Editorial
The Trickle-Up crisis
Throughout September and October, headlines around the world shrieked about global economic chaos: stock exchanges from Toronto to Tokyo plunged by thousands of points, erasing hundreds of billions of dollars of investments. This, we were told, was a day of reckoning, as "bloodbaths" and "carnage" stalked the trading floors of Bay Street, Wall Street, and others. The United States congress voted for a bill that compels the American government to pour $700,000,000,000 down the black vortex of their other-dimensional financial system. The European Union saw that wager and raised, announcing a $3 trillion bailout plan. Here in Canada, Bay Street observers warned that we, too, would be dragged down by the toppling U.S. economy, prompting the federal government to release billions of dollars into the credit market and buy $5 billion worth of mortgages from Canadian banks to keep commerce flowing (and billions more in mortgage purchases are possible). The G8 announced plans for a global summit to fight the collapse together. The party leaders in the Canadian election competed to out-do each other with grandiose proposals for propping up the ailing economy (not that voters seemed to care; the new parliament looks pretty much like the old one).
To many people outside the gilded canyons of the financial centres, the catastrophe may have made headlines, but that didn't make it news. In Canada and the U.S., millions of people with jobs and homes have been living a permanent emergency for months, often years. They've scraped by on credit card debt or supplemented their income with a second job, economized where they could, and in some cases been forced to walk away from the houses that were supposed to ensure their prosperity. Many kept their heads down and ploughed ahead, hoping to rebuild down the road; others shouted for help and found both government and industry indifferent.
But now that the sewage is running uphill, well, now it's a crisis.
Since it looks like the rich as well as the poor might have their bank balances trimmed for a while, it's suddenly time for government to spring into action and promise truckloads of money to fiscal incompetents who demonstrably cannot handle it. Voters in the United States called shenanigans on their government's bailout package, scolding their congressional representatives about it and calling it out for what it was: a vast transfer of social capital into the investment portfolios of a group of financial Dr. Frankensteins whose monster had turned on them. In Canada and Europe, all the same factors are at play: free-market fundamentalists preached their gospel right up until it became inconvenient, and then pleaded for help from the citizens they had clawed over on their way to the top.
Were the government bailouts necessary to prevent further damage? Perhaps. In a true financial calamity it's always the little guys who get it worst, so preventing that is a virtue. But for those who saw this crisis comingÑand there were millions of us — the worldwide bailout will have to buy more than just a bunch of dud bungalows in Phoenix. It has to be a downpayment on serious reform that will bring financial institutions to heelÑin the U.S., in Canada, in the U.K., in every country where wealthy free marketeers have deliberately and methodically shredded the social contract in order to fill their own pockets at the expense of the poorest and most vulnerable. "Trickle-down" wealth is a myth; we're now discovering, however, that trickle-up poverty may not be.
PS: I'm new to this job, as former editor Jessica Johnston noted in the last issue. If you want to know more about who exactly I am and what business I have being here, visit my blog post called "The New Guy."
Graham F. Scott
editor@thismagazine.ca
