Economics

  • The Games of Yanks and Canucks

    Not long ago I was enjoying an evening meal with the monks at St. Gregory's in Three Rivers, Michigan, and the text being read for the evening was a cultural history of the Cold War as told through Monopoly. Over their spartan supper, I learned that Monopoly has become one of the most powerful, influential games in the world. The concomitant rise of its narrative, competitive capitalism, has mirrored American cultural and political ascent. It is a game predicated on the fictions of level playing fields, impartial chance, limited intervention, and the ingenuity of market competition. Victory in Monopoly also spells disaster for capitalism, an ironic tension that now seems to be eternally nestled in the American psyche.

    If there are two cultural artifacts that showcase the distinctives between Americans and Canadians, it is surely these two board games: Monopoly and Poleconomy. What the devil is Pole...

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  • Time to Stop Doubling Down on Short-termism

    Simply stated, none of these jurisdictions have a hope of ever paying down even a portion of their accumulated liabilities, with non-debased money. They are each so strapped with debt and entitlement that none of them can currently service their interest (despite rates being close to zero), without borrowing more money or resorting to the printing press.

    Over the past four decades, the developed economies have gone on the biggest debt bender in history. The current level of global indebtedness, coupled with the massive unfunded government entitlement promises, are conservatively valued at over six times (6x...

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  • Vatican Foreign Policy Exposes Fault Lines Without, but also Within

    Vatican foreign policy has a unique position in the global economy: unlike other developed powers it has less of a stake in the maintenance of the financial architecture that led to crisis and disparity, and an increasing interest in reformation and renovation for the developing world. Catholics aren't as rich anymore, or not as rich as they used to be.

    The Vatican is caught between the rock of the rich and the hard place of the poor, and between the work of theology and political advocacy. Its ...

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  • The great issue of our day

    The great issue of our day is whether we can order our world with flourishing institutions apart from government and markets. This is the key question behind the very taxing challenge facing the Houe of Commons Standing Committee on Finance today. As tax tools go, Canada's charitable tax credit is one of the most successful ever implemented.

    Presented (3:00 pm EST) February 14, 2012, to the Canadian House of Commons Standing Committee on Finance, Pre-Budget Consultations.

    The great issue of our day is whether we can order our world with flourishing institutions apart from gov...

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  • Union Metaphors

    In closing: "When you're marching into battle, you look out for the person next to you, or the mission fails. When you're in the thick of the fight, you rise or fall as one unit, serving one nation, leaving no one behind." . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

    President Obama opened and closed last night's State of the Union with a series of auspicious military metaphors. In opening, "These achievements are a testament to the courage, selflessness and teamwork of America's Armed Forces. At a time when too many of...

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  • The Instant Super Cities of Oil Empires

    National Geographic dedicated a beautiful spread in its latest issue to the new capital of Khazakstan, Astana, described as "brash and grandiose—and wildly attractive to young strivers seeking success." Lavished with billions of petrol power, the new capital lacks for none of the astounding achievements of modern civilization, including its central monument, the Baiterek. Baiterek, which means "tall poplar tree" in Kazakh, is a 318-foot tower buttressed by an exoskeleton of white-painted steel, designed by Nursultan Nazarbayev, a steelworker become strongman who has run the country since the collapse of the Soviet Union. On its observation deck, from which your 360-degree view is periodically refreshed by cold Turkish beer, sits a malachite pedestal capped by a 4.4-pound slab of solid gold, in the centre of which is an imprint of Nazarbayev's right hand. Absent, one imagines, is the faint echo carried off the Euphrates, "Is not this the Babylon I have built as my royal residence, by my mighty power and for the glory of my majesty?"

    Washington was built on a swamp, Ottawa on an old sleepy lumber town, St. Petersburg on a swampy patch of Baltic seacoast. Imperial exercises in urban planning don't always go wrong, or at least not while the empires which sustain them persist. Dostoyevksy ...

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  • How to Tax the Rich

    What and where to cut is for another day, but the best tax to raise in Canada—and to create in America—is one on consumption. It's not as insane as it sounds: Washington wonks are starting to pull out Canadian strategies for the deficit. But if it does happen, history teaches us that the blowback will probably unseat whoever has the temerity to enact it.

