The Parallel Parliament

by Glen Pearson

The Real Creator of Jobs

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IN RESPONDING TO NICK HANAUEER’S observation that “the pitchforks are coming,” one of the .01% noted that the democracy has successfully “tamed” the masses, to the point where violent responses to growing economic inequality are no longer likely.

One wonders what that person must think of the millions marching in the streets of Paris in response to a brutal attack on Charlie Hebdo, or the hundreds of thousands marching in streets across the world seeking change in the world’s financial system. These demonstrators might not carry rudimentary weapons like pitchforks, it’s true, but on the other hand, armed with smartphones, websites, petitions, cameras, and powerful texting abilities has meant that they can actually enter into the consciousness of the world in ways never seen before.

Hanauer understands the distinction, saying forcefully that modern revolutions come gradually, then suddenly. He believes his financial peers just don’t get it, despite all their supposed acquired intelligence.

But his greatest frustration is reserved for just how unnecessary it all will be.

“If we, the elites, do something about it, if we adjust our policies in the way, say, Franklin D. Roosevelt did during the Great Depression – so that we help the 99% and preempt the revolutionaries and cries – that will be the best thing possible for us rich folks, too. It’s not that we’ll escape with our lives; it’s that we’ll most certainly get even richer … My suggestion to you is: Let’s do it all over again. We’ve got to try something. These idiotic trickle-down policies are destroying my customer base. And yours too.”

It was when he realized this that Hanauer decided he wanted to try changing the conversation. He calls it “middle-out economics,” and it’s compelling stuff. It simply asserts that if workers have better jobs and more money, businesses have more customers.

In this he hits on a great truth that has been overlooked. The financial elite is fond of saying that governments don’t create jobs. Well, if recent years are any indication, neither do corporations. It is, in fact, middle-class consumers, not rich businesspeople, that are the true job creators. When businesses have more customers, they require more workers to fill the demand. It is a thriving middle-class that created the rich, not the other way around. Endanger that middle-class and it’s inevitable that fabulous wealth will prove fleeting.

Hanauer is compellingly effective when exposing the underlying fallacies of elite assumptions. For those calling for smaller government, it will never happen, he claims, if so many people keep falling through the cracks. “You have to reduce the demand for government and that hasn’t happened under conservative Republican leadership – in each case, the size of government and debt has mushroomed under their watch.” He isn’t trying to be partisan, he maintains, but it should be obvious to all sides of the political spectrum that the more people out of work or facing financial insecurity, the greater will be the call and need for government intervention and support. It’s inevitable.

Governments are in the crosshairs of the 1% not because they are big or small, but because they can legislate regulatory control and nothing scares the wealthy class more. And so the assault on government continues. Yet despite this reality, Hanauer believes that both the right and left sides of the great political divide are slowly finding common ground on the need for a common approach to save capitalism from itself. “Perhaps that’s one reason the right is beginning, inexorably, to wake up to this reality as well,” he says. If he’s right, then unbridled capitalism doesn’t have much time left. In the next post we’ll examine if politics can actually begin to formulate a plan to pull it all back from the brink.

Pitchfork Democracy

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THE DAVOS MEETINGS HAVE CONCLUDED AND, as always, we await the results. Warnings were coming from everywhere prior to the exclusive sessions – possible recessions, the lowering price of oil, global inequality. But as far back as last summer, one of those in the world’s most elite financial club was already sounding the alarm at various levels.

Nick Hanauer helped launch 30 businesses, including Amazon, owns a bank, his own plane, a huge yacht, and qualifies, not as a member of the 1%, but of the .01%. He says that one of his keenest strengths is to possess a kind of instinctive sense of what the future will bring.

What is his sense picking up now? “I see pitchforks,” he states confidently.

“Our problem is that inequality is at historically high levels and getting worse every day. Our country (the U.S.) is rapidly becoming less a capitalist society and more a feudal society. Unless our policies change dramatically, the middle class will disappear, and we will be back to late 18th-century France. Before the revolution.”

Did the folks at Davos hear this message? It seems likely, and from numerous sources. The problem is that many of those who attended the World Economic Forum last week are of the investment kind. They attend because they sincerely want to hear of the problems in order to know where to place their funds. They aren’t out to solve the problems, but to stay clear of the greatest risk to their resources. Hanauer knows this reality and so put his challenge in plain terms: “And so I have a message for my fellow filthy rich, for all of us who live our gated bubble world: Wake up, people. It won’t last.”

