The Parallel Parliament

by Glen Pearson

Tag: wealth

Can Canada Afford Its Dreams? Follow the Money

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IT’S BUDGET DAY, AND ONGOING POLLING SPEAKS to significant amounts of support for the new Trudeau government. The new PM himself has hinted that he is prepared to help lead a reinvigorated progressive movement internationally. It’s still early days, but it’s difficult to deny that the initial impressions of Justin Trudeau internationally have been favourable.

To be one of the leaders of global progress, however, Trudeau has to show that his ideas work at home, and on this particular budget day that will be a tall order. We’ll hear the usual spin from politicians, economists, media pundits, and interest groups on the budget’s effects. People will debate the size of the proposed deficit, the effectiveness of investment in infrastructure, and how Canada has to get its productivity moving again.

Yet, as with the recent meetings of the World Economic Forum in Davos, all this maneuvering will be taking place against a backdrop of staggering global financial inequity. Just as in Davos, where the world’s elite heard directly from Oxfam that 62 people now control over half the world’s wealth (more than the poorest 3.5 billion people), Canada has to come to terms with the harsh reality that much of the great wealth created in this country goes to fewer and fewer people. While today’s budget will mostly involve tinkering, it’s likely that the fundamental flaws on inequity on how we handle our finances will go unaddressed.

Oxfam’s revealing study was the work of Deborah Hardoon, Sophia Ayele, and Ricardo Fuentes-Nieva. One of their main subjects of research was the increasing disconnect between workers and their earnings. In advanced nations, like Canada, the national income going to workers is falling, while that going to owners and elite executives is growing. This shouldn’t come as a surprise to any of us who have watched average wages remain stagnant at the same as corporate profits mushroom.

In the poorer countries, the same trend continues. Between 1990 and 2010, in many developing nations learned that some 40% of their workforce saw their wages grow more slowly than the national average – a tragic reality that left 200 million people mired in abject poverty despite the growing wealth of their respective nations.

Then came the intriguing revelation in the Oxfam report that $8 trillion dollars of global generated wealth remained untaxed because it was diverted to offshore savings accounts. Much of this was from countries like Canada and the United States – revenue that could have been put towards alleviating poverty or increased worker wages in advanced nations. This has remained the financial backdrop for successive Canadian governments.

We’d be making a great mistake to assume that this vast inequity in our wealth is only taking place in poorer regions of the world. It’s a reality that continues to cripple worker wages in Canada and to rob citizens of the vital investments required to prepare ourselves for a fairer economic future. Canada was built upon the model of effective wealth sharing – the only method possible to adequately manage such a large nation with a relatively small population.

This is crucible working its way through the global financial system at the time that Canada’s new government is laying out its first budget. To lead a global progressive movement means to come face-to-face with this one great conundrum: how to work toward income equality when the financial trends are heading the other way, burgeoning the gap between the rich and the poor? Countries shouldn’t become victims of their own wealth, but, indeed, be liberated by it. Budget 2016 is likely to be more about the former than the latter.

It will take a remarkable amount of courage, ingenuity, and popular support to lead a global movement that will reverse current trends. Mr. Trudeau has some time to develop that leadership by showing that it works at home. People in Canada and around the world are dissatisfied following a decade or more of austerity and the lack of investment in people and in the planet. They are eager for change and it’s this reality that has provided a window for progressivism to take on its onerous task. But should we tinker, the downward slide will continue, affirming Irish writer Oliver Goldsmith’s observation: “Ill fares the land, to hastening ills a prey. Where wealth accumulates, and men decay.”

Middle-Out

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“AMERICA’S PREMIER SELF-LOATHING PLUTOCRAT“ – no kidding, that’s what they call Nick Hanauer. He’s been in these blog posts before, where we spoke of his criticizing his peers for robbing the wealth of the United States instead of investing in productivity.