    In the decades to come, taxes in most developed countries will go up and services will go down. This is the hard logic of years of overspending, coupled with economic recession and crippling personal and corporate debt. So far the cuts in countries like Ame...

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  • Plus ca change one more time

    1) "The conditions which surround us best justify our co-operation; we meet in the midst of a nation brought to the verge of moral, political and material ruin. Corruption dominates the ballot box. The people are demoralized, public opinion silenced, homes covered with mortgages, labor impoverished, and the land concentrating in the hands of capitalists.

    Two citations provide a wonderful historical frame for the Occupy Wall Street movement, now well into its second month.

    1) "The conditions which surround us best justify our co-operation; we meet in the midst of a nation brought to the verge...

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  • Mass Deviance: An Innovation Super-power?

    Positive deviance is well-intentioned rule breaking, making something better by going outside of what was intended. It happens when people tweak, modify, hack, or mash-up a product or service and end up improving things. The off-grid workforce within the sprawling metropolises of the world, the territory that Neuwirth is known for, contains within it positive deviance at a massive scale.

    Wherever there are rules, people break them. But they do it for a lot of different reasons, one of which is necessity. Consider a recent article by Robert Neuwirth in Scientific American titled ...

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  • When the Standard is Poor

    However, it does not take technical expertise to know that the credit rating of the world’s largest economy is by itself no real indicator of health. That process is hardly as objective as they make it seem. Talking heads on television may pontificate regarding projected impacts on interest rates, GDP, and stock exchange indexes but for most of us, these numbers are glazing. It all sounds precise and mathematical but the real triggers are our expectations and moral choices, not mathematical formulas.

    Last week, the credit rating of the United States was downgraded by the credit agency Standard & Poors. Debate has ensued as to whether this was warranted. I am agnostic on the reasons for the downgrade, since I have no qualifications to adjudicate the ...

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  • Doomed to Repeat the Past?

    And yet I can't help but look at the news in recent months and years and think that we may be headed on a path similar to one of the very darkest points in our history, World War II. The recent tragedy in Oslo, Norway that saw an extremist right-wing terrorist blow up a government building and attack a youth camp is evidence of a much larger and disturbing trend in Europe and the wider world.

    Through my time studying history and political science at McMaster University, I've been immersed in the events that have shaped our lives today. I've been taught about the rise and fall of great civilizations, lectured on the great leaders and influencers ...

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  • Budget Deficit, the Debt Ceiling, and the Fifth Horseman

    This is not the first time the United States has adjusted its external financial obligations in favour of domestic concerns. Other, more seemingly sanitary devices, like currency manipulation or—for example—the abandonment of the gold standard in 1971, are strategic forerunners. These are a kind of default, where while the U.S.

    The hysteria of Armageddon, once reserved for apocalyptic super disease, invading aliens, or meteor extinction, has found its way—via the American president—into the debt debate. And with the deal for the American debt ceiling floundering, it seems reasonab...

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  • A Eulogy for Atlantis

    The space shuttle Atlantis rolled to a stop shortly after 6 am Thursday at the Kennedy Space Centre, closing a chapter on one of the most far-reaching super-power confrontations in human history: the cold war space race. The decommission of Atlantis, and of the space shuttle, its service, and its legacy is only faintly heard today over famine in Somalia, economic meltdown in Europe, and midnight deficit deals in the United States itself.

    Photo: The Independent

    ...

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  • 2011: Arab democratic spring - Western economic fall?

    I'm not a numbers nerd, and so I skip most of the details in newspaper reports on the American debt crisis. But you don't need a degree in economics to understand that when the U.S. has to raise its borrowing ceiling, it's probably not a sign of economic health. When the Greek government owes a pile of money to other European countries that it can't pay; when its creditors have agreed to a revised repayment schedule conditional on the Greeks making significant spending cuts; and when many of the Greeks don't like it and are protesting (and sometimes rioting) in the streets—these are not signs of hope. Turn to the next page to find similar stories involving Ireland and Portugal.

    The Arab spring of 2011 has been widely interpreted as a sign of hope for those sympathetic to Western-style democracy. Juxtapose it, though, with the ongoing debt crisis negotiations in the United States, and a warning canary flutters out of the mineshaft....