Many in the financial order actually appreciate his forthrightness and candour, but figure they can avoid the troubles he speaks of. What they don’t comprehend is that Hanaeur is saying this great challenge before them isn’t financial but democratic and human. Just so they wouldn’t misinterpret him, he defined it for them:

“If we don’t do something to fix the glaring inequities in this economy, the pitchforks are going to come for us. No society can sustain this kind of rising inequality. In fact, there is no example in human history where wealth accumulated like this didn’t see the pitchforks eventually come out. There are no counterexamples. None. It’s not if, it’s when.”

We’ll explore more regarding his reasonings in the next post, but for now the contrast between his language and that used in Davos is profound, even exasperating. The jargon largely used in Davos is of the corporate style – technical and vaguely antiseptic. While organizations like Oxfam were providing a clear contrast, speaking with pathos and urgency, the prevailing language is always one of neutrality and a morally numbing kind of objectivity. It focuses on the great problems of the day by analyzing their implications rather than solving their harsh realities. Yes, the great needs of the world are there – poverty, women’s rights, climate change, poor governance, even greed – but they are gathered effectively on the outside, looking in. The fundamental driving force of meetings like those in Davos is how to grow prosperity in order to overcome these problems rather than clearly solving them in human terms.

Just one other thought. If, as presented at the Swiss village last week, over half of the world’s wealth is about to be owned by the 1%, how can we expect them to tackle the great challenges of the age if it would necessarily cut into their profits if more effective measures at reducing inequality were to be undertaken?

This is where Hanauer is helpful, because he speaks from inside the gates, reminding his peers that if they have the most of the wealth, then they will have to apply themselves to the solutions. If democracy is not merely about deregulation, supportive corporate legislation, or access to hordes of capital, but angry citizens coming together, then a day of reckoning might indeed be on the horizon, the modern equivalent of pitchforks everywhere.

The Time for Tinkering is Over

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THE FEDERAL LIBERALS CAUCUSED IN LONDON this week and it was good to see some old friends. Justin Trudeau was struggling through a bout of food poisoning and his caucus was focusing on the one issue they believe will prove critical to the coming election: the economy.

I get it. Each party is talking about our struggling economy, hoping to leverage some advantage from it, one way or the other. But I wanted to ask my Liberal friends one question: will you stop tinkering this time? All parties have been doing so, but this occasion in London could represent a turning point within the party.

We all understand that each time we bounce back from some kind of recession, severe or light, that we never land back where we were. The unemployment rate continues to climb, as do the obstacles confronting the poor. On other occasions, all parties have focused on economic solutions but they never quite pulled it off. Yes, deficits were slayed, or, yes, trade was enhanced, but the growing disillusionment and worry among Canadians is inevitably creeping up to the levels found in the United States. People don’t really trust government to get things right anymore because, well, our problems have grown regardless of who was in power.

The real problem confronting the political order these days is not financial capital but social capital. Somewhere along the line, the political order lost touch with the mood of the people and now everything is about pursuing the vote of a relatively few number of people in order to gain power. We, as Canadians, understand that. But will you go back to the origins of our difficulties and repair them from their very source? There was a time when the corporate good transcended the public good and ever since then we have watched as wealth has been accumulated in record measures at the same time as less and less of it went to average Canadians.

In a very real and increasingly tragic way, Canadians have felt the withdrawal of institutional supports, both private and public. This has created a crisis in confidence that can’t be simply solved by an election. Forget talking about the lower, middle, or upper class; this is about the “anxious” class, and how the worry they feel about the future of their kids and a more dangerous world is far more serious than any political party’s electioneering. These people are struggling to preserve their standing, their sense of worth in an increasingly alienated culture. And now they have slowly begun pursuing individual survival over social solidarity. Signs of this are everywhere, but it’s important to acknowledge that the political and financial classes oversaw this development, and to merely give us the same-old, same-old, will only erode that reality further.

There used to be a time when individual identity and social identity crisscrossed repeatedly in Canada. In rural communities and big cities there was always the sense that this country was “under construction” and going somewhere. Now we have no idea where the politicos are taking us, and our confidence in the future and ourselves is eroding.

Liberals have always prided themselves as the party of balance. Okay, but our sense of equilibrium has been shot for some time now. All parties played a role in that disruption and we won’t get things right unless we go back to the origins of our difficulties. Why has the political class forced us to choose between trade and jobs, between comfortable houses and homelessness, between remaining in the middle-class or poverty, between meager governments or no governments at all? These are sincere questions that should be asked of all parties.

