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Brian Jones: Captains of industry need refresher in Economics 101

Published on December 9, 2016

If you’re intent on following the decline of Western civilization, never mind about Donald Trump’s antics on the news pages — the real action is on the business pages.

Brian Jones

Economic injustice has been building for decades, with no sign of abatement. On the contrary, it expands like a banker’s belly.

It has given us catchphrases such as “the one per cent” and “the vanishing middle class.” It has given us horrid Orwellian euphemisms such as “globalization.” It has given us Trump.

The news pages provide a daily play-by-play of society’s rot. But to understand why it is rotting, you’d best turn to the business pages.

There you can discover that the captains of industry are living comfortably in the 19th century, smoking fat stogies at the club while the rabble live in hovels with dirt floors.

Raise the minimum wage? Don’t do it, wails the Newfoundland and Labrador Employers’ Council, declaring such largesse for the working masses will bring ruin to entrepreneurs and the wider economy. Lavishing such riches upon employees will bring hardship to employers, cries the Canadian Federation of Independent Business.

Since this is December, let’s go ahead and say it: “Are there no workhouses?”

Meanwhile, over at the St. John’s Board of Trade, the captains and lieutenants of industry continue to boss around the government: spending is too high, cuts haven’t gone far enough, listen to us and all will be well and swell.

Except that, wait a minute, something’s not quite right … wasn’t the St. John’s Board of Trade — supposedly composed of the best business brains in the province — one of the loudest cheerleaders for forging ahead with the Muskrat Falls hydroelectric project? Why yes … yes it was.

That would be the same Muskrat Falls hydroelectric project that has sucked $6 billion out of the government so far, and will suck out another $6 billion forthwith.

That would be the same Muskrat Falls hydroelectric project that as early as five years ago showed obvious signs of being an impending economic disaster, to anyone who was paying attention and wasn’t a member of the St. John’s Board of Trade.

Keep an eye on the business pages to see if the captains of industry are still shaking their pompoms and jumping enthusiastically when the Muskrat juice flows in 2019 or so, and the ramifications finally hit home in the form of doubled power bills and an accompanying decrease in consumer spending.

Captains, sirs, if people have to pay $300 or $500 more per month on power bills, that’s $300 or $500 per month they won’t spend at your place of business … unless you’re Newfoundland Power Inc.

On the business pages, you’ll realize that some people can be extremely successful in business without understanding basic economics (see: Cathy Bennett, although she is mostly on the news pages).

The colonels of industry look at the economy and see a place to accumulate money. But Economics 101 includes a fundamental premise: a healthy economy requires the circulation of money.

Less and less cash circulates to the 99 per cent who aren’t members of the one per cent club. This week’s business pages bring news that consumer debt in Canada has risen yet again, to another record level — $1.7 trillion, or $22,000 per person, not including mortgages.

Even people in the supposedly comfortable middle class can’t afford to buy what they need and want, and are going into debt to get it.

If the generals of industry think government debt is a problem, they should pay more attention to the debts of their customers. If deficits are no way to run a government, consumer debt is no way to run an economy. Neither can go on forever. Something’s got to give. In the U.S., Trump was merely a warning shot.

 

Brian Jones is a desk editor at The Telegram. He can be reached at bjones@thetelegram.com.