He’s now at it again, only this time championing a $15 minimum wage south of the border. Again, his peers and the corporate elite are irate with his position, and small business owners aren’t wild about it either, but his rationale, and the way he publicizes it, is carrying some momentum. In fact, the way he sees it, it’s not the labour leader or minimum wage employee who’s the best face of the effort, but his own. His rationale? “A guy like me – a very successful capitalist – is the best face for the message of reforming capitalism, right? I’m the one who can say, ‘It doesn’t have to be that way.’“

Hanaeur made his billions primarily through shrewd investments in businesses like Amazon, but somewhere along the way he came to understand that a wealth that is moving ever-upward would result in a nation spinning ever-downward. He puts it plainly:

“The other side thinks that growth produces a thriving middle class. That’s wrong and backwards. When they say (his peers) that the better profits are, the better it will be for everybody, I’m the one who can say ‘That’s a lie.’ A thriving middle class is the source of growth in a technological, capitalist economy.  Investing in the middle class is the most pro-business thing you can do.”

He finds politicians uninspiring and his fellow plutocrats unimaginative. And so he set about to battle for the $15 minimum in the public arena, and its picking up steam. It began when he made a presentation on the subject to the Democracy Alliance in 2012. What was ironic wasn’t just that he was a plutocrat, but that, while labour leaders were promoting a $10 minimum wage, Hanaeur came in $5 higher. Soon enough striking fast-food workers across the country rallied to his call. When he centered his efforts shortly afterwards in Sea Tac, Washington, that community became the country’s first $15 an hour minimum wage community. Soon enough Seattle followed, as did Los Angeles and San Francisco. Now the concept is under serious consideration in many states and cities across America.

We have all heard the arguments from the other side, about how raising minimum wage will put downward pressure on business and result in increasing job loss, but Hanaeur counters that it will lead to more jobs for the simple reason that workers will have more money and create demand for more products and services. He calls it “a positive feedback loop of prosperity.” Some supporting economists call it “middle-out economics.”

This odd notion that if poor people start doing better it’s bad for the economy is increasingly wearing thin, and the way that the next generation is taking to the message of Bernie Sanders on this point is likely a sign that the time for change in financial policy is now possible. “Trickle down” is slowly yielding to “middle-out.”

The fact that Hanaeur’s efforts are building increasing support from capitalists and economists means that the old divide between labour and business is slowly dissolving, leaving the field open for a new kind of economic policy based on the engine of average people with a bit of capital to spend. In a political season like no other that America has witnessed, “middle-out” just might stand a chance.

Election 2015: Will That Be Cost or Value?

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IT BECAME ONE OF THE MOST TALKED ABOUT experiments in modern psychology. Around 1970, Stanford researcher Walter Mischel decided to sit a series of four-year-olds in a room and put a marshmallow on a table in front of them. He told them that they could eat the marshmallow right away, but that if they waited until he returned he would give them two marshmallows.

Videos shot of the children during that time revealed a lot of squirming and kicking, even kids banging their head on the table. Mischel then followed them through subsequent years and learned some fascinating trends. Those kids that waited until he returned did much better at school and had fewer behavioural problems. Thirteen years later, those kids that waited for the second marshmallow had SAT scores that were 210 points higher than the kids who devoured the first marshmallow immediately. Twenty years later they had much higher college completion rates and 30 years later they had much higher incomes.

The results fascinated the nation and effectively illustrated how kids who could picture longer term strategies in their thinking and exercise self-control (waiting for the second marshmallow) had an easier time of things as they matured. It has come to be known in the vernacular as the “marshmallow test.”

In certain ways, Canadians are being asked to undergo a similar experiment during this federal election season. Sometimes we are asked by the parties to opt for the immediate baubles instead of the longer-term investments. We keep being treated as impulsive shoppers who can choose from an array of boutique items on a shelf that would bring some quick satisfaction – negligible tax credits, limited responses to the refugee crisis, meager investments in climate change adaptation, pension tinkering, even help with the purchase of sports equipment. They all sound great and enticing, but they get us little.

Or we can exert more self-discipline focusing on Canadian arts, education, healthcare, research, environmental, true healing with our indigenous people, and transportation infrastructure that will yield dividends in decades to come. There are a scant few of these on our present election promise season. Why? Because political parties sense that we are more intrigued by costs than we are values. Yes, we desire affordable education, a clean planet, security for our older years, comprehensive healthcare coverage, and a political class that actually delivers on our aspirations. But, in truth, we really like those trinkets that in the end appear to provide a few extra dollars in our pockets.

