~ read it ~
today, january 27, 2009, is budget day
the feds will post an $83 BILLION deficit
every man, woman, and child will contribute
to the erstwhile capitalists who pissed it away
while the bosses raked in millions
~ . . . and weep! ~

by TREVOR W. HARRISON
                Finance Minister Jim Flaherty is said to be contemplating a mix of infrastructure spending and tax cuts in his upcoming budget, while also pressuring banks to loosen their purses. Irrespective of the pros and cons of each approaches, the fact is all three fail to recognize the role social inequality has played in the current economic crisis.
                Now, I can hear you saying, "What?" To connect the dots, we have to go on a time travel.
                Our first stop is the late 1970s. It's the launch of globalization. Margaret 'Thatcher and Ronald Reagan are waving the good ship out to sea, proclaiming a new age of freedom ~ freedom, that is, for finance capital to roam wherever its owners want, to do whatever they please. Left stranded at every dock, however, are workers whose bargaining pow­er has eroded and who find themselves pitted against each other, both within countries and across borders.
                A few numbers illustrate the point.
                In 1975, the ratio of CEO pay to that of workers in the United States' largest publicly traded companies was 41 to 1. In 1990, the ratio was 85 to 1; in 1995, 197 to 1; in 2000, 365 to 1; and by 2004, 431 to 1.
                Keep in mind, however, that these ratios refer to mainly unionized jobs. Union jobs are generally better paid, with non-­union wages carried along in the tide, but under globalization the reverse hap­pened. As union wages fell, non-union wages also declined.
                By 2005, the average CEO in the U.S. earned $11.8 million per year, compared with the average wage of American workers (union and non-union) of $27,460.
                But it didn't stop there. As workers' wages dropped, so also did social al­lowance payments to the non-working poor. Today, the top five per cent of Amencans possess roughly 40 per cent of all America's wealth.
                The same has occurred in Canada and elsewhere. A recent report by the Canadian Centre for Policy Alternatives shows that CEO salaries in Canada rose from 104 times the average income of Canadians in 1995 to almost 400 times today; or, in concrete figures, over $10 million per CEO compared with $40,000 per average Canadian working full time.
                A 2006 report of the World Institute for Development Economics Research showed that the richest two per cent of adults in the world own more than half of global household wealth, while the bottom 50 per cent owned only one per cent of global wealth.
                In short, the rich got richer, and the very rich got very richer, while the poor got poorer, and the middle classes strugled.
                What does this have to do with the current economic crisis? The second stop on our time travel is Henry Ford's auto asssembly plant. The year is 1914. Ford has just announced he is raising his workers wages to a then unimaginable $5 per day (minimum). His competitors are angry and declare him "mad," but Ford remarks that he has to pay his workers well so that they can buy his cars.
                Ford was no friend of labour, but he understood something that many others missed ~ that a virtuous relationship a was emerging between production and consumption; that, in order to clear the shelves of all the wonderful things that a modern had to have money.
                Still, there was a problem. Ford's assembly line was intended to increase production while laying off workers, what is known as "efficiency." But laid-off workers cannot buy the products ~ a lesson proven during the 1930s' Great Depression, our next time stop .
                Looking at the human wreckage, economist John Maynard Keynes arrived at his own solution, one designed as he admitted to save capitalism from itself: the welfare state. Thus were created a vast array of programs that put money in the hands of people ~ things like unemployment insurance, pensions, public works, retraining programs, social as­sistance, etc.
                Keynesianism took a hit after the 1970s, however, replaced by Milton Friedman and his acolytes. The age of globalization had begun.
                Today, we are back where Ford and Keynes knew we must end up if we did not deal with the problem of over­production.
                Until recently, banks, money managers, and New Right politicians (including most liberals) thought they had the answer. So what if people had less money to spend? Offer them easy, and even easier, credit. Happy millions of people soon entered into debt servitude.
                There's an old saying, now adjusted to inflation, that if someone owes the bank a thousand dollars, it's their problem; but if they owe the bank a million dollars, it's the bank's problem. The banks have now handed the problem off to governments, who ultimately must carry the blame for having allowed capitalist markets to run wild.
                So, what's the solution? Certainly not going back to unregulated credit or giving tax cuts to those who already have money.
                A better solution is to increase the real wages of average Canadians.
                But for this to happen, governments must start representing the interests of workers, not just banks, shareholders, and CEOs.
                Likewise, governments need to work for the least of those in society ~ the unemployed, the damaged, and the old ~ through a reinvestment in social programs. It's time, in short, to put money in the hands of those who need it and, because they need it, will spend it.

Trevor W. Harrison is a political sociologist at the University of Lethbridge and southern Alberta research co-ordinator for Parkland Institute
trevor.harrison@uleth.ca

       Satyajit Das is not your average banker ~ he does not have a mobile phone. "There are so many interesting things to do with your time," says Das, 54, who is passionate about cricket, reading, music, travel and wildlife.
       He has had less time for leisure pursuits after Traders, Guns & Money was published in 2006 and he delivered a prescient speech in the US and Australia on "the coming credit crash".
       Now he has written another book that analyses the global market upheavals which, he says, are an inevitable result of "Botox economics" where deep-seated global financial problems were temporarily covered up by government bailouts and stimulus packages.
       Das immigrated to Australia from India with his parents in 1970, aged 12. After 10 years with CBA, Citicorp and Merrill Lynch, Das joined transport giant TNT in 1988 and spent six years as its treasurer during its debt-driven expansion, near collapse and restructure. Since he left TNT in 1994, Das has worked as a derivatives and risk-management consultant to governments, companies and regulators around the world, as well as writing textbooks.

1.03  australia dollar
1.00  canadian dollar
0.96  us dollar
0.96  bahamas dollar
0.79  new zealand dollar
0.78  singapore dollar
0.55  fiji dollar
0.48  barbados dollar
0.36  caribbean dollar
0.15  trinidad dollar
0.13  hong kong dollar
0.03  taiwan dollar
0.01  jamaica dollar

and for comparison:
1.40  euro
1.14  swiss franc
0.15  yuan

            this money - no longer a medium of exchange and without intrinsic value greater than toiletpaper, yet purports to be a product traded in an unreal market (existing only virtually) which sets a rate of exchange without regulation, restriction or oversight

                In a village in Somewherea, everyone shares a set of skills and their produce is derived from local natural resources. Through custom or inclination each person pursues a particular trade, but is capable of pursuing any other in the village. These people exchange their products on a regular basis. Each would know how long it took their fellow to produce their good, and how long it would take them to make it themselves. They would also know how much of their own product they would produce in the same amount of time and how much they would be able to exchange for that product. If anyone tried to overcharge for a good, people would stop buying and make it themselves (or a competitor could enter the market and undercut them). Each person would thus be able to calculate whether it would be better for them to buy a good or make it themselves. In this scenario prices and values would be equal.
                (Friedrich Engels advances such a conceptual model in his Appendix to Marx' Capital v. III)