Raise the Hammer
I'm convinced it's this inherent distrust of government efficiency which I harbour, that lies near the heart of the Conservative upswell today.
By Ben Bull
Published October 02, 2008
Like a billion other folks around the globe, I watched in wonderment (and occasional bewilderment) as Barack Obama accepted his party's nomination for President last month.
Apart from the epileptic raucousness of the crowd (what it is with Americans and their rallies? Do they really think politics can make a difference?!) and the curious mock-gothic backdrop, I was impressed by what I saw and heard.
One theme in particular caught my attention:
"For over two decades," the Senator began, John McCain "has subscribed to that old, discredited Republican philosophy - give more and more to those with the most and hope that prosperity trickles down to everyone else. In Washington, they call this the Ownership Society, but what it really means is - you're on your own. Out of work? Tough luck. No health care? The market will fix it. Born into poverty? Pull yourself up by your own bootstraps - even if you don't have boots. You're on your own."
Trickle down economics: we've all heard of this before, right? After all, what other form of economics is there? How else can we spread the wealth?
I wondered, at the time, exactly what else Obama could be advocating if, as he suggested, the trickle down effect wasn't working. I got my answer a few days later. Another city, another platform, another over-the-top speech:
"We need to enable the working classes of America," Obama was proclaiming, as he explained how America needed to cut its workers some slack so that the economic benefits "can trickle up."
Trickle Up? What the hell is this? I wondered. Some sort of reverse-physics economic osmosis? What would Sir Isaac Newton make of it? Or perhaps I'm way off - maybe this has something to do with waterboarding...?
As with all matters I don't understand, I decided to foget about it and move on. But, as is often the case when I do that, I started to hear a lot more about it.
CBC's The National, a few weeks later: Stéphane Dion musing about Conservative Corporate tax cuts. "They don't trickle down," he stuttered, "They don't work at all."
Then RTH's own Adrian Duyzer, bemoaning the impending economic bailouts in the US, and RTH Editor Ryan McGreal's subsequent comment:
Something like 2 million American families face foreclosure on their homes this year ... If you divide the $700 billion among those 2 million families, each family gets $350,000 ... Use the money to help families pay their mortgages so they don't default, the securities made up of blocks of high risk mortgages don't collapse in value, and the financial institutions that leveraged themselves to the hilt buying them don't go into bankruptcy.
It's beautiful trickle-up economics, and it starts by helping the people at the bottom of the pile, who were screwed first and hardest by the financial crisis, keeping its corporate architects afloat as a side-effect.
So what is "trickle-up"? Obviously, in pure physics terms, such a thing is impossible - unless you live in China - but can it work for our economy?
Well, whatever you do, don't ask my Mum.
Back in the '80s when I first started voting Conservative like my parents, right-wing commentators were regularly besmirtching the "loony left" and their patented welfare state.
"It's cradle-to-the-grave economics!" my parents would rage, "and guess who pays for it?"
"Er...us?"
"That's right!"
My Mum would then cite numerous examples of unemployed people who were "too lazy to work" including the old Romany who came into our shop once a week for his pasties and his dole cheque and bragged about never having worked a day in his life.
"I don't have to," he'd boast, kissing his cheque and tucking into his pastie. "I have everything I need right here."
I remember opening the paper one day around this time and looking at a picture of a fat bloke in Nottingham who'd just had his council house extended to accomodate his rapidly expanding family. A ten thousand pound renovation, ten kids and no job - and millions of angry taxpayers asking the same question: "Why?"
But enough preamble, let me get to the point: I don't trust my government to "trickle-up". Social programs run by the government just don't seem to work, and the reason is quite simple: It's because governments are unaccountable and inherently inefficient.
An example: In 1997 I was a struggling new immigrant, unable to land a job in my chosen profession of health care. Two years of mailing out resumes and busing around town providing male-attendant care to the elderly for eight bucks an hour had led me spiralling into debt.
My RN certificate was gathering dust in my closet by the time I finally stormed into the unemployment office in Toronto and told them to "end the madness."
To my delight I learned about a career planning course being offered to EI recipients, which would provide me with free training in a more in demand profession.
"Sign me up," I said.
I found it ironic at the time that I needed to become even less employed so I would qualify (I wasn't on EI at the time), but I quickly made the necessary adjustments and signed up for the next course. Two weeks later I was enrolled in the most expensive, in demand, senior level IT course I could find, and off I went back to school.