The problem is that post secondary education costs have already gone up over 200% since 1993, and we have to pay more for government services while waiting longer to acquire them. Is this honestly what we desire in this election? Does the political class feel we’ll opt for that first marshmallow? Of course they do, because that’s how they feel they’ll get our vote. They won’t change that approach until we align ourselves with the counsel of Jennifer Crusie: “Values aren’t buses. They’re not supposed to get you anywhere. They’re supposed to define who you are.”

This is our dilemma during Election 2015: we are being forced to choose between the immediate satisfaction of the initial marshmallow or the deeper discernment that comes with waiting to acquire them both. Canadians pride themselves as a value people but all to often accept cost over values, which are ultimately priceless and were the basis upon which our parents and grandparents build an equitable country. The things we truly value and share in common are those things we simply can’t put a cost to but which form the sinews of our civilization.  If we make the proper choice, we will change the future, and that of our children. This could be an election for the ages, or merely for the next four years. It’s time to play the long game.

 

Broken Trust. Broken Future.

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THE CITY OF LONDON, ONTARIO, and its inside unionized workers announced over the weekend that they had reached a tentative agreement, subject to the full approval of both groups. Predictably, opinion was deeply split on both sides throughout the community. The loss of trust across many fronts has made this recent labour conflict perhaps a harbinger of difficult days ahead, as more contracts come up for renewal and disillusionment festers.

It’s become a kind of open season on public employees across North America. The rationale, most often produced through extreme ideological politics, is that it’s difficult to justify public sector salaries when money is scarce and job security fragile. Behind it all is the belief that only the private sector can create jobs and that governments only get in the way of free market development. Unions and public sector workers get caught in the crosshairs and, as in London itself, city managers and politicians who appear to favour the view that a city should be run as a business only simplify the tensions to a degree that continues to threaten social cohesion.

The private sector has basically had the run of the field in the last two decades, with stimulus funding, lowering corporate tax rates, ongoing access to global markets, and an increasingly corporatized methodology moving into the public space. Yet despite such advantages the job market continues to shrivel, not because of government expenditures but corporate efficiencies and the move into the global marketplace. Put bluntly, the more corporatism is enhanced, the more the employment sector is in decline, this mostly through efficiencies. To place the blame for low employment opportunities on government itself is a misnomer and only muddies the waters.

To claim that everything needs to be poured into the private sector as the only effective place where “productive” investments should be made is to forget than the context for a healthy economy is as vital as the players themselves. Canada is a vast nation and the need for timely investments on roads, airports, public transportation, electrical grids, waterways management, and a productive standardized food system fall under public purview and form the vast canvas on which the private sector can invest, grow productivity, and compete effectively. If the private sector had to fund this infrastructure, the cost of their products and services would mushroom. And that doesn’t include the public investments in healthcare, education, research and development, fire and police, public security both domestically and globally, and the vast diplomatic networks that empower international cooperation in everything from trade to immigration.

The real power behind the ideology to cut the public sector is derived in its ability to turn citizens against one another. Few of those citizens makes a fortune, and the vast majority of Canadians have far more in common economically with their public sector counterparts than the wealthy elite. And yet we are increasingly told that paying the public sector means less money in the pockets of the average Canadian. This is a ruse, one that is manifesting itself across the globe, even in those developing nations that have recently begun investing in the public service in order to gain legitimacy and spread the wealth only to be informed that such measures should be cut through austerity.

One thing is obvious: income for most Canadians hasn’t changed much in recent years, except for the wealthy, of course, whose income has doubled, and sometimes tripled, in that same time period.

Canada remains a fabulously wealthy country; it’s just that an increasing amount of that wealth has gone to a relatively few in the nation’s financial order capable of adapting to the global restructuring. Rather than our bounty going to a strong public and private sector workforce in balance, it has been stripped out of both and gone elsewhere. In going after public sector workers, we are inevitably cutting the very services that we will eventually have to pay for, forcing us to stretch our dollars even further. To turn on one another just at the time we need to fight together for a fairer Canada is one of our greatest tragedies.

