For those that don’t support a financial transaction tax and think that a free market economy is the key to prosperity, I point to the San Francisco-based hedge fund Hyphen Partners Ltd.
Hyphen Partners Ltd. is planning on making a bundle by betting against Canada in the markets. A recent Globe and Mail report indicated that Hyphen principal, Vijai Mohan, is wagering on Canadians being tapped out of credit at the same time as their banks and housing prices collapse. If we lose big Vijai and his friends make out like bandits.
My blood boils when investors look forward to profiting from our demise. I must admit that, for all the wrong reasons, Mohan may see something most Canadians don’t.
He can see how Canadians, and Ontarians in particular, are struggling as a result of fiscal policies that empower those at the top of the wealth chain; the one percent. Outsourcing, privatization, and the attacks on organized labour have been used to speed the “race to the bottom” for many.
Working families are stretched because wages have not kept pace with the cost of living. Many have grown used to relying on cheap credit to purchase basic needs. Like crack dealers, the banks have obliged. They encourage this when they say: “you are richer than you think.”
But are we richer or poorer? Borrowing against home equity and cheap consumer credit hide the fact that the economy can’t grow without wage growth.
We now also see the Harper government tightening rules around borrowing. With this, the housing market will go down. When housing prices decline, the equity many use as collateral for lines of credit disappears. Sound familiar? It should. That’s what happened in the United States in 2008 to prompt the last big market collapse.
Home equity has proven to be imaginary wealth. When the bubble bursts homes are lost, credit dries up, and jobs disappear. Massive unemployment is the result.
Who in Ontario buys into the logic of Mohan’s Hyphen Partners?
Anyone who has read Tim Hudak’s white papers, entitled “Paths to Prosperity” would know. The Ontario Conservatives have. Their documents should be titled the “Road to Ruin.”
Hudak’s papers call for tax cuts for wealthy corporations as a way to spur the economy even though it is well proven that tax cuts just make corporations and their CEO’s rich. This is not the road to growth. It is the road to ruin.
Hudak also calls for huge cuts to the public sector even though studies indicate public service job cuts do not prompt private sector growth. If they did, then countries like Greece and Cyprus would have full employment. They have the opposite with huge unemployment, especially amongst youth.
Hudak has also forgotten that most small business owners depend on the wages and spending of workers for their profits. Working people spend most of what they earn close to home in their communities.
Hudak’s plan to fire thousands of public sector workers and lynch trade unions has never solved problems faced by working people and those desperately seeking work. If someone can explain to me how throwing thousands of skilled workers onto the unemployment line helps those already unemployed, I’m all ears.
Hudak’s plans have however made tremendous gains for the rich. They have done so by exploiting deficits and debt even though the entire capitalist system is dependent on debt.
History shows Conservatives have accumulated plenty of debt through tax cuts for the wealthy. When the Harris/Eves Tories vacated office, they left behind more than a six billion dollar deficit during a period when Ontario’s economy was strong.
It is ironic that Hudak now leads a political party drowning in debt. Maybe he should work on that set of books first using the same principles?
Hyphen Partners Vijai Mohan and home grown Tim Hudak are vultures at our door. Both are ready to pick at the carcass of what was a dynamic economy.
That creative and financial strength came at a time when Ontarians bet on each other; a simpler time when working people received a decent wage and a fair share of the economic pie. Back then, society understood that this was the right way to move society forward.
Friends, many think we are now on an economic precipice.
I believe we are on the edge of something great. We can move towards greatness by first acknowledging we have been lied to. Once we have, we can focus our anger towards the people and things that divide us. Then we can begin to act in the interest of our children and all those that succeed us.
Our first chance for action will be at election polls. A provincial election may come sooner than we think! If it does, contrary to the Hudak’s and Mohan’s of the world, I’m betting on us.
In solidarity,
Smokey Thomas