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If the economy is so rosy, why are things so grim ?
--- TWO ECONOMIES ---
July 6, 1999 -- by Thomas Walkom.
The economic boom, we are told, continues. Production continues to grow; the stock market is rocking. Asia is bouncing back and the big, powerful U.S. economic engine chugs along in one of the longest periods of continuous growth since 1945.
But at ground level, where most of us live, the world still seems a precarious place. Wages lag. Big, profitable companies continue to lay off staff. The unemployment rate is falling but good jobs are still hard to find. The Kingston Rd. motel strip is chockablock with homeless families.
How can things be so rosy yet so grim ?
Jim Stanford proposes an answer to this question (in) .. a book called "Paper Boom". Its central argument is that there are two economies in Canada: a real one which produces the things that people use --- such as homes, cares, health care, roads; and a paper, or financial one. ...
But in practice, the real economy finances itself. ... The stock market, he points out, ends up financing not real productive investment but get-rich-quick schemes, particularly mergers and acquisitions. ...
.. the beneficiaries are the high rollers in the financial industry, corporate captains paid in stock options and the still tiny percentage of people who own most of Canada's wealth.
In fact, the very success of the financial economy has hindered the real economy. ...
The Prosumer market share will continue to expand until the financial (paper) market implodes. Since prosumers do not yet understand the creation of and the influence of the "paper" market, they are helpless in being continually exposed to workplace uncertainty and a decreasing standard of living. Losers in the paper market have no credibility. They have bought the paper market myth along with the envious and dependent status quo --- leaving them too ashamed, and too confused --- to mount a defence and change the direction of an economy which is slowly burying them.
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