OTTAWA—The Republicans of the North have never met a point they didn’t bludgeon, nor a fact they didn’t massage into terror.
It’s understandable that the Conservatives want to jump on the inflation bandwagon, since people are feeling the pinch of rising grocery prices, reduced aggregate supply due to the pandemic, and many of them rushed out and bought homes at inflated prices. And I haven’t even talked about utilities in an aggressively cold winter. As the CBC reported: “The Consumer Price Index increased at an annual pace of 4.8 per cent in December, as sharply higher prices for food led to the cost of living going up at its fastest rate since 1991.” Food prices have risen by 5.7 per cent; housing has risen by 5.4 per cent.
We should expect a rise in the interest rates at some point this year, further squeezing homeowners (hope you got a fixed rate in 2020). Basically, it’s all bad news, but that’s a middle-class analysis and if they work in insurance, tech, or financial services they’ll be alright. But how are those at the lower end of the socio-economic spectrum doing, you know the essential workers, hospitality workers, and the heroes we’ve abandoned through questionable public policies?
Abominably bad, according to Oxfam International, which released a report on the real crime of the century—economic violence.
Economic violence “is perpetrated when structural policy choices are made for the richest and most powerful people. This causes direct harm to us all, and to the poorest people, women and girls, and racialized groups most. Inequality contributes to the death of at least one person every four seconds.”
This pandemic should’ve made that abundantly clear, however the poisoned chalice of economic growth at all costs was invariably going to leave people behind. And when people are left behind, they get angry and violent, resulting in political divisions in society.
But the stage where we are now was a long time coming. We are still using the economic policies of the 1980s, née supply-side economics as delivered by Reagan and Thatcher, two people who should be locked up for the economic violence they perpetrated, were they not already dead.
Supply-side economics (trickle-down economics) is a macroeconomic theory that postulates economic growth can be most effectively fostered by lowering taxes, decreasing regulation, and cutting government spending. According to supply-side economics, consumers will benefit from greater supplies of goods and services at lower prices, and employment will increase. Reaganomics, its trusty sidekick, believes that corporate tax cuts are the best way to grow the economy. It goes something like this: when companies earn more, they’ll hire more workers to expand their businesses; concurrently, income tax cuts will incentivize people to work, thereby expanding labour supply. Embedded in this theory is the slavery to indices of economic growth, cost reductions, debts, and deficits. Sound familiar?
Under Bill Clinton, the 1990s added to the trickle-down trend with globalization through an emphasis on trade liberalization. Multinational corporations became the main carriers of economic globalization that organized production and allocated resources according to the principle of profit maximization within global supply chains.
Globalization increased by de-industrialization, which is the erosion of an economy’s manufacturing base. As such, Western countries have exported the middle-class to developing countries. Historically, manufacturing has been the means to economic progress over generations: immigrants and the poor and working class were able to provide their families with a standard of living that provided complete health-care benefits, sick days, vacation, pensions, and educational supports that allowed their children to attend universities and colleges as a form of social and economic progression over a generation. Today, through successive cuts to education and the disappearance of manufacturing jobs—coupled with the appearance of service jobs that are precarious and provide zero benefits—that is no longer the case.
Simultaneously, governments continued to cut public spending. We see those successive cuts in health care have left us with a tattered health system unable to properly deal with, and absorb the shock of, a global pandemic. We also continue to see massive cuts in social spending (benefits accrue to those middle class and below) and increasing national security and policing spending, or defence spending (benefits accrue to upper-class or the wealthy).
No one can deny that jobs were lost because of the structural changes arising from globalization. Structural changes led to structural unemployment and widened the gap between rich and poor within societies. Nobel Prize economist Paul Krugman wrote a mea culpa in Bloomberg in 2019, admitting that economists “generally concluded that the effect was relatively modest and not the central factor in the widening income gap.”
Whoops.
As David MacDonald noted in his report with the Canadian Centre for Policy Alternatives, “more than one-third of the companies headed by those CEOs received the COVID-19 Canada Emergency Wage Subsidy (CEWS) either directly or indirectly through their subsidiaries or franchisees.” Corporations continue to get this support, while support for workers through Canada Emergency Response Benefit (CERB) has been cut. As of Dec. 19, Ottawa has paid out $99.13-billion under the program, according to CBC News.
Economic progress now means bailing out corporations with public money, a helluva wealth transfer from public money to fund shareholders and CEOs. Our economy of the last four decades has grown on the backs of the poor, working class, racialized, migrant and female workforce while white, upper-class men and women have made out like bandits and have not looked back.
The math ain’t mathing.
Erica Ifill is a co-host of the Bad+Bitchy podcast.
The Hill Times