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2008 03 21
Failing Economics

Now there's a story at the Globe & Mail about how "Canada begins tracking U.S. into slump". The implication being we need not worry -- it's only going to be a "slump".

Meanwhile, there's opinions published at the Globe about how "Global capitalism teeters on the brink". Meaning that economies everywhere aren't just slumping or flirting with recession or depression. Nope. Economies are teetering. On the brink of what? Destruction? Annihilation? Obliteration?

Fair enough. Nobody knows how bad the economic news will get. In Toronto everything seems fine. Across Canada inflation is down while consumer demand, housing starts and home prices are all up. But by this time next year? Who knows.

Other than soothing present anxiety, there's not much point even trying to predict economic futures. However. Is it possible to avoid economic disasters? Can we learn anything from this one? Who is to blame?

Back in August 2007, the Globe ran a piece suggesting we ought to blame our economic disasters on 77 year-old widows living on social security and refinancing their homes in order to pay for medical bills. Because, by unwittingly stepping into the arcane world of subprime lending, Ms. Barron was, in fact,
.. helping to set in motion a chain of events that has rocked financial markets around the world and left few investors untouched.
And it didn't sound like they were kidding. But why would Globe editors run any story insinuating "The face of the global credit crisis" belonged to Ms. Barron? As if any global crisis should ever get blamed on elderly widows? As if refinancing homes to pay for medical bills happened so frequently often as to demolish whole economies? Why, other than as a truly sad joke, would Globe editors run stories blaming Ms. Barron's demographic?

No clue. Ought to call and ask why. Except, going by what happened last time -- better not to call or ask them anything at the Globe.

Best guess? Globe editors prefer blaming anyone but those actually responsible. They’d blame medically distressed elderly widows living on social security if it meant turning blind eyes to the real source of North-American irresponsibility.

It wasn’t the medically distressed elderly poor. Nor was it just the rich getting too greedy. Let's stop pointing such false fingers. Regardless whether in illness or good health, for richer or relatively poorer -- it continues to be across every North-American demographic that we’ve become irresponsibly and obscenely greedy.

Whether using our home equities as ATM machines. Or lending no money down. Or securitizing bad lending practices. North-Americans across every socio-economic spectrum are fully to blame.

Not to say all speculating is wrong. To the contrary. But liquidating our own homes? Securitizing our debts? Hedge-funding our obligations? When we agree to do so across every demographic? How can consequences not assume biblical proportions when we so shamelessly rob and sacrifice the future to our all-consuming, devouring greed?

The irresponsibility of North-American greed. It is not just natural or regular greed. Economically, ecologically, personally and culturally -- it is obscene. And while I fear the pragmatic consequences like anyone else -- in principle, I am glad. Almost eager to observe the spillage from this tempest we’ve been brewing in each and all our cups. Just maybe we’ll learn something.

[Peter Fruchter teaches in the Division of Humanities at York University.]

Image above screenshot from here.
[email this story] Posted by Peter Fruchter on 03/21 at 02:22 PM

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