Even at the best of times in recent decades we have felt the tearing at the fabric of the Canadian identity. We have failed our aboriginal people seriously enough that we can’t even muster the strength or sense of social justice to launch a commission to locate the roughly 1,000 missing or murdered aboriginal women in this country. What is that about? Is this the vitality of our social consciousness these days? Must we watch as parties bludgeon themselves to a depraved degree and walk away with any sense of hope diminished?

You believe in balance, right? But can we all bring ourselves to acknowledge that we lost that tenuous tension that was Confederation years ago? The number of poor is growing. Good jobs are becoming scarce. Veterans are being denied. Seniors are fretting. And students can’t even afford to learn anymore. This is not the Canada we envision in our finest moments. So, enough with balance already; let’s get on with finding answers to these, our deepest problems.

In the U.S., Obama has opted to use the last two years of his tenure to attempt to bring about social and economic change. Yet there was a time when people thought he would start with such things, not end with them in a lame duck scenario. Enough with institutional cynicism; get on with the task of remaking the country on the basis of our progressive ideals and not some corporate ideology.

This is about the battle for the heart and soul, not of the Liberal Party, but of the country. The sweet spot isn’t the middle-class, but the aspirations of a good people. The time for tinkering is over; the time for renaissance has come.

 

How Much Isn’t Enough?

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THE NEWS JUST KEEPS ROLLING OUT, and for Americans especially an important time has arrived. We consistently hear now that the United States has an economy getting stronger by the day and that citizens can look forward to a more robust future.

And then a study appears in the Washington Post that brings a dose of reality. The Southern Education Foundation reports that for the first time over 50% of American children come from low-income households in 2013. Back in 1986, the number was 32%, moving ever upwards to 42% in 2006, just prior to the great economic recession. The bottom has fallen out for thousands of more families since that recession, so that the numbers is about to reach 51%.

At first I thought these numbers can’t be correct because, if they were, surely the media would be all over them. Kent McGuire, of the Southern Education Foundation, put it starkly: “The fact is, we’ve had growing inequality in the country for many years. It didn’t happen overnight. Now we are a nation disinclined to invest in our young people.” He goes on to state to the Washington Post that the country has reached a “watershed moment.”

In recent weeks, President Obama has opened a new political and economic front, offering new initiatives to support the middle-class. Part of his incentive came from the Southern Education Foundation report. He is recognizing that an increasing number of families are falling out of the lower portions of the middle-class and landing squarely in poverty.

It all sounds timely, and makes sense. But no sooner was the Foundation’s report made public than another bit of information emerged that reveals just how difficult this fight is going to be. The highly credible international organization, OXFAM, informed us yesterday that by next year, over 50% of global wealth will be owned by the 1% financial elite. The 80 richest people on the planet have the same wealth as 3.5 billion people.

This was all over the news yesterday, serving as a kind of “aha” moment for world leaders about to meet at the World Economic Summit in Switzerland this week. The political and economic elite meet there every year, announcing plans to make the global economy more fair, and yet it doesn’t happen. In fact, it’s going the other way.

Winnie Byanyima, executive director of OXFAM, is as bold a champion as any you will ever meet. She’s heading to Davos to unveil the details of the report and challenge world leaders to stop pretending that they are concerned about inequality and get on with dealing with it. She puts it plainly:

“Do we really want to live in a world where the 1% own more than the rest of us combined? The scale of global inequality is simply staggering; and despite the issues shooting up the global agenda, the gap between the richest and rising fast. It’s time our global leaders took on the powerful vested interests that stand in the way of a fairer and more prosperous world.”

This dynamic woman will be co-chairing the Davos forum and won’t be denied, in part because the majority of those falling ever farther behind are the world’s woman. This is a global challenge and Byanyima is placing it front and centre on the global stage later this week.

But she released it now because President Obama is about to unveil his plans for the empowerment of the middle-class tonight, in his State of the Union speech.

There is no longer the need to keep talking about global inequality; there is now a clear consensus and the time has come to act. That’s why Bank of England governor, and Canadian, Mark Carney, recently stated that the capitalism is doomed if ethics continue to vanish, or why the Lancet stated that Canada is losing its knack for global citizenship and in the process is losing the battle against poverty and healthcare at home – especially among aboriginal populations.

A half-century ago, another president of the U.S. stood up to give his State of the Union speech in the same place Obama will tonight. John Kennedy spotted this problem of global inequality and reminded the American people what would happen if they didn’t take it seriously. “If a free society cannot help the many who are poor, it cannot save the few who are rich.” This is the challenge now before us. Growing poverty and inequality says something about us as citizens, and what we will tolerate. At home, Canada is losing this battle, and internationally our voice against poverty has been diminished. Perhaps people like Winnie Byanyima can help us pull back from the brink.

