If Hell isn't breaking loose yet, there's at least an ominous cracking sound...
The TSX fell over 600 points today, its largest one-day drop since 9/11. That's alarming enough, but when you consider the market has shed more than 12 percent in just fourteen business days, you start to wonder where rock bottom might be...and the downward momentum becomes great enough that we'll reach it and start tunnelling.
The official explanation: "fears that the United States may be entering a recession". Hello? May be entering? Mr. Obvious, please pick up a white courtesy phone...
I'm not in the market to speak of--I work in a grocery store, after all--so I can look at this from an outsider's perspective and...I'm sorry, folks, but I have to laugh. It's either laugh, cry, or scream.
Look, I know Jack Squat about the economy, still, but I know two things that it seems the majority of credentialled, highly-paid finaciers have forgotten. One, economies are cyclical. What goes up must come down, and all that. Two, you can't just create money out of thin air...well, you can, but sooner or later you're going to be found out. The finding out is well underway now, and the consequences speak for themselves, as consequences so often do.
But it's the reaction that really amazes me: the huge collective huh? followed by what certainly appears to be sheer, unadulterated panic.
Um, people? They've been forecasting this for years. Sure, maybe somebody cried wolf a few too many times, but once that sub-prime mess started to ooze into the light, once the cries of yonder circling wolfpacks became audible, it must have taken supreme effort to ignore the warning signs. You'd have to have your heads buried deep in the sand--or at least the latest copies of US Weekly and Hello!--to miss them. (Interesting: Hello!'s circulation's up 54% over the past year, and Time's is down 17%. Not that Time is necessarily the best source for news out there, but it's a damn sight better than celebrity rag-mags.)
As for the panic, once again I must quote Blood, Sweat and Tears: What goes up/ Must come down. Do you get into a tizzy every night at sunset?
Unless...
Unless maybe--just maybe--the reason everybody has lost their freakin' minds is because they've just realized they lost their freakin' minds there for awhile, thinking they could get something for nothing. Maybe the thought has crossed a few brains that staking your entire economy on a buttload of derivatives isn't the wisest thing to do. It mght be that the entire house of cards is about to be--whoosh!--blown over. If that's the case...
...well, go ahead and panic if it makes you feel better.
Showing posts with label economics. Show all posts
Showing posts with label economics. Show all posts
Monday, January 21, 2008
Sunday, August 05, 2007
On this long weekend that isn't...
I hope all you people out there are enjoying your long weekend. If you can find it in your heart, please spare a thought for those less privileged...those of us in the retail industry, by and large.
As I wrote a couple of years ago, this one doesn't count. Pretty much every store is open this Monday, for reasons that escape me.
For the most part I love living in Canada and consider this country to be one of the world's finest. But that doesn't mean it's perfect, and one of the ways it falls woefully short of perfection is its paucity of paid holidays. We just don't get enough of 'em. Not only do we have to go all the way from New Year's Day to Easter without a break, we only get two real holiday weekends in calendar summer.
Business types fret about our declining productivity vis-a-vis the United States, and occasionally you hear about our deficient standard of living (everywhere but in the Calgary-Fort McMurray corridor, where the average income is ten percent higher than America's average). I just want to slap these people senseless. So what if people here in Canada are much more likely to buy a Civic or a Corolla over an Accord or a Camry? Our smaller cars are better for the environment, especially given the distances many of us drive. (I know, I know, commuting is evil...but we have counties in Ontario the size of some U.S. states, and our country is so vast we usually measure distance in driving time.)
And it's not as if compacts and subcompacts have tramp chairs or something. Our Echo is quite comfortable, even over long drives.
There is an unhealthy emphasis, in my opinion, on materials over experience and environment when we rank standards of living. I could easily live in a double-wide trailer, so long as the view out its window included water. Most of the "stuff" I have I don't need and wouldn't miss overmuch if suddenly I didn't have it. This attitude is utterly foreign in many areas of the U.S., where, let's not forget, the first order of business post 9/11 was to spend! spend! spend! "or the terrorists win".
Debt is now a status symbol, not just in the United States but increasingly here in Canada, too. When did this happen, exactly, this going out in public with your financial fly down and bragging about how well you're hung? Let me tell you something, when the interest rates start to go up a lot of people will find themselves well and truly hung.
