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A Wide Range of Economy-Related Facts & Quotes

The growth of the financial sector – the paper economy – has generally been detrimental to everyone but the wealthy.

The growth of real capital (such as tools, equipment, infrastructure, etc) has stagnated whereas the paper economy (financial assets such as shares in Internet companies) has absolutely exploded.

Currency speculation – over a trillion dollars a day – is a tax-free activity.

The U.S. growth rate has averaged 2.4 percent a year between 1973 and 1993.

By increasing the tax rate on high income people by about 4%, on middle income people by about 3%, and on the lowest rate of income tax by slightly more than 2% the government could have raised the same revenue as it gets from the GST.  The reason why they went with the GST instead of increasing the income tax is because the income tax tends to be much more progressive and they wanted to shift the tax burden to middle and low income Canadians.

Joseph Stiglitz, a former economist with the World Bank, points out that IMF policies have caused the Russian economy to shrink by about 50 % over the past ten years – a peacetime record for a modern economy.

Twenty-four countries have a better record than Canada in the distribution of national income.

Cubans have a greater life expectancy than Americans.

In 1980 American CEOs received 42 times the pay of an average worker, compared with 419 times in 1998.

More than 5 million people in Britain are living in conditions of absolute poverty (set at $240 per week), according to Breadline Europe, a recent study led by academics from Bristol University and the London School of Economics.  Poverty in other European countries – apart from Russia – is not nearly as high as in Britain.  In France, for example, the study found that fewer than 1% of the population lives in absolute poverty.  The study found that more than 60% of Russians are now living in poverty, with over a quarter of them in extreme poverty.  This compares with a poverty level of less than 5% before the collapse of the Soviet Union.

The CCPA Monitor, June 2001

The Canadian economy is not nearly as trade-dependent as claimed.  Over 80% of our total economic output is produced in Canada, and consumed in Canada – by Canadians, for Canadians, never crossing a national boundary.

Jim Stanford, The CCPA Monitor, June 2001

The median net worth (total assets minus debts) of the top 10% of Canadians was more than $700,000 (the median is the family right in the middle of this group if ranked from most to least wealthy).   In the bottom 10%, the median family owed $2,100 more than they owned, while the median wealth of the second 10% was a paltry $3,100, the equivalent of a used car.

from a new study by Statistics Canada

The CCPA Monitor, June 2001

The new study by Statistics Canada on wealth distribution does not show the extent to which financial wealth is even more unequally distributed than wealth in general.

Sixty-one percent of Canadian families have a RRSP.

While the sales of the top 200 corporations are the equivalent of 27.5% of world economic activity, they employ only 0.78% of the world's workforce.  The No. 1 private employer in the world, with 1,140,000 workers, is Wal-Mart.  The No.2 employer is DaimlerChrysler with 466,938.

The CCPA Monitor, March 2001

In the U.S. the candidates that spent more than their opponents were victorious in 94% of their campaigns.

The CCPA Monitor, March 2001

According to the OECD (Organization for Economic Cooperation and Development), over the past two decades the share of total taxes made up by corporate income tax in the industrialized OECD countries has remained at the 8% level, despite strong increases in corporate profits.

According to the International Institute for Environment and Development, the annual amount spent globally on advertising aimed at increasing consumption topped $430 billion in 1998.

Before the IMF and World Bank imposed their structural adjustment programs, 2 million Russians were living in poverty.  That number has now soared to 60 million – a peacetime slump of unprecedented scale.

The CCPA Monitor, April 2001

Civil government, insofar as it is instituted for the security of property, is in reality instituted for the defence of the rich against the poor, and for the defence of those who have property against those who have none.

Adam Smith

Foreign corporations spent $102 billion last year to buy 222 Canadian companies, setting a record for the takeover of Canadian firms by foreigners.  The single largest transaction was the $49.5 billion purchase of Seagram's by the French company Vivendi SA.

