The Parallel Parliament

by Glen Pearson

Tag: economic reform

A Populist With Punch

cn_image.size.elizabeth-warren

SOMEHOW THE COUNSEL OF THOMAS JEFFERSON doesn’t seem too dated anymore: “The end of democracy and the defeat of the American revolution will occur when government falls into the hands of lending institutions and moneyed interest.” It’s an insight Elizabeth Warren would readily adhere to over two centuries later. And who can blame her, given the troubling rise of Wall Street again.

The crippling economic crisis of only a few years ago, largely precipitated by Wall Street’s incompetence, was supposedly a wake up call to all of us. Those initial attempts at regulation to keep it from happening again have been the object of numerous complaints from financial executives who claim that such constraints only serve to keep the economy from effectively recovering.

For financial institutions, however, the times couldn’t be better. The federal government forwarded Wall Street hundreds of billions of dollars of new capital, and trillions of dollars of credit were made available to keep capital flowing. At the height of this spree, the Fed was buying $85 billion in bonds each month, in what became a massive windfall for Wall Street. All of it happened without Wall Street having to significantly change anything in how it operated. Even worse, the market for risky financial practices is booming again. Huge bonuses to CEOs continue to rise. It’s now assumed that any urgent and necessary reform will have to come after the next great crash.

But don’t tell Elizabeth Warren that. For her the time is now and the need for political reform to effectively match any kind of economic change is essential before it’s too late. Here it is in her own words:

“I know everyone is wringing their hands about the recent election. What went right, what went wrong, what we could have done better, what we need to do now, and these are all very important questions. But one thing has not changed: the stock market and GDP continue to go up, while families across the country are getting squeezed harder and harder. Dealing with this problem requires an honest recognition of the kinds of changes we need to make if families across the country are going to get a shot at building a secure future. This is not about big government or small government. Rather, it’s the deep down concern over who government works for. Say what you like, people across the country, everyday folks with bills to pay and kids to raise, know that this government does not work for them.”

This isn’t new stuff, but it’s powerfully presented and courageously proclaimed. To the great discouragement of many, Warren has opted not to run in the upcoming race for the presidency. Many Democrats, fearful of another elitist candidate like Hillary Clinton or other challengers, are pressing her to jump into the race; she refuses. And the Republicans? Well, Elizabeth Warren is their worst nightmare – a populist with punch. For now at least, she is contented to align herself with the citizen side of politics and in doing so she is gaining some remarkable credibility in an awfully pessimistic time.

She’s come by her financial perspective honestly. A former Harvard Law School professor, she’s an expert on how Wall Street and the financial industry is, in her words, “destroying the middle class.” That intelligence sees her rapidly becoming the most articulate voice in Washington D.C. In fact, Vanity Fair finished a column on Warren titled The Woman Who Knew Too Much.

Another title would also have been appropriate: “The Woman Who Experienced Too Much.” Read her book, A Fighting Chance, as I did over the holidays, and you’ll immediately pick up the narrative of a young girl (Warren) personally witnessing her normal middle-class family decline in income, stature, and hope. A sad tale, it is also the story of millions of families who looked to government for a sense of balance and who came to the understanding that they were alone. It was that experience, unfolding over difficult years, that lit the fire of challenge that eventually wound its way to the U.S. Senate. That mix of the personal, the passionate, and the principled, is what makes her a modern force to be reckoned with – her story is like that of millions.

At a time of record corporate profits, a time when 14 million Americans are out of work, when millions have lost their homes and, according to the Census Bureau, the ranks of those living in poverty has grown to one in six, Warren has turned this development into a just cause. She has become the living embodiment of advocate Elie Wiesel’s observation that, “There may be times when we are powerless to prevent injustice, but there must never be a time when we fail to protest.” And protest she does – a voice to the voiceless, an oracle to the outcasts, and an enemy to the elites. But she’s intelligent enough to know that unless millions of others follow suit she will remain a voice crying in the wilderness.

