I do my research, and I think long and hard before I form an opinion. As a result, I don’t find myself changing my mind too often. (My wife might not agree with this analysis, but she’s entitled to her own opinions.) However, present economic trends have forced me to re-evaluate some ideas I have taken for granted for decades.
We have some major cognitive dissonance going on in North America. The American Democrats are campaigning on the premise that the stock market has doubled in value during Biden’s term. Which it has. The Bank of Canada has been keeping interest rates up in order to cool down the economy. And yet the Right Wing in both countries contends that our economies are going to hell in a handbasket. They are wrong, but not as wrong as we’d like them to be. How can these factors both be right?
Point of View
Well, it depends on who you are. It’s obvious that those at the economic level where the stock market is the major factor are doing fine. Looking at the target audience for the doomsayers, it is those lower on the food chain that are suffering.
How Is This Happening?
It leads one to wonder just what is wrong with the assumptions upon which we base our society. It seems there are several myths that need to be examined closely.
Free Trade is Good for Everyone
The trend for decades has been towards opening borders and widening markets. This works for the bigger companies who trade at that scale. But how has it helped the small business and the working stiff? Basically, only through the trickledown effect, which, as everybody has finally realized, doesn’t work. The European Union is based on free market principles. Their economies seem to be doing fine, but if you go there and talk to the people in the local marketplace, all they do is complain about their lost opportunities because of red tape and competition from conglomerates.
And if you’re watching Canadian accomplishments with ecar and ebattery factories, you’ll see that government interference in the economy is still going strong,
We Need Lots of Immigration
This is one that crosses party lines, because the Liberals are all for it and the Conservatives are all against it; but look closer. The main reason we need higher levels of immigration is to bring in workers. Thus the only benefit is to employers. The other factors are all negative: strained social services, strained medical services, rising crime rates (Okay, the causation is dubious there) and worst of all, strained housing.
We Must Build More Houses.
The solution to a housing shortage is to increase the supply of houses. That part is true. But due to several factors, the housing being built is the wrong kind.
It’s an unfortunate economic fact, but the type of housing that makes the most money is upscale. But the major needs of the housing market are for the lower economic levels. Remember all those new immigrants? So, governments are doing all they can to induce constructors to build homes for the poor, and the contractors are using every trick in the book to increase the percentage of upscale homes in their projects.
And then there’s the NIMBY set who don’t want to see more housing. The main opponents of densification are those who live in single family homes worth millions because they use up so much of the city’s surface area. Which drives up the cost of building apartments and condos.
Private Medical Facilities Help with Overloads
This is a sneaky one. Hospitals are overcrowded. Surgery waiting lists are increasing. Along come private companies that set up facilities and help to ease the burden. Isn’t that nice of them?
Wrong! Along come private companies that take another slice out of the available economic pie for their shareholders and siphon off needed medical personnel from the government-run facilities. Private facilities are only of use to people who can afford to use them to skip the lineups where the rest of us find ourselves.
The Bottom Line
These basic misconceptions have been fostered in our societies for such a long time that they feel like obvious truths. In fact, they only benefit those at the top end of the economic scale.
As usual.