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Yes, Canada has Dutch Disease

2012 June 1
by Ian Welsh

Or at least, the Bank of Canada thinks so, though they’ll never call it by that name:

Nonetheless, Canada’s current account was in surplus for many years before the crisis, and is now expected to remain in deficit indefinitely.

The main reason? A currency at parity with the U.S. dollar means Canadian exports are at a disadvantage and will be for some time. Indeed, until companies do more to improve their efficiency to offset the effects of the higher loonie, they’ll remain at a competitive disadvantage. Bank of Canada Governor Mark Carney has highlighted this point for more than a year.

No, really, the oil sector is killing non-oil jobs.  And the Conservatives are bringing in foreign guest-workers to do oil jobs.

This is how the prosperity of a country can be destroyed.

40 Responses
  1. Morocco Bama permalink
    June 1, 2012

    I have no sympathy for the Canadians. They deserve what they get.

  2. jcapan permalink
    June 1, 2012

    What MB said, and that goes double for the children.

    “The pathetic attempts of [Canadi]ans to pretend they’re good people and don’t deserve what’s happening to them are just that, pathetic. Yeah, some of them are good, but not enough. It’s just that simple.

    Take some goddamn responsibility.”

  3. someofparts permalink
    June 1, 2012

    You know, Yves Smith posts an Antidote du Jour every day. Sort of cleanses the emotional palate after a main course of depressing economic news.

    So why don’t I start a companion website for this one? My site will be nothing but episodes of the Trailer Park Boys, with some Monty Python and Pinky Show thrown in for variety.

  4. rumor permalink
    June 1, 2012

    Thanks for pointing out the view from the BoC, Ian. Somehow, I missed this.

    +1000 for Pinky Show.

  5. June 1, 2012

    Who wouldn’t want their country to end up like Saudi Arabia?

  6. Morocco Bama permalink
    June 1, 2012

    Here’s what Dutch disease looks like under the scope:

    http://rlv.zcache.com/ronald_reagan_dutch_poster-r060eede2055f47629841284579fd4009_az0uo_400.jpg

  7. Ian Welsh permalink
    June 1, 2012

    And where, exactly, did I ask for sympathy, mmm? Canadians voted for this, and they’re getting what they deserve. When they vote against it, they can fix it.

    Should I ask for sympathy, you may call me out. In the meantime, jcapan and Morrocco, do not take vendettas from thread to thread.

  8. Morocco Bama permalink
    June 1, 2012

    Ian, I’m just messing around. Don’t take it seriously. Just a friendly jab. I don’t have any vendettas and my sympathies are far too complex to describe adequately.

  9. June 1, 2012

    That was funny, guys. 🙂

  10. Jumpjet permalink
    June 1, 2012

    At least you still have universal health care.

    I’m not being sarcastic, that’s still a big plus.

  11. S Brennan permalink
    June 1, 2012

    Industry is fleeing Canada for Mexico…thank goodness for Bill Clinton’s NAFTA

  12. Benedict@Large permalink
    June 2, 2012

    “This is how the prosperity of a country can be destroyed.”

    OR: This is how a prosperous country can be turned into a resouce colony.

    @Ian ~ Your comment re voters getting what they deserve is noted. Most people seem to think that this is a problem with democracy; that people vote for stupid things. I’d suggest that it is actually a feature of democracy. In democracy, it is exactly that people DO vote for stupid things that teaches those people which things are stupid. They then vote again, and try to pick better things. Maybe they do, and maybe they don’t, but at least there is the regular opportunity for correction. You don’t get that in a dictatorship, as the dictator will always opt for saving face over improving the people’s lives.

    Of course, all of this can be subverted or at least impaired depending upon a society’s tollerance for propaganda. But that is not a problem with democracy; it is a problem with education.

  13. David Kowalski permalink
    June 2, 2012

    Dutch disease benefits a few, in this case, at the expense of the many.

    I live in the U.S. but visit Canada as a tourist from time to time and look in as an interested spectator during your campaigns. One thing that is interesting is that Canadians expect that Americans know little or nothing about their politics and concerns and seem surprised at a passing acquaintance with Canadian policies and politics.

    I could be very wrong but I have been struck, over the years, with the lack of national politics in Canada. Ontario clearly identifies with a national Canada but the Rockies and Quebec clearly do not and BC and the Maritimes are iffy at best.