No Need For Persuasion

Unknown-1

JUST WHEN YOU THINK NATIONAL POLITICS appears firmly cemented into the realm of hyper-partisan and unimaginative policies comes along a candidate who causes us to think different. Sometimes the effect of such a presence is profound, as I discovered over the holidays reading U. S. Senator Elizabeth Warren’s gritty, A Fighting Chance. The New York Times describes the book as, “a potent mix of memoir and policy,” as indeed it is. Her presence in the political dimension is energizing enough to spend more than one post on her influence. She’s rapidly becoming the most captivating political personality in years.

Yes, Warren is a Democrat, and, yes, she comes from the progressive spectrum. But she is best described as a populist, as seen in the massive movement of middle-class citizens who have found in her practical reasoning and delightful courage a cause for hope. Tired of elitist politics, millions have come to see her as the best choice for president over people like Hillary Clinton or any Republican candidate. And because of that very reality she has become dangerous to the establishment on the Left and Right of the political spectrum.

Put simply, she has successfully launched a new wave involving millions of citizens who are buying into an agenda for political and economic change. It’s important to note that Warren didn’t woo people into such a decision; they were already there, energized and increasingly angry. It’s foolish to think that these people needed convincing and were mere kindling for Warren’s fiery rhetoric.  They lived through a number of decades which saw billions of dollars poured into politics and trillions into a globalized financial system with little to show for it in their own personal progress. So convincing them wasn’t necessary. They are savvy enough to know when the game is fixed, frustrated enough to feel they can’t prevail over an unjust economic order, but just furious enough to stay in the arena and fight back. And Elizabeth Warren has assisted them in understanding their potential for change. Whereas Obama’s early calls for change had been more of a social phenomenon, Warren’s clearly comes from a desire for equity and economic justice.

But the reality is that she has won over so many people specifically because she credits the average person with being smart enough to know something is wrong and human enough to demand change. In drawing a direct link between economic justice and financial reform she has located the sweet spot of middle-class angst.

To give us just a fleeting sense of her outlook, here’s a brief portion of her recent speech to the New Populism Conference last May:

“From tax policy to retirement security, the voices of hard-working groups get drowned out by powerful industries and well-financed front groups. The game is rigged by powerful interests – against the rest of us. If Wall Street can borrow money at 0.75% interest, why can’t we? Our college kids are getting crushed by student loan debt. We need to rebuild our roads and bridges and upgrade our power grids. We need more investment in research. But instead of building a future, this country is bleeding billions of dollars in tax loopholes and subsidies that go to the wealthy and profitable corporations. For big corporations, trade agreement time is like Christmas morning. They can get special gifts they could never pass through Congress out in the public. Because it’s a trade deal, the negotiations are secret and the big corporations can do their work behind closed doors. The game is rigged. The rich and the powerful have lobbyists, and lawyers, and plenty of friends in Congress. Everyone else, not so much. Now we can whine about it. We can whimper. Or we can fight back. Me? I’m fighting back.”

Words like these have been uttered before, but not usually by someone so high up the political ladder and who has effectively galvanized millions of people behind the message. Yes, she’s dangerous – not merely because of her rhetoric, but because of the movement she is assisting to create. Just in time for national elections looming north and south of the 49th parallel has come a voice that counts more on people like us than her own influence. It’s a start. But it’s not the finish.  It might by the early days of the new year, but the old fight continues.

The New Star of Bethlehem

We forget that one of the key characteristics shared by all great faiths was that they were marginalized in their origins. Their appearance in their unique geographical confines most often represented an overestimated threat to the holders of power. The reasons why the great religions survived is because they were calling for refinements of the soul as the primary mechanism for societal change.

Jesus Christ came from a long line of prophets – a string that lasted for hundreds of years. When he finally arrived on the scene with his gospel of humility and self-sacrifice, about the kingdom of God being somewhere “within,” he hardly appeared as any true threat to the established powerbrokers. But as with Muhammad or Buddha, there was a remarkable magnetism in a worldview that called for respect, love and repentance towards God. Jesus drew his greater numbers from the marginalized and outcast. Naturally they were drawn to him because they were rejected by their own societies, trapped in systems that made marginalization seem more like a prison cell than a temporary place.