I applied myself earnestly to my new studies and quickly ran through my exams. The course was tough - designed for experienced and knowledgable IT Professionals and with seven modules to complete. But with the encouragement and support of my fellow classmates, I eventually dispatched them all.
The discouraging part of the experience however, were some of these same classmates.
I recall one incident, a few weeks into the curriculum. I had noticed that several people were routinely showing up late for class, walking out halfway through or just simply not turning up at all.
As we prepared for class one day, a Career Advisor from one of the government agencies that had signed us all up came barging into the classroom and berated us for "not making an effort."
"You're trying to work the system," she raged, wagging her finger and looking in my direction. "You will be weeded out!"
What was she harping on about? I wondered, as she stormed out of the class. At the time I had completed two of the seven exams that comprised the certification, and I was quite happy with my progress. But as we discussed the situation over lunch, I soon realized that I was about the only person on the course who had made this kind of progress.
As we went around the room I listened to a litany of excuses from my fellow classmates on their stalemate status.
"This course is too hard," said one.
"I'm scared I'll fail," said another.
"I can't be bothered," said someone else.
Looking at the situation through new eyes, I came to realize that most of my colleaugues were complete and utter slackers, signed onto this career planning gig as yet another "freebie" from the government, a way to extend their EI and defer the day they ever entered the workforce and started returning the tax payers investment.
I met up with one of my fellow classmates a few years later when I signed up for a refresher.
"Are you doing this course too?" I asked, happy to see her again.
"No," she laughed, "I work here now."
"That's great! Are you one of the trainers?"
"No, I work on reception."
Turns out she'd bailed on the course after the money ran out.
Ten thousand dollars of tax payers money, to train a receptionist.
My distrust of social programs is not limited to this experience. I have witnessed the ongoing abuse of government-enabled taxpayer generosity by people all around me.
A family member who signed up for a free course and then dropped it, pocketting to subsequent course fees and depositing the government issued remittance slips in the bin.
Welfare cheques dutifully collected with not a job search in sight. And a gradually acquired attitude of, "the world owes me a living - and so do you."
The fact that Governments sponsor these efforts doesn't make me feel any better either. From almost everything I see and hear, governments are spectacularly inept at addressing social causes.
The real culprits for the terminal apathy on my IT course were not just the sad-sack layabouts who signed up, sat longside me and pretended to listen. No, it was the Career Planners who gave them the undeserved opportunity in the first place, and the government who designed the scheme to fail.
I'm convinced it's this inherent distrust of government efficiency which I harbour, that lies near the heart of the Conservative upswell today. "If the government is going to screw up," I reason, "then at least let them screw up with fewer of my dollars."
It's a sad commentary that I feel this way. After all, I have always looked to my government to equalize our standard of living. And the government sponsored IT course that was offered to me gave me just the leg-up I needed.
At the same time, this program was badly run, and there was no accountability. The course was axed shortly after I graduated, perhaps in part because of all the dropouts, but I'm sure the perpetrators of the scheme were left to plot their next tax expenditure adventure.
I don't trust what I can't see, and actions without consequences just can't be trusted. So until we have a system of government in place that offers more transparency in the way my tax dollars are invested, I'm afraid I'm just not willing to sign up for any more of these black hole investments.
When our government works the way it does today, there's only one thing I want to do with the trickle effect, and that's reign it in. Turn the faucet back a few notches. Turn the trickle into a drip.
By gullchasedship (registered) - website | Posted October 03, 2008 at 08:09:03
You hit the nail right on the head.
Why should some bureaucrat decide what to do with my money? I'll spend it on what I think is important myself.
If the government wants me to spend my money in a certain way, then set up incentives (fewer taxes, more rebates) instead of taking my money and handing it out.
By SE (anonymous) | Posted October 04, 2008 at 14:48:01
Sure, get rid of the welfare state. Let's go back to the days of Dickensian England and the privately-run Poor Houses. Right.
From the dawn of humanity, societies have made sure their members don't slip below an "irreducible minimum" of material comfort. "Welfare", in that sense, is a completely natural human impulse. To suggest doing away with it to supposedly save on some tax dollars (which would probably be sucked up by increased taxes for cops and prisons) is, in my opinion, cruel, crass, and ultimately inhuman.
