Carlisle Institute
Bentley Street E2M 1M 6 Saint John, NB, Canada

We are witnessing the rise of the Buyback Economy. Contrary to the views of orthodox economists and most politicians, today's economic boom is not powered by accelerating innovation or growth in productivity. It's not the consequence of finally harnessing big data or other technological advancement. It's driven by another round of financial engineering that, much like the pre-2008 housing boom that preceded it, converts equity into debt. This financial engineering has the con...sequence of sacrificing future growth for present consumption. And, once again, it will redistribute even more of the subsequent wealth to corporate executives, wealthy investors and Wall Street financiers. Across industries, the Buyback Economy is diverting capital from productive long-term investment to further inflate a financial bubble in corporate stocks and bonds. When this bubble bursts, it will send the economy into another global recession. This is taking place at precisely the time that the American federal administration is dismantling safeguards and weakening regulations put into place to prevent a repeat of the 2008 Great Recession.

It's a modern myth that the neoliberal revolution of the 1970s and the 1980s weakened the power of the state. What really happened was that the political parties of the rightsupported by industry financingrefashioned and repurposed the institutions of the state to undermine the power and legitimacy of labor and strengthen the power of capital. When seen from this perspective, inequality, racism, bigotry and xenophobic nationalism are outcomes of a more profound pathological dysfunction, not the cause.

One explanation for the so-called mysterious combination of stronger growth and low inflation is that, in addition to stronger aggregate demand, developed economies have been experiencing positive supply shocks in the form of globalization, which keeps inexpensive goods and services flowing from China and other emerging markets. In addition, unions and workers' reduced bargaining power have flattened out the Phillips curve, with low structural unemployment producing less wage inflation than has been the case historically; oil and commodity prices remain low or are declining; and technological advances, including the expansion of the role of online purchasing and the process simplification of supply chains, are reducing the final costs of goods and services more generally.

CEOs might speak to social or political issues; that's an integral part of their responsibility as the chief spokespeople for their organizations. But the CEO's views on ethics or morality don't necessarily reflect the organization. It's more important to review the firm's operating principles, its policies and practices, processes and procedures, and the nature of its commitment to shareholders to evaluate whether the organization's leadership statements are consistent with its way of working. And while mission and vision statements are important, a corporation's code of ethicsboth explicit and unwrittenare best evaluated when they are tested under fire.

First of four "Business Education 2025" symposia @UNBSJ on February 27, 2015. Great speaker lineup and excellent interaction with the audience. Next #symposium scheduled for May.Left to right: #unbsj Business School Dean Greg Fleet, Enterprise Saint John Chair Larry Hachey, #unbsj Business School Dean Morrie Mendelson, Carlisle Institute Chair Peter Lindfield. #carlisleinstitute #bized2025 #unbsj #symposium #newbrunswick #education #globalization