Keith McNenly
Special to The Lake Report

Sixty years ago Bob Dylan released his song “The Times They Are a-Changin’.”

That song has never lost its relevance. Like a tolling bell, it calls us still today to look upon our younger generations ability to cope with a very changed world bequeathed to them.

The economic policy of the past 60 years simply does not reflect the current world reality. It has the effect of allowing the rich to amass wealth to the detriment of the poor and middle classes.

While Western governments espouse the efficacy of the free market system, public policy in its totality, especially with prime interest rate intervention by national banks, ensures the migration of wealth to the already rich and powerful.

When the middle class finally get a small raise and begin buying stuff they previously couldn’t afford, the makers and sellers of that stuff make a windfall, which for some piques their greed.

Not content with the increased profits from higher sales, they seize the opportunity to raise prices because there is more competition for their products.

Politicians label it inflation, setting the stage for a financial double whammy windfall for the already rich, and the Fed, on schedule, raises interest rates to “fight inflation.”

These same CEOs and shareholders with portfolios that include banks and mortgage lenders are now set to receive their part two reward for raising prices. The Fed (or in our country, the Bank of Canada) raises interest rates.

Increased interest rates have an almost immediate and predictable impact. On top of barely being able to afford food, gas and other staples due to higher prices, the middle class now starts losing their homes as well, not because they can’t afford it, but because they can’t afford the increased monthly interest payments to the banks and mortgage lenders.

The homeowners evicted from their homes must now compete for increasingly rare and costly rentals that are also unaffordable.

Rents they must pay after losing their home often exceed their previous mortgage payments, except now the bank owns their home and they have lost their good credit rating. Inability to qualify for a mortgage renewal in times of higher interest rates is a game changer.

How is it that we still rule our economics with this antiquated system of punishments to the middle class when it is corporations that raise the price of goods and services?

Economists expound that the way to combat inflation is to curb the buying power of the middle class by raising interest rates. It indeed does that, with a byproduct of increasing profits and incomes for the wealthy, banks and large monopolistic corporations.

Is this really the only or best solution? When inflation is quelled, prices never go back down all the way to or even near previous levels. Why is that?

Maybe the idea of using interest rate increases to ease inflation held less collateral damage on citizens when the idea was first promulgated, but today’s effect of kicking the middle class out of their homes is too steep a price to pay.

Home ownership today is unaffordable to a growing segment of the population and many of our youth have already discounted the idea of ever being a homeowner. The alternative, a life of renting, is also unaffordable, thanks to growing competition for scarce rentals, and it provides no nest egg for retirement.

Dylan released “The Times They are a-Changin’ ” in 1964 and those of us around at that time can attest to the fact times really were changing.

We had the Vietnam war, civil activism, the influential boomer generation getting politically active, hippie and drug culture to cite but a few, but no one grew up thinking they would fall behind their parents in their ability to earn enough to own their own home someday.

But that’s where we are today.

Many of our kids no longer see home ownership as inevitable, but as unattainable. Since the 1960s food sales competition in Canada has dwindled from more than 50 to only five monopolistic corporations that control our food choices and prices.

That is one real cause of inflation, not the middle class owning homes and getting a small increase in salary.

In his song 60 years ago, Dylan had some advice: … Your old road is rapidly agin’, Please get out of the new one if you can’t lend your hand, For the times they are a-changin’…

Niagara-on-the-Lake resident Keith McNenly was the chief administrator of the Town of Mono for 41 years.