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Thursday, May 17, 2012

The war on Ontario's poor.

There is a class war going on in Ontario, but it may not be the one that most of us, even on the Left, would like to believe. It is a war by all of our political representatives and a large proportion of our middle and upper classes on the poor and working poor in the province. A war whose great hallmark is to have created and maintained terrible poverty and suffering in the midst of tremendous social productivity and wealth so as to subsidize nearly 17 years of relentless personal and corporate tax cuts.

This issue has been brought into focus over the last couple of days due to the comments of United Nations' envoy Olivier De Schutter. 

But while many in Canada's progressive community may be tempted to feel smug about these comments, as if they are really about the actions of the Right or the result of the "1 per cent," I would suggest that this smugness is largely unwarranted.

The numbers and statistics, the day-to-day facts of this suffering, are very clear.

Back specifically to Ontario, since the fall of the Rae government in 1995 the province has entirely turned its back on the most vulnerable members of our society. Welfare rates, which were cut by 22 per cent in 1995 by Harris and then, appallingly, frozen for eight years, have stayed well below the rate of inflation even under the McGuinty Liberals. In fact, the ONDP has joined in this terrible record by allowing the passage of a budget that "raised" welfare rates by 1 per cent, which actually meant that they were decreased by over 2 per cent versus inflation yet again. Given that the Liberals were in real danger of falling from government, the ONDP had a true opportunity, but failed, to stand up for our sisters and brothers on welfare who have been punished year after year by a neo-Victorian idea that the interests of the allegedly "hard-working" members of the middle and upper middle classes, as well as the very wealthy, come first, despite the fact that aiding the poor would actually cost these classes next to nothing in real terms
Thanks to politicians of all stripes, a single person on welfare in Ontario lives on around $20 a day for EVERYTHING. Rent, food, "recreation," job hunting, etc... Twenty dollars a day. Given what life in Ontario costs,  this is a joke. Try living on it.

A single person with a child benefits slightly more and can count on around $56 a day and yearly benefits of a little more than $19,700.

One is expected to live on this income, with a child, in cities like Toronto or Ottawa. I challenge anyone with a child  in Toronto, who has not already been driven onto social assistance, to attempt this next month. It would mean living, for an entire month, on $1,645 before paying rent.
These "benefits" are so low, they actually act as a downward pressure on the general value of labour. They serve to depress wage and income expectations and, by doing so, ensure that subsistence and sub-standard wages seem almost generous by comparison. This is entirely intentional.
In addition, they amount to little more than a subsidy to landlords. A very large proportion of these benefits will go to rent and, as it is basically impossible to actually survive on what is left, we as citizens are essentially turning these "benefits" over to landlords while those who are allegedly supposed to "benefit" from them have little choice but to seek some type of "off-the-books" employment. Your tax dollars as slumlord income subsidy.

What if you are "fortunate" enough to have a full time minimum wage job in Ontario? I add "full time", as many minimum wage workers in Ontario are unable to get a full 40 hours because employers prefer to avoid the issues that come from having too much of a full-time workforce. But assuming you are getting the full $10.25 an hour, 40 hours a week, your yearly income is $21,320. Or, around $59 a day.

Now it is worth noting that relative to inflation social assistance in Ontario has decreased by at least 20 per cent since 1995, including the already noted decrease of over 2 per cent this year. The minimum wage, an issue which was raised by no parliamentary politicians this year, despite the fact that it would cost the government nothing, also remained frozen for a second year in a row meaning it has declined in real terms by over 5 per cent in the last two  years.

Our poorest fellow citizens are being asked and forced yet again, to "share the pain" to pay off a debt that was caused entirely by immoral tax cuts and the bailouts of corporations due to the 2008 recession.

The record and impact of Ontario's tax cuts are very clear. These tax cuts are also supported by every party in the legislature, meaning that we continue to subsidize second cars for citizens making $80,000 a year, or a home expansion for families making $120,000 a year, at the direct and demonstrable expense of not only the poor, but the citizens of the lower "middle classes" who get by on paycheque-to-paycheque incomes of $30,000 or $40, 000. Incomes, with all the cuts to services, all the user and tuition fees, etc, that render many of these citizens very close to functional destitution.

In addition, for all except two years of this period, Ontario's economy has grown. Often tremendously. Even at the height of this growth, however, no one made the elimination of poverty a priority.

The reality is that as a society we have abandoned these citizens by choice. Out of motives that range from indifference to political calculation or "realism" or simply due to personal greed. Despite what some might say, in this case the motives do not matter that much; the end result remains identical.

The poor continue to get poorer and working people are placed in ever greater situations of social distress.

One might take pause to note that, for rather obvious reasons and proven time and time again, it is women who disproportionately suffer due to poverty and the decline of social assistance rates. It is difficult to understand how any political party claiming to act in the interests of women or of  feminism could countenance or have not attempted to defeat the budget that Ontario just passed.
In addition, there is the fact that in this land of plenty and wealth, over 14 per cent of Ontario's children live in poverty. Children who could not possibly, by even some bizarre logic of the civilization we live in, be actually held responsible for their own situation.

To say that the interests and needs of these children had been ignored by those in our  parliament who pledged to protect them would, I think, be a fair comment.

It has been fashionable of late to claim that somehow the "1 per cent" or some tiny proportion of our society is responsible for the greater part of our collective ills. Myself and others have noted the essential fallacy in such a view.

But far worse than the intellectual error of these ideas is their moral error. To equate the suffering and challenges faced by those who make $80,00  a year, who are well within the so-called "99 per cent," with the grim reality of poverty and the challenges faced by those on social assistance is, frankly, wrong. One can only think that it is designed to make the many in the upper middle classes that supported the system until it stropped working for them as individuals feel better about themselves.
It bears no resemblance to reality in any other way. Nor does it note the incredible and very different challenges faced by those millions that our society forces to live in the margins.

In the end, one must note, the governments that brought in these policies were democratically elected. And they got far more than 1 per cent of the vote.

Poverty, especially in the context of a wealthy Ontario, is profoundly immoral. For a fraction of what was spent on auto industry and banking bailouts and squandered in tax cuts to corporations and the top 30 per cent of income earners, we could eradicate not only child poverty in the province, but poverty in general.

We, and our elected representatives, regardless of party, have simply chosen not to do this.

This point cannot be made enough.  Whatever the justification and whatever the alleged motivation, the war on Ontario's poor continues and we have all been made a party to it.

It is a political choice that we have made.

Tuesday, May 1, 2012

Scenes from the class struggle in Canada.

We have all heard the story of how the Canadian banks weathered the storm of the post-2008 recession as a kind of Rock of Gibraltar, proving the soundness of Canada's financial sector and fiscal model. It has been pointed to, again-and-again, by the mindless financial pundits that the media trot out to tell us that the sky is not falling and the system works just fine.

In fact, when Occupy Toronto began, there was no end to the preening of the imbecilic peacocks of the business commentary community (a truly sad crowd, they are not actually rich...they just make a living kissing the asses of the rich) spouting off with a bunch of nonsense about how, to loosely paraphrase, "the people in New York may have a point but our banking sector is just fine. It is not like the USA".

In between moments of pontificating on the perils of doing anything other than what the Conservative government of Canada has done, our Finance Minister, Jim Flaherty, told the world in no uncertain terms, that "In Canada, we did not suffer a single bank or federally regulated insurance company bailout or failure. Our country’s financial institutions stood solid and steadfast, based on sound risk management and supported by a very effective regulatory and supervisory framework."

Well, it turns out Jim may have been being more than a little disingenuous.

It seems that, in fact, Canada's big banks were dipping deeply into the proverbial gravy train that populist rich kids like Toronto's pseudo-mayor like to ramble on about. To the tune of $114 billion.

Now the not unexpectedly hyper-defensive drones of the financial pages have tried to claim that this was not a bailout at all. But clearly, unless one is to succumb to near Orwellian logic, it was. The Canadian government, through the CHMC program alone, removed over $69 billion in mortgages from the balance sheets of the big banks. They did this to prevent their potential insolvency.

Anytime the federal government wants to take over my risky investments, I will have no problem, to keep the myth alive, saying that it was not a was actually, wink-wink, a "program" to aid my liquidity. 

As it turns out, "Canadian lenders also dipped into a program set up by the U.S. Federal Reserve aimed at providing cash to keep American banks afloat. CIBC and BMO took almost $3 billion each out of the fund, RBC and TD took out $8 billion and Scotiabank drew down almost $12 billion".

Unlike in the US, however, the Bank of Canada apparently treats its numbers as being, not surprisingly, a state secret. It does seem that, in spite of this secrecy, we now know the government handed out at least $41 billion to Canada's banks under a similar "shadow" program.

The end result of all this is that, by whatever terminology you wish to use, the government of Canada aided the banks to the extent of around $3,400 a year per man, woman and child in the country and to the equivalent of 7% of our country's GDP.

This means, in real terms, that they took this money from you, as citizens, and redirected it to our banks.

Now, as we head into the austerity insanity that  has begun to ruin the economies of the UK and Spain, this is worth remembering, even on capitalist terms.

But, it is also worth remembering that this reverse Robin Hood transfer of wealth is a form of pure class warfare. $114 billion for the banks meant, directly, $114 billion less for the poor, social programs, infrastructure, job creation, etc.

Especially due to the speculative nature of the bailout, the stimulus is not akin to the far less that Canada gave out to the auto industry. It is not only far less likely to actually provide real economic stimulus, it is also more likely to put us into a loan driven personal debt crisis like the US faced.

Beyond the numbers, we get to the basic moral implications of this.

We know that, for example,  by all accounts between 600,000 and 1 million children live in poverty in Canada. And this is in spite of the cruel joke that in 1989 Canada's parliament unanimously promised to eliminate child poverty by the year 2000. I have little doubt that $3,400 a year to each of their parents would have a dramatic impact on their quality of life. And it would cost the government between $2 billion and $3.4 billion a year.

In other words, it would cost $110 billion less than the bank bailouts, direct or indirect, did. The money to at least start to really fight child poverty is clearly there, even if no one wants to touch it.

Genuine job creation, health and anti-poverty programs would cost a fraction of the $110 billion left over total.

All of the job and service cuts that the Tories are proposing would be covered.

There would be no deficit.

What is abundantly clear is that our political leaders, and remember that this occurred primarily in a minority parliament when there was far greater oversight of the actions of the Harper Tories, have decided that while we clearly have the means and the social wealth to end poverty in Canada, the far greater priority is to subsidize the liquidity of the bloated profits of our, as it turns out, incompetent and not solid financial sector.

As to the question of which side these politicians are on, they have made this quite clear, and the public is fed this not as an assault by the wealthy and the corporations on society, but as a reasonable and responsible course of action. 

There is a little that is worse than a class war that few are even willing to acknowledge is going on.