The CCPA Monitor, April 2001

Half the total area of US cities (65% in Los Angeles) is now occupied by roads, garages and car parks.  Cars take up more space than homes.

The CCPA Monitor, April 2001

Baron Rothschild is rumoured to have said on one occasion that he knew of only three people that understood money, and none of them had very much of it.

The present assumption that the [Canadian] banking system, which has been bailed out by government on an average once every seven years or so, is alone to be trusted with our money creation, whereas the government that rescues them is not, must be abandoned.

William Krehm

More than 30 percent of black men are disenfranchised for life, a result of felony convictions, many for passing the same drugs that Al Gore smoked and George W. snorted in years gone by.

Tim Canova

Many Western governments reduced or eliminated reserve requirements for banks during the 1990s.  This signifies an increase in the banks' powers of money creation since a reserve requirement of 10 percent (of total assets) allows a bank to create $9 dollars of credit for every $1 of cash held by the bank, while a reserve requirement of 1 percent permits the bank to create $99 of credit for every dollar of cash.  The declining reserve requirements for nontransaction and transaction deposits (in brackets) are as follows:

Most producers, small, medium or large, know what they have earned or lost only when their accountant tells them months after their year has closed.

To maintain its market value, a stock must continue going up with the same increase of momentum, of acceleration, and so forth.  If it doesn't it starts dropping in the same drastic pattern.

William Krehm

In the wake of the Crash of 1929 borrowers didn't dare borrow and lenders didn't dare lend.  The government had to step in and do what was simply unthinkable in terms of the self-balancing ever-clearing market – provide enough investment and relief to start the economy functioning again, albeit at a modest level.

From 1933, Hitler borrowed money and spent – and he did it liberally as Keynes would have advised. It seemed the obvious thing to do, given the unemployment. At first, the spending was mostly for civilian works – railroads, canals, public buildings, the Autobahnen. Exchange control then kept frightened Germans from sending their money abroad and those with rising incomes from spending too much of it on imports.             The results were all a Keynesian could have wished. By late 1935, unemployment was at an end in Germany. By 1936, high income was pulling up prices or making it possible to raise them. Likewise wages were beginning to rise. So a ceiling was put over both prices and wages, and this too worked. Germany, by the late thirties, had full employment at stable prices. It was, in the industrial world, an absolutely unique achievement.

John Kenneth Galbraith

Hitler, like Franklin Roosevelt, came to power in 1933 primarily because of popular discontent over unemployment which in Germany was about 23 percent and in the USA about 24 percent.  By 1936 the Roosevelt Administration had reduced unemployment by about seven percentage points to 17 percent.  Under Hitler, however, unemployment was down 20 percent to 3 percent by 1937.  What was accomplished in Germany made the American accomplishment almost insignificant by comparison.  What Hitler and his central banker Hjalmar Schacht resorted to was what in other countries and at a later date came to be called "military Keynesianism."  Meanwhile back in the USA "unmilitary Keynesianism" by January 1941 had reduced unemployment only from 24 to 15 percent although by that time unemployment in Germany had been virtually nil for five or six years.  Greatly increased non-military spending would have further reduced unemployment in the USA, but a consensus for the needed amount of spending was unobtainable.  The first and most important lesson of the experiences of the two countries is that whatever is engineeringly or technically feasible is financially feasible.  When sufficient labour, natural resources, and know-how are at hand, any project which government cares to undertake can be financed.

condensed from an article by William F. Hixson

A rentier is an investor whose relationship to a company or enterprise is strictly limited to the ownership of financial wealth (such as stocks or bonds) and the receipt of income on that wealth (such as dividends or interest).  Every rentier is an investor, but not every investor is a rentier. The rentier differs from the investor in that the rentier's income derives primarily or exclusively from his investments and not from a job.

