Several things are driving extreme inequality :
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Corporate concentration : Behind every huge multinational, you find billionaires and extreme CEO compensation. This is why I avoid multinationals like Starbucks Coffee, Dunkin Donuts, McDonalds, Tim Hortons. I prefer to go to local coffees. This is also why I use Linux instead of Microsoft. This is why I encourage people to use Firefox instead of Google Chrome. This is why I financially support free open source software such as LibreOffice, VLC, GIMP. This is why I always avoid huge hotel chains. I only go to local hotels. Every Billionaire owns a multinational. An economy of small and mid-sized businesses is an economy with far less inequality.
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Labor market flooding The labor market was flooded with temporary workers and recent migrants that often don’t know their basic rights. This has had bad consequences on low-income workers.
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Money in politics: Several provinces have very weak rules when it comes to money in politics. This gives rich donors enormous influence.
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Weak lobbying rules: The maximum fine for illegal federal lobbying in Canada is $25,000 dollars. If you get caught again, it’s $50,000. These figures are an absolute joke.
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Under-investment in public transit: Forcing people to use an individual car to move is a great way to support the insurance industry, the banking industry and the oil industry. Guess who happen to own Canadian Insurers, Canadian Banks and Oil Refineries? The elite.
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Stupid provincial tax policies A lot of the provincial tax policies are just plain stupid. Take Ontario. Doug Ford announced a tax cut on gas to help working families. This is a purely stupid idea. It means a Toronto Bank CEO going to the country club on Sunday gets a tax cut. The TD Bank clerk taking the bus doesn’t.
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Stupid zoning policies: Several Canadian cities make it incredibly hard to build apartment buildings. Toronto, which suffers from one of the worse housing crisis in the Western World, recently failed to allowed sixplexes citywide. Apartments buildings are far more affordable than individual homes. Winners are landlords and single home owners.
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Fucked charity system: Revenue Canada allows deductions for donations to charities. Perhaps it started out as a well-meaning idea, but it turned out to be a major mistake. Often, rich Canadians appoint their wives to these fake charities and give them a huge salary. It’s common to see charities paying people $300,000 or $750,000 to run an empty art gallery. The goal is just to pay less taxes. This system is now totally out of control.
Basically, this is going to require change at the federal, provincial and municipal level.
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Holy fuck. I’d call this one of the largest issues of our time - society is further splitting into haves and have-nots. It drives a bunch of other problems, not least of which is the stark swing to the right of our youth.
(And yeah, climate change is a huge fucking deal, but if we have a growing oligarch class, and an angry proletariat, we aren’t going to get real movement on it)
Those in the bottom 20 per cent of the income distribution saw the weakest growth in disposable income in the first quarter at 3.2 per cent compared with a year ago as their average wages edged down 0.7 per cent.
The lowest income households also saw the largest drop in net investment income as their investment earnings fell 35.3 per cent, while net transfers received, including increased government support measures, rose 31.2 per cent.
The average disposable income for those in the top 20 per cent of the income distribution increased at the fastest pace of any income group in the first quarter of 2025 as they benefited from a 7.7 per cent increase compared with a year earlier.
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Statistics Canada said the wealth gap also increased as the top 20 per cent of the wealth distribution accounted for 64.7 per cent of Canada’s total net worth in the first quarter, averaging $3.3 million per household.
The bottom 40 per cent of the wealth distribution accounted for 3.3 per cent of net worth, averaging $85,700 per household.
Even climate change as a problem is largely driven by the oligarch class. The working class would have been alright driving the smaller cars used to drive in the 2010s, and would have likely been okay climate action even in the late 80s. Especially since the cost would have been much lower if action was taken at that time.
That is if the oligarch class did not wage relentless propaganda on climate change science and any solutions, instead promoting the fossil fuels industry which they own.
If climate change info was pushed like the hole in the ozone layer/acid rain during the same time period people would be totally on board. It would be normal by now.
The changes necessary to mitigate acid rain and the ozone hole didn’t threaten existing oligopolies.
Acid rain was “easy” to solve by shipping production overseas (which benefits the rich, since production costs go down), slapping scrubbers onto emitters (whose costs could be passed on to consumers via fees or tax breaks), or changing the formulation of stuff getting burned. The rich stayed rich without changing their business model.
AFAIU, CFCs (and other ozone depleting compounds) had analogs that were relatively easy to use without changing processes. Once again, no yachts were harmed in the making of that solution.
Addressing climate change means we have to change how we do everything: transportation, agriculture, and manufacturing. Even band-aid solutions like EVs and renewable power require minor change and are getting a shit tonne of pushback. Doing the hard work necessary to keep our climate stable (and avoiding possible extinction) would invalidate a bunch of business models.
Hence the resistance.
No yachts were harmed in the making of that solution.
👏
I totally agree.
It’s the inevitable outcome of policy created specifically to do so. There was never any doubt as to where we would end up.
Just remember, when you are hungry, eat the rich.
I agree with the sentiment, but I’m getting tired of the “eat the rich” slogan.
Unless someone is gonna go full Luigi, the reality is more like “reform tax and investment law!” which sounds way less cool, but way more attainable.
Like I said, I agree, but “eat the rich” doesn’t seem actionable. We can vote people in to change those stupid laws in the next election cycle. “Eat the rich” doesn’t have a clear next step.
