Category Archives: Economics

Evil Socialism and the Green New Deal


The common complaint against the Green New Deal is that it amounts to socialism. In the US socialists are of course on the same plane as child molesters. Nothing they say can be good and nothing that could lead to socialism can possibly be good. Any government largesse in favor of the poor, but not the rich of course, is quickly labelled socialism. When massive subsidies are given to the rich this is not socialism. This is good for business. When farmers get huge subsidies somehow that is free enterprise. After all they deserve those subsidies.  The poor deserve to suffer and therefore should suffer in silence.


The most famous recent example, were the enormous subsidies to the rich by the Bush and Obama administrations after the 2008 financial collapse. This is a good example of what has often been called socialism for the rich.  John Kenneth Galbraith described such actions this way, “Socialism is deeply abhorrent in the culture of contentment but not for the financially most contented.


This is perhaps one of the reasons Galbraith said, in another book, The Affluent Society, “wealth is the relentless enemy of understanding.” That is exactly the reason I am suspicious of their current objections to the New Green Deal. A good recent example of this phenomenon was the massive tax cuts the British Prime Minster Liz Truss advocated and led to her downfall today.  Fortunately, the British did not swallow her arguments.


I admit I am not an economist. That is a gross understatement. I am not trusted to make or endorse cheques or to reconcile our modest home accounts. As a result, I don’t really know if the ridicule heaped on the proponents of the Green New Deal are justified. I just know that I am deeply sceptical whenever I hear the well to do defending their turf.  I want to hear from independent impartial expertise without skin in the game. I will withhold judgment until then.


I wish John Kenneth Galbraith was still around to help. We need clear and independent thinking on this. We should be deeply sceptical about the spokespersons for the rich.

Stock Markets like Monopolies; People don’t


Some people have been surprised that I have been critical of capitalism. I deny that I have been critical of capitalism.   First, let me say, I have been critical of what has happened to capitalism, not capitalism itself. It is appalling what has happened to it. Monopolies are not capitalism. They are predators of capitalism. They destroy capitalism. Subsidies for capitalists are not capitalism either. What we need is capitalism!

 Hari Sreenivasan pointed out to Scott Galloway, “One of the interesting things about the pandemic is that it has been exceptional for the big 4–Google, Apple, Facebook, and Amazon.”

Scott Galloway, a defender of capitalism, and Professor of Marketing, not socialism, agreed, and added this,

If you owned shares in those 4 companies they have risen 47% so far in the pandemic. And it might be just the middle of the pandemic…Markets have spoken. They have said monopolies are good.”

Galloway also said,

“If you think of the market as an organism that absorbs millions of data points and then spits back a verdict, the market is saying those unregulated monopolies and these are fantastic companies, but let’s be honest, they’re monopolies, they are able to extract rents like other companies can’t, and also companies that are too big to fail like airlines that have reinvested 93% of their free cash back into stock buy-backs which juices the equity based compensation of their CEOs and then on the way down they wrap themselves in the American flag and say ‘we’re all in this together’ and look for bailouts.”


As Galloway said,

“One the way the up in the markets, capitalists love to be rugged individualists. On the way down they want to be coddled and entitled socialists.”

That is modern capitalism. It is sickly capitalism, good for only a few corporations. According to Galloway,

“The Big 4 have come out of the pandemic stronger. So far at least. The Pandemic has treated monopolists kindly like the child of a rich man. Which of course is what they are.

60 cents of the digital marketing dollar pre-pandemic went to Facebook and Google. Coming out of the pandemic it will be 80 cents, because there’s a culling of the herd right now in business. And the biggest elephants will come out of this with more foliage to feed fewer elephants. ”


And monopoly power is never a good thing. It is not good for capitalism. It is bad for capitalism, but some monopolists benefit enormously. And all of this is very bad for the economy. As Galloway said,

“We’ve had a very scary trend towards more and more consolidation of power across fewer and fewer companies. It’s bad for the economy because typically the companies that generate jobs are small and medium-sized companies. There are half as many companies being formed today as there were during the Carter administration! The consolidation of power, the tyrannical march of big tech taking shares from everybody else continues unabated.”


Massive stimulus is good for the economy. We’ve had that. Galloway said, what capitalism needs to oxygenate the economy would be to drastically increase the funding of regulators like the Department of Justice. They have to restore their historic role of reigning in big companies that are destroying the economy. As Galloway said, a company like Amazon can become so big that it can make an announcement that scares the crap out  of the entire “free” market. For example, he mentioned how Amazon announced that it would start delivering prescriptions to home and immediately retail pharmacies and pharmaceutical companies shed billions of dollars of market capitalization.  As he said,

“we need to go to these companies, and not only big tech, but also big Pharma and big Ag. and break them up and restore and oxygenate the marketplace. If you go back to the AT&T breakup all 7 companies were more valuable than the original one. So, you have more jobs, more acquisitions, more funding, broader tax base. Typically, everybody wins in such a breakup except for one stakeholder the CEO.”


