As a follow up to my column on the universal money pit that is the modern university, it turns out, as the National Post reported last Friday, now that the federal government has foisted $295 million in defaulted students loans onto the taxpayer (yes, you and me).  That is on top of the  $ 837 million they have already given up any hope of collecting and, therefore, yes, you guessed it…I wonder how many utterly useless degrees in Queer and Gender Issues and Postmodernist literature that billion-plus dollars was wasted on?   As a previous post made clear, we already paid for a good portion of those ‘degrees’, and now we’re on the hook for the rest.  Of course people walk away from these loans, for there is little or no return on them, and, apparently, no incentive to pay them back.

On a similar note, another article castigated Canadians for carrying a personal debt load greater than the income that they are taking in, maxing out their credit cards and bank loans.  You don’t say?  I wonder whom they are imitating?  Could it be Ontario, currently spending about $12 billion a year more than it is taking in?  Or how about lowly old Toronto, currently $5 billion in debt, that is just one city.  Why would Canadians save if their own government, one of whose primary tasks is to ensure a stable currency, devalues the money they do save on a daily, monthly, yearly basis.  Unless you are virtuous, and that means acting well even if you do not see the fruits thereof, why not party like there’s no tomorrow?  After all, as Keynes so famously said, in the end we’re all dead.  So much for future generations. But, hey, in the meantime, we can go ice fishing in the brand new ATV, loaded on to my four wheel Toyota Tundra, then go back and party in my house, in which I am over-leveraged by about 25%; but we can forget about that as we soak in the hot tub on my $12,000 deck, and….Well, see my last sentence, above.

But, all is all right, for Wal-Mart in the U.S. has just raised its minimum wage to $9 an hour…After popping some champagne, well, make that sparkling grape juice, I would imagine the workers would rejoice they share so fully (0.2%) in the megastore’s $497 billion in sales.  Wal-Mart embodies just about everything wrong with laissez-faire, pure free market capitalism.  Profit is the bottom line.  Make cheap, sell not-so-cheap, but just a bit cheaper than everyone else.  Read the fascinating book   that takes a rather balanced approach to this behemoth of United States capitalism, the Wal-Mart Effect.

Due to the slump in oil prices, Canada’s inflation rate, so said the article, “could briefly nudge…into the negative territory”.  But, rest assured, that would not constitute deflation.  No, no.  That is simply negative inflation, quite different, apparently, from deflation.  Much like the difference between a negative increase and decrease?  Or losing a game and ‘not winning’?  Well, ‘deflation’, continued the article, would require “a decline in consumer prices across the board”.  But what, one may ask, is to stop companies from simply charging the same amount, even if deflation is occurring, much like airlines are still charging the same for flights, even though the drop in oil prices is saving them up to 25% in costs?  Of course, those savings are not transferred to the customer, but to the company, the CEO and the shareholders, who will receive a windfall.  I think the same is happening to oil, as the price per barrel drops, but the price at the pumps continues to rise…The money is not going into our pocket.

February 25, 2015