2014, the Year of Living Consciously

Two of the big storms hitting Canada in the last year were not just terrifying and incredibly damaging, they were a little spooky. It was as if nature was making its already unmistakable message of impending catastrophe even more specific.

The almost biblical flooding in Calgary — the home base for the oil companies aiming to quadruple the output from the tar sands — and the ice storm in Toronto both had these almost-sentient aspects to them. Lots of people (though apparently no one in government in Alberta) saw the irony of the Calgary flood and its connection to climate change and the oil patch.

And Toronto? It’s hard to imagine a more dramatic way to slow down Christmas shopping madness than to encase the country’s biggest shopping city in an inch of ice and turn comfortable urban dwellings into dark, freezing caves. Surely the message is clear enough: our blasé expectations that we can just keep shopping no matter the unintended consequences was challenged in dramatic fashion.

But how many people got the message? Or if they did, how many just paused momentarily before they opened their gifts by candlelight, wrapped in sleeping bags, and then mused about the Boxing Day sales?

The truth is that we are all woefully ill-equipped to deal with the multiple crises that are bearing down on us. (A friend of mine is so alarmed that during an evening of political small talk he periodically declared that we were facing “A tsunami!!” and then just went silent, no more able to cope with the reality than the rest of us.)

The terrible irony of our situation is that just as we all need to be what I call “intentional citizens,” we are, unconsciously and even unwillingly, becoming less and less engaged, more and more individualistic. Just what are we to do, as individuals, when faced with crises so overwhelming that our minds reel at the thought of the varied, frightening consequences: “Oops, better not go there. Way too scary. I know! Let’s go shopping!”

Our collective institutions are similarly at their weakest points just as we need them to be at their strongest and most imaginative. Our democracy — including political parties — is increasingly unable to deliver what it once promised, let alone what we want. Universities are increasingly corporatized, jettisoning traditional ethics for corporate loot to pay their bills. Regulations developed over decades to protect us are either being eliminated or simply unenforced by governments whose job it once was to ensure our safety. Major media, which once, nominally at least, entertained the notion of political debate about society’s direction, have been hijacked by corporatist ideology and are thus rendered incapable of seeking the truth, let alone telling it.

So, as always, it is up to us to reverse this juggernaut, to get in its way, to make clear statements through our actions as individual citizens until a time when we constitute a critical mass of citizenry that becomes a movement for social change. And it will take time. My generation will only see the start of it.

How realistic is such a notion? No one can say for certain how the next five to 10 years will unfold regarding democracy, inequality, climate change and peak oil. But the notion that we can behave as if it is business as usual will not wash. We can hardly expect our institutions — which like it or not are reflections of us — to address the moral imperative of facing the crises, if we don’t do so personally.

There are organizations out there which are actually addressing the crises and we as citizens must support them to a much greater extent than we do now. We need to consume less and give more. (Obviously I am not talking about those who have no discretionary income.) But to consume less we need to recognize what we are up against.

The drive to consume is at the heart of a perverse capitalist system that is incapable of ever moderating its behaviour. We might want to think of the so-called corporate citizen as a psychopath, characterized, according to Wikipedia, by “…enduring dissocial or antisocial behavior, a diminished capacity for empathy or remorse, and poor behavioral controls or fearless dominance.”

To make matters worse, this personality disorder is effectively codified in the law so that corporations, obligated solely to meet their fiduciary duty to shareholders, are actually encouraged to behave in this manner.

We are not just up against the most powerful institution in human history, we are also up against its particularly sophisticated — one could say maniacally designed and executed — marketing and advertising arm. We are all affected. When students in media studies classes are asked if they think advertising affects people’s behaviour the vast majority say yes. When asked if their behaviour is affected, the vast majority say no.

Given that firms make millions by determining for their clients what twelve year olds buy or might buy by wiring young brains to see what lights them up, what chance does any of us have in escaping the subconscious pull of marketing? You just know in your gut that we are completely out-gunned, out-smarted and easily manipulated. When it comes to advertising we are all twelve year olds.

Unless. Unless we actually become conscious, anti-consumer warriors, trained in the fine art of resisting every ad we ever see and vigilant in our efforts to live simply so that others may simply live.

It is not enough to “ignore” advertising. In fact, it can’t be done. They’ve already incorporated this naive and amateurish tactic into their strategy. The anti-consumer warrior treats advertising as a sinister psyop campaign launched by a mortal enemy. And if you feel squeamish about the term enemy, then take a moment to imagine how many people will die from climate change and the rampant inequality being unleashed by consumer capitalism as you read this. Buying more and more stuff is already killing us, but it will kill a lot more of our children and their children and their children, and in ever-increasing numbers.

When we buy stuff we don’t need we should see it as a declaration of active support for the forces aligned against the planet and against social justice. To actually stop buying more useless stuff requires a serious shift in consciousness: examining everything we purchase beyond food and shelter and other real necessities. Every dollar we spend on things we don’t need is a dollar that could go to supporting the change we know we need. Obviously things are more complicated than this and it is simply unrealistic to never buy anything we don’t need (rather than want). But the exercise itself will be instructive and it will change the way we see the world that has been constructed for us (and not by us).

Now comes the easier part — what to do with the money you didn’t spend on more stuff. There have been studies in the past few years showing clearly that spending on someone else actually generates more happiness than spending on yourself because it creates social connections that would otherwise not exist in a culture that rewards possessive individualism. That would be a gratifying contribution to rebuilding community, but it also happens that spending on things that matter also brings more happiness than selfish spending.

One way of buying less stuff is to choose a percentage of your pre-tax income that you are going to deduct from your useless-stuff-budget. The Christian right effectively does this through a tithe that is set at 10 per cent with the money going to their causes (including dismantling democracy). But let’s assume most of us reading this are still pikers when it comes to tithing so maybe we should aim for five per cent. That’s right. If you gross $70,000 a year then explain to yourself why you can’t find $3,500 a year to contribute to organizations that are actually making a difference in facing the global crises that threaten us. Feeling frisky? Make it 10 per cent and $7,000.

Maybe you don’t like quotas or perhaps a tithe sounds too religious. Fine. But 2014 needs to be the year of living — and giving — consciously. Up to now, we haven’t been serious.

Left Needs Soul Searching

[Note: This week the Tyee is republishing some columns from the past 10 years. Yesterday they published one of mine from 2009. And I agree, the message is just as critical today as it was then.]

“We hunger for communities of meaning that can transcend the individualism and selfishness that we see around us and that will provide an ethical and spiritual framework that gives our lives some higher purpose.” — Michael Lerner, The Politics of Meaning

If progressives, whether in unions, activist groups or political parties, don’t soon begin doing politics differently — radically differently — they will fail to show that “a better world is possible.”

And the price of failure will be catastrophic.