...And they will go up, trust me. The recent volatility in the stock market is a precursor of things to come: indeed some economists are forecasting that recession is not just possible but imminent. Granted, the same economists have been forecasting imminent recession for years now, and that wolf hasn't shown. But they keep on about it not out of some perverse desire to frighten, but because much of the economy, particularly in the U.S., is built on sand. Don't think them insane just because they natter on about insanity.
It may appear that I've wandered far away from where I started this post. Not so much. I work in retail, an industry that's inextricably tied to the wider economy. When food prices soar, disposable income (already at a premium) is reduced even further, an ill economic wind. But I'd argue that we could all do with a little less spending and a hell of a lot more saving. I won't mind: I work in a discount grocery store...my job is fairly recession-proof.
No, I'll go further: I'd like to see us redefine the economy. I'd like to see a decline in productivity (within reason) as cause for celebration, not alarm. In France, all workers are guaranteed 30(!) paid holidays a year. How many days are guaranteed in the United States? Zero. And in Canada, while at least we get some paid vacation, it's nowhere near what France enjoys.
Why? The article linked above makes a convincing case that it's because of rampant consumerism. People may claim to highly value their time off, but their actions show they're more concerned with one-upping their neighbours: bigger house, bigger SUV, bigger wide-screen TV...For that, they need money, and to get money they need to work. A lot. The average American male works 100 hours more a year than his father did; the average female, 200 hours more a year than her mother. The entire culture is geared around spending ever-increasing sums of money: it is widely reported, for instance, that it costs over a quarter of a million dollars to raise a single child from birth to age 18. There are families that barely make that much money in eighteen years, yet they manage.
If we really valued our time as we claim to, we'd have no problem, for instance, taking a 20% cut in pay in return for a three-day weekend every week. Nearly all of us could save 20% of our monthly expenses if we were honest with ourselves.
The coming market correction will restore some sanity to the economy. How's about we restore some sanity to our lives?
As I wrote a couple of years ago, this one doesn't count. Pretty much every store is open this Monday, for reasons that escape me.
For the most part I love living in Canada and consider this country to be one of the world's finest. But that doesn't mean it's perfect, and one of the ways it falls woefully short of perfection is its paucity of paid holidays. We just don't get enough of 'em. Not only do we have to go all the way from New Year's Day to Easter without a break, we only get two real holiday weekends in calendar summer.
Business types fret about our declining productivity vis-a-vis the United States, and occasionally you hear about our deficient standard of living (everywhere but in the Calgary-Fort McMurray corridor, where the average income is ten percent higher than America's average). I just want to slap these people senseless. So what if people here in Canada are much more likely to buy a Civic or a Corolla over an Accord or a Camry? Our smaller cars are better for the environment, especially given the distances many of us drive. (I know, I know, commuting is evil...but we have counties in Ontario the size of some U.S. states, and our country is so vast we usually measure distance in driving time.)
And it's not as if compacts and subcompacts have tramp chairs or something. Our Echo is quite comfortable, even over long drives.
There is an unhealthy emphasis, in my opinion, on materials over experience and environment when we rank standards of living. I could easily live in a double-wide trailer, so long as the view out its window included water. Most of the "stuff" I have I don't need and wouldn't miss overmuch if suddenly I didn't have it. This attitude is utterly foreign in many areas of the U.S., where, let's not forget, the first order of business post 9/11 was to spend! spend! spend! "or the terrorists win".
Debt is now a status symbol, not just in the United States but increasingly here in Canada, too. When did this happen, exactly, this going out in public with your financial fly down and bragging about how well you're hung? Let me tell you something, when the interest rates start to go up a lot of people will find themselves well and truly hung.
...And they will go up, trust me. The recent volatility in the stock market is a precursor of things to come: indeed some economists are forecasting that recession is not just possible but imminent. Granted, the same economists have been forecasting imminent recession for years now, and that wolf hasn't shown. But they keep on about it not out of some perverse desire to frighten, but because much of the economy, particularly in the U.S., is built on sand. Don't think them insane just because they natter on about insanity.
It may appear that I've wandered far away from where I started this post. Not so much. I work in retail, an industry that's inextricably tied to the wider economy. When food prices soar, disposable income (already at a premium) is reduced even further, an ill economic wind. But I'd argue that we could all do with a little less spending and a hell of a lot more saving. I won't mind: I work in a discount grocery store...my job is fairly recession-proof.