Of course the bureaucracies of the centralized state are inefficient at producing welfare, as well as most other things. But, for people who are concerned about that, before they make a knee-jerk conversion to right-wing market fundamentalism, I encourage them to at least consider a left-libertarian analysis: the problem with welfare in state-capitalist society is the anonymity that comes with centralization and the breakdown of community. The alienated and frankly undignified nature of wage labour is bound to produce an aversion to work (which is felt by even the most conscientious workers). Finally, the mentality that produces abuse of the welfare system is the same "me-first" ideology underpins conservatism.
Protest the WARfare state. End corporate welfare first. Then decentralize the welfare (and health and education) system.
By geoff's two cents (anonymous) | Posted October 04, 2008 at 18:55:12
Well put, SE, and you're right about wage labor. One wonders if it would be possible or entirely desirable to end corporate welfare though - I'm thinking here of the problems that arise when banks aren't insured. I think we'd both agree it's a lot more complicated than simply "not giving to people who don't deserve it." The sheer logistics of a system that could accurately predict when welfare money will be well spent belong in some sort of fifth dimension. There is no easy solution.
Unfortunately, gullchasedship, if the urban poor had to rely on their wealthier counterparts being smart enough to recognize tax incentives and the like, I'm not sure we'd have a very reliable or predictable welfare system. Perhaps if the people with money weren't constantly doing stupid things with it that are obviously not in their financial interests (such as an older acquaintance of mine buying a brand-new, gas-guzzling pick-up that he cannot afford), I'd be less alarmed at the prospect of leaving welfare entirely up to the private sector.
By SE (anonymous) | Posted October 04, 2008 at 19:38:13
geoff: good points. I realize society can't completely reconstitute itself overnight. History suggests that seemingly cataclysmic revolutions are preceded by popular movements that built slowly over many decades, interacting with the very culture and character structure of the communities involved, and demonstrating alternative possibilities by engaging in "prefigurative organization".
I can suggest (and I'm not the only one) a governing system that could handle things like "welfare" transparantly. It's face-to-face, decentralized, direct democracy. Self-management has precedents, if one dares to look in some of the nooks and crannies of history. Not perfect; but nothing that involves humans is, and that includes authoritarian systems.
About corporate welfare: I too can see some uses for it. E.g., I think some green tech should be subsidized. But I think there are also some subsidies that should go ASAP.
By Grassroots are the way forward (registered) | Posted October 05, 2008 at 14:41:42
Ben: It is somewhat unclear as to when you went through this training? Was it through the 1980's before the Harris cutbacks?
But since the Harris cutbacks, we have see the privatization of our social safety net. Do you actually think about where your tax dollars are going?
Much of your tax dollars are going to these "not for profits", that adminster programs, in line with workfare and elect to work policies but then there is no accountability to the tax payers.
While I can agree that there are some who do their utmost to live on the system their entire lives but about those who truly want to move ahead but are held back by the draconian system we have created, of which you seem to hold to high esteem, which is the privatization of our social safety net.
Hi Grassroots,
I took the course in 1997 (well, approximately then). It was partly because of Harris cutting back on healthcare expenditures that I couldn't land an RN gig (I had just about landed a critical care nursing gig when the ward was closed down...)
The career planning assesment was indeed outsourced, to various agencies. Mine was run by Goodwill and my career advisors were very careful not to put people forward for courses they felt they could not complete. Unfortunately other agencies were not so astute.
Ultimately the 'blame' for the course's problems has to lie with the government department tasked with running the program (i.e. the department spending my tax dollars). What is discouraging is that there never seems to be any transparency around programs like this.
I'm not ideallogically opposed to privatizing certain elements of our 'safety net'. I'm sure there are some very well run and ethical organizations out there, but the oversight and transparency needs to be there at the government level. For instance, what were the goals of this program? What was the reporting structure? When there is no effective accountability in an organization inefficiency is rife.
It's a shame that programs like this - properly run programs at least - are not more prevelant because they are sorely needed. I have worked over 10 years in the IT workforce since completing the training and more than paid back the investment.
Thanks for the comments.
Ben
By Grassroots are the way forward (registered) | Posted October 05, 2008 at 20:23:56
Hi Ben: Thanks for the clarification. While your experience with the goodwill has been positive, my own experience with them was draconian.
