Apologies – this qualifies as a bit of a rant. I am writing in an attempt to answer my own question posed in the last blog: Why do I feel so confused?
Given my knowledge of the subject, I am qualified only as an Economic dummy and so that is who I write for. And that is who I am. I know nothing and that is what I have to share. Read at your peril.
Firstly, I think we can all agree that supply and demand are no longer the primary price setting metrics for much of anything. House prices, for instance, cannot be explained by supply and demand (did we get 50% more people in Canada last year?) but interest rates, mass hysteria, altered statistics and desperation certainly come into play. Food prices? Same kinda thing (are we all eating more all of a sudden?). We are all driving less – but look at gasoline prices….?
Of course, supply and demand are still factors but in say, avocadoes, the drug cartels also play a big role. Like the marketing boards. Like the CRTC does with internet services. Like the oil cartels do with fuel. And, of course, the government messes with the fundamentals all the time with money supply, interest rates and various policy mandates, not to mention taxes.
National budgets are now based more on threat and extortion, not basic scarcity or abundance. Or, better put: national budgets are based on taxes (whether they are affordable or not). Government first looks after government. Some pundits even theorize that inflation is a tax (of sorts) and the government plays with (or tries to) with inflation as an income stimulant (for them). If a country like Canada has an almost 50% tax rate, isn’t supply and demand altered/diluted by that?
Of course it is. Basic marketplace fundamentals (supply and demand) can no longer – nor have they ever been able to – fully explain economics despite what Samuelson wrote back in the 50’s. Paul said that it was all about scarcity and maximizing resources in a free market system. It just ain’t that simple anymore.
Now it is rigged.
Mind you, rigging the system is what we do. Always have. Fishermen, loggers, doctors, nurses, the whole enchilada constantly work to maximize their own, personal resources and do so with regulations, professional credentials, licenses, permits, laws, unions, corporations, political donations, monopolistic practices and, sometimes, just your basic cheating. Like the hockey player using his elbows in the corner, they push the limits of tolerance to maximize their position even if it means cheating. Samuelson never taught his students about cheating and cheating is a big part of any business or any ‘system’. “If you don’t cheat on your taxes (permits, regulations, payments, etc.) you will not succeed”. That has been the Capitalist ‘secret’ for as long as there has been money. See: Trump.
Bottom line: trying to figure out economics is now more than just a social science based on the behaviours of the buyer and the seller. Now it is a complicated soup of lying, cheating and manipulation as well.
“Dave! That is NOT news.” True. In fact, all the miscreants and parasites that influence our basic economics have been known for a long time and that is why some of the laws and regulations were originally written. That is why some standards and qualifications were required. Of course, that just means we are trying to control strong deviant forces with toothless regulators, cobwebs and some ‘stinkin’ badges’. They are there just for show and to shake down the little guy. They are largely ineffective. We are more corrupt than ever.
Which brings me to my point: something shifted awhile back. It was a morality shift. It was significant. The collective ‘we’ embraced lying and cheating even more so than ever before. It was like a collective side-step onto the dark side. Looking back, I am going to suggest that the start of the ‘slippage’ occurred starting in the 80’s and got a leg up, as it were, in the 2000’s.
This is a hard thing to describe but, when I was growing up, lying and stealing were not only heavily frowned upon, they were rarely encountered. And bear in mind I lived in more than a few ‘bad sections’ of various cities and towns. Naturally, lying and cheating and stealing were present but there was a larger ‘morality’ that influenced people – especially those in the same neighbourhood. Today? Not so much.
Side note: a lot of older people feel the Gen X’ers and Millenials have lost that earlier quasi moral compass. X and Millenials are supposedly marked by the ‘what’s in it for me’ maxim. Do I believe that? I don’t know. I am OTG. But it is a somewhat popularly held denigration.
The drug cartels in Mexico are now so entrenched, embedded in society, they are now the arbiters of much of Mexico, the de facto governors. Mexico is a narco state and it is failing as a society. So is the USA. Even Canada has a growing gang society. Six year-olds swear like Lenny Bruce, ten year-olds are over-dosing, 16 year-olds are shooting each other and petty theft is so common the police do not even look for the thieves or the stolen goods anymore. Hell, half the murders in the country are done by the police!
