“Our” “Economy”

We see this beguiling phrase (Our Economy) in the newspapers all the time. I submit that the word “our” is an automoron.

Those of you who missed it can get a laugh and catch up here. I proposed the word ‘automoron’ as a parallel to oxymoron. An oxymoron is a real (or apparent) contradiction in two adjacent words. ‘Military Intelligence’ is the usual snickering example, while I prefer ‘secret evidence.’

My proposed  automoron is a simple construction: it consists of a single word which, by its very presence, denies its own impact. My favourite example is a performance review of an unliked employee. The reviewer said it was basically fair. By needing to describe the fairness, the word basically defeated itself. (pun intended.)

We are told it is ‘our’ economy (that is improving or deteriorating). I submit that it is not. It is the economy of large, sometimes foreign, corporations. It is the economy of the Gord Nixon (which feel free to search for in this website) types who consider sending jobs offshore to be good business. It is the economy of the US Republican Party, which wants to keep health care unaffordable for the poor majority. It is the economy of special interests. In no sense is it ‘our’ economy.

Even better, (worse, actually) it is not really an ‘economy‘. This mellifluous word implies order: ‘the hidden hand of the marketplace’, the ‘balancing of supply and demand,’ the creation of decent employment statistics, a system of governance preventing financial meltdowns, a fair distribution of products based on contribution of labour and inputs. None of the previous noun phrases actually exist.

Cars have airbags. This is a dumb example in that modern airbags do save lives. However, when they were being legislated, the fine American magazine Road and Track pointed out that: a) a three-point seat belt was a lot of protection; b) a five-point seat belt is even more (and, if you saw the high speed Formula One crash the other day from which the driver emerged with a totally shattered car, two cracked vertebrae, and a broken leg – no airbags, just a five-point harness, a roll bar, and a chassis designed to protect the driver) and c) most tellingly, Road and Track predicted the injuries that would result from airbag deployment. Even with the new ‘slow’ airbags, if you have your hands over the centre of the steering wheel, expect to have both wrists broken.

So what, you say. Get to the point. The point is this: there were alternate means of greater safety (the Volkswagen Dasher had automatically latching three-point seatbelts and a knee bolster) but the vehicle lobby wanted the more expensive solution. So that became law. It was not a decision based on safety so much as one based on forcing drivers to pay for new gadgets.

More to the point, there were laws implemented after the Great Depression to increase consumer financial safety. Dismantled over decades, protections like the Glass-Steagall act were meant to curb financial corporations from risking ‘our’ ‘economy’. When the protections had been dismantled, financial institutions could get rich while risking ‘our’ ‘economy.’ You will note that, while profitable, profits were limited to the heads and chief traders – the 0.1 % of America. You will note that, when everything tanked, bailouts were done by Federal institutions, using ‘our’ money.

Today, in the USA, the economy is being held up by, among other things, the purchase of low quality mortgage-backed securities. You can start your research on this Quantitative Easing here. What nobody seems to have noticed is, the bad debts written by the financial institutions after tearing down our protections, are being bought up by the Fed using money that is essentially printed. Printing money makes more of it exist. (You already knew that.) Having more money chasing goods is called inflation. Sooner or later this fact is going to catch up with the US economy, and we little beavers living next door in Canada will also notice.

To recap: articles telling us to worry, invest, be optimistic, whatever, about ‘our’ ‘economy’ are misleading us. Big Business will stay profitable. Prices may rise. Jobs may disappear. It isn’t our economy at all.

If there is an invisible hand, it’s in your wallet pocket, it’s handing you a pink slip, and it’s doing really well for itself at the same time. This is the economy that isn’t ours.

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