"There may be a conflict here between the interests of the financial world and the interests of politicians… We can’t constantly explain to our voters that taxpayers have to be on the hook for certain risks rather than those who make a lot of money taking those risks."
Angela Merkel, Chancellor of Germany.
The problem is not that we do not know what it is, it is simple that we do not wish to face the music. We just had a G20 with zero results, not even the usual platitudes. Our own Harper walks around like a know-it-all just because Canada got lucky for a change, but otherwise looks a little spaced out with his toupé , or whatever it is , on his head.The idea to limit exports to a certain fraction of GDP was dead on arrival, if not a lot sooner. On the other hand, income distribution, rather the lack of it, is a huge problem that will not be addressed as long as misguided economists continue to believe in the “pure” model of capitalism and “growth” as a condition sine qua non, conveniently ignoring the fact that the USofA had its best economic times when marginal tax rates were near 90%! The US is contemplating cutting government jobs by 10%, fooling around with the tax-deductability of mortgage payments , cutting defense spending and a whole host of other things that are not that much different from what the Brits are contemplating. In Canada the department of Indian affaires, or whatever it is called , has upped its staff by about 40% since 1995, with no results whatsoever to show for it. Same thing with the OLG, our Ontario Lottery Corp. ,they now have a more than a hundred employees making over $100,000., this as a result of tenure where everybody automatically earns more provided they do not get off their behinds. Yet none of these overpaid civil servants were even remotely aware how their own employees gamed the game and pocketed north of , allegedly, $220mln or so in winnings. What do these people do will be the question!
What really troubles me is that few people seem to understand why if , during your lifetime, you spend the first 20/25 years getting educated and the last 20/25 years in retirement and only the middle 30/40 years working, the model is supposed to work. It requires constant returns of 20%, or contributions of 30% of income or other such draconian measures that nobody is prepared to do. Unless, of course, you opt to become a civil servant. That , now, seems to be coming to an end.