In the depths of the Great Depression, John Maynard Keynes prophesied the `euthanasia of the rentier.'  By this he meant that in a highly developed economy capital would be plentiful, interest rates would stabilize at very low levels, and the income of the rentier would fall accordingly.  Clearly Keynes welcomed the prospect as a means of "getting rid of many of the objectionable features of capitalism."  "Interest," he wrote, "rewards no genuine sacrifice."  When capital is scarce, interest is needed to convert savings into investment.  When it is plentiful, no such premium is needed.  The rentier or capitalist will presumably invest his capital at a low return rather than get no return at all – or a negative return due to inflation.
            It hasn't happened.  Indeed the opposite has occurred.  Since the 1950s there has been a spectacular rise in real (i.e. nominal interest minus inflation) interest rates from about 2% to over 6%, with periodic spikes over 10%.  This increase, combined with an even larger increase in the total debt, has produced a rise in the proportion of our national income payable as interest from 5% to 20%.  It is clear that interest is now the `dominant revenue' – the leading force in economic decision making and the prime determinant of economic policy.
            I do not blame Keynes for this unhappy state of affairs.  He clearly understood that "there is no intrinsic reason for the scarcity of capital."  But there is power and self-interest.  The financiers and bankers have ensured that society will continue to pay ever increasing interest.  The rentier flourishes.

condensed from an article by David Gracey

Why would you pour a foundation, buy machines, hire employees, if you can make as much money buying bonds?

Frank Stronach

former CEO of Magna International, July 1994

Even at capitalism's best – when the rich grow richer but even the poor grow richer too – the rich grow richer faster than the poor and the distribution of income grows worse and with it the ability of the least fortunate to pay the prices.

William F. Hixson

It became increasingly obvious as capitalism matured over time that a private enterprise system is tolerable only if parallel to it there exists a government that not only curtails [excessive greed], but also supplements the system of rationing by price by a system of rationing according to need.  Whatever other functions may properly be ascribed to government, it has emerged that one indispensable function is to take from the rich and give to the poor.

William F. Hixson

The capitalist game can be played for much lower stakes than currently without substantially reducing the number of enthusiastic players.  There is little evidence that the far higher income taxes of the Roosevelt-Truman-Eisenhower era, or even higher taxes in other countries, served to kill capitalist incentives.

William F. Hixson

Under civil law Canada has no ceiling on interest rates.  Its only limit is 60% annually under criminal law.

For decades, Canada's bank governors have not wavered from conformity to current Wall Street dogma and its on-loan executives running the US Federal Reserve.  Ayn Rand's favourite disciple, Allan Greenspan, is the chairman of the Fed, but on one notices the connections.  Gordon Thiessen seems a relief after the fanatical John Crow, but he has continued to make the Bank of Canada a puppet of the ruling monetarist dogma that inflation is the only problem in the world, and that the only way to beat inflation is to raise interest rates.

John McMurtry, Economic Reform, November 2000

In 1991, the Mulroney government secretly phased out the requirement of Canada's banks to hold any currency reserves to cover the money they loaned out to governments and individuals at compound interest rates.  The Bank of Canada pushed for this zero-reserve policy.  Governor Gordon Thiessen still advocates it, repeating word-for-word the banks' absurd slogan that reserve requirements for the money the banks [create and] loan out at compound interest is "an unfair tax on the banks"!

John McMurtry, Economic Reform, November 2000

On [Trudeau's] watch the monetarist take-over of our central bank was far advanced, with little concern on his part.  Trudeau, who had some training as an economist, apparently found the subject too boring to merit his attention.  He was prepared on such matters to read from the prompting cards that came via the Finance Department from his bugbear – Washington.

William Krehm, Economic Reform, February 2001

On average for 1929-1932 government spending in the US amounted to a little less than 12% of GDP, [while] for 1996-1999 government spending averaged just under 30% of GDP.