    My small samples of Canada over many years really belie a lot of the American stereotypes. the people in Quebec are not even close to surly and a few words and phrases of high school French went a long way. Toronto was a cleaner, newer Chicago. BC was great, particularly Victoria although Vancouver was nice for a large city. Montreal was too large, too commercial/corporate for an uninformed tourist spending a few days . Quebec City and particularly its countryside was delightful for a tourist. The Yukon was an adjunct to Alaska on a cruise and I plan to visit the Maritimes, possibly this summer. I’ve known people from Calgary (“eight months of winter and four months of bad skating”).

    My confused and over personal examination is pretty simple. If the people of Ontario, who have strongly supported Harper in past elections, turn on Dutch disease, than the balanced policy will return. No Canadian party has lost Ontario by 52 votes to its major rival and secured power. Some of lost by much smaller margins but gained (or held on to) power by overwhelming victories in Quebec.

    The PCP and Harper have majorities in BC and New Brunswick but they don’t matter. Nor do the overwhelming majorities in Manitoba, Alberta, and Saskatchewan. Politically, it is all about Ontario and making the case that Harper is burning jobs there at the pleasure and temporary gain of the oil provinces out west.

    The costs of the artificially high Canadian dollar to tourism and fishing in the Maritimes is obvious as is the cost to manufacturing in Ontario. Dutch disease may be the rope on which Harper and his neo-Reaganist/W policies are hanged.

  14. June 2, 2012

    “until companies do more to improve their efficiency to offset the effects of the higher loonie”

    You always see this bizarre suggestion in these discussions, but it’s disappointing to see the Bank of Canada say it too. Do they imagine that companies deliberately remain inefficient but then can magically ‘improve their efficiency to offset the effects of the higher loonie.’ If they could do that, they already would. It’s just a euphemism, to hide the fact that ‘companies improve their efficiency’ just means that all the companies that were closest to the line either go bankrupt or move out of the country. That brings up the average ‘efficiency’, but not in the sense alluded to.

    Not to wish ill on others, but at this point Canada’s best bet for a more balanced economy is not internal politics, but a sharp downturn in China.

    I see a GM plant is closing because the Canadian workers wanted $32/hour and the Americans were willing to work for $14 . Union leaders noted that another option for GM was moving to Mexico where the workers only want $6. On the plus side, global convergence of wage levels at a low level increases the prospects for a global unionization movement, which, short of a massive change in global politics or a catastrophic rise in energy prices, seems the only way out of our current predicament (economic stagnation and decline due to inequality).

  15. June 2, 2012

    “Efficiency just a euphemism, to hide the fact that ‘companies improve their efficiency’ just means that all the companies that were closest to the line either go bankrupt or move out of the country”

    Or slash their workforce and make those who remain work harder for the same pay.

  16. S Brennan permalink
    June 2, 2012

    Anybody talking about wages and inferring greed needs to get a grip, the cost living [ie delivering over to the rentiars their pound of flesh] is what drive wages upwards…not greed. Most worker just want stability and a decent life for their family.

    On the subject of “voters get what they deserve”. Utter bulldinky. people are deceived by a corporate that repeat lies 24/7. When they vote for what they think is “CHANGE” they just get more of the same. If you work in a subsistence factory [the south is littered with them], cleaning the houses upper class moms too lazy to lift a finger, manning two part time jobs in gas station convenience stores hoping not to get shot…et al…you get home bug ass tired. What on TV is what you learn. I know, back in the ’70’s I worked as a hard scrabble laborer until I finally got a UNION JOB. The difference was back then PBS offered real news and thought provoking programs on a regular basis…that’s not true now. Back then subsidized education was available…that’s not true now. Back then the US Army took undereducated young men who weren’t seen as CANNON FODDER by both [D’s] & [R’s] trained them and gave them a chance at education with an intact body…that’s not true now. I personally know these things because that is how I rose out of living on the streets. That way is closed due to the [D’s] embracing Milton Friedman’s blasphemous theology.

    “Voters get what they deserve” is the same as blaming a woman for being raped, when “liberals” engage is this rhetoric, they aren’t simply wrong…they are ineffectual and alienating. It might stroke your ego, make you feel like the smartest person in the room, but it does nothing to advance the cause of rudimentary justice. It’s the same as when Obama lectured* young men in Chicago’s ghetto to pull themselves up by the boot straps…as he purported to have done.

    *That’s another lie that many take as inconsequential, but is far from it. When people of wealth pretend otherwise and falsely lecture those who have not seen opportunity come their way on “if I can make it, surely you can”. They justify all of society’s with a simple lie.

    As Christ said on the subject [which current two millennium ago]: ~ “walk a mile in the other man’s shoes…before you cast judgement”

  17. jcapan permalink
    June 2, 2012

    What S. Brennan just said. But Ian’s got all the bases covered. You can vote, if you still consider America a democracy. After all, Edwards was > Hillary > Obama–and surely voting for one of them would have prevented collapse and led to brighter tomorrow. Or at the moment, with the Yoohoo “choice” of the duopoly doppelgangers, one can always vote Jill Stein–b/c god knows 300 million Americans will see so much of her/her ideas on the telly in the coming months and/or they could if they wished find out such info online. That is if they weren’t repellent in their ignorance, complicity and failure to take responsibility.

    If the charming experiment in US democracy has ended, as I say it has (corporate coup d etat-ed), then you can start a revolution, the historical record of murderous bastards being replaced by yet newer better murderous bastards being set aside from your mental palate. The notion of losing those you love in the face of this nihilist enterprise simply marks you off as a coward deserving of anything coming your way. All of this is greatly enhanced when the preacher sits on the far side of the border, mind you.

    But, hell, I’m just on a vendetta. Cheerio.

  18. June 2, 2012

    I’d love to be able to blame ignorance and media non-coverage, etc. But when I tell people what is happening in the starkest possible terms, most of them simply don’t care. If “their” guy is doing it, it’s alright.

  19. Jumpjet permalink
    June 2, 2012

    Perhaps it’s not important that a lot of people understand what’s really going on.

    Perhaps it’s merely enough that a certain segment of people in the right place at the right time understand.

    “Never doubt that a small group of thoughtful, committed citizens [people] can change the world. Indeed, it is the only thing that ever has.”

    The quote is repeated ad nauseum because it’s meant to be inspiring, but is it really? Or is it just true?

  20. Ian Welsh permalink
    June 2, 2012

    Anyone who thinks I haven’t worked 60 hour a week manual labor jobs doesn’t know me, and when I did I voted NDP because I understood my basic self-interest: they were going to raise the minimum wage. The abject refusal to accept responsibility is pathetic. The candidates given to you are not given to you out of mid-air, they are produced by a primary system which you can join and effect.

    You have become so consumerized you cannot even conceive of creating your own politics, but only of choosing between coke and pepsi. Bush/Gore – Clinton/Obama.

    Oh well.

    Considering people with the ability to vote and organize the same thing as a women who is raped is a pathetic analogy, but keep telling yourself ordinary people have no responsibility for anything.

  21. jcapan permalink
    June 2, 2012

    When “liberals” engage is this rhetoric, they aren’t simply wrong…they are ineffectual and alienating. It might stroke your ego, make you feel like the smartest person in the room, but it does nothing to advance the cause of rudimentary justice. It’s the same as when Obama lectured* young men in Chicago’s ghetto to pull themselves up by the boot straps…as he purported to have done.

    Exactly. Elites generally come from well off, well educated enclaves and wouldn’t know hardship if it smacked them with their own tennis rackets. As if the great, unwashed masses wallow in ignorance of their own making. It couldn’t possibly have anything to do with completely failed K-12 culture. I taught college in the US for nearly a decade and most of my students didn’t know what a thesis was–a sizeable number couldn’t get their subjects and verbs to agree. And they’re the sad minority who actually reached college, in lieu of the killing fields or Walmart aisles.

    Whether Ian was born privileged or not is irrelevant (it’s no more about him than it’s about Obama–see DC Blogger’s latest riff on that). And if he was up from the bootstraps, reaching the zenith where he stands before you today, this doesn’t make his view any less repellent, “alienating” and self-defeating. You want to reach a group of voters or activists–telling them they’re complicit with the predatory class that’s right this minute robbing them is hardly a winning formula. The fact that a sizeable % of Americans has a warped view of reality, that they’ve been misinformed to the point of seeing their enemies as their benefactors doesn’t mean you give up on them. It means you redouble your efforts to reach them where they live.

    But again this always rubs against progressives’ soft spot–they simply don’t want to get close to the working class anymore. Union activists, wobblies, the stuff of Grapes of Wrath or Howard Zinn doesn’t appeal to them anymore–which is why you never see them quote the entire generation of activists who did get it and actually accomplished something. They wonder why the stupid people don’t comprehend or respond to the language of “liberalism,” when all it does is insult and alienate them, when the only liberal folks on TV or in office are sell-out neoliberal swine.

    They may be dumb but they know b-s when they see it. But see, such progressives aren’t about building a real movement. They’re about protecting what they’ve got, maintaining their closed, futile discourse and watching it all burn down. And the only warm feeling I have about the dark days ahead is they’re going to get their wish.

  22. S Brennan permalink
    June 2, 2012

    Hey Ian,

    I know your past, we’ve emailed back and forth…remember? It wasn’t directed at you personally, but it was directed at you politically. I don’t want you to pick up Tom Friedman’s lazy “intellectualism”…you are better than that.

    Let me add, we [meaning me and you] both have had access to some experiences and education that is WELL ABOVE what the average Joe got…and of which is not even within the realm of possibility for working class folks today.

    If you were worthless I wouldn’t even bother…you are not.

    Please dial into your judgement, hings have changed since:

    1] Reagan [with the help of Democrats who held both houses] did away with the FDR media rules.

    2] College became student financed.

    3] Since soldiers became throw away toys for [D’s] & [R’s] to play with carelessly.

  23. Ian Welsh permalink
    June 3, 2012

    Quite the caricature jcapan. But nothing to do with me.

    What fools don’t understand is that the first step towards power is the acceptance of responsibility and that people want high standards, not be patronizingly told “it’s not your fault”. Because the corollary of “it’s not your fault” is “there’s nothing you can do.”

    Keep telling yourself we’re not responsible for the straits we’re in. That will guarantee we stay there.

    I am largely uninterested in the opinions of old folks, even though that’s most of my readers. Old folks are attached to the current system, they will not rebel and they will continue to vote to fuck over everyone else to keep their pathetic little piece of the pie then pretend they aren’t responsible for the entirely forseeable consequences of their own votes. The people I’m interested in are the cadre which is forming as we speak: in my country, most noticeably in Quebec, right now.

    There are few countries where we are going to win in the short run. It’s off the table, even in Quebec, the majority of the population would vote for the tuition increases the students are against, against the students having the low tuition they themselves enjoyed. We have populations of degraded people who enjoy being mean to other people. That is what they get off on. I am not willing to excuse them for it. This is irrespective of education, the Quebecois who want to screw over students are well educated. The Irish who just voted to bend themselves over the table, are well educated. These are not Americans, they got a decent education.

    Yes, Americans live in a soup of propaganda, so do members of other 1st world nations, to a lesser degree.

    Why is that? What were they doing when the FCC in America decided to get rid of the fiarness doctrine and relax ownership controls so that media could be bought up by a few large companies? Hmmm? They decided it didn’t matter. They didn’t care. They voted for the politicians who put the policies in place.

    Why does the US education system suck? Many reasons, but the main one is that education was used as a way to give the children of a few people in places with high property values an advantage over those who lived in areas with low property values. This was a middle class priority, they didn’t want to pay taxes to educate poor people’s children (especially black poor people). They were onside with this, there was an entire fucking generation of tax revolts.

    No, sorry, the population is complicit. Enough making excuses. Being responsible means they can fix it if they choose, when they choose. But the generation which will fix it is only now being educated, and they are not being educated by me, or by you, they are being educated by the student-loan collector and by the riot cop. They will not listen to such as I, or you, until they have been educated by life that radical change is needed, and that they are victims and will stay victims till they decide to take actual, effective, action.

  24. S Brennan permalink
    June 3, 2012

    You are wrong here Ian…you are just wrong. I still think of you as brother…but damn it man, you are wrong.

  25. Ian Welsh permalink
    June 3, 2012

    Perhaps Brennan, perhaps. I can make the opposite argument easily enough, you know. I’ve discussed propaganda at length, I understand how bad education is in much of the US (when companies have to use pictograms to train employees…), I have studied how the wealthy have corrupted both politics and the system of discourse.

    But I look at post-wwii war history, and I say “how did it come to be thus?” and I find that the general population was complicit.

    And, believe it or not, I find that a hopeful thing.

  26. Celsius 233 permalink
    June 3, 2012

    I’m sitting here eating popcorn and drinking a beer; waiting to see Brennan’s response.
    This is good stuff; and, as an “old person”, I’m paying attention. Ian’s usually pretty close to my thoughts on these various topics of social injustice and criminality; but Brennan’s response is ripe with possibilities.
    It seems to hinge on responsibility and where to place it, no?
    ~~~~~~~~~~~~~~~~~
    Ian Welsh *
    June 3, 2012

    I am largely uninterested in the opinions of old folks, even though that’s most of my readers. Old folks are attached to the current system, they will not rebel and they will continue to vote to fuck over everyone else to keep their pathetic little piece of the pie then pretend they aren’t responsible for the entirely forseeable consequences of their own votes.
    ~~~~~~~~~~~~~~~~~
    Yes, I can see why you might say that. But don’t rule us out; many of us don’t have a lot to lose, which is likely more true today than the relatively recent past. This one left the states at the age of 57 because of the Iraq invasion; and I’ll be 67 in 10 days.
    As I recall there were quite a few older folks at the occupy sites around the country. A hell of a lot of the economic austerity shit is squarely aimed at us.
    As an old house painter once told me; “Don’t let the bastards (in Washington, DC) get you.”
    Cheers.

  27. jcapan permalink
    June 3, 2012

    Ian, you mention older folks with something to lose, a share of the pie. You mention a relatively affluent middle to upper-middle class with higher property values. I’m talking about folks who’ve never gotten a piece of that elusive pie, who’ve never lived in areas that aren’t shrouded by endemic poverty, drugs, and crime. I’m talking about a huge demographic that wouldn’t be able to say what the fuck the FCC is as gunpoint.

    In other words, I’m talking about the street, where all positive change that’s ever taken place has begun. They weren’t to blame when union organizers rallied them a century ago, yet change occurred, they weren’t to blame during the civil rights movement either and yet change occurred. This notion of yours that acknowledging blame is prerequisite to either empowerment or change is mindboggling. Should RFK have gone to Appalachia and said you fucking dumb, complicit inbreds, why don’t you find you some boots and pull em up. Was that Cesar Chavez’ message? Enlighten me. Or Emma Goldman’s?

    Finally, you talk about a cadre bred by riot police and student loan collectors and I see disenchanted, relatively pampered folks from the middle class who don’t want a better future for the entire population but simply for themselves. They’re not prepared to overthrow the system—they simply want better outcomes, outcomes they feel entitled to. In any event, thanks for laying out your vision of vanguardism. It’s full of promise.

  28. Ian Welsh permalink
    June 3, 2012

    The students are the first, anyone who studies revolutions is well aware of this. They are not enough, but they are first.

    If you do not know that, why should I care about anything else you blather on about?

    The majority of the population was not in poverty when the key decisions were made, and they are not in poverty now.

    Bu ok, bud, it wasn’t your fault. There’s nothing you could have done, it was all the big bad people and everyone was helpless before them. You can feel better now that I’ve absolved you and the people you want absolved.

    Yup, not your fault, nothing you could have done. Everyone was so weak there was nothing they could do.

    Anyone who thinks I am trying to organize on this blog is a little thick. If I were trying to organize I would be doing things differently (like, oh, posting regularly, to start).

    I have never called anybody inbred, but when talking to middle aged people and above, even if I was organizing, you can damn well believe I’d tell them this was their fault, and I’d make them eat it, too.

    Finally, I note that anyone who doesn’t like what they read here is free to go somewhere else. I’m not putting a gun to your head and making you read, and I don’t earn a cent from this blog. If you don’t like the free content, take it elsewhere. I am no longer someone with even minor influence, so gassing at me accomplishes nothing.

  29. jcapan permalink
    June 3, 2012

    B/C I’ve studied revolutions, I’m saying the idea is inherently fucked. It’s Leninist and thus doomed to failure at the outset.

    In any event, moving on…

  30. The Tragically Flip permalink
    June 3, 2012

    “But I look at post-wwii war history, and I say “how did it come to be thus?” and I find that the general population was complicit.”

    I’ve been reading Perlstein’s book on the 60s and yeah, that’s very evident. The general population supported the Vietnam war for a damn long time, until it was very glaringly a failure. Nixon was a despicable criminal, but that should have been obvious to voters who nonetheless voted for him and his “secret plan” to end the war in ’68. It’s also evident how much simple racism and Republican willingness to exploit racism, made the difference between the Great Society and Morning in America. The middle class broadly voted again and again to keep the blacks down and far away, even as the people the voted for undercut the foundation of white middle class affluence.

    I will say the murders of JFK, RFK and MLK deserve more blame than they’re generally given for the shitty turn in US politics. It shouldn’t be the case that the direction of an entire society turns on the lives of just 3 people, but it really seems plausible that it did. I’m a soft believer in the “JFK was going to leave Vietnam” theory but even him aside, loss of the latter two much more directly led to President Nixon, the culture of ratfuckery and the empowerment of the scorched earth Powell memo vast right wing conspiracy.

  31. S Brennan permalink
    June 3, 2012

    TF, the tragedy of the 60’s was LBJ buying into the State/”NSA” assessment on the strategic value of Viet Nam .

    However, the greater tragedy occurred much earlier under Truman who did not go after the US Nazi supporters [who had gone to ground] post WWII, instead allowing them to breed & multiply in the Departments of State and the national security apparatus. These post hoc Nazi’s overruled agents on the ground who saw the young WWII resistance fighters, most of whom could be describe in today’s term as being US friendly nationalist, with socialist leanings and instead supported the quislings of WWII. Think, Greece, Viet Nam, Yugoslavia, Italy, France…et al.

    These US born Nazi’s saw the danger that some day they might be investigated and hung as traitors…so they projected what they had done onto the active progressive of the day, hence the communist witch hunts. The communist witch hunts disabled the people most likely to go after the Nazi Traitors in this country…and the traitors were numerous…and were well represented in the .1%.

    Much suffering has come from the US’s domestic Nazi’s in international and domestic affairs…as I see it, they have won the peace, defeating progress and destroying the programs of FDR, the person most responsible for their defeat.

  32. June 3, 2012

    Ian “I find that the general population was complicit. believe it or not, I find that a hopeful thing.”

    The Guardian had an article the other day, “Bank bailout makes Spaniards question their future as agonies mount”, and when I looked, the highest rated comment suggested that, “Justice won’t be done until we see bankers and real estate agents hanging from lampposts.”

    On Krugman’s last column, the top rated comment was just the same old partisan sniping, but the second highest rated comment ended by saying, “Regular people are scraping by with less and less, even as corporate profits soar. Call it the class war, call it a reign of terror. I am beginning to think we are all on one of those secret kill lists.”

    That was not on Free Republic or Daily Kos, that was on the New York Times. I think the 1% is underestimating just how much anger is accumulating out there. Maybe they feel it can safely be directed at Muslims or Blacks or the poor or unions or the public sector or at the Republicrats or the Demopublicans indefinitely, but I wonder. Every time a country like Ireland votes in more austerity and finds itself falling further into the abyss as a result, the spring just gets compressed a little more.

    In the couch potato TV era maybe this wouldn’t have come to anything, but in the internet era, I’m not so sure.

  33. Everythings Jake permalink
    June 3, 2012

    I don’t come here to find a savior, although I find plenty of solution is offered. The clear-eyed analysis is greatly welcome and reminds me not to despair. I hope it continues, depsite those who don’t want to stare into the abyss. I think Ian has historical fact behind him – much of what he calls for sounds like what militant workers and unions in the U.S. practiced in the first 30 years of the 20th century which actually led to real change. As far as I can tell, Big Bill Haywood wasn’t exactly out coddling the feelings of his listeners either – stakes were too dire and he didn’t lie to himself or them about the sacrifices that might and most likely would have to be made.

    At any rate, society hasn’t liked its Cassandras since, well Cassandra. But we need them more than ever.

  34. June 3, 2012

    “Should RFK have gone to Appalachia and said you fucking dumb, complicit inbreds, why don’t you find you some boots and pull em up”

    He could reasonably have said “do you really, REALLY think the black guy in the clapboard house next door is a bigger threat to your peace and comfort than the coal companies or the defense contractors or the land speculators?”

  35. S Brennan permalink
    June 4, 2012

    Since I started a disagreement with a blogger who I like and respect I might as finish with a another contrary POV to what has been running through his commentator’s threads.

    Contraire to “THE GREEDY BABY BOOMERS F%&#ed UP EVERYTHING” meme…so popular with wedge issue players [now…just who would have an interest in dividing the 99%…huh?], their minions…and easily duped patsy’s, the numbers just don’t support the greed angle.

    This article should make clear [if you bother to read it] that those [particularly at the younger end] of this 1945-1965 demographic are getting a rawer deal than any in the post FDR world did.

    http://www.ritholtz.com/blog/2012/06/the-not-so-golden-years-revisited/

    I am NOT A fan of Hillary, but she would NOT have cut & then “privatized” SSI the way Obama is trying to do. And Obama, as a [D], will succeed in destroying SSI irreversibly if he is re-elected. FYI, the spade work for “privatized” annuities is in ObamaCare. The Insurance Mandate that uses Government to compel you to buy a demonstrably defective product, if held constitutional, can be used to compel citizens to buy “private” annuities and..POOF…no more SSI. And that is why Obama is the greatest evil in the political sphere.