Wealth is not the issue; there’s plenty of it for all in our vast country. It is the effective sharing of that wealth that we must strive for. We have been tricked, bamboozled, into turning on our own service providers and protectors out of our own anger at a diverted economy.

Government (as opposed to merely politics) and the public service are the names we give to those things that we share and build together. It’s time to turn our focus to the equitable distribution of our shared wealth. In a land struggling for employment, we all have a collective job right now: pull together and achieve economic balance once more, to get our groove back. As cities like London are in danger of discovering, you can’t break trust with historic partners and build an equitable nation at the same time.

The Long Road From Charity to Justice

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MARTIN LUTHER KING JR. HAD EXACTLY one year left before an assassin’s bullet struck him down and traumatized a nation. He had spent recent months attempting to break through the “indifference barrier” by drawing a direct link between racism to poverty. It wasn’t enough, he would maintain, to seek equal rights for black Americans if they remained mired in poverty. And so on this particular night, April 4, 1967, at New York City’s Riverside Church, he laid it out as he had seen and experienced it:

“A true revolution of values will soon cause us to question the fairness and justice of many of our past and present policies. On the one hand we are called to play the Good Samaritan on life’s roadside, but that will be only an initial act. One day we must come to see that the whole Jericho Road must be transformed so that men and women will not be constantly beaten and robbed as they make their journey on life’s highway. True compassion is more than flinging a coin to a beggar. It comes to see that an edifice which produces beggars needs restructuring.”

And there it was. He was calling on the nation to give more to charity, but to also change its structure so that human justice and not mere charity became the ultimate motivator and goal. He assumed most knew the story of the Good Samaritan, of how a man is beaten and robbed, left by the road side, and of how a compassionate Samaritan helped him. He praised such actions, seeing them as a great aspect of the American character. Yet he reminded his generation that true compassion is attacking the forces and systems that leave others in need in the first place.

As King saw it, to those living on the margins of our communities, acts of charity and compassion should be our very first response to meet the need. But then there is the next stage. What caused it? Who is responsible? How can we change things at their source so that acts of charity are not as required as those were we help those who begin to find their footing?

Reflecting on King’s words years later, Nelson Mandela concurred: “Overcoming poverty is not a gesture of charity. It is an act of justice.” And as the south African leader knew, the prevailing system of his time would itself have to be changed if justice was to be achieved. He knew, as we all know deep within us, that if an economic and social system leaves huge fallout, then the very best of charitable generosity will never be enough. Will donating to a food bank alleviate hunger pangs? Absolutely. But it can never eradicate hunger itself. For that there must change at deeper levels.

Richard Nixon had a different point of view at that time, maintaining that the best method for eliminating poverty was to “enlist the greatest engine of progress ever developed – private enterprise.” In other words, Nixon was looking for millions of more Good Samaritans.

In a very real sense, the former president got his wish but not his desired outcome. The corporate structure that has taken over our public policy machinery has recruited a plentitude of corporate largesse for those at risk, offering funding, expertise, services, and leadership. But after almost half a century of this, where has it gotten us? Poverty, hunger, homelessness, mental health and addictions – all these have grown, not diminished under Nixon’s structure.  They have had their opportunity; it has not worked.

The time has seriously come to ask ourselves, individual and collectively, “Will we just let everybody worry about themselves and rely on charitable donations of time and money to get by? Is this what we would want for ourselves if we remained mired in poverty? If so, then it won’t be too long until the damage created by present structure will become so great that prosperity will never be gained other than by a few.

Or will we be different? Will we reform by our actions and votes the deep and unjust structural inequalities at our nation’s core that favour power and abandon the powerless? To that wonderful Canadian trait of generosity and charity can we add a passion and understanding for justice? There are no quick fixes in justice – it is a long road – but the results last decades and lift millions out of their despair. Charity by itself is surely limited, but when added to sincere efforts at systemic restructuring it can become a springboard for change. Without serious reform, charity just leads to an ever-increasing cycle of hopelessness. Charity gives, but justice changes. What will we fight for, the present or the future?

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