The story of how Jesus Christ eventually established a kingdom of spirit out of the poor, sick, disenchanted and rejected is only fitting because of his own origins. According to the scriptures he was already being driven away on the night of his birth – the first Christmas. He was born in a stable with animals and forced to flee to Egypt because the religious and political powers, knowing of the prophecies proclaiming his coming, did everything in their immense power to exterminate Jesus before he could acquire any status. Returning from the obscurity of Egypt, he lived his life in the isolation of what was then Jewish life. When he finally emerged as a challenger for the hearts and minds of Jewish citizens, it was to the outcasts that he eventually centred his ministry, often railing at the political and religious elites for their lack of concern for the physical, moral and spiritual plight of the people they were meant to care for.

For the average Christian this is well-known, revered repeatedly over the Christmas season. But it’s not actually understood by experience. Faith is now an intensively personal journey and places of worship are learning that in order to keep their followers they have to run the gauntlet between proclaiming the need for self-sacrifice while at the same time making pew members comfortable where they are seated.

We now live in an age where, through design or accident, the marginalized in society are growing in number and calling for remedial action to assist their plight. Around them they witness massive churches of great wealth, full of affluent people who are comfortable in their surroundings. They also see churches at their very best, offering feeding programs, housing strangers, addressing special needs, and attempting to inspire barren souls.

But this isn’t enough – not nearly. Jesus didn’t come to just minister to such folk, but to call on great powers to bend their inclinations towards human justice and the struggling of society. This is what is missing in the modern era. People don’t want to just be fed, clothed or housed. They want out – lifted from the confines of poverty and ushered into a society of opportunity, employment and freedom from want.

The church’s lack of such a clear voice during the Occupy Wall Street movement has revealed a fatal flaw in its historic presence in society. For all its service, it is mute – unable to speak out lest it disturb the affluent in its pews. Certain faith leaders in London, Ontario have visited political offices over the last two years and urged leaders to take action on poverty. But these were meetings held inside cloistered halls and in the offices of leaders who have the pictures of themselves shaking hands with prime ministers, famous people, and the elite of their day on the walls. Everything seems to be about ambition and the well to do. Speaking in private is one thing; proclaiming your belief in public is another. And challenging you own congregations is something else again.

The very thing these religious leaders were calling on our city to undertake has now been echoed in the call from the Occupy movement to address where our modern society has gone astray. But suddenly from the churches – silence. This isn’t some pretty star gliding across the heavens guiding wise men to a manger. It’s the nova of a new era, calling upon all people of faith to pick up their beliefs and follow what is clearly a troubled road. Our city officials have called for a new citizen’s effort to deal with the legitimate grievances of the Occupy movement and to bring recommendations back for city and provincial review. Church leaders had challenged these officials to do something, and now, thanks to the Occupy movement, the city is moving forward with the challenge. But they now gaze in the distance for the people of Christian faith to follow their historic leader, not to the mission or foodbanks of their age, but into the halls of power and wealth. To date, they wait in vain.

Martin Luther King Jr. once remarked that the most prejudicial hour in America was 11 o’clock on Sunday mornings, when churches met to worship their God. He called upon those churches to get up from the comfortable pews and throw their weight behind the civil rights movement. That call is now being uttered in our time. A symbolic star is moving across our own firmament, calling us to follow. The Christian faith was born among the marginalized and it was world-changing. The more it has moved out into affluence, the less power it has retained. The call for the churches this Christmas is not just to worship, but to consecrate themselves to the original mission of their founder – restoring justice to the earth.

Reform versus Retrenchment

Just suppose we’ve got the mechanics of economic recovery wrong. Other nations, realizing that a double-dip recession is now a clear possibility, are ramping up stimulus spending in an effort to keep their economies from falling through the floor. According to Jim Flaherty, our finance minister, Canada won’t be heading down that road. Instead we’ll tighten our belts – the same language he used when he was finance minister under Mike Harris.

