When ‘the good old days’ get dangerous
This appeared in the St. John’s Telegram
Sometimes, a news feed offers up a stunning juxtaposition. First in, there was news coverage of the Bank of Montreal’s quarterly financials: $1.35 billion in profits for its fourth quarter, or, $20.5 million in profits every single working day of the quarter.
Or, to think about it another way, 29,700 pounds of $100 bills. In profits. In three months. For a company that essentially moves money around.
The other story, delivered mere minutes later? A news story on a speech by Mark Carney, formerly the head of the Bank of Canada, now the head of the Bank of England. Carney’s message?
That the current system of global capitalism — with its clear gap between the “haves” and the “have-nots” — is lurching towards dangerous ground. Think about what he said:
“Now may be the time of the famous or fortunate, but what of the frustrated and frightened? From the rising spectre of global terrorism to intensifying geopolitical tensions and financial crises, for too long, for far too many people, the world seems to be getting riskier. They are right.
“One of the things that I think contributes very understandably to the level of anxiety that households feel in this economy, in other economies, is the fact that it has for them been almost a lost decade of growth.
“Real incomes have not grown for the last 10 years. That is incredible and that shines a light on inequality, inequalities that exist in this economy, exist in other economies and make people question what is being done to address those and what are the fundamental causes of those.”
Among the central issues Carney raised? That the real beneficiaries of global trade are often companies, among them, companies that don’t even pay a fair share of society’s expenses: “Globalization is associated with low wages, insecure employment, stateless corporations and striking inequalities.” Automation and technology have stripped more jobs than most people realize, and the new economic world is going to be very, very different.
Carney is right: if governments don’t take an active role in finding ways to ensure gains are shared more equally, voters will, as they may have done in the last U.S. election, take matters into their own hands.