I’m really jaded on whether reforming tax and investment law is a sustainable solution. Because the countries that did that are all trending in the direction of reversing those changes as capital accumulates and gains power over the political system and people (voters) themselves. Even in high union density places like Finland where unions and reformist socialist policy have slowed this process you can see people electing governments on austerity for the many. A policy squarely favouring their rich class. This speaks to erosion of the understanding of why the previous regulatory regime was introduced, who it benefitted, what would be the long term results of abandoning it, how things were before it. And this erosion isn’t random. There’s all sorts of information channels through which the rich convince people in explanations about the world that favour the rich. I hope there is some ingredient that if added would avoid this in the future for a very long time, but I’m not too hopeful. High prevalence of worker co-ops perhaps. I don’t know. Jaded I tell you!
It’s hard not to be jaded. In the past few decades it seemed like we might be able to make progress on climate change. But now we’ve fallen into a weird right wing rut, where people seem to vote squarely against their own best interests.
I dunno. I think everyone was implicitly on board with neoliberalism for a couple of decades, and now they find themselves poorer and lower status than before. So they blame the trappings of big-L liberal parties, scream that they want woke to end, and shoot themselves in the foot.
But yeah. I gotta hope!
Hmm, maybe we should increase the capital gains inclusion rate or something
no no no think of the retiring doctors and tech bros
They should compare it to what they’re paying on CPP to disabled people. The gap will widen considerably.
The Bank of Canada did QE and bought all our Covid debt, ballooning the money supply.
This caused inflation, which causes a labor shortage, as per the Phillips curve.
The Liberals and NDP did 4% annual population growth, increased TFW numbers, and allowed students to work 40 hours a week.
So currency was debased, housing is in a massive shortage, equities ballooned due to cheap labor, and our Bank of Canada is buying half of all mortgage bonds to further inflate asset values for the rich.
This manipulation lead to negative per capita GDP growth so we are all poorer in aggregate, but we avoided a technical recession, whatever that means.
When it comes to non-asset price inflation, there’s plenty of analysis already showing the largest proportion by far came from increases in corporate profit margins - a profit-led inflation.
You cite the Phillips curve model as if it’s an infallible oracle. At this point we know that not only it doesn’t always hold (e.g. stagflation contradicts it) but also its predicted effects break down in the long-run.
Your hypothesis for inflation in assets doesn’t hold up for housing prices, at least not everywhere. The GTA market has been flat after falling from the 2022 spike and it’s currently hovering 2021 levels:
Rents on the other hand have increased on the basis of the population growth, housing shortage, and interest rates hikes but even those have slowed a bit:
Some of what you’re saying is obviously true but the majority increase in non-asset inflation did not come from that. You’re going about cheap labour driving equities, presumably through higher profits since that’s what equities track, but don’t point to the recognized arbitrary price increases that increase those profits. This is what labour cost vs profits actually look like for some of this period:
I think it doesn’t look like those profits came predominantly due to cheap labour. Which leaves the other factor. So it seems like profit-led inflation is a larger contributor to equities going up. And we know as much since some execs have said that in plain language. So even some of the equity asset inflation is linked to the arbitrary price hikes.
This stuff is really important because if people are pointed to the wrong cause, they ask for the wrong solutions, and then we’re confused as to why things keep getting worse. The low-interest / QE asset inflation explanation that worked well in the 2010s is not well suited to what’s been happening post-COVID. We’re all seeing prices going up in non-asset markets left front and centre even during high interest rates. And we’re all seeing corporations posting record profits. The consolidated players in every major part of our lives are the better explanation to all this. And when you add their ability to exert power over the political system in their favour, it gets even clearer. For example they drove increased TFW immigration. Modifying monetary policy doesn’t remove their market power over the consumer market, labour market and their political power.
I realize the phillips curve eventually reverts given enough time, in the short term it still depicts an expected increase in unemployment due to monetary stimulus.
The way I see it as far as corporate profits they will always rise when there is a large bout of stimulus, the stock market is a sea of green during hyperinflation as well when measured in nominal dollar terms. When you devalue dollars everything goes up relative to dollars.
Then the BoC raises rates to cool inflation which is when corporations profits would revert to the mean; inflation which was still pushed down via immigration and mortgage bond purchase despite the large price hikes. Till we are eventually left in this state of a cooled job market, now with excess labor and a large youth unemployment, and we haven’t even officially hit a technical recession yet.
As far as house prices rising and falling I think that’s just stimulus followed by rate hikes. We still have a dire shortage due to immigration which pushes up prices, with the mortgage purchases allowing prices to remain elevated despite rate hikes due to pushing down mortgage costs.
To my understanding the Philips curve doesn’t even depict an expected increase in unemployment due to monetary stimulus. It depicts a relationship between (lower) unemployment and (higher) wages, and therefore at some level of (low) unemployment, (higher) inflation, due to people having more money to spend. In the short run. This is in relation to government stimulus (Keyensian policy) that lowers unemployment. It says that stimulus can lower unemployment at expense of higher inflation. Not that stimulus leads to unemployment. In fact rising unemployment during stimulus is an example of the model breaking down over the long run, according to what’s written here.
You expect corporate profits to revert to the mean with cooling inflation, but this year, within our current higher interest rate environment, with inflation near target, corporate profits are at an all time high.. Sorry no data at my fingertips for Canada but the processes are the same. They even say that margins to GDP are at all time high. If prices rose because workers had more money in their pockets chasing the same goods due to stimulus, we wouldn’t see profits rise significantly more than wages. We wouldn’t see margins increase. This therefore can’t be wage-driven inflation. Which also means the Phillips curve doesn’t even apply here. I don’t know what else to tell you, but looking at BoC policy and population, without factoring in the market power of large firms in every consolidated market to set prices is bound to lead to incomplete conclusions and predictions. That’s kinda like considering that (level of) competition doesn’t have real effect on prices, irrespective of other variables.
ya think…