Who’s right? Could they all be wrong? One more question: why have we treated this last serious recession as a one-off, a sad downturn that will surely pass? I think it’s far more likely that our present financial predicament is merely the greatest in a line of economic declines. They are connected, and what joins them all together is that in each case where our economies stumbled we failed to take the proper steps to correct the previous series of mistakes. And because we haven’t taken the necessary steps to fix the financial economy the real economy has grown dysfunctional.

Each time we failed to make the proper corrections we increasingly distorted the proper distribution of wealth. We’ve done it for decades, but things are now serious enough that some people are no longer willing to trust the powers that be. Disenchantment with the political order has been growing deeper, yet for a time we’ve been willing to give our corporate leaders a pass. Now, however, we are in a process that has found its precedent at other times in history – disillusionments about both political and financial leaders are now joining together in one stream. The Wall Street demonstration last weekend was merely another wake-up call to the established order – something about to be replicated in cities across Canada, according to this week’s news reports. They didn’t demonstrate in front of a church or a city hall but on the very main street of the capitalistic empire. The majority of demonstrators weren’t from some fringe group, but were largely part of the shrinking American middle-class. Their misapprehensions have reached the point where they refuse to suffer their incremental decline in silence. The old order is being shaken up; we don’t know yet what the one to take its place will look like. Or will the present power brokers exert enough control to keep hanging on for one more recession? Oddly, it’s reminiscent of the Arab Spring.

You can see what’s happening. Consumers won’t be able to spend enough to keep the recovery going. Without serious buying, businesses won’t invest enough in R & D to fuel growing productivity. Whatever we export will never be enough to make up for our deep-rooted unemployment. The Canadian government won’t invest in serious infrastructure, or prepare the way for the meaningful jobs of tomorrow. Increased free trade agreements will inevitably result in our jobs being exported overseas. That might get us more goods brought to our shores, but if we don’t have meaningful wages, what will we do? And the environment? Well, its about ready to come crashing down on us and we have no plan! Blue boxing will never be enough to stop carbon emissions. Federal governments and financial leaders will never take dynamic action because the theory is that it will tip a precarious economy into the dumpster. Yet recession after recession that appears to be the way we’re headed anyway.

What the use of having all this wealth if we can’t find meaningful jobs or we spend our time watching the middle-class’s purchasing power continue to erode? We can only string our credit debt along so long, just like governments. At some point confidence will break and we’ll cut back on shopping. It can’t be any other way. It’s time to pay the piper. We pretend otherwise, but consumers are drained of their savings, governments are drained of their revenue, and corporations are facing a crisis of humanity. The government of the day in Ottawa, instead of guiding us to a place where the middle class can stretch its wings, is reflecting the prevailing faith in the all-knowing free market. It embraces deregulation, privatization, attacks on unions, increased tax cuts for the wealthy who don’t really need them, and is bailing on the social safety net. Tim Hudak, aspiring to be Ontario’s premier tomorrow, helped close 28 hospitals, fired 6,000 nurses in Ontario as the junior health minister under Mike Harris, and watched over the worst wait times in the country.This history could be repeated once more. Governments of the developed nations are presiding over a situation where the benefits of economic growth are accruing to a smaller and smaller group.

I think most of us are now starting to get this. The slash and burn politics of the last few years is now beginning to show its fangs as the grandmother’s attire gives way to the wolfish grin of wealth gone awry. Yet if people’s wages barely rise and they can only fulfill their commitments by borrowing, thereby going deeper and deeper into debt, how long before the jig is up and they cast off their blind obedience? Well, it’s my sense we are on the verge of it.

All this is but a symptom of what is really wrong. Our fetish for the financial economy has beguilingly blinded us to the real economy. Maybe that phase is ending. Whatever is about to transpire, it will likely result in a herculean contest between reformers and the power brokers. It won’t be pretty, but it can be hopeful. Someone asked me today what is the real economy. Perhaps we should take a look.

%d bloggers like this: