The Tao of Globalization

There was a period in the past where social relations were mostly limited to the localities where they existed.

Social relations are becoming sufficiently related throughout the entire world that it is possible speak of the emergence of an integrated social system. So…

Globalization is the term that describes this

ongoing CHANGE... ‘ghttp://www.youtube.com/watch?v=emx92kBKads&feature=related

439 Printing Press

1200-1350 Thule migration – Canadian Arctic Inuit

1492 Discover of NA by Europe

1543 Copernican revolution

1648 Peace of Westphalia

1665 First Scholarly Journal

1773 Boston Tea Party

1876 Telephone invented

1905 Russian Revolution

1914 End of WWI

1944 Bretton Woods

1957 Nuclear disarmament movement

1989 Fall of Berlin Wall

1991 World Wide Web

1995 WTO formed

1997 Asian Economic Crisis

2000 MDGs

2001 9/11

2001 Budapest Declaration on OA

2009 Global Economic Crisis

2009 Kepler Mission

2010 – 50 million scholarly articles exist– 20-30% of current are free globally online

Be aware when things are out of balance. When rich speculators prosper while farmers lose their land; when government officials spend money on weapons instead of cures; when the upper class is extravagant and irresponsible while the poor have nowhere to turn, all of this is robbery and chaos.

(from the Tao Te Ching, circa 500 BC)

1945- 1960sBabies, Hippies and Buildings

• Post-WWII – Bretton Woods, Marshall Plan and GATT– boom in Western economic growth that

financed the social welfare state as a transnational norm

• 1960s - Independence in Africa, high hopes

• An era of infrastructure and social development, nation-building and growth of the international system

1970s -1990s – Yuppies, downsizing and outsourcing Growth slowed from 3.5-4% from 1960

to 1973, to less than 2% from 1973 to 1990. Unemployment rose to 7.8% in OECD countries. Fierce Competition, centralization, mechanization and trade liberalization.

Jobs move to low-wage labour markets in industrializing countries. Unemployment, instability, decline of social cohesion.

1970s-1990s – Famine, wars and Bob GeldofIncome in the South – Indebtedness and

SAPs– Market reforms exposed developing economies

to global competition too fast, too deeply– Public sector, health and education

eviscerated, and farmers lose their land with agricultural liberalization = reservoirs of low-wage labour

– Poverty-driven conflict and insecurity • 3 days of global military

spending = global spending on HIV medicines

when government officials spend money on weapons instead of cures

1980s – 2008 Money=trouble and it is contagious (financial globalization)Argentinian, Asian, and the Global economic

crises

and now... the Greek crisis- Capital market liberalization (pegged currency

for Argentinian and Asian)- Bad lending, crony capitalism, expectation of

bailout- Bank deregulation- Speculative bubble- Capital flight, contagion, stock market crash- Bailouts

When the upper class is extravagant and irresponsible, while the poor have nowhere to turn, all of this is Robbery and Chaos

My Topics

Student experiences in community health in Africa

Access to ICTs & research – African universities

Globalization and Smiths Falls

Economic crisis, recession and stimulus – housing policy

“There is a crack in everything, that's how the light gets in” L.

Cohen

Asking Policy Questions"Why is Jason in the hospital?Because he has a bad infection in his leg.But why does he have an infection?Because he has a cut on his leg and it got infected.But why does he have a cut on his leg?Because he was playing in the junk yard next to his apartment building and there was some sharp, jagged steel there that he fell on.But why was he playing in a junk yard?Because his neighbourhood is kind of run down. A lot of kids play there and there is no one to supervise them.But why does he live in that neighbourhood?Because his parents can't afford a nicer place to live.But why can't his parents afford a nicer place to live?Because his Dad is unemployed and his Mom is sick.But why is his Dad unemployed?Because he doesn't have much education and he can't find a job. But why ...?"

The Three Stories of Housing Policy in Canada

Post-WWII boom. Non-profit era. Neo-liberal withdrawal -homelessness.

4th Story Economic Crisis Change?

Affordability Supply of money versus what things cost

(prices) Household affordability problem Public affordability problem

- Eg. the RGI mismatch in Canada’s Affordable Housing Program (AHP)

money prices

Income + savings + creditShelter + living + debts

Revenue + borrowing + printingExpenditures+ debt servicing + inflation

Affordability crisis

People have less money available for housingHousing is more expensive

The Housing System

Tenure – rental and ownershipFinancing – households, banks and publicStock – composition and maintenanceInfrastructure – market, physical, social and community Market – demography, demand, supplyAnd…..Politics – ideas about the role of government and marketsEconomics – employment, money and interest, policy norms, reforms, path dependance

Arguments The problem of affordability in housing exists

along a continuum across income and tenure, private and public

The economic crisis of 2008 and homelessness had the same roots in public policy & the housing system Tenure – ownership subsidized over rental Market – income stagnation of middle class, poor

got poorer, rich got richer Financing – Innovation stretched 'affordability' of

ownership housing, self-reinforcing inflation. Stock – tight rental markets, ownership bubble,

reduction in social & affordable housing

Affordability and Tenure – a ContinuumCan we afford…

to rent? Tight rental market High rent to income ratio Low savings, high debt Reduction in social benefits

NOT TO RENT? Inadequate, unsafe,

overcrowded housing Homelessness Emergency visits, street-

involvement, hospital, jail

to own? Rising prices Interest rates Unaffordable payments Low savings, high debt

and flat income NOT TO OWN? High rents Rising equity – an

opportunity cost

Public Affordability ProblemWe can't afford…. Housing and Income supports?