I am not alone in my view with this organziation that works hand in hand with the policies of workfare. You see, you were not on social assistance, so they treated you different.
As someone who has post secondary education, who was looking for work but could not find anything before my EI run out, I had to go to OW. They found me work alright, an entry level job that had nothing to do with my field of which I had worked for over 15 years, I was told I had to accept this job, which did not provide a living wage or benefits of which I would not be paid for one to two weeks and I was threatened to be cut off OW.
Please explain to me how this was helping me when the amount from OW did not even cover my rent, yet I was expected to take work that I was not even to be paid for, as the objective was to get work to cover my rent and bills.
No, the people deserve the right to have oversight over these organziations, that I deem as the "poverty industry". I would like to see this so called social worker in my shoes, yes, nothing but a tyrant who fail to even listen to my concerns or my experiences.
By A Smith (anonymous) | Posted October 06, 2008 at 22:35:40
Se, I totally agree with you, working is for losers.
Why do you think God put rich people on this earth, to pay our bills of course.
Ben, some people were not born with the motivation you have, so it isn't fair to expect them to "try" and to "study" in order to increase their skills. That is the job for those with motivation.
Actually, by paying even higher taxes, you might generate additional motivation to produce wealth that can fill the pockets of those who are better at relaxing.
In this case, the poor are helping you Ben, therefore you shouldn't be complaining, you should be thanking them.
By Undustrial (registered) - website | Posted October 06, 2008 at 23:24:55
The amount of money spent on welfare and similar social programs is fairly tiny, an almost unnoticable amount of your tax bill. Corporate welfare, on the other hand, in the form of massive white-elephant public infrastructure spending on big firms on friendly terms with the government is huge. Look at old George W, he's virtually tripled the American national debt, and nearly all of that spending has gone toward the banking and defense sectors. Similar programs are in effect in Canada - we virtually give away our natural resources (or, in some cases like lumber, actually lose money allocating "licences" to cut on crown land) to any company willing to extract them, in exchange for "creating jobs".
I live in the North End. Some days it's beautiful, some days it's freakin' terrifying. The issues of human inertia and welfare dependency are definitely real. On the other hand, it's hard to see people down here as exploiting anyone, except maybe the meth dealers.
Living in poverty in this country means a stiff deal wherever you go. Slumlords milk you for rent on buildings which should be condemned, you go to Money Mart instead of a bank and pay a 3% tax just to get your paycheque, to say nothing of the payday loans, and work is low paying, demeaning, dangerous and dead-end. Even on welfare, life's pretty rough. $500 a month isn't much to live on (most people I've known on OW lately pay it entirely in rent), and abuse from workers is endemic. It's easy to imagine how after having to jump through ridiculous hoops for that long something like job training would seem like one more stupid appointment. One of my best friends, for the record, went to chef school off a welfare job training grant, and has been working in the field ever since, though that was a few years ago now and they were phasing out that sort of help soon after. Welfare may sound like the easy life when you're not on it, but being treated like a refugee, a flood victim and a criminal gets quite tiring after a while.
By A Smith (anonymous) | Posted October 07, 2008 at 01:54:08
Undustrial, let's take a look at how the Feds spend their money...30.3 B for old age benefits, 28.7B to the provinces for health and welfare benefits, 17B to the provinces for "other" fiscal arrangements, 14B for EI benefits, 11.2B for children's benefits, 26.8B for "other" transfer payments.
The Feds also spend 63.3B on ministries , including 15.7B on defense. Debt charges come out to 33.9B. All these figures are for 2007.
If you can tell me where the government donates large amounts of cash to corporations, I would love to hear it. As far as I can tell, it's the poor and middle class who get the bulk of government spending, even though corporations pay about 30% of federal taxes.
As to your point about welfare being a poor way to live, I totally agree.
What people really need is a growing economy, which was produced in the 90's when governments cut back on non military spending. The numbers show that when governments give less to the poor and middle class in benefits, the median income for these same people grows at a strong and steady clip.
Unfortunately, when governments go soft and give in to the demands of the electorate, the economy slows down. What government gives with one hand, the economy takes away with the other.
Call it balance, call it unintended consequences, the results are the same, making life harder on people is what helps them in the long run. Try to be nice to people and you only end up producing the opposite effect.
Here are some numbers to chew on (first figure is non military spending as % of GDP, second is real GDP growth, from US Bureau of Economic Analysis)...1993 - 28.98, 2.67, 1994 - 28.38, 4.02, 1995 - 28.61, 2.5, 1996 - 28.34, 3.7 1997 - 27.64, 4.5, 1998 - 27.13, 4.18, 1999 - 26.89, 4.45, 2000 - 26.81, 3.66. These figures are from Bill Clinton's two terms in office and they show how restraining government spending leads to robust growth in the economy.
Contrast those numbers with Bush Jr's two terms... 2001 - 27.6, 0.75, 2002 - 28.19, 1.6, 2003 - 28.25, 2.51, 2004 - 27.75, 3.64, 2005 - 27.97, 3.07, 2006 - 27.95, 2.87, 2007 - 28.7, 2.19
2008(first two qtr's annualized) - 29.25, 2.06.
Notice the correlation between bigger government and a slower economy.
This same effect can be seen in Canada, as the Conservatives have slowed the economy to a crawl by pushing spending to ridiculous levels in their first two years.
Contrast this with Jean Chretien, who slashed spending, but also allowed the economy to grow at world class rates during his first two terms.
The bottom line is that all things come at a price, so if really want to help yourself, try reducing the amount of government money that comes your way.
By Grassroots are the way forward (registered) | Posted October 07, 2008 at 22:40:18
A Smith: Did not the provinical government not give 500 million to GM? I think they gave them more before, also there are statistics that there are a number of mutlinationals that do not pay taxes period, or very little.
Quote numbers but there are sneiors who are living on next to nothing, maybe around a $1000 a month, with OAS and the income supplement. But there are many seniors, as per ISWG, that did a forum on seniors in poverty, that there were a number of seniors in our own community that did not know about the supplement. The government does not phone people and say hey, you know what you are entitlted to this extra money.
What about the information we do not know about, do you really think that everything is up and up? What about the the money from Adscam, you know the 250 million, where did that go?
By A Smith (anonymous) | Posted October 08, 2008 at 15:01:34
Grassroots, do you believe that the numbers presented by the federal government are being falsified?
If so, are you still going to vote in the next election?
Assuming you don't believe the numbers are falsified, comparing $500 million to tens of billions does not strengthen the belief that corporations are screwing taxpayers over.
I am not arguing that corporations aren't trying to do this, I 'm just saying the numbers don't show that it is actually happening.
By Undustrial (registered) - website | Posted October 08, 2008 at 16:20:46
It's hard to get an accurate picture of welfare spending when it's lumped in with health that way. Canada's health care system is astoundingly expensive (though definitely more cost-effective than the American system). As for EI, since that's somewhat of a separate system tax-wise. Showing federal budgetary information only skews these things a fair bit, since most of the actual decisions are made at the local or provincial level.
Where do you go looking for corporate welfare? First, in infrastructure spending (usually municipal), especially roads (like the Red Hill Expressway). Next, in natural resource sectors, which lie entirely off the national budget since Canada doesn't seem to view natural resources on crown lands as a part of the public coffers. The defense budget would be another great place to look, given the costs of munitions (though the US is a much better example of this). Along the same vein in the US, the private prison system is another great example. Also, look towards the "tax incentives" given out frequently, like the money Grassroots alluded to with General Motors. Both Bush and Harper have slashed billions from corporate and upper-class tax bills, though as you show, not having a tremendously positive impact on the economy.
In terms of the effects of public spending on the GDP, there's a fair bit more at work there, on an international scale, than the welfare spending of Bush, Clinton, Cretien or Harper. I also have to take some issue with the use of the GDP as benchmark, but that's a much bigger issue.
One wonders what such die-hard conservatives are doing with all of that spending...certainly isn't going toward welfare.
By Grassroots are the way forward (registered) | Posted October 08, 2008 at 23:16:01
A Smith: Since my background is in numbers, one can work the numbers to arrive at an answer the fits the intended goal. As I learned many years ago, "Accounting is an Art".
In my own riding, I went to the all candidates debate. There are other voices/views out there. Maybe one needs to look at the matrix? Maybe people need to really start listening to the voices, instead of the sound bits, if you know what I mean.
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