William F. Hixson, Economic Reform, February 2001

For the 43 years from the first year for which we have more or less accurate GDP figures – 1889 to 1932 – the per capita GDP measured in dollars of constant purchasing power increased at the rate of only 0.87% per annum on average or took about 80 years to double.  After 1932 the government's role began to increase with the result that for the 65 years from 1932 to 1997 the constant dollar per capita GDP increased at the rate of 2.52% per year on average or took only about 28 years to double.

William F. Hixson, Economic Reform, February 2001

Of all spending by government, that which is least redistributive is the spending that goes for procurement of military hardware.  A considerable proportion of such spending goes into corporative profits and dividends and less of it than in other cases of government spending goes into the hands of those who really need it.  For this reason (and because of the misconceived and excessive nationalism to which humans seem to be prone) government spending of this type is the most popular with those who are large donors to the campaigns of office-seekers and, in turn, most popular with those who get elected.  Politicians who are totally opposed to efficient forms of redistribution or only lukewarm in favouring them enthusiastically champion more spending for the military.

William F. Hixson, Economic Reform, February 2001

As we slide into the first recession of the 21st century (the expert's being in denial, as always), it is timely to reflect on its causes.  First and foremost is the underlying debt which a modern economy is obliged to incur in order to grow.  Sooner or later, depending on credit conditions and interest rates, that debt becomes unsustainable and must be repudiated.

David Gracey, Economic Reform, April 2001

In the US corporate debt is now 45% of GNP, a doubling in 8 years.

David Gracey, Economic Reform, April 2001

Britain spends $1,209 per capita on health care, compared with $3,070 in the US and $1,860 in France.  The ratio of doctors to population in Britain is about half that of Germany, France, or the US.

Economic Reform, April 2001

Consider the hypothesis that the world is being steered by moneyed interest with special access to governments.  This would have obvious implications for democratic reforms.  It would mean that it is nearly useless to resort to reasoned arguments of a kind that the powers-that-be understand very well but consider not in their interests to recognize.

Economic Reform, June 2001

For over three years now China has been undergoing a deep deflation, with hundreds of millions of unemployed moving from the interior to coastal cities in search of employment.

Economic Reform, June 2001

The North American markets have lost some six trillion dollars of their peak-value.

Economic Reform, June 2001

In 1861, when Abraham Lincoln and his cabinet were confronted with a demand from the New York bankers for 17% interest on a war loan, they refused.  But the war didn't stop.  They still needed the men, the guns, the transport, etc. to prosecute the war.  These goods were available, or could be produced, in the real economy.  The solution was obvious.  Lincoln persuaded Congress to authorized the printing of money – greenbacks – which the US government then spent into circulation to purchase the needed materials.  They did the job just as well as the money the bankers would have created, and there was no interest attached, and no debt.
             The same thing happened when Canada entered World War II.  The need was urgent, the resources were clearly available, so the Bank of Canada created millions to purchase the materials.

David Gracey, Economic Reform, June 2001

All money in our society, except the tiny portion (6%) still created by government, comes into existence only if someone is willing to borrow it and pay the interest and the principal on the loan.

David Gracey, Economic Reform, June 2001

For some years now, Economic Reform has compiled statistical evidence that money creation once surrendered by the Bank of Canada to the chartered banks, has been passed on in effect to the stock markets.

Economic Reform, July 2001

The most vicious aspect of previous bank bailouts was that they were further deregulated at the same time.  That increased their capacity to enter fields prohibited to banks for good reason.  The combination of money creating powers with deregulation of what banks can do with the money they create is a deadly one.  The 1991 bailout cost the Canadian public $100 billion – one third of the federal debt at the time.

Economic Reform, July 2001

The federal government pays the Bank of Canada the interest due on the bonds it holds, but, by virtue of being the Bank's owner, gets practically all its money back.  Thus, in 1999, the government paid the Bank of Canada $1,911 million in interest.  The Bank's expenses for that year were $145 million, so at year-end it remitted the remaining $1,766 million to the Receiver-General.

Ruben C. Bellan, The CCPA Monitor, February 2001

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