- Peter Schroeder reports on a galling lobbying effort to keep the U.S.' government paying free money to banks. And Jeremy Smith discusses how corporate groups have pushed to treat any form of public-interest regulation or fair taxation as an imposition on financial-sector profiteering:
Mr Das outflanks even Ms Reinhart in the scope of what he includes (as it appears) within the scope of "financial repression". It also covers – according to his article – higher taxes, co-paying for government services, cuts in benefits, raising pensionable retirement dates, currency devaluations, as well as maintaining low and negative interest rates, and new liquidity requirements for banks. What he fails to mention (yet this is surely more “repressive” than low interest rates) is the fact that real wages in the UK were “repressed” by about 8% from 2009 to 2013.- Meanwhile, Aimee Groth points out that entrepreneurship - so often pitched as a means of encouraging social mobility - actually arises out of privilege since the only people with the ability to take risks are those with alternate means of support. The Huffington Post comments on the "glass floor" which ensures that the children of privilege never lose their advantages. And Miles Corak outlines some steps we should be taking to build an inclusive economy.
At the end of the day Mr Das’s argument is no more than the classic bond-holder’s self-serving contention down the ages: that creditors - and sovereign bond-holders above all - always and everywhere must have their real rate of return protected and enforced...
What the “financial repression” proponents always ignore is that there was one period in western societies when the finance sector was well-managed, in line with Keynes’s policies for cheap money, with interest rates at low levels across the range of maturities. This was the period from 1945 to the early 1970s – and in some respects starting earlier, with the New Deal in America. In his response to a paper published by the Bank of International Settlements on financial repression by Carmen Reinhart and Maria Belen Sbrancia, "The Liquidation of Government Debt” (2011), Professor Alan Taylor commented:
We must be wary of confusing financial repression (which sounds like a terrible thing) with financial regulation (which sounds a good deal more wholesome). In the context of current debate on how better to regulate the financial sector after the recent debacle, it is entirely understandable that the authorities have decided that banks and other entities were given far too much leeway to pursue activities that were not only self-destructive, but also destructive of the wider economy…Whether we call it financial repression, lack of competition, tough regulation, the fact remains that the 1945 to 1975 era was a glorious period of economic growth in the advanced countries, as well as in many emerging economies. It was a time of rapid economic growth with the allocation and mobilization of large amounts of capital, generalized macroeconomic and financial stability, sustained real wage growth and low unemployment…In marked contrast, the subsequent thirty-some year period from 1975 to the present has been one of financial liberalization, but at the same time has seen a pronounced slowdown in growth and capital accumulation, more financial crises, real wage stagnation, and elevated unemployment.
- Marie-Danielle Smith follows up on the UN Human Rights Committee's review of Canada by pointing out that the Cons seem to be the only people in the country who don't see both room for improvement, and an urgent need to achieve it.
- Finally, Drew Nelles writes that if the Cons' Mother Canada proposal is an abomination, it also reflects far too well the culture of corporatism and self-worship that represents their most obvious contribution to Canada. Which means it's no wonder that (as Charles Mandel reports) the project's proponents are cancelling public meetings which might result in people actually thinking about what it means.