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Monday, March 30, 2020
Their View / Opinion

The finance industry always extracts its ounce of flesh

More than half of Canadians won’t be contributing to an RRSP this year, apparently immune to the exhortations of the financial services industry that would have us render unto them that which is ours.

For many, there will be no such contributions or savings of any kind given that the cost of living leaves nothing to set aside. For others, it’ll be the cost of living beyond their means that leaves nothing to save, in which case the banksters will be raking it in through other means – they always get their pound of flesh.

But we can and should add an unwillingness to support the often-rigged financial services sector as another reason not to buy into the pre-March 2 hype.

Banks and related financial services are some of the worst offenders when it comes to the fiscal bind we – both as individuals and as a society – find ourselves in. Specifically, for the corporatism that has eroded the middle class, subverted democracy, fostered inequality, stolen billions of dollars and led to an unproductive economy where money and power is increasingly held by a small minority.

We saw what that wrought in 2008, but soon forgot. Some of us are undoubtedly under the impression things got “fixed” after the meltdown, that rogue elements in the financial sector were curtailed. Not so. In fact, some of the excesses are creeping back in, both in that sector and in the wider corporate world.

Just as the financial instruments became so convoluted – and so far removed from useful investments – that few could explain them, the corporate world has grown beyond the scale of those who are meant to benefit from the system: us.

There are pundits calling for transformation, some more radical than others. The shenanigans in the market have made prophets of the many critics – often marginalized – who’ve pointed out the dangers of globalism, deregulated markets, corporatism and a host of other trends in the West.

The burgeoning middle class, equitable society and philosophy of the common good that developed in the postwar years were a testament to the values of those who saw what came out of the horrors of war and the Great Depression: people at that time were eager to do away with the scourges of the past and to create a better society for themselves and, more pressingly, their children. The next three decades saw that happen. The last three have seen that steadily eroded by the rise of corporatism, including its wholesale purchase of the political system, particularly in the U.S., an undemocratic trend that is being reflected here as well.

Yes, Canada was spared some of the economic impacts seen south of the border and elsewhere, but that’s nothing for which recent governments can take credit. We were sheltered partly because of our resources and, more to the point in a discussion of the economic crisis, by the fact previous governments refused to go along with the kind of deregulation we see in the States.

We weren’t, however, immune to the meltdown in 2008, despite what the federal government claims. Today, the reliance on resources, particularly oil, is coming back to bite us in the posterior.

Clearly we’ve learned nothing from the most-recent recession. Created by financial-sector avarice, unfettered corporate greed and compliant governments that championed deregulation, the economic meltdown has continued to be catastrophic to middle- and working-class people across the globe. Even though we’re technically out of a recession, the only people who have bounced back are the ones who were responsible for the mess.

Far from being penalized, they were in essence rewarded for what happened, and appear quite content to keep on doing what they’ve done before. Perhaps they’re convinced they’ll continue to reap the profits while the rest of us will pick up the tab. A clampdown was warranted at the time, but the politicians, bought and paid for, made only noises, not regulations.

Those who argue that regulation only hinders capitalism – often the same people who wrongly equate capitalism with democracy – miss the point of a so-called free market. The idea of a free-market economy is to let the market decide what will be made and in what quantity, rather than the central planning of the communist system, for instance. It doesn’t, however, mean free from regulation. How many people would argue that business should be “free” to use slaves or child labour? That was once the case in the West, but has been regulated out of the mix.

Once we’ve established that the market is an artificial construct that we’ve devised, we’re free to shape it in such a way that it provides only benefits to society, not harms. The deregulation that fuelled the corporatism of the last few decades – think of the rise of globalization, monopolies and oligarchies and the resultant decline in our quality of life – followed a postwar boom that was shaped by a market system that was devised with the broad public in mind. It wasn’t perfect by any means, but far more equitable than is the case today. Deregulation killed that. New regulations controlling the excesses of the financial sector are needed to put us back on track. The same goes for removing corporate influence in the political system.

The system of trickle-down economics is what we’ve been living with for more than three decades … and paying the price for. It’s founded on the belief that what’s good for the wealthiest classes is good for everyone. Bank profits are at an all-time high, financial services are raking in billions and corporations have rebounded nicely. For the bulk of us, however, unemployment remains high, personal debt levels soar and the standard of living falls. But it’s the bulk of us that gets to pay for the austerity measures we’re told we need in order to pay for the profits of those who’ve done well – not coincidentally, the ones asking you for more prior to March 2.

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