Auto Service World
Feature   December 1, 2011   by Jim Anderton, Technical Editor

Why Occupy Matters

Unless you've been under a rock the last few months, you've heard of the "Occupy" movement. Like all good protest movements, this one is rooted in youthful outrage over injustice; but this time, it's not about U.S. foreign policy or harp seals...

Unless you’ve been under a rock the last few months, you’ve heard of the “Occupy” movement. Like all good protest movements, this one is rooted in youthful outrage over injustice; but this time, it’s not about U.S. foreign policy or harp seals … it’s about our future in business. Business? While the sign-wavers on Bay Street talk about the “99 Per Cent” in reference to the skewed distribution of wealth in the market economies, what they’re really saying, or should be anyway, is “Save the middle class.”
Although most of us don’t feel it, I think we’re in a rarely experienced period of real deflation, with many prices falling in lock-step with falling middle class incomes. In my morning paper I see excellent Korean mid-sized sedans selling for lower prices than five years ago … with low interest rates and long warranties. Can you stay in business with perpetually dropping door rates? We’re already in an environment where formerly common repairs like transmissions or repower jobs don’t happen because there’s simply no point when you can lease a very good Hyundai or Kia for $290 a month. I’ve commented on this phenomenon before, but this time it’s not driven by the cost/value ratio of repair vs. buy/lease … it’s about real incomes and standards of living of ordinary Canadians sliding slowly downhill.
Productivity in this country has been improving steadily for decades, yet middle class standards of living are dropping. Why? Improving productivity by definition should be creating surplus wealth in any economic system … so where’s the money? Certainly not in the hands of average Canadians, who are driving cars with deferred repairs and maintenance, or trading down to ever cheaper new and used cars to try to salvage their lifestyles of living. The question no one seems to ask is, “Where is the money?”
The stats suggest that it’s gone to the top couple of per cent of income earners in the Western world, which suggests a bigger question: Do we want an economic system that delivers poorer lives for the majority of Canadians? Obviously the answer is no, but the noise from extreme factions on both the Left and the Right here and in Europe and the U.S., are papering over the real fact: growth and prosperity are only possible and sustainable with a growing middle class, and if the wealth is there (and it is) then someone is taking too much for themselves. U.S. Federal Reserve Chairman Alan Greenspan advocated banking deregulation in the U.S. because he figured that bankers wouldn’t do irrational things … who would take stupid risks with the company that employs them? We all know what happened. Yet regulation is only a short-term solution. My fear is that if we don’t re-jig capitalism to first and foremost grow the middle class, we’re going to end up with a command economy or something close to it, where big companies do amazing things courtesy of government handouts and protectionism, and who you know becomes more important than what you can achieve or how hard you work.
Scary? You bet. And what’s worse is that it’s all because a handful of people see their responsibility to the economy is to grab as much as they can for themselves and screw the rest of the world. The “Occupy” kids know something’s wrong and we’d better figure it out too, if we want a healthy, growing Canada with two cars in every driveway.

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