No, I'll go further: I'd like to see us redefine the economy. I'd like to see a decline in productivity (within reason) as cause for celebration, not alarm. In France, all workers are guaranteed 30(!) paid holidays a year. How many days are guaranteed in the United States? Zero. And in Canada, while at least we get some paid vacation, it's nowhere near what France enjoys.
Why? The article linked above makes a convincing case that it's because of rampant consumerism. People may claim to highly value their time off, but their actions show they're more concerned with one-upping their neighbours: bigger house, bigger SUV, bigger wide-screen TV...For that, they need money, and to get money they need to work. A lot. The average American male works 100 hours more a year than his father did; the average female, 200 hours more a year than her mother. The entire culture is geared around spending ever-increasing sums of money: it is widely reported, for instance, that it costs over a quarter of a million dollars to raise a single child from birth to age 18. There are families that barely make that much money in eighteen years, yet they manage.
If we really valued our time as we claim to, we'd have no problem, for instance, taking a 20% cut in pay in return for a three-day weekend every week. Nearly all of us could save 20% of our monthly expenses if we were honest with ourselves.
The coming market correction will restore some sanity to the economy. How's about we restore some sanity to our lives?
Sunday, March 25, 2007
Did you know you need a quarter to put air in your tires?
Or, the high cost of inflation
I've blown the budget on budget blogs for this week, but let me address one point out of Ontario Premier Dalton McGuinty's final (I hope), NDP-ish budget: the raising of the minimum wage in Ontario to $10.25/hr (in three years). I had a wee change of brain on this one a couple of weeks ago, as a result of something I read in the Toronto Star.
Digression: the price of prejudice is constant mantenance, the checking of your cherished truisms against invading facts. Whenever one of mine gets overturned, I feel momentarily naked and unsure of myself. I'm like a baby who's had his security blankie snatched away. Far from feeling liberated, I actually feel a tad threatened. I've betrayed myself: there will be reprisals, yes? Never mind the good reasons, they aren't that good at all, you're thinking like them, stop that!
Thus do prejudices re-assert and perpetuate themselves.
I used to side with practically every economist in the world in saying that raising the minimum wage is reckless, irresponsible, and just plain wrongheaded. The general consensus seems to be that employers will simply refuse to pay people a decent living wage, even if mandated by law, and will eliminate jobs wherever possible. So government would be hurting the people it's trying to help.
There may be some validity to this argument. All you have to do is think back to the dawn of office computerization. Remember all those naive fools who predicted a four day work week and undreamed amounts of leisure time? Yeah, like that happened, right? Instead, companies quickly figured out how to do more with less, eliminating jobs galore. Hey, the thinking went. If right now we're forcing one guy to do the work of two, and a computer can do the work of ten, well, then, now one guy can do the work of twenty. Or something like that. There is no God but Greed, and Dollar is His Profit.
What's to say that companies, mandated by law to pay their employees a reasonable minimum wage, won't find new and brilliantly creative ways to beat the system? And never mind that "enlightened self-interest" crap.
The answer is simple, really: they need their minimum wage workers. More often than not, they are the face of your company, the front line to your bottom line, as it were. You can't eliminate your grocery cashier, your burger flipper, or your telemarketer (although wouldn't that be nice?)
Almost seventy percent of those earning minimum wage work for companies with more than 500 employees. Surely they can afford to dole out a little of their CEOs' obscene salary packages to the people who really drive their business?
Sorry, thinking like a socialist, there. No, wait a second. Never mind the minimum wage: I wish somebody would enact a maximum wage. Make it, say, ten times the minimum. Nice metric figures. You could call it a remuneration rating, or RR for short. If the minimum wage is $10.25 an hour--call it RR 1--then the maximum would be $102.50 an hour...RR 10. If there's anybody out there reading this blog who currently makes more than $102.50 an hour, I would please invite you to (a) justify your wage and (b) explain why you require more than that to live your life.
There. Socialist to outright communist in one paragraph. And they call me a Conservative. Ha. But all that money above and beyond $102.50/hr that lots of people make, but I contend nobody really needs--can you imagine the positive impact that would have, loosed upon the world?
What really got me in line with the idea of a minimum wage increase was a single sentence in one Toronto Star column. (I wish I could attribute it better than that: I feel a sense of gratitude for having been Shown The Light.) The Light read thusly:
If, in 1972, the minimum wage had been tied to inflation, today it would be $10.25/hr.
I actually felt the impact of that sentence in my head. It reverberated around my skull: rrrrrrrrrippppppp! as my blankie was torn away.
