. Isn’t that welfare? Isn’t that what they tried to stamp out? I just don’t get it.
 
It's not welfare; it's a hostage crisis. The banks have poisoned the global economy and now they're saying, "Pay up or your little friend here dies!"

Globalization and deregulation have been the cause of this mess, and it's time to reverse course and inject some sanity and humanity back into the global economy. I do believe in free markets, but the free-market economy only functions when there's a level playing field. What we have here is a problem of scale. The multinationals are so big now that they're able to manipulate the playing field itself. We can't just blame them, however - corporations are bound by law to act in the interest of their shareholders. Government regulation is supposed to be the collective voice of the people, acting to counterbalance the ruthless profit-seeking of the private sector. We should be able to draw lines, set limits, slow things down, and prevent the kind of market volatility that ultimately led to the current crisis. But we've grown too comfortable, too complacent, and too apathetic. We've decided that democracy is the job of politicians, that it can take care of itself. Meanwhile, the corporate world has taken advantage of the resulting power vacuum and staged a silent coup.

When I refer to "we," I mean both Canadians and Americans. I'm American, but my girlfriend is Canadian, and she's been filling me in on the political situation in Canada right now. We're both dismayed at the prospect of the Conservatives remaining in power. They seem to have borrowed a copy of the Republican Party strategy guide, and it seems to be working. They're chipping away at environmental protections and free access to information, and it's only going to get worse if Canadians sit idly by. My girlfriend knows far too many Canadians who aren't even going to bother to vote. Canadian voters need to wake up now, before Canada ends up a carbon copy (Ha! Get it? Carbon?) of the US.

It's easier for ordinary citizens to make a difference in Canada than it is in the US. Canada only has about 1/10 of the population of the US, so every Canadian who sees the light has effectively 10 times the political power of an American. So go it! Make a difference! Don't make the same mistakes we did.

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