Tuesday, May 15, 2012

Thoughts about the economy

My friend Jon asked me to explain to him the role of credit rating agencies in the global economy.  It got me thinking: I sure have a lot to say about the global economy even without a finance degree.

I posted this video on my Facebook wall last night and commented that, "it has become more apparent than ever why people need to opt out and live simply. The Greeks are right to fight against complacency and eternal servitude. If increasingly austere measures are the trade-off for more loans, then it's time to revert back to the feudal system and call a spade a spade."

The Northern Hemisphere was thisclose to an economic catastrophe back in 2008, yet Canada's Tories think our slightly more regulated banking system shields us from the worst of the storm. But as that video details (her dad knows good PR!), Canada is at the mercy of private banks, too.  Although credit is an integral component of modern-day capitalism, why must they be doled out by banks with investment branches created for the sole purpose of making more money? It boggles the mind how companies are capable of quickly moving billions of dollars across borders and how quickly they can lose billions of dollars out of sheer stupidity and hubris.

I once scheduled a meeting between Jamie Dimon and my then-boss, which was preceded by a fancy luncheon on Park Avenue in New York City.  I coordinated the trip with another JPMorgan executive and it had the feel of a casual stroll to the Oracle of Delphi (although we all know the real oracle lives in Omaha).  I think my boss went there looking for investors, so I understand the importance of loans to help build and expand businesses (empires?), but must they be so excessive and destructive to the point of enslavement?

Only twelve years into the new century and the whole world has run afoul. It really is a shameful time we live in. On a personal level, I am taking jobs out of desperation, which atrophy the skills I was trained to do. On a macro level, the European Union is on the brink of breaking apart due to the unchecked greed and naive optimism of those fluent in jargon. Everywhere you look, youth employment is pitiful (though there's no shortage of Baby Boomers and Gen X'ers arguing laziness is the cause).

Canada's Finance Minister Jim Flaherty spoke out recently about putting strict conditions on Employment Insurance -- yes, insurance that employees and their employers pay into. He seems to think it's a government welfare program. Hey, Jim? Rather than forcing people to take jobs that are across the country for shitty pay, why don't you increase the minimum wage so people don't have to rely on desperate measures? What an SOB.

This is Canada, for fuck's sake! The land of hockey, maple syrup, and... uh, political cronyism, apparently.  I can't believe this is the country I grew up in: The authoritarian rhetoric, the corporate shenanigans, the anti-environmental discourse, and the place where wealthy investors (rather than immigrants with actual skills) are welcomed.  Ugh ...

As general as this sounds, I've always maintained the 1980s is to blame. Those were the formative years for people now in charge and its values -- work hard, play hard -- stayed with them long past its expiration date.

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