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Saturday, February 14, 2009

Financial elite have no shame

Good weekend to you!  We the business team are pleased to bring you an article that really gives a scolding to the financial ilete.  During these very scary economic times many are saying that a lot of our hardships should and could be attributed to the financial ilete. 
We will let you be the judge of this.  This article gives you an insight into what is really going on here and why the financial elite should be taking responsibility.
We wish you a great weekend.
Financial elite have no shame
Even in face of crisis, they continue to push for tax cuts instead of
by Linda McQuaig
January 27, 2009
Let's imagine, for a moment, how different the public debate would be today
if it had been unions that had caused the current economic turmoil.
In other words, try to imagine a scenario in which union leaders - not
financial managers - were the ones whose reckless behaviour had driven a
number of Wall Street firms into bankruptcy and in the process triggered a
worldwide recession.
Surely it's time to rethink this resistance to government acting as an agent
of the common good.
Needless to say, it's hard to imagine a labour leader being appointed to
oversee a bailout of unions the way former Goldman Sachs CEO Henry Paulson
was put in charge of supervising the $700 billion bailout of his former Wall
Street colleagues.
My point is simply to note how odd it is that the financial community has
emerged so unscathed, despite its central role in the collapse that has
brought havoc to the world economy.
Of course, not all members of the financial community were involved in Wall
Street's wildly irresponsible practices of bundling mortgages into
securities and trading credit default swaps. But the financial community as
a whole, on both sides of the border, certainly pushed hard to put in place
an agenda of small government, in which financial markets largely regulated
themselves and citizens (particularly high-income investors) would be spared
the burden
of paying much tax.
The agenda advanced much further in the US, but had an impact in Canada,
particularly on the tax front.
One would think that those who pushed this agenda so enthusiastically would,
at the very least, be a tad embarrassed today.
But so influential are those in the financial elite - and their hangers-on
in think-tanks and economics departments - that they continue to appear on
our TV screens, confidently providing us with economic advice, as if they'd
played no role whatsoever in shaping our economic system for the past
quarter century.
Of course, we're told there's been a major change in their thinking, in that
many of them are now willing to accept large deficits in today's federal
budget, in the name of stimulating the economy.
While this does seem like a sharp departure from the deficit hysteria of the
1990s, a closer look reveals the change may not be that significant.
In fact, financial types have always accepted deficits - when they liked the
cause. Hence their lack of protest over George W Bush's enormous deficits,
which were caused by his large tax cuts for the rich and his extravagant
foreign wars.
What they don't like is governments going into deficit to help ordinary
citizens - either by creating jobs or providing much unemployment relief.
So the Canadian financial community has been urging that the stimulus
package consist mostly of income tax cuts - even though direct government
spending would provide much more stimulus and do more to help the neediest.
If the Harper government follows the financial community's advice, we will
simply move further along with the small government revolution launched by
Ronald Reagan in the early 1980s.
Of course, tax cuts are not the same as financial deregulation. But they are
twin prongs of a bundled package aimed at reducing the power of government
to operate in the public interest.
Surely it's time to rethink this resistance to government acting as an agent
of the common good. And maybe it's time for a little humility on the part of
a financial elite that long has enjoyed such deference while turning out to
be so spectacularly inept.


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