It is doubtful the developers of the reality television show “Hoarders” have considered Bay, Wall and Fleet streets or the Cayman Islands as possible shooting locales.
But perhaps they should.
Confession time. I have never seen an episode of “Hoarders.” It is just not my cup of television tea.
I have, though, seen it advertised. It is billed as a documentary series and has even won an Emmy.
The show’s website says it attempts to put hoarders on the road to recovery by getting them expert help. By the end of each episode, again according to the show’s website, the audience finds out if the featured hoarders have been able to get their behaviour under control or if they have “fallen into the deep end of this painful disease.”
The difference between these hoarders and those we have been reading about in recent days in newspapers like The Guardian and The Globe and Mail is that one group acquires “a large number of possessions that others would consider useless,” and the other acquires possessions of value like cash and assets.
But both suffer from the inability to discard their hoarded possessions.
Take corporate Canada. Progressive economists have been complaining for some time about their cash and asset hoarding. Canada’s Governor of the Bank of Canada, Mark Carney, has also been critical of corporate Canada’s hoarding practices, saying there is no reason keeping Canadian companies from investing.
Certainly they have been given incentive enough to do so. But billions in corporate tax cuts have instead been stockpiled on top of their more than half a trillion dollars in cash reserves, rather than invested in the economy.
Canadian companies are sitting on over $525 billion in cash, almost one-third the size of the entire economy of the country, according to a report by The Globe’s Doug Saunders this past week.
He was quoting a study by the Gandalf Group which discovered that at least 45 per cent of Canada’s biggest companies are hoarding their cash rather than investing in jobs or capital.
This cash and asset hoarding by corporate Canada is not news. Contributors to the Progressive Economics Forum have been documenting this problem for well over a year now.
The corporate hoarding is much worse in the United States, where, Saunders reports, over $5 trillion is being stockpiled rather than invested. If corporate America started investing some of their cash reserves into creating U.S. jobs, it is safe to say it would help turn around the country’s floundering economy.
Saunders’ main point was that the problem facing the global economy is not debt, but rather those “teetering mountains of cash.” He proposed that governments act and tax the hoarders, or rather their cash reserves.
Instead governments, especially the federal government, are adding to the corporate cash stockpiles by slashing corporate taxes. Newfoundland and Labrador stands out as one jurisdiction that has refused to slash corporate taxes and yet we are also one of the provinces where multinationals continue to invest, and invest heavily.
In addition to the utter failure of many wealthy corporations to re-invest in the world’s economy and create the jobs so desperately needed in so many areas of the world, including many regions of Canada, there are also the tax evaders.
They, too, are carrying out a form of hoarding, or rather hiding their wealth in offshore tax havens around the world.
Last week, The Guardian reported that the world’s super-rich have taken advantage of lax tax rules, stashing away at least $21 trillion, possibly as much as $32 trillion, from their home countries and hiding it away in various tax havens. The research was carried out for the Tax Justice Network by economist James Henry.
The result of the stashed, tax-haven cash is a staggering loss of about $280 billion in income tax revenues.
According to The Guardian, John Christensen of the Tax Justice Network noted that inequality is much, much worse than official statistics show, but politicians still rely on trickle-down economics to transfer wealth to poorer people.
“This new data shows the exact opposite has happened: for three decades extraordinary wealth
has been cascading into offshore accounts of a tiny number of super-rich.”
In other words, all this hidden wealth means we have underestimated the depth of inequality.
And yet this cash hoarding is allowed to happen while the world’s economies struggle, citizens are forced to work longer, or are thrown out of work, or forced to take wage cuts, give up their pensions or suffer in abject poverty.
For the most part, governments have failed to reverse or even
stymie this growing and staggering inequality.
World-renown economist Nouriel Roubini has warned that growing inequality threatens global social stability.
Any economic model that does not properly address inequality will eventually face a “crisis of legitimacy,” says Roubini. “Unless the relative economic roles of the market and the state are rebalanced, the protests of 2011 will become more severe, with social and political instability eventually harming long-term economic growth and welfare.”
Balance. It’s not a lot to demand.
Lana Payne is president of the
Newfoundland and Labrador Federation of Labour. She can be reached by email at email@example.com.
Her column returns Aug. 11.