Juggling Dynamite

While the US central bank cites official unemployment under 5% and inflation near 2% as mission accomplished on their dual monetary mandate, the reality is that the labor force participation rate is the lowest since 1978, and especially for the critical worker bee cohort (ages 25-54) who are supposed to be paying into all the benefit programs the boomers are drawing on as they age. And then there are all the very expensive properties and financial assets that the boomers want to sell at peak valuations to younger folks, in order to raise cash for their retirement years. Older folks can’t keep their jobs into their 70’s, collect all the benefits, and sell all their assets at peak levels…something has to give… younger people need some wage growth and savings as well as lower asset prices, if they are to be buyers and taxpayers.  This discussion is on point.

Gary Shilling, president at A. Gary Shilling & Co. and Bloomberg View columnist, examines the shortfalls he sees in the U.S. economy with a focus on the labor force. Here is a direct video link.

Taxing the things we want less of is a necessary prod to dis-incentivize destructive behaviors (think alcohol and tabacco taxes, junk food). Recycling the revenues raised back into paying for clean up and treatment of the destruction caused is also necessary (70-80% of our crushing health care costs are caused by the widespread use of these drugs).

We know that we need to release much less greenhouse gases into the atmosphere, and we need a lot more revenue to clean up the environmental harm already caused.  Hence we must cause emitters to pay.  Ontario is on the right track here. See: Ontario’s first cap-and-trade-auction a sellout.

Ontario’s first auction for greenhouse gas allowances was a sellout — with 100 per cent of current permits available snapped up by the province’s biggest polluters.

But Environment Minister Glen Murray said while the participation showed “a high level of confidence” among businesses, the real measure of success comes in curbing emissions.

“The participation rate — whether 100 per cent or 20 per cent . . . is not the success of the market,” he told reporters at Queen’s Park. “The success of the market is really based on our ability to reduce GHGs. We will not expect to get 100 per cent all the time.”  Here is a direct video link.

Someone is using devices that track and spy on cellphones in the area around Parliament Hill, but what’s unclear is who’s doing it. Here is a direct video link.