I’ve had nightmare visions before my mind this past week, as three local events have seemed to flow together in a Nostradamian conjunction: this weekend Winnipeg is set to witness Winnipeg Zombiewalk, Winnipeg Slutwalk, and the march and demonstration of the local version of the Occupy Wall Street movement.
What if the Slutwalk and Occupier marches run into each other and get in the way of hungover zombies trying to get home? Yikes! Perhaps this is the beginning of the apocalypse.
(If I seem a tad lighthearted and humorous about this, let me point out that Slutwalk makes a valuable point about the importance of not blaming sexual assault victims for the crimes they are subjected to, and that real life zombies are generally peaceful, cheerful and law-abiding. I just find the names of the events startling – which is their point, of course.)
Read Also
Determining tariff compensation will be difficult but necessary
Prime minister Mark Carney says his government will support canola farmers, yet estimating the loss and paying compensation in an equitable fashion will be no easy task, but it can be done.
The Occupy Wall Street locals will be interesting to watch, as will those across Canada, because not only did Canucks start this thing out (Adbusters) but – and this is why I am blogging about this – Canada has a remarkably different situation to that of the United States and Europe, and that’s all due to commodity prices. Including crop prices. Not only is Canada much better off in general than most of the rest of the advanced world, but commodity producers are far, far better off than they usually are even in economically good times.
And that includes farmers. Farmers who have gotten decent crops over the past five years are doing better than they have since the 1970s, with lots of woe and suffering between 1982 and the 2000s. But now, with high crop prices year after year, that suffering is getting paid back with profits. That’s only just and fair. And for the sake of farmers I hope the high price crop cycle continues to 2019.
But the protests of the Occupy Wall Street folks, and the Tea Party types, show how the pain has switched out of the commodity producers’ lives and into those of commodity consumers. Obviously neither the Occupiers nor Tea Partiers think they’re protesting the impact of high commodity prices, but high commodity prices are probably the chief cause of the economic malaise that has gripped the U.S. and Europe for half a decade now. As I’ve written about many times, high commodity prices suck the vigor out of the economies and industries that use them, stopping them making any headway for up to two decades. You can’t double, triple and quadruple the prices of things like copper, crude oil – and wheat – and not cause other parts of the system to blow out.
So outside of commodity production, the system seems broken to millions of people. And everyone’s blaming their favorite bogeyman. The right wing Tea Partiers have enjoyed raging against big government and increasing government debt – which they are legitimately concerned about having to pay back after seeming to have gotten nothing from it – while the lefty Occupy Wall Street folks have been having fun blaming everything “corporate” and corporationy – based on a legitimate outrage that the incompetent bobs at many financial firms and big companies helped cause the 2008 meltdown but still have jobs and will get million dollar bonuses this Christmas while they don’t have jobs or are losing their pensions.
In terms of economics, I am what I call a Wimpy Austrian. That means I generally follow the Austrian School form of thinking, but think the government needs to have a strong safety net to catch the people displaced by its approach. I think bad companies need to be allowed to fail and go bankrupt, their managements be disemployed, and non-screwed-up companies be allowed to buy them up at 10 cents on the dollar. And all their debts need to disappear, with bondholders losing their money for making such bad investments. That teaches a lesson and gets rid of the debt that stops a recovery from happening. When companies and governments are crippled by debt, and high commodity prices are placing an enormous burden on them, you’re not likely to get any sort of sustainable growth. When you save the bad companies and protect the debt holders, you create stagnation by keeping the screw-ups in place. And that’s what has happened since 2008.
There’s no easy way out of this kind of economic stagnation. The Tea Party solution of stopping all stimulus spending and cutting core spending so the private sector can rise up and create growth isn’t going to work as long as the private sector is traumatized by 2008 and everything since. The people with money aren’t investing it. The Occupy Wall Street approach of attacking bankers and corporations isn’t likely to make those folks loosen their hands and lend out their money and get economic growth going again, which is what’s most required.
And really, while commodity prices remain historically high, there’s not much chance of America or Europe getting much beyond a limping-along situation. The dates I keep in mind are 2016 – probably the bottom of the equity markets and economic cycle – and 2017-19 – probably the end of the long run commodity bull market.
Until those dates pass, we’re likely to keep seeing peaks in commodity prices, recessions, political ferment – and protest movements like the Tea Party and Occupy Wall Street.
Profits will come to farmers, but society in general will probably seem pretty dreary. At least we’ll have the zombie walkers to give us a chuckle, because not much else will.
