The new economy

By Andrew Hastings

I think it is pretty clear that we live in a world controlled by money. Money in everyday life is used for our security, pleasure and to attain many things. What is not clear is how this type of economy that we live in came to exist. I would like to think that a lot of what I am about to talk about is insane conspiracy theories but unfortunately the evidence does nothing but compound on itself. I hope to not only offer a solution that many people are talking about for our manipulative banking system, but a short history of how markets now dominate our banking and other financial institutions.

In the name of objectivism and self-led interest being the best way to live our lives, politicians and financial wizards began to promote a new type of economy. An economy that was going to bring us out of the sluggish growth of the 70’s and in to a new age of prosperity and self-determination. What politicians and their economic leaders did not mention is this new type of economy would lead to a day and age where all the progression promised to our baby boomers has been turned upside down. Instead we live in a time where the separation of rich to poor is at a level not seen since the great depression. It is so frustrating at times walking around a town like Wallaceburg or certain other areas of our community and just seeing the desert of production but then walking down to a WalMart and seeing the store shelves stocked full. Most people understand where these goods are coming from, and no it’s not just China, but it seems our governments do nothing but make the problem worse by signing free trade agreement after free trade agreement.

Promises not met

You have to even wonder if our leaders at Queens Park are even reading the legislation when Premier Dalton McGuinty makes comments to reporters about not even knowing what the CETA agreement is. Should the conversation not be heard? Especially since Ontario is ground zero for this experiment called the New Economy in Canada. To understand the new economy we have to go back in time to a day even before such monsters like derivatives and nano second trading began to infect the markets like a cancer. We have to go back to a day when an older generation was promised that markets would create a new type of stability in the world and a prosperity never seen before. During that time unemployment was low and growth was sluggish. That period gave the rise to certain financial gods that came to shareholders with a new solution to expand their profits. The solution was not new but now instead of using junk bonds market men would now use the vast wealth of pension funds to “streamline” even more of industry.  The expansion of power to shareholders gave rise to the giant we see today that has a constant lust for profits, even over the consequences to a nations people.

Disaster after disaster in this free market brought us a new monster however, in that the free market would cause an even bigger erosion of the working class. The policies have gone by many names, but over all globalization is the best way to sum it up.  In the name of globalization free trade agreement after free trade agreement has been signed. These agreements have torn down tariffs and allowed for corporations to export our labor to the cheapest labor market possible. This was no longer a problem because the wealth of every nation under theses free trade agreements could be siphoned into the pension funds of the manipulated shareholder and vast bonuses could be paid to a new type of financial elite. Even in the later years of their lives many of these financial elites have admitted to what kinds of consequences their grandiose dreams of a “stable economy” have brought to the common working man.

Will government learn?

When will our governments learn that the labor of millions is too important to be put in the hands of a tiny financial elite? With the advancement in technologies and the invention of the internet the deregulation of the markets has allowed for a whole new type of growth and a new system has been offered and is currently in place, and is once again supposed to offer us a stable society with all the benefits of a globally connected economy.  This new type of economy would bring us such beautiful words as derivatives, high frequency trading or nano trading, and even the ability of the man sitting at home with a small amount of money to “play like the big boys”. The continued deregulation of the market has allowed for things like the average man sitting at home with no financial training to fall victim to speculation after speculation. Sometimes this speculation is used to raise and lower the price of stock and is what Adam Smith would refer today to as the “hidden hand” in today’s market. What kind of leaders allow for their constituency to be taken advantage of like this? The brilliant dream of derivatives is the biggest monster in the market and if you still go and ask any financial advisor to explain to you how derivatives work they’re either lying or reading some line passed down to them from a head office. This scheme of “hedging” your bet has allowed for speculators to make money of the loss of a stocks price. If you have to go back and re-read that sentence I would understand. This loss in a stocks price can come for many reasons but the result is always the same: the loss of labor with none created.

High frequency trading is also another scary weapon that certain financial institutions use. Some would say it is to take advantage of markets with nano second trading and others would say it could be used as a weapon by the banks like we saw in 2008 during the global market crisis when they were used to cause markets to lose 10% or more of their value in minutes. Regardless of the type of freedom and stability that was promised in the new economy, the conversation should be had to take certain securities of the common man out of the hands of the manipulators and robber barons of the market. This new economy has done one thing for us all though in my opinion, and that is to show that this “free market” is one that is a rigged game for the benefit of a very few. We should demand a market where education, health, shelter and social services our not bought and sold for the interest of the few but allowed to be free and fair and for the benefit of all.   It is time for such things not to be manipulated by markets and bankers. It is time for the man behind the curtain of oz to be exposed.