Capitalism needs regulation. Monopolies don’t want it. Real capitalists know that they need it.


Economics writer, Will Hutton, agrees with this. He  believes what American capitalism needs is more, not less regulation. Regulation can often be good for business. Business needs good government. A government like that led by Trump is not the answer. He tried his best to eliminate all regulations. There are many on the right who think that is the right approach. It isn’t. It would have been disastrous. According to Hutton, that is why European companies are in many cases doing better than American companies. They are regulated better. So they can’t get fat and lazy.

When these giants are broken up you have more robust and vigorous corporations and it is better for everyone, in particular the public but also the organizations. They all benefit. So, the United States needs a strong President, unlike Trump, who can do this. Is Biden the one? I doubt it, but I hope I am wrong. He certainly will be better than Trump, no matter what he does or does not do.

Capitalism needs smart regulation. Without it, capitalism starves.

The Creed of Cancer


At the Climate First Tour in Winnipeg, David Suzuki, who  is always critical of economists and economics said our current economic system is  based on the idea of endless growth. “The philosophy of infinite growth means that progress is measured by growth, constant growth, and this is the creed of cancer. This can end in only way, with death.

Another pet peeve of Suzuki is that economics, the dim science, is out of whack. According to economics, all of the things that nature does to keep the world intact are externalities. They are all irrelevant from the perspective of economics. Everything nature does is irrelevant; it does not count.  From my perspective, this  is the original  sin of economics. If we are serious about tackling climate change, this is the attitude that must be rejected.

David Suzuki thinks that Stephen Harper epitomized this attitude. Harper elevated the economy over everything else. The atmosphere, for example, according to Harper, was an externality that did not matter. As a result of such attitudes, damage to nature is not counted as a cost. The people who caused the damage, whether to the air, the atmosphere or the ocean did not have to pay for that damage, because such costs were externalities. Externalities do not fit into the equations of economics. That attitude leads directly to our current collapsing natural world and our existential climate crisis. Suzuki categorically rejects this attitude: “Holding up human constructs over nature is crazy.”

Suzuki said the essential characteristic of humans is that we can foresee dangers. Foresight was critically relevant for our survival during our long evolutionary history. Now science and computer technology have amplified foresight. Scientists have warned us that we are headed for danger, but we don’t pay attention. As a result we are ignoring one of our most important characteristics and it will be our peril.

In 1992 in a famous public statement  a large group of scientists of the world warned us. They said that human actions and the natural world are on a collision course. This is already affecting our atmosphere, oceans, soil, forests, corals, and species extinction. It is the cause of over population. This statement was signed by ½ the Nobel scientists who were alive at the time. Yet we did nothing about it. We did not heed the warnings. We ignored our foresight that had saved us so often in the past. Had we heeded the warning, we likely would not have this existential crisis now.

In 2017 scientists gave us a new warning. They warned us that unless we changed our ways within 12 years and drastically reduced our emission of greenhouse gas emissions, we would be destroying the life as we know it. Again little has been done. Again  we are lacking foresight. Greta Thunberg’s big theme is that all she is telling us is to listen to the scientists. Listen to the warnings. Use our foresight.

There is one more thing we need besides foresight. We need to work together. This problem we face, this emergency, demands that everyone work together. All parties have to be set aside.

Suzuki said that when he was a student in the United States in the late 1950s after Russia launched the first space ship into space to orbit the world, America was horrified. How could the Russian do it first? What did this mean? The America reaction was clear and simple: we have to deal with this. No one asked ‘how can we afford this?’ They got together and poured money into the NASA space program. Anyone in science who wanted a grant got one.

With an urgent goal, we can perform what appears impossible. When it comes to climate change, we need that sense of urgency now. It doesn’t look like we can do it.

Booms follow Busts; Busts follow Booms



The National Bird of Iceland: Cranes


Our coach driver, A.O.,  pointed out how Iceland was coming back from their recession that was brought about when  their 3 major banks failed in 2008.  He said that Iceland was the only country to have paid back its IMF emergency loans. He said that now the country was back in a big spending mode. I had already noticed that cranes were omnipresent. It reminded me of Shanghai, which at one time reputedly had 1/3 of all the cranes in the world. In China our guide had said the crane was China’s national bird. Perhaps that was now true of Iceland. I hope that this spending  spree does not mean that another bust will follow the current boom. Busts are not pleasant.  Yet that is how capitalism seems to work. Booms are followed by busts. Bust  cause a lot of pain. I remember what John Kenneth Galbraith had said, “A balloon never deflates in an orderly fashion.”