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?