Recessions of 1970s and 1980s Austerity measures of 1980s-

1990sOr...Not to have housing and income supports?

Reinsitutionalization and shelterization

De-housing and poverty Municipal pressures - Urban

sprawl, devolution, property tax pressure etc.

Affordability problem

Or….

MONEY SPENT BADLY?

Public Policy Errors

Housing Policy - Tenure• Anti-rental – reduction in incentives, decline of new

supply, demolition and condo conversion• Pro-Ownership

– Skewed subsidization – lobby/government push.– Entry barrier– rising prices, flat wages and high

debts = lowered through financial innovation.– Affordability paradox – making owning affordable

by way of rising prices (future equity).

Income Stagnation

Ineffective demand• More exposure to global economy and policy pressures.• Mass private consumption required• Flat wages for average worker• More inequality, less job security, more working poor•Higher debt and less social security

• Anti-social – reduction in employment insurance, welfare,

disability, deinstitutionalization without community supports, drug war.

• Anti- social and affordable housing– withdrawal of public funds– declining as proportion and

absolutely.

Social Policy

Extend credit to make unaffordable home purchases affordable!

Everybody wins…until they don’t, and everyone loses.

Didn’t cost governments anything…until it cost them trillions.

(Rather Stupid)Solution to Affordability Problem

Recipe for disaster

Ingredients

No-recourse mortgages

Mortgage-interest deductibility

Tight rental markets

Sub-prime lending

Vast shadow-banking system(keep investment/commercial bank ratio of $4 trillion to $6 trillion)

1. Keep heating the market so investments don’t sour, when you run out of prime – go to subprime!2. Inevitably, risky investments will go bad and people will pull out. 3. This will leave a smaller pool of money to back returns4. So….you must hike interest rates .This will lead to foreclosures. 5. 1 to 5 is to be repeated until safe investments go bad, ***if you don’t, the market will collapse right now! 6. Then house prices will actually fall off with major foreclosures, triggering bank collapse. Note: So long as you’ve ensured unfettered financial globalization, the global financial system will implode, leading to stock market collapse.

How to Cook the Economy (This will create a global recession - the worst

since the Great Depression! )

Recession

‘The Washington Consensus has collapsed’ - economist

A space for UPSTREAM economic arguments– Re-housing and better income supports– Community infrastructure– Affordable rental supply

A Space for Money Evaporation of the money supply creates

space for new money (Monetary stimulus - Krugman, Cooper)

Best to direct money in ways that will benefit the most vulnerable and least well off (Development Research Group; World Bank)

Most efficient stimulus for aggregate demand

Most ethically defensible

'Crispurtunity'

Most informants felt that a there will be a significant re-think of the economic model we have been following and the change would be centred around:

-The role of government in relation to markets

The nature of the change would be a move to a more balanced approach.

The Mother of All Policy Questions

The Balance of State and Market

“I’m neither left nor right, I’m just staying home tonight, getting lost in this hopeless little scream’- L. Cohen, Democracy.

Stuff I recently found that you might find interesting

- Global Housing – Slum Dwellers International - www.sdi.net

- Economics – www.voxeu.org

Policy Recommendations DEMAND SIDE

Match shelter allowances to affordable housing rents.

Index shelter allowances to BMR (at 80% of AMR)

Provide shelter allowances for the working poor so that BMR is 30% of income (RGI).

Enhance incomes of poor seniors so BMR=RGI.

Upload shelter allowances to province.This will create competition, choice and

sustainability for social and affordable housing and eliminate wait lists and supplements. It will create incentive to curb rent inflation through supply measures. It will mean more sustainable rent revenue for municipal non-profits.

SUPPLY SIDE Work with Feds to restore incentives for

building rental supply in general. Continue with capital grants for non-profit affordable housing.– this will raise vacancy rates to healthy and

curb rent inflation, thus controlling indexed allowance costs.

Very aggressive repair and green retrofit programs and incentives. – This will create a better margin between

affordable rent and operational costs.

SUPPORT SIDE Increase and diversify community

and housing supports to ensure service for all.

Eliminate disincentives to work for people on OW and ODSP.

Involve tenants in community-building and in maintenance of healthy and safe housing.

This will reduce costs to mandatory government services and create inclusion - ownership, participation and responsibility from the ground up.