317 – Globalization, Inequality and Debt With Jeff Rubin

Today's first time guest is Jeff Rubin, who was the Chief Economist at CIBC World Markets (where he worked for over 20 years). He has just released a new book: The Expendables: How the Middle Class Got Screwed by Globalization, where he says that the decline in permanent, well paying full time jobs is a direct result of free trade agreements that transferred jobs to lower wage countries, leaving factories in Canada idle. On today's show Jeff Rubin argues that globalization allows the rich to get richer, and that leads to increasing inequality, and that leads to high debt levels for the average Canadian. Is there a solution? We discuss that and a lot more on today's show.

Helpful Links:

Jeff Rubin on Twitter https://twitter.com/jeffrubin

The Expendables How the Middle Class Got Screwed By Globalization link to book on Amazon: https://amzn.to/2FLeORE

Debt Free in 30 Podcast on Modern Monetary Theory: https://youtu.be/TMGDaTGx3V4

Topics Covered:

00:47 What is globalization, and who are the expendables who got screwed by it?

2:48 What's wrong with moving jobs to lower wage countries? Consumers pay less, and corporate profits are higher; what's the problem?

5:55 Does outsourcing lead to lower wages, lower interest rates, and lower inflation?

7:40 How are low wages tied to consumer debt?

9:50 Interest rates are very low, so does it matter that governments have high deficits?

11:18 How does globalization lead to more middle class debt?

13:43 Does globalization lead to speculative bubbles (like the stock market and the housing bubble)?

15:51 Do you agree or disagree with David Ricardo's Theory of Comparative Advantage? Are we not better off if we do what we are best at?

18:48 With globalization we have more exposure to other cultures; does that increase the chances for world peace? Is that not an upside of globalization?

20:14 What are the solutions to the problems caused by globalization?

21:27 Donald Trump and Bernie Sanders both have the same trade policy

23:39 Not being able to get N95 masks was a big problem, because we didn't produce them in Canada. Do you expect in the future to see more manufacturing returning to Canada?

27:15 Contrary to popular belief, why do you not think we have a progressive tax system?

29:10 But if we had a more progressive tax system, would that not lead to money and jobs and wealthy people leaving the country, making our economic situation even worse?

33:00 Closing comments: advice for the average Canadian hurt by globalization.