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Casino Economics: From Our Hands to Their Pockets

“The decade 2003-2012, the 449 companies publicly listed in the S&P 500 index spent only 9% of their earnings on new capital investment. They used 54% to buy back their own stock, and 37% to pay dividends.”

– Michael Hudson

“Gambling is a stealth tax on poor people hoping to beat impossible odds. Governmental income from gambling is an effort to make up for taxes the rich and corporations no longer pay.”

– Chris Hedges

“Throughout history every state that has come to rely on gambling for its tax base has been in steep decline.”

– John Ralston Saul

The effects of the Casino Economy are fully upon us. For the wealthy and our corporations its the game rigged in their favour on Wall Street.  For the rest its the games rigged against us – lotteries and casinos.

The speculative financial industry has taken control over the economy. As opposed to capital being invested for productive uses it instead is used to create profit. Money making money on money while making nothing else. This is at best an inflationary activity creating debt and so driving up the cost of doing business for the economy as a whole. At its worst it is a bubble making activity looking for a place to burst.

Our elites paid billions in lobbying over the decades since the New Deal to create this reversal in our economies. N.B. In the 1950’s nine out of every ten dollars of capital was invested in productive capacity. Today ninety five out of every hundred is not! The greatest and most debilitating trick that was pulled was convincing our populations that our governments have run out of money. Simultaneously engineering a situation where every government in the world is ‘drowning in debt’.

The reality of course is that you can be out of trees, out of bees, out of topsoil and drinkable water. All of these are finite and irreplaceable. Ask the people of Flint or Canada’s indigenous peoples. By very stark contrast a country with its own currency can never be out of money. How our financial elites created this self-serving misconception was by financial engineering. In effect instituting a corporate coup d’etat over the creation of the money supply and the servicing of debt. Moving these from the public sector to the private sector.

So whereas for the first century of my country’s existence our debt was owed to the Bank of Canada – aka ourselves – in the 1970’s the private banks convinced our politicians to instead owe it to them. The consequence of this is that the interest on the debt no longer returns to we the citizens of the country. Instead it goes to the foreign and domestic financial elites who have thereby taken the country from our hands to their pockets. This is of course not unique to Canada it is rather the very basis of the Washington Consensus and the new financial order of the OECD countries and beyond.

As a result our politicians have enabled the essentially fascist outcome of corporations being in control of both our government representatives as well as our monetary policies. As Mussolini pointed out fascism is defined by an economic system where the policies chosen by government are indistinguishable from those desired by corporations.

Today we have a situation where our elites have financially engineered possession and/or control of virtually all the money in our economic systems. With this control they have chosen to ‘seek yield’; through leverage, high speed trading, and share buybacks. Failing at the same time to invest in human and environmental needs. Our ‘representatives’ preach the gospel that governments must ‘tighten their belts’ and so cannot afford to reduce homelessness, crumbling infrastructure and the environment. Despite this gospel they always manage to find money for tax cuts military spending and corporate subsidies. Capital our elites then devote to the casino that creates more inequality while inflating us ever closer to the bursting of yet another bubble like the one of 2008.

Along with this warping of our economy our elites have also paid billions to elect politicians who do not believe in politics. Who instead believe that the taxes that our government was formerly returning to us in services and infrastructure spending should be either abolished or privatized. This is as true for ‘liberals’ as it is for ‘conservatives’ both labels having lost all meaning along the way.

Harper, Howard, Blair, Clinton, Bush, Hollande, Trudeau, Trump, it matters not at all. Each of them pushes the same prescriptions. I.e. Governments are broke so the private sector is the only alternative. Here at home in Ontario this has led to a perfectly instructive bit of insanity. Our ‘Liberal’ government seeking to push through what a previous ‘Conservative’ government was forced to back away from out of fear of the political damage it would do to their electoral fortunes. I.e. Privatize the electrical system that we citizens have paid for and owned for close to a century. It quite simply cannot be more obvious that the future of all energy is electricity. The Wynne government’s response? Give away the greatest jewel in the crown of the people. So much for the identity politics utility of electing a gay woman.

Be they ‘libs’ or ‘cons’ our politicians are in service to same ideology and paymasters. Both dedicated to the proposition that the private sector should be entrusted with solving the challenges we face.  Be it climate change, the destruction of our oceans, our drinking water, our farmlands, our pollinators. These will never be challenges that the market will proactively invest in to avoid. That is obvious on its face. It is equally obvious that they will however be happy to exploit them for profit after they have occurred. Here in Canada we have the good fortune of being able to put in power the NDP or the Greens. The NDP being in essence the New Deal Party. We don’t but we could.

Be they ‘left’ or right for the last forty years our politicians have been guilty of shifting power away from democratic control and towards our financial elites and our corporations. The only difference between the two wings of the one business party was the rate of devolution. At best the population was given a slight pause during some terms. This is what a downward spiral looks like.

Thanks to the corporately owned media our ‘liberals’ were given such effective cover that even as they devolved ever increasing amounts of power to the private sector they were painted as ‘tax and spend’ and ‘big government types’. The result being that when the public tired of their snake oil and its ill effects on their fortunes they had nowhere to turn but the other wing of this bird of prey. One whose only ‘solution’ was even more of the same.

Our corporations and our elites have performed a slow moving coup d’etat ever since the New Deal. As a result we have moved from being democracies to being a plutocracies. No longer is it one person one vote, it is now instead one dollar one vote. This crippling of our social and economic ability to work collectively could not come at a worse time. Plastics in the ocean, the destruction of global fisheries. The pollution of our drinking water, the looming dust bowl in our prairies. We are headed for a level of challenge to our well being greater than the threat of war. Clearly this is a threat to our affluence not to mention many lives.

Yes some of our politicians took a few baby steps forward. Many, like myself, were happy that at least they weren’t taking large steps backwards. It has however become obvious that the gap between small steps forward and large steps backwards is a distinction without a difference. The challenges we face are on a timeline and if we do not meet that timeline the feedback loops of Mother Nature will take over and all but certainly end the project of civilization.  Thankfully this is now being recognized within the scientific community at least as anything but hyperbole.

I used to be afraid of a Trump Presidency. No more. Devos for Education, Perry for Energy, Pruitt for the Environment. The destruction they intend is so very obvious that finally people are becoming enraged and engaged. Even more heartening is that polls show that Trump and Clinton are equally despised while the young and many others have aligned themselves with the New Deal democratic policies espoused by Sanders. The bald faced wreckage that this Presidency intends has had the effect of accelerating the protest required to make fundamental changes to our systems. Given the timeline we face dictated by the laws of physics and chemistry that is a silver lining we must mine with haste.

The era of bigger government is in front of us because when it comes to solving the problems of people and nature there truly is no alternative.

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