We have known for years that our consumer culture is out of control and our obsession with having more and more stuff has reached the status of a virus. Our consumer-driven global economy is a lethal threat to the planet and every one of its ecosystems.

The lock that consumerism has on Western so-called civilization is formidable — a virtual death-grip on our culture and our future as a species.

It is a kind of madness but one which we can apparently adapt to. This manufactured addiction to more and more stuff undermines community, threatens the planet and doesn’t even make us happy. Consumerism, driven by the most sophisticated and manipulative psychology the advertising industry can buy, has had the effect of atomizing us. We are defined more and more by what we have, less and less by our relationships to family, friends, colleagues and community.

One anecdote has stuck in my mind for over 20 years. A friend attending an international peace conference in Edmonton accompanied a group of Filipino women — all from rural areas of the Philippines — to the West Edmonton Mall as a “tourist” outing for the visitors. Twenty minutes into the tour the women burst into tears and pleaded with their hosts to get them out. The insanity, the grotesque over-stimulation of the place, no longer obvious to the Canadian women who had grown up with these monstrosities, was grimly apparent to the village activists.

They were right. We should all burst into tears after 20 minutes in a giant mall — it would be a test of our mental and spiritual health.

It’s not as if we don’t know what the Filipinas knew. It’s just that we have adapted to it — like we might adapt to some physical disability. Yet if we all know this, why is it that we are unable to incorporate our understanding of this all-important cultural disability into our progressive politics — into the ways in which we try to engage people in the struggle for a better, sustainable world?

American rabbi and radical Michael Lerner blames what he calls “secular fundamentalism” — the tendency amongst mainstream activists to stick rigidly to a rationalist and technocratic interpretation of both politics and culture. He calls for a politics of meaning which “posits a new bottom line. An institution or social practice is to be considered efficient or productive to the extent that it fosters ethically, spiritually, ecologically, and psychologically sensitive and caring human beings who can maintain long-term, loving personal and social relationships.

“While this new definition of productivity does not reject the importance of material well-being, it subsumes that concern within an expanded view of ‘the good life’: one that insists on the primacy of spiritual harmony, loving relationships, mutual recognition, and work that contributes to the common good.”

Secular fundamentalists find talk of spiritualism intensely uncomfortable, probably because they draw immediate connections to either organized ‘God’ religion and its patriarchal authoritarianism or vaguely to some mushy “self-improvement” sub-culture. Spiritualism seems to fly in the face of the kind of rationalism that has been at the core of socialist and social democratic theory for nearly two centuries.

But organizers for social change face a critical problem. Trying to mobilize people strictly on a rational basis, and in particular with uncritical acceptance of the assumptions of a consumer driven economy, is proving increasingly difficult. On paper it should be working. Intensive values surveys of Canadians consistently reveal that they are progressive in their views about the role of government and the value of community. On the basis of such surveys, over 60 per cent of Canadians could be described politically as social democratic. And yet we see two neo-liberal federal leaders and their parties garnering two-thirds of Canadians’ voting intentions. Something is very wrong here.

It raises the question of why people get engaged. Why is that tens of millions get into an emotional frenzy over the death of a pop star or identify their lives with a professional sports team but can’t be convinced to fight for social programs that would increase the quality of life of their communities? Why do further millions identify with right-wing evangelical religion rather than the call for secular social justice?

According to Lerner, they are in a search for meaning and in the context of the destruction of community of the past 30 years, they find in sports and Michael Jackson’s fandom pseudo-communities they can identify with. In their quest for community they pass by the door that says left-wing politics. Why? You need not search much further than the typical political meeting — overly earnest, boring, economistic, gloom and doom and, except on rare occasions, distinctly unwelcoming to the newcomers who have braved their first tentative outing.

And after the meeting? Nothing. No nurturing. No ongoing connection. No community.

While the U.S. example does not apply as clearly here, Lerner’s analysis of why the Christian right in the U.S. has been so successful has lessons for Canadian activists.

“We find thousands of Americans — from every walk of life, ethnic and religious background, political persuasion and lifestyle — with lives of pain and self-blame, and turning to the political Right because the Right speaks about the collapse of families, the difficulty of teaching good values to children, the fear of crime, and the absence of spirituality in their lives. The Right seems to understand their hunger for community and connection.” Lerner clearly acknowledges the destructive and often vicious politics of the right, but argues most people vote for the Christian right because they feel understood and cared for by it, not because of its policies.

The left, on the other hand, fears that the people it is trying to persuade and mobilize aren’t capable of imagining or accepting a truly radical vision of the future. So the NDP, instead of developing and presenting such a vision (assuming it is still capable of imagining it) that addresses people’s need for a broader meaning, reduces that vision to a package of disconnected, minor reforms that doesn’t offend the media power brokers.

Of course, it doesn’t inspire anyone either, as evidenced by its inability to get beyond 20 per cent support. Social movement organizations are in some ways even more trapped in the single issue incrementalism that fails to inspire all but a relative handful of politically conscious followers.

Convinced that “ordinary” people are incapable of radical change, says Lerner, too many left activists themselves retreat into a middle-class, consumer existence that they know deep down is not only unsustainable but deeply unsatisfying. We fight the good fight — and then drive home, turn on the TV and watch the news report on a world that does not acknowledge our existence.

Lerner’s call for a politics of meaning is truly revolutionary given the extent to which consumerism is embedded in our lives and our culture, and the failure of our organizations to address the coming catastrophe. Who will be amongst the first revolutionaries to challenge the system?

We will — the activists who are now exhausted, demoralized and convinced there is nothing new they can do to make change.

Says Lerner, “Having been burnt by past failures, these former activists will not quickly jump into new political movements. Yet, as a meaning-oriented movement gains momentum many of them will feel a homecoming that reconnects to their deepest hopes. They will become the transformative agents who move these ideas into the mainstream… These people respond out of a real inner need, not from a commitment to an abstract idea, nor out of a sense that someone else ought to be treated differently…”

“These are radical needs,” writes Lerner. “Unlike needs for economic well-being or political rights, these cannot be fulfilled inside our society as it currently is constructed.”

It’s time for reconstruction. The economic and climate change crises can serve as an enforced breathing space: an obligatory opportunity to get off the consumer/wealth accumulation/hyper-individualism tread mill for long enough to realize it was taking us over a cliff.

Harper and His Movement Were No Friends to Mandela

Of all the hypocrisies revealed by Stephen Harper, perhaps none are so morally offensive as his sudden, solemn respect for Nelson Mandela. We will never know how Harper would reconcile his past attitudes towards apartheid with his trip to South Africa to honour the iconic statesman at his memorial.

In 1989 Harper was a member of the Northern Foundation (NF) about the same time that he became policy chief of the Reform Party. The exclusive mandate of the NF was to counter the serious efforts of the Canadian government of Brian Mulroney to pressure the South African government to release Nelson Mandela from prison and to end apartheid.

The membership of the NF read like a who’s who of the far right in Canada. Many, if not all, of its members were also members of the Reform Party. In 1991 Harper told Trevor Harrison, who was researching his PhD on the Reform Party (later a book entitled Of Passionate Intensity): “I helped establish something called the Northern Foundation before it (much later) deteriorated into a kind of quasi-fascist organization. I was actually expelled from it. It’s got stranger and stranger.” Yet there was no doubt about what the organization stood for when Harper was still a member. And by his own account he didn’t leave voluntarily.

Prime Minister Harper’s communications aide gives a very different account now. In an email response to a version of this story published earlier today, he claimed Harper simply attended one meeting (about British market reforms) and that once he realized it was a pro-apartheid group he had nothing further to do with it.*

The NF’s magazine was explicitly pro-apartheid (as well as anti-gay, and anti-French language rights). It provided free advertising to many right-wing groups including the pro-apartheid magazine The Phoenix and the Reform Party which apparently didn’t object to being promoted by a gang of racists.

As I documented in my book Preston Manning and the Reform Party, the Reform Party’s connection to, and harbouring of, pro-apartheid activists went right to the top. William Gairdner (a right-wing public speaker and immigration critic) was one of the party’s favourite key note speakers and regularly attacked Canada’s policy on South Africa and leveling attacks on the “One party dictatorships of Black African countries.”

Stan Waters, the Reform Party Senator (he won an election for senator in Alberta) was the party’s foreign affairs spokesman. He was openly supportive of white rule in South Africa: “South Africa should think twice before allowing majority rule because most black African countries live under tyranny.”

As a result Waters received the financial backing for his senate campaign from Arthur Child, the president of Burns Foods and long time supporter of the South African white regime. Child is the only Canadian to have received the apartheid regime’s medal of honour. Child was also a Reform member and on the board of the Canadian South African Society — a front group supporting apartheid and funded principally by the South African embassy in Ottawa.

Harper was Manning’s chief policy officer, a position that reflected considerable influence with Manning — and his trust. Harper, Manning and Waters were the almost exclusive spokespersons for the party before it replaced the PC Party as opposition in 1993. Harper would have worked closely with Waters as the party’s lead on foreign affairs. He would almost certainly have known Child and most of the other high profile pro-apartheid figures.

Most if not all of the high profile pro-apartheid activists and writers were active in the Reform Party because they felt the party was sympathetic to their cause. K.H.W. Hilborn, a professor at the University of Western Ontario was an outspoken critic of the African National Congress (ANC) and joined the party in the hopes of changing the government’s “orientation towards the like of the ANC.” He was also on the president’s council of the National Citizens Coalition, the organization Harper joined early on and would head up when he temporarily left politics in 1997.

SFU economics professor Herb Grubel, a Reform Party MP, wrote two academic articles critical of sanctions against South Africa and taught at the University of Capetown in 1984 and again in 1989, in violation of Commonwealth sanctions. Ted Byfield, then publisher of the Alberta-based “Report” magazines (the virtual mouthpiece of the Reform Party), was in the same pro-apartheid camp.

Perhaps the most notorious Reformer working on behalf of the apartheid regime was Donovan Carter, a former TV broadcaster in Calgary. He worked directly with the South African embassy to set up pro-apartheid front groups across the country. He set up nine such groups and then hired operatives to infiltrate anti-apartheid groups. Carter worked closely with Stan Waters.

Clearly the key figures in Reform knew better than to openly promote the racist apartheid regime let alone take an official policy stand opposing the release of Nelson Mandela. Indeed Harper was often worried about the potential damage extremist groups could do to Reform’s carefully nurtured image as a mainstream party. Yet from his initial membership in the Northern Foundation to his willingness to have some of the most vociferous defenders of apartheid South Africa as prominent members of the party, Harper demonstrated where his sympathies lay.

The rule was simple: so long as these pro-apartheid activists did not publicly embarrass the party, they were welcome as fellow travelers.

After Mandela’s release from prison in 1990 and the subsequent end to apartheid, the question was moot in any case. Yet the issue did not go away entirely as some ten years later one of the party’s most controversial and extreme right-wingers embarrassed the party. In 2001 Rob Anders, an MP from Harper’s own Calgary home-base, refused the House of Commons unanimous consent to declare Nelson Mandela an honourary Canadian citizen. When the speaker asked for unanimous consent he shouted “No!” — declaring that Mandela was a terrorist and a communist.

Even upon Mandela’s death and amid an outpouring of adulation from every corner of the planet, Anders has refused to change his position. Harper had ample opportunity to indicate his disapproval of Anders when in the lead-up to the 2008 election local Calgary Conservatives made it clear they wanted him replaced as their candidate. Instead of accepting this democratic imperative, Harper fought for Anders, changing the membership rules to disqualify new members and spending hundreds of thousands of dollars fighting the dissidents all the way to the Supreme Court. Why would Harper expend party funds and his own political capital on such a marginal MP?

There are other key people in the present day Conservative Party with histories that include attacks on Nelson Mandela, including Harper’s former chief of staff, Guy Giorno, one of the most powerful figures to occupy that position. When he attended St. Michael’s College in the 1980s, he wrote for the right-wing Catholic Digest, attacking Mandela for espousing violence.

A key Harper cabinet minister, President of the Treasury Board Tony Clement, also has controversy in his background related to South African apartheid. In 1985 he was instrumental in fighting a University of Toronto Law Society decision to cancel a speaking invitation to SA ambassador Glenn Babb (the same man who hired Donovan Carter to set up pro-apartheid front groups in Canada). The Dean of the law school opposed the invitation saying it was “entirely inappropriate ” to invite the spokesman “for a grotesque regime built on violence and racism.” Clement then formed his own “society” with other neo-con law students and brought Babb in where he denounced the increasingly effective sanctions against SA. Clement claimed he found apartheid “reprehensible” but had to defend free speech. He was burned in effigy for his efforts by anti-apartheid activists.

Of course all of this is now in the past and perhaps all these declared opponents to Nelson Mandela’s cause have changed their minds. Maybe Stephen Harper really does admire Nelson Mandela — but only as a statesman, never as a revolutionary warrior. And the consequences of this neo-con hostility to anti-colonialism in Africa seem to still be reflected in the Harper government’s policies. In 2009, Harper closed the embassy in Malawi just five years after it was established by Paul Martin. The next year Harper shifted aid away from Africa to South America saying Canada wanted “… to target more Canadian aid to countries in its own geographic backyard.” He eliminated bilateral aid to eight African countries, over half the recipient African nations. The government was widely criticized for the move, even by the OECD which accused Canada of “…hurting development efforts in the world’s poorest countries.” Harper announced more cuts of $377 million in 2012 to twelve of the world’s poorest nations, seven of them in Africa.

These actions dramatically reversed a decade or more of major Canadian commitments to Africa. And while the decision to slash African aid was couched in economic terms, much of the cancelled aid had actually been targeted at infrastructure to facilitate further investment. According to the Geopolitical Monitor the Canada Investment Fund for Africa was “dedicated to making private equity investments in businesses throughout Africa.”

Despite its claim to have a new diplomatic focus on trade and economics the Harper government now has virtually no political presence in Africa at a time when China and other countries are pouring billions in investment dollars into the continent. On the face of it, Canada’s deliberate downgrading of its commitment to Africa seems irrational from any policy standpoint. Perhaps it is nostalgia for the 1800s when British colonialism was at its height.

According to Trevor Harrison, the pro-apartheid agitators on the late 1980s had “strong Anglo-Saxon nativist inclinations” and depicted “…Canada as not only historically an Anglo-Saxon country but also part of a wider Anglo-Saxon culture that is in need of recognizing and re-establishing its heritage…. The notion of a ‘common heritage’ seems to encompass the white settler colonies of the former empire, including white South Africa.”

The idea of Anglo-Saxon nativism does find expression in the Five Eyes intelligence alliance comprising the five English speaking developed nations, and in Harper’s resurrecting of the term “Royal” to describe the Canadian Air Force. Media reports from South Africa during the memorial services for Mandela suggest Harper stuck with his own kind: “Mr. Harper, meanwhile, chatted with leaders from Australia, Britain and New Zealand at the memorial and in an earlier breakfast meeting.”

I wonder if they were reminiscing about the Empire.

Why Tories Are So Afraid of What Deloitte’s Runia Might Testify

With all the reporting on the Senate scandal you might think there’s not much more to be discovered. But reading the actual documents the RCMP turned up in its Mike Duffy investigation is definitely worth the effort. The documents pull back the curtain on Harperland, a landscape so profoundly unethical Harper’s staff does not hesitate even for a second in plotting to interfere with a supposedly independent official Senate audit. You have to ask yourself that if this is how Harper’s inner circle behaved on the Duffy file, what kinds of things do they get up to when they are strategizing against Harper’s enemies.

The documents also suggest that despite the extensive media coverage on the Duffy scandal, we are still at risk of being played by the conservative political spin machine. Ezra Levant and Conrad Black are attacking the RCMP, with Black questioning how a mere RCMP corporal could have the effrontery to make allegations against a member of the elite like Nigel Wright. The scandal – according to the Globe’s Margaret Wente - has no more legs and we should move on to writing about things that are easier to understand.

Well, here’s another important leg to the story that is easy to understand and yet has gone largely unreported. The lynchpin of the PMO’s strategy to contain the Duffy scandal was the Deloitte audit. For their strategy to work, Deloitte could not say Duffy’s primary residence was in Ontario rather than PEI which is the province Duffy is supposed to represent. This was number one on Duffy’s list of conditions. The PMO could get Duffy to repay his expenses only if, in the words of PMO staffer Patrick Rogers, they had Deloitte “locked in”.

In February, the Senate hired Deloitte to conduct an independent investigation into whether Duffy had made inappropriate expense claims. Duffy seemed terrified the auditors might conclude that his home of thirty years in Ottawa was in fact his primary residence and he should not have been claiming a housing allowance for it.

Duffy repeatedly contacted Conservative Senators Dave Tkachuk, Carolyn Stewart Olsen, Marjorie Lebreton and PMO staff to get the audit called off. He insisted that the PMO do something about the audit if he was going to go along with the plan to reimburse the government for his expense claims. The audit was a deal-breaker.

Even with Nigel Wright covering the bill, Duffy vigorously resisted paying back his housing allowance and expense claims related to the time he spent in Ottawa for the obvious reason that this would look like he was admitting his primary residence was there and not in PEI. If Deloitte subsequently issued a report stating Duffy’s primary residence actually was in Ottawa, that could have been the kiss of death to his life as a Senator. So ending the audit was a key demand in the draft expense repayment deal sent by Duffy’s lawyer to Benjamin Perrin, PMO legal counsel, and reprinted on page 31 of the RCMP documents. This was the deal, with a few minor changes, that was eventually implemented by Duffy and the PMO.

But how could the PMO deliver on a deal that included something seemingly beyond their control – an independent audit? PMO staffers have a very expansive view of what is in their control. In an internal email, Patrick Rogers said: “I believe that we should make arrangements for repayment knowing [emphasis added] that Deloitte will not say one way or another on his residency.”

Duffy was not convinced by the PMO’s reassurances about the audit. His lawyer, Janice Payne, asked yet again in a March 20 email to Conservative Senator Tkachuk that the audit be called off. On page 39 of the RCMP documents you can find this extraordinary insight into the PMO’s ambitions for neutralizing the audit. When he was informed about Payne asking Tkachuk to call off the audit, Nigel Wright described it as a “very dangerous tactic” and expressed frustration that Payne was not understanding the game plan: “I wonder if she is paying attention, because Ben [Perrin]will have explained to her several times that it is not ‘the audit being called off’ but rather Deloitte ‘not having to come to a conclusion on primary vs secondary residence’…”

Wright apparently believed that Duffy and his lawyers should consider Deloitte not reaching a conclusion on primary residence as just as valuable to him as if the audit had been called off. He seemed to think Payne was thick for not understanding this despite repeated coaching by Benjamin Perrin.

Why did PMO staffers become so confident Deloitte would not determine that Duffy’s primary residence was in Ottawa? According to Duffy, in February Wright was warning him that Deloitte would find against him. Wright emailed Perrin on February 15 to say he was “gravely concerned that Duffy would be considered a resident of Ontario” according to Senate rules. Wright told Duffy in a February 20 email – reprinted on page 28 of the RCMP documents – that he expected Deloitte would conclude that his primary residence was not in PEI.

Duffy sent over his diaries to PMO staff to make their own judgment about his primary residence, diaries he refused to give to Deloitte. Wright informed his colleagues that if the diaries made it look like Duffy’s PEI residency claim would hold up with Deloitte, he would stop asking him to repay his expenses. But since Wright continued to insist that Duffy repay, the diaries must have confirmed for him that Duffy had a weak case.

Yet despite these pessimistic views about Duffy’s residency claims, by March the PMO’s opinion about the Deloitte report appears to change. Now they are certain Deloitte will not conclude anything about residency and they can go ahead with their deal with Duffy.

One of the tactics the PMO used to try to prevent Deloitte from issuing a finding on residency was for Duffy to refuse to give Deloitte the information they requested. Patrick Rogers recommended “that the Senator continue to not engage with Deloitte.” Nigel Wright warned against Duffy contacting Deloitte directly to find out how much he owed because that would “give Deloitte an excuse to ask for documents from Sen. Duffy again.”

Here is Wright, supposedly the taxpayers’ champion for personally covering Duffy’s $90,000 expense claims, frustrating an independent audit that cost taxpayers more than half a million dollars. And what was Wright’s response when Duffy finally offered in April to meet with Deloitte? On learning about the possibility of Duffy co-operating with Deloitte, Wright wrote in an email “Never heard of this. Is bad.” The Conservative-dominated Senate sub-committee handling the audit pre-empted Duffy’s meeting with the auditors, informing Duffy he could not talk to Deloitte because the audit was finished.

As well as putting roadblocks in the auditors’ path, there is no doubt the PMO also tried to shape the content of their report. On March 1, Wright wrote Conservative Senator Carolyn Stewart Olsen, a member of the Senate audit sub-committee. He expressed extreme frustration that the PMO could not “get Deloitte to the point” where they agreed that the audit is over once Duffy paid back his expense claims.

In Wright’s view, Duffy’s repayment of his expenses should have killed the audit, but it went ahead. The RCMP report on page 18 states it is unclear whether the Senate committee decided the audit should proceed, or that Deloitte refused when the committee told them to stop their work. Since the audit could not be stopped, Wright asked Stewart Olsen to ensure Deloitte did not say in their final report that Ottawa is Duffy’s primary residence. Wright could rely on Stewart Olsen because she had promised him in an email “I am always ready to do what is asked…” (Despite numerous email exchanges with Wright on the Conservatives’ Duffy problem, when questioned by the RCMP Stewart Olsen recalled only talking to Wright once in person at a meeting in April.)

Wright emailed Benjamin Perrin reporting that he and two other PMO staff were all working to get an update for Duffy on the Deloitte audit, even though the auditors were required to keep their work confidential. Wright wrote chief Conservative fundraiser, Senator Irving Gerstein, asking him “to work through senior contacts at Deloitte” to get the outcome the PMO was “pushing for”.

Gerstein then contacted Michael Runia, a Deloitte managing partner and the Conservative Fund’s auditor. On March 8, PMO staffer Patrick Rogers reported Gerstein told him that his contact at Deloitte “agreed with our understanding of the situation” and that he was working to get the Deloitte employee responsible for the audit to agree as well. On March 21, Rogers reported on an update Gerstein had received from his Deloitte contact. The contact told Gerstein that Deloitte would not “…reach a conclusion on residency…” And, in fact, they did not. The Deloitte report released in May stated “we are not able to assess the status of the primary residence declared by Senator Duffy against existing regulations and guidelines.” Deloitte blamed “lack of clarity” in the Senate’s rules.

The draft Senate report prepared by the Senate’s own administrative staff came to a very different conclusion. This report stated that the Senate regulations regarding residency were “unambiguous” and that Duffy’s continued presence in Ottawa over the years meant his place in PEI could not be considered his primary residence. PMO staff disagreed with the draft and thought it should be changed to reflect Deloitte’s opinion.

When the Senate committee was reviewing the draft report, Patrick Rogers met with Stewart Olsen to pass on the changes the PMO wanted. He reported back that “she agreed with them 100%… “ The Conservative Senators on the steering committee – Stewart Olsen and Tkachuk – deleted the references to Duffy’s residency status as well as to Duffy’s refusal to provide the documents Deloitte requested.

Chris Montgomery, who worked for Senate Majority Leader Marjory Lebreton, thought it was wrong to have PMO staffers sit in on Senate committee meetings and demand specific changes to Senate reports. He said in a May 8 email that Lebreton believed the report on Duffy needed to be consistent with the ones on Senators Harb and Brazeau, with all three reports making critical judgments about these Senators’ primary residence claims. But the PMO demonized Montgomery as “the Problem”. After a donnybrook meeting at the Senate, the PMO got what it wanted and references to Duffy not meeting primary residence criteria were dropped. A PMO staffer gleefully reported to Wright: “We’re done, Patrick [Rogers] made it happen.”

Yet when Harper was questioned about the revised Senate committee report, he said committee members “were not directed by anyone to reach any conclusions other than the ones they reached, which were the same conclusions as reached by an independent external audit.”

The response to all this could be a yawn. “Quelle surprise” that the Prime Minister of Canada’s top advisors would think that because the Conservative Party paid Deloitte to audit their books that entitled them to influence the firm’s other work. Quelle surprise that the managing partner of one Canada’s largest accounting firms would take a call from a politician inquiring about a supposedly independent audit and follow through on his requests. But it would signal a dangerous slide into corruption if we respond to these events with a bored cynicism.

Deloitte spokespersons, testifying to the Senate, denied that there was any outside influence on their work. However, they were at a loss to explain how the PMO could have been so well-informed in advance of their report’s conclusions despite the security steps they claimed to have taken to keep this information confidential. Conservative Senators blocked hearing from Deloitte’s Michael Runia to explain his role.

Obviously a number of Conservative insiders know the answer to what happened. It would be refreshing if one of them had the integrity and courage to speak up.

Timeline on key events related to the Duffy audit

Feb 7 – Duffy says in a phone call with Wright that he is upset he is going to be audited. (p. 14 of RCMP documents)
Feb 8 – Senate Standing Committee on Internal Economy contract Deloitte to review residency and related expenses of Senators Duffy, Brazeau, and Harb. Conservative Senators Tkachuk and Stewart Olsen and Liberal Senator Furey named to subcommittee to review Duffy expenses.
Feb 20 – Wright tells Duffy he expects Deloitte will conclude his primary residence is not in PEI. (p. 28)
Feb 21 – Duffy’s lawyer sets conditions for repaying expenses, including that the audit be stopped. (p. 31)
Feb 27 – Duffy’s lawyer emails Harper’s legal counsel, Benjamin Perrin, asking for confirmation the audit would be stopped. (p. 35)
March 1 – Wright emails Conservative Senator Stewart Olsen stating while he acknowledges that the audit is going ahead, he needs her help to get Deloitte not to make a conclusion on Duffy’s primary residence. (p.37)
March 1 – Duffy’s lawyer asks Perrin for an update on the audit. Wright tells Perrin he contacted Conservative Senator Gerstein to work through his Deloitte contacts to get the outcome the PMO was “pushing for.” (p. 37)
March 8 – Rogers reports to PMO colleagues that Gerstein has called to say his contact at Deloitte “agrees with our understanding of the situation”, would get “the actual auditor on the file to agree” and that Gerstein would call once Deloitte was “locked in.”(p. 38)
March 20 – Wright expresses annoyance that Duffy’s lawyer is still talking about the “audit being called off” rather than Deloitte not coming to a conclusion on residency.(p. 39)
March 21 – Rogers reports that Gerstein has found out from his Deloitte contact that the firm will not “reach a conclusion on residency.” Rogers says repayment should be arranged “knowing that Deloitte will not say one way or another on residency.”( p. 39)
March 25 – Duffy writes a $90,172.24 check to the government.(p.9) Wright writes a $90,172.24 bank draft for Duffy’s lawyer.(p.13)
May 7, 8 – Deloitte submits its report to the Senate stating they cannot determine Duffy’s residency status under Senate rules because the rules are unclear. PMO disagrees with criticisms of Duffy in Senate administration’s draft report and wants it to reflect Deloitte’s opinion.(p.19) PMO intervenes to have the draft report changed. (pps. 43, 44)
May 9 – Senate Steering Committee reviewing Duffy’s expenses publishes report finding no fault on Duffy’s part and say Deloitte could not determine Duffy’s primary residence.
November 28 – Conservative Senators vote against hearing from Deloitte managing partner Michael Runia on the role he played in the Duffy audit.

Moving Beyond Our Obsession with Stephen Harper

Remember Brian Mulroney, the PM so many people loved to hate? We need to remember him so we can learn a lesson from that period in our political history: there is a real danger in demonizing prime ministers to the exclusion of other longer term political objectives. Mulroney’s unctuous manner, his arrogance and his shameless toadying to the U.S. and to corporate CEOs made people crazed with anger at the man.

In the end, however, the corporate interests that Mulroney served so loyally could hardly have asked for a better outcome. Progressives, in particular, were so bent out of shape about the man that they forgot that once he was gone (they all go eventually) there would be someone else whose job it was to serve the same corporate interests. Those progressives actually forgot two things:

One, that the damage done by any particular prime minister sets the foundation for the new normal for the next one.

And, two, things can always get worse.

No one was prepared for what Finance Minister Paul Martin had in store for the country (he effectively ran the Chretien government). Mulroney had established the foundation for corporatism with the free trade deal with the U.S. Martin delivered punch number two: the gutting of federal spending and revenue raising. In his famous 1995 “deficit-fighting” budget speech he boasted not about the reduced deficit but about radically diminishing the role of government: “…it is the very redefinition of government itself that is the main achievement of this budget… Relative to the size of our economy, program spending will be lower in 1996-97 than at any time since 1951.” When surpluses went through the roof, he slashed taxes — and revenue — by $100 billion over five years.

Making predictions is a risky business which I try to avoid, but I have a strong sense that Stephen Harper will not be prime minister after the next election. His much-touted strategic brilliance has always been compromised by his narcissism — a critical flaw that will keep undermining his admittedly brilliant manipulation of the political process. And his moral turpitude may finally undo his efforts to lock in his core of largely Christian supporters.

In the meantime just what should the democratic political process look like if Canadians, in their large majority, are to get what they say they want from government? What does the constant, almost exclusive focus on the absolutely worse aspects of politics and politicians (the Senate scandal included) have on democratic practice and citizen engagement? What does it do to the political culture to focus on the corrupt, dishonest, secretive and vindictive character of the Harper government?

The whole exercise is enervating and demoralizing — the more so the longer it prevails. The combination of our perverse political system which gives prime ministers virtually dictatorial powers, and the willingness of Harper to abuse every one of those powers, leaves citizens and political institutions feeling virtually powerless. We are like (and are treated like) peasants in a feudal society with a malevolent and contemptuous monarch. Trying in this atmosphere to maintain faith that the system will eventually correct itself, let alone trying to keep an even keel as an engaged citizen is nearly impossible. It has the effect of immobilizing and incapacitating all but the most committed citizens.

If democracy is ultimately to prevail and if the values of Canadians are to find their way once again into public policy we need to move beyond the obsession with Stephen Harper and pay attention to the other players. It is these politicians and their parties which, after all, we expect and hope will defeat the Harperium. Do we care who or what they are — what their policies will be and perhaps most importantly whether they are committed to reversing the worst aspects of Harper’s blitzkrieg though Canadian democracy?

We had better care or the past will repeat itself and whoever becomes the next prime minister will inevitably — even if by default — start his administration from the new normal. The changed nature of our political culture, even before Harper became prime minister, is its powerful disincentive to be bold on any policy front. We have long since exited the era of political leaders and visionaries and are firmly stuck in a new period of economic managers. This is a reflection of the government being run as a business mentality, the ferocious right-wing media and the resulting fear of proposing anything risky by way of policy.

From this perspective Paul Martin and Stephen Harper have done future managers a big favour: they so thoroughly gutted federal revenues that without serious tax reform — that is, tax increases — bold new policies or even repairs to damaged programs (like decreasing tuition fees) will be impossible.

Has any social justice or group, union or NGO approached the opposition parties asking about their commitment to restore Canadian democracy and governance? If they have it’s a well kept secret.

We can expect almost nothing from trying to engage the Liberal Party except the next phase in the neo-liberal normal. Little has changed in the party of Paul Martin, and Justin Trudeau seems too weak morally and too lazy intellectually to establish a vision that can stand against the party’s power brokers. Yet progressive Liberals must use their voices and pocketbooks to press their party to pledge a reversal of Harper’s right-wing social engineering.

The NDP with its long history of social justice principles should be the party committed to repairing the damage done by Harper. But without a concerted campaign by its own members and supporters we are likely to be disappointed. NDP leader Tom Mulcair has essentially declared that even if his party becomes government in 2015 he will do little more than administer the train wreck left to him by Harper. What else are we to make of his repeated, aggressive statement on raising personal taxes? He told the St. John’s Telegram in August: “Several provinces are already at the 50 per cent rate. Beyond that, you’re not talking taxation, you’re talking confiscation. And that is never going to be part of my policies, going after more individual taxes. Period. Full stop.”

This declaration was made at virtually the same time that the International Monetary Fund (IMF), one of the world’s most influential neo-liberal economic institutions, was doing an historic mea-culpa on the topic. After enforcing devastating fiscal policies on scores of countries around the world for over two decades, the IMF now recognizes that to deal with both government debt and infrastructure needs, taxes must be raised. In the most recent issue of its Fiscal Monitor it suggested that taxes on high income earners be raised to levels reminiscent of the 1960s and ’70s — 60 to 70 per cent — and also proposed a one-time capital levy on wealthy households.

In almost the same breath as the tax pronouncements Mulcair was praising progress on the CETA, the so-called trade deal with the E.U. This monstrosity of an agreement (increasing our drug costs, weakening the Atlantic fishery, opening the door to even more temporary foreign workers, and preventing municipalities from giving preferential treatment to local firms in procurement) includes the same investment provisions as NAFTA allowing corporations to sue governments for any measure that affects their profitability.

The party says it is remaining neutral on the deal until it sees the details but clearly the heart and soul of the NDP is up for grabs on this and other key philosophical positions. Don Davies, the NDP’s trade critic, says the party will hold public consultations on CETA. The consultations could be a critical opportunity for the progressive community to be heard. On CETA, the tax issue, on restoring democratic institutions and reversing the worst outrages of the Harper government Canadians need to be just as active and vigilant in pressing the opposition parties as they are in opposing Stephen Harper’s efforts to take us back to the 1930s.

The latter will be a depressing and difficult task as Harper will continue his dictatorial practices until we throw him out of office. Imagining a better future is much more rewarding exercise but if we really want it we will have to convince the opposition parties to deliver it.

The economy, labour and the 2015 election

With the formation Unifor, a “new kind of union” and the country’s largest private sector union, there is at least a chance that the long slumber o the labour movement is over. An organization that big, with a radically new mandate, cannot help but influence developments elsewhere in the movement. The largely complacent leadership of other large unions will ether be inspired by Unifor’s approach, or be forced to recognize that change is in the offing – which might just mean their replacement.

One key part of that mandate is the idea of community chapters, consisting of any workers who want to join and focused not just on the workplace but on the community. While dramatic membership declines in the private sector union world is clearly a motivating factor in Unifor’s founding, a core part of the response to the crisis is to up the ante regarding social unionism – that tradition of unions engaging in the social and political life of the country.

One of the strongest motivating factors behind Unifor, and a wide variety of other initiatives being undertaken, is the desire to rid the country of the Harper government in 2015. If that is indeed a key objective – and it must be – then perhaps the most important element of this social unionism needs to be to focus as much attention on the economy as possible, to engage the media, the public and political parties in a broad discussion about the catastrophic economic policies of the Harper government.

There are two good reasons for this suggested focus. First, the economy simply isn’t working for working people and hasn’t been for almost thirty years. Wage (and salary) earners have suffered enormously since the so-called free trade deal with the US. Incomes have been literally flat since even before manufacturing jobs began to disappear. A high-wage, value-added economy focused on building resilience and addressing climate change could turn things around over time.

There is a second reason for Unifor and labour in general to focus on the economy. It is Stephen Harper’s only card heading into the 2015 election. It is stunning that Harper still gets the highest polling marks for economic management given what his policies have done. But that is exactly why he has spent over $100 million of taxpayers’ money drilling “Canada’s Economic Action Plan” deep into people’s consciousness. Even people living in or facing poverty have been brainwashed into accepting this absurdist conclusion.

Take away Harper’s advantage on the economy and he has virtually nothing to replace it to get elected. His agenda is one of dismantling, not building. He is unlikeable. The senate scandal has hurt him badly. People do not trust him.

In fact, Harper doesn’t actually have what would conventionally be called an economic policy. With the exception of three areas of the economy – military spending, the resource sector and real estate – Harper is an economic libertarian who would rather jump off a bridge than implement an industrial strategy. Maximizing the extraction of resources (mostly oil and gas) promoting a permanent war economy, and manipulating real estate. That’s it. If you aren’t a part of any of these sectors, then consider yourself and your employer on your own.

Harper is extremely vulnerable in all three of these areas. On resources, especially the tar sands, the Dutch disease is real. Despite desperate efforts by right-wing think tanks and other Harper stooges to deny it, the billions invested in the tar sands have affected manufacturing. While its effects have moderated with the recent decline of the dollar the hell-bent-for-leather development of the tar sands distorts the economy and the allocation of capital.

In 2006 Harper immediately upon his first mandate stared shifting billions into new weapons system. His 2008 Canada First Defence Strategy revealed a $500 billion military expansion over 20 years – a build up that includes stealth fighters, tanks, drones, military satellites and ships. Part of this strategy is to create a huge military manufacturing base to supply weapons to the world. Aside from the repugnant moral implications of selling stuff designed exclusively to kill people and destroy things, this is one of the worst way to create jobs. A US study revealed that a billion dollars spent by government on the military created 11,200 jobs compared to 16,600 for clean energy and 26,700 for educational services. One reason for the disparity is that a large percentage of military spending is spent outside the country while virtually every education dollar is spent here.

Harper’s principle Action Plan for the economy is praying that the real estate sector doesn’t implode. But implode it will and it could come before the 2015 election. Seventeen percent of mortgage holders will be in default of their loans if interest rates rise just 1.5%. While Harper and his finance sidekick Jim Flaherty continue to take credit for “cooling down” the market it was Flaherty who set it on fire in the first place with 40 year, no down payment mortgages. Relying on this sector is tantamount to playing high stakes poker – and no one wins forever. Moreover, promoting this sector is what has driven millions of Canadians into record levels of housing debt – once again, distorting the economy.

A revitalized labour movement needs to challenge all these policies but it has a unique role to play in exposing another set of policies implemented by both the Liberals and Conservatives: so-called labour flexibility. It is this bundle of policies that account for much of the gross income inequality (now matching that which existed in 1928) and the labour movement seems to have long since quit addressing them. It is time to get back to defending all working people – and the Unifor model has great potential for doing just that. Labour standards, minimum wage rate, welfare, EI, pension erosion, and the threat of three more corporate rights agreements about to be signed should all be on the agenda. Dramatic cuts to EI and social assistance since the mied-1990s has severely weakened the bargaining power of individual workers. Labour standards are now rarely, if ever, enforced by business-friendly governments. Maybe Unifor should re-start the fight for the 40 hour week – a thing of the past for over half of Canadian workers. Gutted EI and welfare means workers are obliged to put with intolerable working conditions and abusive bosses. Perhaps Unifor’s community chapters could picket particularly nasty employers – while at the same time taking up the cause of ending poverty in Canada by demanding that the minimum wage meet the standard of a living wage and the EI and social assistance be restored to their former levels.

Unifor says it will spend $50 million over 5 years to organize more workers into unions. That’s an amazing commitment. Combined with a public campaign to promote high paying jobs and an appropriate industrial strategy such a drive could have a real impact. But as unions already know, the impact of Liberal and Conservative economic policies has been the loss of such jobs and their replacement with low-paying, part-time, temporary jobs in the service sector (Canada has the second highest proportion of low-paying jobs in the industrialized world – behind only the US). These are the positions that are the hardest to bring under the conventional collective bargaining umbrella.

If unions don’t address the economic policy front in their struggle for a more equal society, they will be faced with trying to organize workers in ever more low paying jobs. I wonder if taking $10 million of that $50 million and educating/mobilizing Canadians for a high-wage economy might make the $40 million remaining more effective.

Perhaps the toughest task facing a revitalized labour movement is changing the political culture regarding the role of unions. While many workers, especially young ones, want to join a union too many others have been sucked into the race to the bottom mentality – attacking public sector workers along the lines of “I don’t have job security or a pension, why should they?” Labour has to work overtime on reversing this self destructive mind-set.

Workers don’t need to be told they’re being screwed. They know that.

They need to know who is doing it to them. A sustained, highly public, well-financed campaign could help accomplish that – and create line-ups at the union door.

The Crisis of Extreme Capitalism

Our current incarnation of capitalism — variously referred to as savage capitalism, extreme capitalism or euphemistically as the “free market” (free of any constraints) — is in one of its periodic crises. For years many assumed that the smart people who ran the system and benefitted from it would find a practical way to fix it. The problem is that the solutions are all framed within an ideology that makes that extremely unlikely. That ideology, neo-liberalism, is like a religion. Once you are a true believer you see other solutions as heresy.

Milton Friedman, the Chicago School economist whose extreme economic theories helped transform the English speaking world, was not fond of democracy. While most academics would shy away from suggesting that democracy was a problem, not Friedman. At a conference on Freedom, Democracy and Economic Welfare in 1986, he challenged an audience member who had placed democracy at the pinnacle of human achievement — not so, said Friedman. “You can’t say that majority voting is a basic right…. That’s a proposition I object to very strenuously.” He later wrote: “One of the things that troubles me very much is that I believe a relatively free economy is a necessary condition for a democratic society. But I also believe … that a democratic society, once established, destroys a free economy.”

The transnational corporations and finance capital that now rule the world owe their dominance in no small measure to the global application of Friedman’s ideas. In the service free economy — which really means unfettered capitalism and the pathological greed that underpins it — Friedman’s followers have made sure that democracy’s threat has been quashed.

But the “free economy” romanticized by Friedman and his ilk is anything but. Completely dominated by giant corporations whose wealth outstrips all but the richest nations, economic freedom does not exist for anyone else, including the vast majority of businesses who are at the mercy of financial institutions and mega-corporations. This says nothing of workers whose “freedom” to sell their labour now means they are free to compete with those who earn a few dollars a day thousands of miles away from their communities.

A free economy has always been a euphemism for liberated capital, and globalization is its obvious expression. While the behaviour of genuine markets as envisioned by Adam Smith were actually rooted in the customs, mores and culture of communities, this is less and less often the case. Market behaviour is now typically that of Goldman Sachs or hedge funds. Their coldly calculated and amoral decisions affect every community on the planet and everyone living in them.

But this 30-year history of liberating capital has had exactly the effect that many predicted: a persistent consumption crisis. Capitalists cannot sell all the goods and services they are capable of producing. The crisis has been delayed a number of times — most notably by the globalization of production.

But the 2008 meltdown stripped away all the camouflage from a system that could not prevail. In Canada as well as in other developed Western nations, the crisis has been delayed by cheap goods from China and other low-wage countries, and by the liberal use of credit. But nothing in nature or economies stays the same for long and these two factors can no longer save extreme capitalism from its crisis.

The latest report to demonstrate just how dire the situation is was actually ordered up by Jim Flaherty himself in apparent response to Justin Trudeau’s focus on the middle class in his leadership campaign. The report revealed that after-tax income for the middle 20 per cent of Canadians (the classic middle class) had increased by just seven percent between 1976 and 2010 — or .2 per cent a year. (1976 just happens to be the year that the campaign to liberate capital began in earnest.) This just reaffirms the 2008 figures from the Centre for the Study of Living Standards which showed just how out of balance the power of capital had become over labour. The increase in annual median earnings (adjusted for inflation) for a full-time, full-year employee between 1980 and 2005 was a mere $53 — in other words a real increase of about $2 a year.

As stunning as that figure is, even more revealing is that labour productivity over that period increased 37 per cent. One very concrete way of comparing the power of labour and capital is to examine the share of the proceeds of increased productivity each receives. This time capital took it all — virtually every dime over a 25 year period. Had incomes grown at the same rate as productivity, the median income would have been $56,826 in 2005 instead of $41,401. But they didn’t. Capital took it all because it could, because year by year democracy and its constraints on the “market” were steadily eroded.

In that missing $15,000 a year you can find the crisis of consumption Canadian chapter. If millions of Canadian workers and families had actually kept pace with productivity, the astonishing level of debt they now face would be much lower and they would be spending money in the economy. Last October the debt to income ratio of Canadian families hit a new record of 163.4 per cent. The comparable figure in the U.S. — where it is also considered dangerously high — is 110 per cent. As if that wasn’t bad enough, money borrowed against home equity totals $206 billion, equal to 12 per cent of Canadian GDP (it’s four per cent in the U.S.).

The impression left by many economic writers is that Canada is primarily an export economy, but the fact is that some 70 per cent of the economy is domestic. If people aren’t spending and the global economy is struggling, capitalism has a problem. Capital, in its drive for complete liberation from community and society, has outsmarted itself. In Canada the largest corporations are now sitting on some $700 billion in cash that they can’t invest in productive activity because demand has flatlined.

To solve the consumption crisis, governments and the corporations they serve need to put money back in the hands of people who will spend it. But the iconic One Per Cent can only spend so much. It is they who have scooped up most of the increased wealth in the past 30 years, creating a level of income inequality not seen since 1928. Yet, to shift income to middle and working class families would entail once again constraining capital, something no political party, not even the NDP, even hints at.

The one remaining method of increasing disposable income is, of course, cutting taxes which governments have done with reckless, ideological abandon for the past twenty years. Yet even here some 60 per cent of the total wealth “liberated” at both federal and provincial levels has gone to the wealthiest 10-15 per cent and to large corporations. For the latter these tax cuts have simply added to their mountain of unusable cash.

Tax cuts actually threaten to exacerbate the crisis, not solve it. While few CEOs dare admit it, government spending actually is the best way for corporations to externalize many of their costs: health care, education, social stability and perhaps most obviously, physical infrastructure. A CCPA study released last January concluded that Canada would have to spend $30 billion a year for the next decade to bring infrastructure spending back to historic levels. Ottawa accounted for 34 per cent of such spending in 1955 in the days when our current infrastructure was being built. But by 2003 it was down to 13 per cent.

It would be instructive for someone to calculate how much of the $700 billion of unspent corporate cash came from corporate tax cuts — and then apply it to the social and physical deficit.

This refusal of the federal government to collect adequate revenue to address this huge deficit in infrastructure is one of the best examples of just how perverse neo-liberal ideology has become. A modern economy cannot function efficiently with crumbling infrastructure — roads, bridges, mass transit systems, sewer and water systems — yet government policy continues to contribute to the crisis. And this is just one category of service that corporations rely on. Cuts to education, medicare and the lack of investment in social housing and child care are equally irrational from a business perspective.

Yet the current management committee of capitalism will respond to its crisis based on the theory that got them here in the first place — Milton Friedman’s edict that democracy is the problem. The greater the crisis, the more democracy will have to constrained. If the medicine doesn’t work, increase the dose. Inequality will not be addressed, it will be institutionalized.

And here you have the rationale for the gradual development of the security/surveillance state. Is the United States ahead of Canada on this front? We can’t know for sure. The massive invasion of privacy and violation of civil liberties in the U.S. exposed by whistle-blower Edward Snowden has been justified as the necessary price Americans have to pay to keep them safe from terrorism. It is more likely the price Americans — and perhaps Canadians — will be forced to pay as extreme capitalism anticipates future domestic resistance to its behaviour.

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