A Few Thoughts on the Economy and Economics

My views on general economics are likely in keeping with Canada's broad middle. Most of the 'schools' of economics haven't panned out. Karl Marx was wrong. If everyone 'Takes according to their need and gives according to their ability' there are too many people who will 'take according to their ability and give according to their need' - too many people who won't realize their potential without occasional pushes and incentives. Adam Smith was also wrong. Everyone looking after their own self interest all of the time leads to disaster. There are alot of greedy people in the world and encouraging them to be greedier and greedier without cheques or limits lead to the economic collapses of 1929 and 2007. Even outside of economic collapse it leads to a few people being very, very wealthy and alot of people being very, very poor.

I think all of our leaders need to think in terms of hybrids, in terms of what has actually worked in the real world. I don't mean what has worked in the short term - neo-con economics worked for awhile, for some and then the bottom fell out. Supply side economics has it's place - but not much ends up 'trickling down'. The demand side is important as well, people at the bottom of the ladder have to have money to spend or there is no one to buy the products you make.

In terms of specifics I would recommend two things.

1) A Office of Public Investment (OPI): These should exist at the federal, provincial and local levels. The OPI would listen to please for bailouts, loans, tax deferrals etc., Instead of just handing out cash and tax credits though the OPI would invest. So, for example, if GM wanted 3 Billion Dollars, the OPI would buy 3 billion dollars worth of stock in the company and then (assuming the company returns to profitability) would sell that stock off over time, recouping the governments money and possibly turning a profit.

2) I still really like the $1000 Solution. It's a bit complicated to summarize and someone with better accounting skills than mine needs to take a look at it, but I believe it could end (or nearly end) extreme poverty and homelessness in Canada, boost sales for retailers and wholesalers, help people pay for prescription medications, day care, university, and more. If implemented along with a carbon tax it could even be good for the environment.

I guess the long and short of what I'm saying is that given the economic models we've tried haven't worked well for us we need to think boldly and creatively and abandon ideological positions when it comes to economics.