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  • Food Labelling Fights

    The pyramid-plate switchup was the least of the battles, apparently, as there's an effort underway to improve nutrition facts on the labels, as well as a knock-down drag-out fight on the horizon over imposing nutritional standards on which foods can be marketed to children (much, I imagine, like the rules about marketing tobacco products):

    In last week's Economist, I read a piece about the measures in the U.S. to improve nutrition information on food packaging and to overhaul the USDA "food icon"—which has now been change...

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  • Intern Nation

    It's the season of interns, and with it the debasing hazing rituals (Cardus' is doing the President's expense reports). Those undergrads who haven't retreated to dignified manual labour to pay tuition bills for the summer, are working to pad their résumé and bolster their experience with now-legion internship opportunities.

     

    It's the seas...

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  • The BRIC Shift: Decadence and Decline or "The Rise of the Rest"?

    is essentially that the West has not failed, but that it has reached a plateau. Multi-polarity, as the Rest catch up, will be the coming order. Albeit, Zakaria does save some sharp criticisms for what he considers the highly dysfunctional nature of the American political system, suggesting that the "the rise of the Rest" is facilitated partly by lost opportunities afforded by archaic administrations in the global north. All this will be bad news for America, but it could also be great news for global poverty. Spreading around the extreme concentration of wealth and power that has been endemic of the international system in the last decades might make a better justice. America has slowly bled that wealth and power of the last generation to the so-called BRICs: Brazil, Russia, India and China. . Optimistic estimates say that by 2022 those living in poverty will be a minority for the first time. As the middle class dwindles in the West, it's exploding abroad. How will international relations be transformed by the injection of hundreds of millions of Indian, Brazilian, and Chinese families into a global middle class? Will middle class itself come to take on a new meaning, and what will be the implications for the often less than desirable governance conditions of these countries? But most intriguingly, these shifts will give a good grilling to the economic orthodoxy that wealth produces well-adjusted, democratic, and tolerant citizens. Will a wider distribution of wealth inspire revolutions in culture and politics in otherwise marginally tyrannical regimes, like Russia and China? People like Zakaria and Francis Fukuyama argue that democracy can only be sustained in countries with a per capita GDP threshold of around $6000. It's hard to overestimate the importance of a stable economy, and the underlying social architecture that sustains it (just laws, property rights etc), but whether a wealthier world will be a more democratic, peaceful, and just one is another matter. Where rising middle class BRICs are spending their money and priorities today may give us a window into the world of tomorrow.

    Fareed Zakaria has long argued that it is not so much that the West is in decline, as that the Rest are in extraordinary ascent. His argument in The Post-American World

    is essen...

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  • The Social Economy in Canada

        Yesterday The Guardian published a brief article that highlights the importance of the third sector (the social economy), identifies the challenges that arise from defining the third sector, and suggests some possible ways forward. Cox contemplates whether the variation and blurring may, in fact, be a great strength:   Perhaps the most useful aspect of the article is the link that connects to the Third Sector Research Centre.

    Reposted from the Cardus After Hours blog (RIP).

      ...

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  • A Week of Caritas in Veritate

    It's a "C in V" kind of week. In light of which, I'll happily blog from its conclusion for my contribution to this modest space: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

    Last fall some friends and I wrote an open letter signed by a variety of prominent evangelicals calling people of faith everywhere to respond to the papal encyclical, Caritas in Veritate. That cycle has tak...

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  • Who Hurts the Most in Recessions?

    Joe Clark—a once (Conservative) Prime Minister of Canada—argues the poor will feel this recession the worst for four reasons:

    Answer: the already poor, and especially the recently upwardly mobile. Recession economics aren't fair: the brunt isn't borne by the already wealthy and industrialized. America, and middle power countries like Canada, will continue to attract foreign...

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  • The End of Wall Street

    Favourite quote:

    The problems that plagued Wall Street were variously cast in the last American election as individual greed and deregulation. The solution—it seems to me—lies somewhere in between. A provocative piece I enjoyed this morning on ...

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  • An Economy that Doesn't Deserve Bailing Out?

    In his piece today on The Formerly Middle Class Brooks aptly notes that some people think recession is good because it means a moral revival—that Americans will learn to live without material extravagance and simplify their lives, rediscovering "home, friends and family".

    I was reviewing the Uni student newspaper where I teach part-time and got very annoyed by a passing headline, "An Economy that Doesn't Deserve Bailing Out". David Brooks—one of my favourite New York Times columnists—summarizes nicely why I think this...

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