    Why should the “younger” folks care about folks other than themselves? Read the article and clue in to why a secure retirement for older generations is good for those in their late teens and twenties…here’s a hint, think supply/demand.

    Fun Facts:

    In 1983 [the year we raised retirement and SSI taxes] from 90% of total national wages to the Social Security tax. Because of inequality in income growth since then (the rich growing richer), the amount of wages escaping such taxation has grown from 10% to about 15%

    Social Security is currently estimated to keep roughly 40 percent of all Americans age 65 or older out of poverty.

    Year of birth vs Normal retirement age
    1937 and prior 65
    1938 65 and 2 months
    1939 65 and 4 months
    1940 65 and 6 months
    1941 65 and 8 months
    1942 65 and 10 months
    1943 to 1954 – 66 y.o.
    1955 66 and 2 months
    1956 66 and 4 months
    1957 66 and 6 months
    1958 66 and 8 months
    1959 66 and 10 months
    1960 and later – 67 y.o.

    Year – Contribution (%)
    1980 – 12.26
    1983 – 13.40
    1984 – 13.40
    1985 – 14.10
    1986 – 14.30
    1987 – 14.30
    1988 – 15.02
    1989 – 15.02

    In 1980, 38% of Americans had a defined benefit pension as their primary retirement plan. By 1997, just 21% of Americans had such plans, according to the Pension Benefits Council. That percentage is estimated at just 12% now. Explain to me the how the 1945-1965 demographic benefits by this?

    1] Numbers make it clear, working class…that’s about 85~% of the 1945-1965 demographic [particularly at the younger end], have been targeted and taxed at a higher rate and forced to work longer.

    2] The canard “people are living longer” is just that, for the lower income demographics it stabilized long ago and has been falling. Consider “..statistically, when an adult in 1920 turned 60 years old, he could expect to live an average of 17 more years, to about 77. Today, a 60 year old adult can expect to live 19 more years, to about 79. Now look at the SSI retirement age above and tell me we are making progress.

    So while it’s true more people survive to/through their working years because they don’t die in youth they do not live much longer than their great grandparents did. The “modern” notion embraced by [D’s] & [R’s] that human’s should work until their bodies give out and then warehoused until death, is not in a young person’s interest…either near or long term. Now who would want to convince 99% of America’s youth to advocate against their own interests…hmmm.

    Ian, you have the floor

  36. Ian Welsh permalink
    June 5, 2012

    The rule of a liberal or social economy is that everyone should look after each other, including the old after the young and the young after the old. The problem is that the young have been getting it in the neck a lot harder than the old for decades now. HCR was and is a HUGE tax on the young, and explicitly so (Krugman essentially admits it). We all know about tuition, and of course youth unemployment and not allowing home prices to collapse and so on.

    Once the social contract is broken, once everyone doesn’t look after everyone, then you can’t expect the young to say “well, I’ve been fucked by old folks but I’ll take care of them anyway.” And you can’t expect it in the sense that if you don’t punish betrayal, it will keep happening. Same thing with the rich. Once upon a time the rich and the poor got richer at about the same rate (rich very slightly less in % terms, but much more in absolute). Now they don’t. The poor and the middle class must brutally punish the rich for this, or they will not stop.

    The old have voted, again and again, for policies that fuck the young. Even in Quebec, the majority of the population would vote for the tuition increase. They want to take away advantages they enjoyed when they were young.

    That’s despicable.

    Of course, a lot of the old are playing the death bet, they will win it because they will die before the backlash. But many of the younger old won’t win it.

  37. S Brennan permalink
    June 5, 2012

    Ian, wages have been flat for thirty five years, payroll taxes maxed 24 years ago. Who are you kidding? Did you read what I wrote?

  38. Ian Welsh permalink
    June 5, 2012

    The old have more money, per capita, than any other age-cohort. This is a fact. The poverty rate for old people is lower than the poverty rate for the young. That is a fact:

    http://www.statehealthfacts.org/comparebar.jsp?ind=10&cat=1

    I don’t have figures for more broken down cohorts than that, but I’ll tell you that I’d put a lot of money that the youth cohort is poorer than the elderly cohort, and that they are poorer than their parents or grandparents were at their age, in real dollars-debt. I will state outright that every cohort is poorer than the next older cohort, and that they are poorer than the cohort before them was when they were their age, in real dollars, including debt.

