Unless current trends miraculously reverse themselves, market watchers will remember 2016 as the year Canada went to hell, stranded in No Man’s Land in a war among the world’s biggest central banks. The loonie and crude have yet to find a floor. Unemployment is expected to top 7% but stats will be misleading. As EI benefits run out, the destitute turn to the underground economy. The taxpayer loses any which way.
Meanwhile, Canadian investors are so terrified of losing their nest eggs in a bear market they’re sitting on $75 billion of excess cash. Remember former Bank of Canada head Mark Carney calling out Canadian corporations for sitting on cash reserves rather than investing in productivity? Carney’s ‘dead money’ estimate is thought to be closer to $600 billion than it was when Carney said it. The banks scold us for lacking faith in Canada, but in an economic environment this bleak, who feels like investing?
Besides, not everyone is hurting equally. As NDP leader Tom Mulcair notes in a fundraising plea this week, Canadian banks earned a record $35 billion in profits in 2015 and handed out $12.5 billion in bonuses. According to Disgruntled Tom, those same banks eliminated 4,600 good-paying Canadian jobs last year alone.
We’re looking at a planetary crisis. Earlier this week, an Ottawa symposium on income inequality sponsored by the Hill Times heard that as 2015 drew to a close, 62 people held the same amount of wealth as the world’s poorest 50%.
…the wealth of the one per cent richest people in the world amounts to $110-trillion, which is 65 times the total wealth of the poorest half of humanity. An international network of tax havens allows the world’s elite to hide $7.6-trillion. – Oxfam International’s Ricardo Fuentes-Nueva
…which brings me to why I like Bernie Sanders for president of the United States. I recall the first time I heard Sanders explain his Robin Hood tax. Sanders would tax stock transactions at half a percentage point, less for bond and derivative trades. Bernie estimates it would raise $300 billion a year to cover free tuition at every public college and university in the U.S. His supporters estimate the collective student loan debt is close to $1.3 trillion, much of it at unsustainable interest rates.
A whole lot of ifs stand in the way. If Sanders wins the Democratic nomination, if Michael Bloomberg doesn’t spoil a Sanders/Trump shootout. And of course, if Bernie wins with the Democratic majority he would need to pilot socially divisive legislation through the House and the Senate.
If it adopted such a measure the U.S. wouldn’t be alone; Britain, Germany, Switzerland and China tax financial transactions. The Trudeau Liberals would put themselves on the right side of history by including a made-in-Canada transaction tax in the upcoming budget. Sooner or later, the world’s central banks will have no option but to agree to measures that will have the effect of reining in wealth flight, corporate extortionists and fiscal tax havens because of the human cost of extreme wealth inequality and injustice. An equality tax is a modest first step.