When I was a young reporter, which is a very long time ago, the Toronto Star assigned me to cover a politician named Tommy Douglas as he campaigned across Canada for the New Democratic Party. It was a great assignment. Douglas was smart and eloquent. And what he said made sense. It still makes sense. Here’s one story that came to mind today as I read about the vast sums of money that governments are pledging to prop up the worldwide financial system:
In his first term in the Canadian Parliament, Douglas proposed a $200 million war on poverty. But the Minister of Finance (whose name I cannot recall) scoffed at the idea. According to Douglas, the minister reminded “the young member” that “$200 million does not grow on gooseberry bushes.” To which Douglas replied, ” I don’t know what kind of bush $200 million grows on, but I know that if war were declared tomorrow, the honorable minister would find the bush.”
Isn’t it amazing how quickly the governments of the United States, Germany, Britain, France, the Netherlands, Spain, Portugal and Austria found the bush when their financial systems were threatened? The major European governments put $2.3 trillion on the line Monday, in addition to the $700 billion rescue package assembled earlier by the United States. We’re not talking about some paltry $200 million here. We’re talking trillions. Where did all that money come from?
You will read a lot of sober explanations in the media and on the web, but the honest answer is: out of thin air. Oh, there will be borrowing and bond issues and budget entries in the countries involved in this gigantic rescue operation… but they won’t mean a thing. You see money is just a scrap of paper or a piece of metal these days. It used to represent something of value, an ounce of gold for example. Now it means whatever the people who have the most of it want it to mean. If some very rich people are willing to exchange a barrel of oil for a hundred dollar bills, then a barrel of oil is worth $100.
What I don’t understand is why the services of the people who operate this simple barter system are valued so highly. For reasons beyond my grasp, an army of middle men (known collectively as the financial system) are paid millions – make that billions – to transfer these pieces of paper and bits of metal from one account to another. They call themselves bankers or stock brokers, or whatever, but all they basically do is take money from the government and pass it on to citizens.
Eventually, you or I might get our hands on some of that paper and metal, and we trustingly take it to the store, confident that the grocer will give us bread and milk in exchange for it. I have long wondered why the government couldn’t just print it and give it to us directly, but I guess that would be too simple.
Tommy Douglas never got his war on poverty. I suspect Canada still has poor people living there – I wouldn’t know; I emigrated in search of warmer weather 30 years ago. But I know America has many impoverished citizens. As I write this, single mothers struggle to feed their children, youths serve hamburgers for peanuts (if they’re lucky enough to have a job), thousands of breadwinners are losing their paychecks, thousands of families are being thrown out of their homes, millions of Americans are without health insurance, and homeless veterans sleep in garbage-strewn alleys.
Barack Obama is one of the few American politicians who dares to mention these things. He even suggests that the government might want to do something to alleviate the suffering of its citizens. For this he has been branded a “radical” – even a “terrorist.” Turn on the radio or television, or pick up a newspaper, and you will come across complaints that Obama’s proposed social programs are far too expensive for America. The argument is that America already has a staggering debt (more than $10 trillion) and every year brings more runaway deficits.
“We just don’t have the money,” these critics say. They must be forgetting about that bush Tommy Douglas talked about – the bush that’s bearing trillions for the world’s bankers.