    Now, would it be good to retire more old people? Sure. It would also be good to just have more jobs, y’know. But you aren’t going to get that money by taxing young people, they don’t have the goddamn money. In fact they are massively in debt. If the old people want to retire they have to tax the rich and corporations. What the old are doing right now is loading the young down with massive debt, and forcing them to buy health insurance they can’t afford.

    Who do they think is going to buy their houses? Hmmm?

    The old are better off than youth, so what we should do is give them more money first?

    Trickle down generational economics, I guess. It would work as well as the original trickle down economics did.

    When we decide to help everyone, we can help everyone. That will include fixing pensions, yes (I would suggest ending private pensions entirely, if we’re talking ideal policy). But it will include much more than that.

    Tax the rich and let the banks fail and all this can be fixed. Until then, it won’t be.

    Special pleading for this group or that group is most of what liberals do these days. Break the rich, nothing else will work.

  39. S Brennan permalink
    June 5, 2012

    Nonsense arguments Ian, do people acquire wealth over time? You argue that the young should get assets upfront and then stay at that level for the rest of their lives? Yeah sure Ian. Subsidized education or training without fear of going to war? Absolutely, but just o argue for them to handed somebody elses life savings? Why not go whole hog Ian and repeat the failings of China’s “Cultural Revolution”.

    FYI Ian, I got my first house at 44 in 2001, it was in such poor shape it needed to be gutted. Working every spare minute for 3 years I completed the task with skills I learned in my late teens and early twenties. I live in an 850 ft^2 house…and you call me a lucky ducky…and truth be told, I am, 4 of my friends [my age BTW, whom I am helping] are respectively, about to be put onto the street, living in a car, in a shelter and living in my house. Ooooh but we have it too good…we have too much…sure Ian. My new next door neighbor is a nice kid of 20, his parents [also my neighbors] helped with a 20% down payment, the house was in foreclosure fully rehabbed and was bought for 129,000.00. They both have lousy jobs, but good parents/in-laws and their prospects are good, however, they have less than me…so I should give them what I have…even though they are waaay ahead of where I was when I was their age. Using average statistics to avocate for generational war is beyond dumb. The upper class inherits when their parents die…Ian, that usually happens when people get older and skews the numbers? To repeat the often told tale about how averages skew, “four homeless men are under a bridge, Bill Gates walks by, now the average income of men sheltered by a bridge is in the billions”. That is the argument you used above.

    Anybody that is unemployed over say 40 in engineering is going to stay that way and the numbers bear that out. I only work because I travel state to state getting a job when the project gets way behind and they hire me for a 2-3 month gig. And that’s only because I have a history of working 60 hours a week to get the project back on track…while the office spends it’s day chattering about how they are getting screwed over…I come in before them, leave afterward and work Saturday & Sunday. When I am working, I pinch penny’s so when I am unemployed I can hold out…and that’s how it will be until I drop dead. But you are right Ian, I should give my money to the folks who spend their day surfing the web and complaining. Yep, that will be fair, they already make more money, but hey, Ian says I’m the oppresser based on average incomes. BTW, these 20-30 something folks don’t miss an opportunity to insult me, or talk up my age. Most are too clueless to realize that in 10 years they will be on the street.

    You think the Obama kids can carry out reform Ian, I think not. Unlike the Obama kewl kids I met at the state caucus [we used to have an open primary here]…I knew who Obama was AND WHO WAS ON his ECONOMIC TEAM. The kids didn’t want to hear it, Obama was kewl, Hillary was a “C&#T”…nothing about policy, just conjecture and senseless ad hominem attacks like. “You are a racist if you vote for Hillary. Let me add, I don’t like Hillary, her foreign policy sucks, but her economic team was devoid of Bill’s stupid a–holes Rubin-Summers, plus Obama had doubled down with Wall Street’s fan bois Golsbee & Giethner.
    Who these a–holes on Obama’s ECONOMIC TEAM were…and why it was important was met with insults and ordering me to be silent about their God, Obama or they would shut me up. When the threats didn’t work, a guy shoved me, I dropped kick him to the ground…he ran off like a wussy and got the cops. There were enough witnesses that his version of me dropping him out of the blue got shouted down…I filed a cross complaint and the cop started talking about filing a false police report and Obama’s kewl kids melted away. Not exactly the kind of young men you’d want to carry out a revolution with Ian.

    If you counting on Kewl Kids to carry reform forward Ian I think you are kidding yourself.

  40. Ian Welsh permalink
    June 5, 2012

    You apparently didn’t read what I wrote.

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