Middle Class Over

As Canadians, we don’t like doom and gloom. We’ve become quite cynical…especially about our politicians. They’re all in it for themselves. Nothing ever changes. We’re happy with the status quo. A third of us can’t even bother to vote.

Because we like calm. We like consistency. In a world of the unknown…when we don’t know if and when Covid will ever end…we like stability. But it wasn’t that long ago that Canadian federal politics were different...

Yes, Facebook has become the number one source of news, in only 15 years.

We’ve stopped thinking for ourselves…by choosing which channel to watch on t.v.…because we’ve allowed Facebook to do our thinking for us.

All based on algorithms and artificial intelligence…to decide what is important…what is newsworthy…what we might be interested in.

As a result of the recent federal election…the breakdown in seats for Western Canada shows one Green Party Member of Parliament…18 for the NDP…21 for the governing Liberals…and 64 Conservatives! 64!!! 

That’s more than 3 times what the Liberals elected!

If Western Canada was its own country, it would have a majority Conservative government…with Erin O’Toole as the Prime Minister.

 You could almost run an election blindfolded…because it’s so predictable…at least in Western Canada.

Trying to stay in the middle class, we all have choices on how to make money.

We can rent out our time, in the form of wages. That covers everything from working for the government…to big multi-national corporations…right down to the small, mom & pop business. But in every case…we have a boss…a manager…someone that controls your time.

 Or you can rent out your assets. Like your home…or a few homes like my friend did. Or your car, and become a delivery driver. The downside is that assets depreciate…they get old…and there’s the cost of constantly maintaining things. Like if the pipes leak in your home…or if your car needs a new transmission.

And if you can’t find a warm body…if an app just won’t cut it…then innovation in the form of Artificial Intelligence kicks in. Necessity is the mother of invention!

 But using rented assets can have some unexpected results...

Please remember one thing.

It doesn’t matter what inflation is doing in Canada. 

We are powerless. What really matters is what inflation is doing in the States. If the U.S. has a protracted period of inflation that’s over 3% for months or even years, their Federal Reserve Bank will have no choice but to increase interest rates to put a lid on it.

Don’t think higher interest rates can happen? Central banks in Iceland, Brazil and Russia have already raised their interest rates to counter inflation.

And if interest rates go up south of the border…we will HAVE to increase our rates in Canada accordingly. Otherwise, capital will go south to get a better rate of return. Talk about foreign influence…yes…it’s true…Americans control Canada’s economy. 

They say that a rising tide lifts all boats. In the old days…they called it the horse-and-sparrow theory. If you feed the horse enough oats, some will pass through to the road for the sparrows. 

I call bull crap.

It’s been 40 years. The experiment went horribly wrong. Unless you’re a one percenter, or a Fortune 500 company. Let’s look back as to what happened…why it happened…and where do we go from here… on this,..episode 38…of Middle Class Over.

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Way back in 1887, Lord Acton stated that “power tends to corrupt; absolute power corrupts absolutely”. 
People…society…don’t know how to behave when nobody is there to enforce the rules.
 So we give certain people power. 
They become authority figures. 
Anarchy ensues when authority collapses. 
Authority is a story. 
Resistance is when you don't believe the story.

Life is all the stuff in between authority and resistance.

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I started this podcast claiming that the middle class was over starting in 1980. The era of Ronald Reagan in the U.S., Margaret Thatcher in the U.K., and Pierre Trudeau and the National Energy Program in Canada. Trickle down economics. Reduce taxes on the big guys…give them more money…and it will trickle down to the little guy.

Mainly because of the second OPEC oil crisis in 1979, when the world was dependent on oil and gas from the Middle East. It was a time right after the Iranian Revolution, when the price of crude oil doubled to $39.50 a barrel, equivalent to about $110 a barrel today. Long line-ups at gas stations, as the world was coming to an end…or so we thought...

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So how big is big, bad retail? Let’s look at sales. In 2019, Costco had sales of $153 billion. Amazon came in at $158 billion. And Walmart? $524 billion.  Half a trillion dollars…every year. Almost double what Costco and Amazon sold…put TOGETHER! That’s insane. 

If Walmart was a country, it would rank 27th in GDP…bigger than Austria, Ireland or Israel. If you add all of them together…the Big 3 in retail would rank 17th…bigger than Switzerland, Saudi Arabia, or Taiwan.

Which of course got me thinking…is this where the world is really heading? On this…episode 35…of Middle Class Over…

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That’s just it. For capitalism to succeed, we have to consume. We have to buy more and more things. And if our income doesn’t match the lifestyle that we’ve become accustomed to…if we don’t have enough money to consume what we want…well then…we’ll just borrow the money…most of the time from a bank. But banks are in the business of making money, at the expense of the middle class.

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