The previous president of the United States was and still is an unabashed liar and cheat who is infamous for also being selfish and narcissistic. He gave license to this mental and moral erosion. He enables it. He is followed by millions of dupes, trolls and propagandists who ‘in their heart’ support all that. They do NOT tolerate all that, they SUPPORT and PRACTISE all that!
We have always been bad. We have always lied and cheated. But NOT at this scale. This is different. We have, it seems, evolved and reinforced our worst ‘resources’ and lost much of our better ones. We have abandoned goodness and ethics and integrity to make (or steal) a buck. For some reason, we have slipped further than ever. We have become a society of porch pirates, car thieves, con men and cheats. How did that happen? And how do you plan, predict, manage and live in an economy based way too heavily on lies and deception?
You move off-grid.
It may be the rookie eyes or the ‘too much in bliss to notice’ but the real world you describe does NOT seem to live here. Yes, everything is expensive but it seems that everything is also Real. So it’s a far cry from the rat race for the almighty buck, and I do believe…
I can live with that.
True. Paradise OTG works for me and you, that’s for sure. But we are not the species – we are just a small lucky component of a privileged society. Methinks dysfunctional lying, cheating, delusion and corruption will – if not destroy – retard our evolution. I never would have thought that lying would be our undoing but lying is denying reality and that is what might kill ya.
Hi. How are u? Hope you and your family are healthy and safe during these hard times.
Yo, Niki!!! Good to hear from you. We are fine but I am pretty sure HK is feeling the pressure. You still good? Mom? Take care, kid. “This, too, shall pass.”
Groan. I could write an economics essay on this. Unfortunately I have no chocolate or icecream in the house and I don’t drink. Monopolistic competition. Businesses in competitive markets want market power so they do this by seeking to establish a monopoly in their niche. If the niche is small, the theory is governments won’t want to regulate them. Trouble is they become attractive takeover targets and niches get bigger. And bigger. In a perfectly competitive free market, there will be new entrants and beat them down, but as we know, markets are not perfectly competitive. Political donations, jobs for the boys from the parties that “represent” business, blah, blah, blah. Neo-liberal economics. Deregulation agenda. It is soon regulate thyself. Rape and pillage suppliers and customers. Grow too big to fail. Spend a lot on advertising on some right wing media. Corporate identify = national identity. Brand loyalty. Marketing 101. Those with a social and environmental conscious, including those in Gen X and Millennials, identify with social enterprise, local (and often small) business. The don’t even get invited to the negotiating table, let alone backroom deals. Need chocolate.
Wow! And I thought the blog was a rant! But I sympathize and empathize with you…Capitalism (especially corrupt Capitalism) is all so self destructive (to the planet). Some old, senile, ugly dorks get rich while their products pollute the ocean with plastic or the air with pollutants or the earth with chemicals or their families with Cancer. What the hell is wrong with us besides greed, ignorance, sociopathy and lack of moral values? Is buying a yacht so important that one can be delusional to the point of manslaughter? And how does embracing a pathological tyrant serve even that perverted purpose?
They think you’re making it up.
you started your blog with ” a false prophet line”…I think this has something to do with your previous post 😉 . But again, you are right. The “slipping” started long ago, as you were saying, but I agree, at a higher pace every year. The filthy rich are getting richer by all the money that was pumped into the system, and they are orchestrating what is happening now to get even richer. So then they can make a competition between themselves who has the biggest yacht….did you know that the business of “superyachts” is booming like never before?? I always make the comparison by financial guys making money with “shorting”….it is the most artificial financial tool created. So I was happy that the “Gamestop/reddit” happened and that hedgefunds and shortsellers lost a lot of money. Maybe “we” should do something similar with oil prices/wood prices/house prices??
I think there was always lying and cheating in business, politics and power.
Now they’re just more blatant about it and (if Trump is any indication) even brag about it.
It seems that Trump may have been the bell ringer for the US Law enforcement.
He was so blatant about his lies and influence pedaling its come back to bite.
The indictments and trials are circling him.
As for Canada?
We need laws that actually scare people.
Which would mean more prosecutors, prisons, and punishment.
Aint gonna happen with the touchy , feely govt we have now.
Society in general needs a major slap in the face.
A pandemic doesnt seem to have brought out the best in us…
A economic disaster? A major earthquake? A world war?
Us against Them?
75% few people on the planet?
Too many rats in the cage eating each other right now.