How much isn’t enough for the global elite? Half the world’s wealth doesn’t seem to do it for them. It’s time to take them on before they, and us, lose the battle altogether.

The Truth is You

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WHEN BILL MOYERS RESIGNED FROM political advising in 1967 in order to become the publisher of Newsday, he offered a frank admission: “When I left the White House I had to learn that what matters in journalism is not how close you are to power, but how near you are to truth.”

He arrived at this conclusion after taking a 13,000-mile bus trip around the country, armed with a notepad and tape recorder, and interviewing average people across the United States. What he discovered in that odyssey convinced him that politics and citizens were careening along ever-widening paths. He learned that citizens were quickly losing trust in politics to answer their most basic problems and that politics itself, as an institution, couldn’t really have cared.

Then he set about to interview many leaders of society who tacitly agreed with that assessment. “All these people share the conviction that news is what’s hidden. Everything else is publicity,” Moyers stated. Instinctively, we know this to be true. In fact, we’re almost 100% certain.

While traditional media largely continues its coverage of institutional spokespeople, non-traditional venues have sought another path, looking outside of established means to gain their story. Sadly, and in both cases, the real news gets suppressed amidst all the coverage.

Before she became an American senator, Elizabeth Warren had been placed in charge of a blue ribbon panel assigned with getting to the real truth about the financial bailouts given by the government to the largest lending institutions during the financial meltdown in 2008-09. She was already a seasoned pro at understanding the disappointment of modern politics, but even she wasn’t prepared for what she unearthed. She calls it the “BS Meter” and the title is suitable. In her book, A Fighting Chance, she tells of when her committee met with the second-in-command of the U.S. Treasury. When she asked him directly if the government was still bailing out the large banks with huge sums, he looked directly at her and said, “No, that has now ended.” Yet a few hours later her committee was shocked while watching the news to learn that a special government bill had just been announced that offered a further $800 billion bailout of the key banks. BS Meter indeed.

Meanwhile, from non-traditional media sources we have been hearing of a new economic order about to descend, in which each person will have their own start-up, their own brand, and control their own destiny through selling into digitally enabled markets. The problem is that we know already that it can’t be true, even for most people. We hear daily of how large companies have every intention of remaining profit-maximiers and that most consumers will play along. Unemployment will remain stubbornly high as a result, and government programs meant to help people transition through the emerging economy are being slashed.

Either way, the real truth behind the coverage is being ignored. And that truth is you … and me. Real people, despite all their creativity and resourcefulness, saw all their savings lost in the sub-prime mortgage scandal during Warren’s tenure on the committee. At one point, a family was going bankrupt on average of one every six minutes – 16 million families altogether in one year. And how did their government respond to this development? Simply by blaming such families for being poor savers and greedy consumers. The real reasons for bankruptcies were eclipsed by the blame game.

We all know the numbers. We are fully aware of the precarious nature of the middle-class. We know that significant numbers of Canadians are either unemployed or underemployed.

But it’s worse than that. Polls tell us that a large percentage of Canadians don’t feel that any political party will defy the moneyed interests enough to restore the equitable financial health of the country. An increasing number of citizens no longer rely on the promises of election campaigns because … well, let’s just say they’ve learned their lesson.

In such a setting, the comment by Moyers concerning truth and power carries a troubling fact: the closer one gets to power, the farther they can journey from the truth. We, average citizens, are that truth – not ultimate, but perceptive truth. We know of the rise in food bank numbers, the proposed procurement of sophisticated fighter jets that don’t work, the meteoric rise of the financial elite over the everyday working person, the politicians that seem increasingly isolated, the decline in our roads, sewers, and other infrastructure, the higher costs of post-secondary education, the catastrophic effects of climate change, and the fact that the savings from government program cuts will simply go to reduce taxes for the rich. We know it all, but have no way of getting out of our predicament.

We keep being told that the free market is benign and largely neutral on economic issues, yet our experience tells us that some individuals and large organizations have such powerful influence that the decisions that benefit them adversely affect the rest of us.

This is the news that remains hidden while we grow swamped with spurious advertising and self-serving publicity. It remains hidden because no one believes it will be dealt with under our present economic/political system.  It won’t be fixed until we show up in sufficient numbers to demand truthful communication. And it will remain broken if we leave power untouched and unchallenged.

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