I've never felt it at all fair that your buying power could stagnate and decline as a result of economic factors completely out of your control. Life's not fair, goes the parental voice in my head, but come on, that's just barbarous. It's possible for your salary to have doubled or even tripled over your career, while your take home pay remains the same or even falls, in terms of what it can buy. This is acceptable? I think not.
As far as I'm concerned, ALL wages, including welfare rates, should be fully indexed to inflation. Companies can't even say they'd be losing money, since the buying power of their profits is also tied to inflation. I'll admit I'm nobody's economist, but doesn't this make sense?
I've blown the budget on budget blogs for this week, but let me address one point out of Ontario Premier Dalton McGuinty's final (I hope), NDP-ish budget: the raising of the minimum wage in Ontario to $10.25/hr (in three years). I had a wee change of brain on this one a couple of weeks ago, as a result of something I read in the Toronto Star.
Digression: the price of prejudice is constant mantenance, the checking of your cherished truisms against invading facts. Whenever one of mine gets overturned, I feel momentarily naked and unsure of myself. I'm like a baby who's had his security blankie snatched away. Far from feeling liberated, I actually feel a tad threatened. I've betrayed myself: there will be reprisals, yes? Never mind the good reasons, they aren't that good at all, you're thinking like them, stop that!
Thus do prejudices re-assert and perpetuate themselves.
I used to side with practically every economist in the world in saying that raising the minimum wage is reckless, irresponsible, and just plain wrongheaded. The general consensus seems to be that employers will simply refuse to pay people a decent living wage, even if mandated by law, and will eliminate jobs wherever possible. So government would be hurting the people it's trying to help.
There may be some validity to this argument. All you have to do is think back to the dawn of office computerization. Remember all those naive fools who predicted a four day work week and undreamed amounts of leisure time? Yeah, like that happened, right? Instead, companies quickly figured out how to do more with less, eliminating jobs galore. Hey, the thinking went. If right now we're forcing one guy to do the work of two, and a computer can do the work of ten, well, then, now one guy can do the work of twenty. Or something like that. There is no God but Greed, and Dollar is His Profit.
What's to say that companies, mandated by law to pay their employees a reasonable minimum wage, won't find new and brilliantly creative ways to beat the system? And never mind that "enlightened self-interest" crap.
The answer is simple, really: they need their minimum wage workers. More often than not, they are the face of your company, the front line to your bottom line, as it were. You can't eliminate your grocery cashier, your burger flipper, or your telemarketer (although wouldn't that be nice?)
Almost seventy percent of those earning minimum wage work for companies with more than 500 employees. Surely they can afford to dole out a little of their CEOs' obscene salary packages to the people who really drive their business?
Sorry, thinking like a socialist, there. No, wait a second. Never mind the minimum wage: I wish somebody would enact a maximum wage. Make it, say, ten times the minimum. Nice metric figures. You could call it a remuneration rating, or RR for short. If the minimum wage is $10.25 an hour--call it RR 1--then the maximum would be $102.50 an hour...RR 10. If there's anybody out there reading this blog who currently makes more than $102.50 an hour, I would please invite you to (a) justify your wage and (b) explain why you require more than that to live your life.
There. Socialist to outright communist in one paragraph. And they call me a Conservative. Ha. But all that money above and beyond $102.50/hr that lots of people make, but I contend nobody really needs--can you imagine the positive impact that would have, loosed upon the world?
What really got me in line with the idea of a minimum wage increase was a single sentence in one Toronto Star column. (I wish I could attribute it better than that: I feel a sense of gratitude for having been Shown The Light.) The Light read thusly:
If, in 1972, the minimum wage had been tied to inflation, today it would be $10.25/hr.
I actually felt the impact of that sentence in my head. It reverberated around my skull: rrrrrrrrrippppppp! as my blankie was torn away.
I've never felt it at all fair that your buying power could stagnate and decline as a result of economic factors completely out of your control. Life's not fair, goes the parental voice in my head, but come on, that's just barbarous. It's possible for your salary to have doubled or even tripled over your career, while your take home pay remains the same or even falls, in terms of what it can buy. This is acceptable? I think not.
As far as I'm concerned, ALL wages, including welfare rates, should be fully indexed to inflation. Companies can't even say they'd be losing money, since the buying power of their profits is also tied to inflation. I'll admit I'm nobody's economist, but doesn't this make sense?
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