From a Star Reader: Welcome to Harper’s Harsh New World

A particularly insightful lead letter is found in today's Toronto Star. Because most letters seem to be available online for but a short time, I am reproducing writer Stephen Douglas' thoughts on the folly of our pseudo-economist Prime Minister's tax giveaways to the corporate sector, which continues its relentless mission of eradicating good-paying jobs from Canada:


On Jan. 1, 2012 the last of five annual corporate tax cuts took effect, reducing the federal rate by another 1.5 points to 15 per cent, now among the lowest rates in the industrialized world. This amounts to a total $2.85 billion in tax savings for the most profitable of Canadian business.

The notion that this will spur new jobs is a fallacy; tax breaks don’t benefit those businesses starting up who are not yet in a profitable position. Nor will it lead to increased capital expenditure by those business who do receive it; Stephen Harper himself was recently complaining about all the private business money “sitting on the sidelines” in Canada during these recent difficult times. His solution? Give them more.

At the same time, Harper’s government is proceeding with increases in employment insurance premiums. The Canadian Federation of Independent Business, representing those small- and medium-sized businesses least likely to benefit from the new lower corporate tax rate, are protesting loudly with a 15,000 signature petition that this will, in fact, deter the hiring of any new employees. It is completely without merit, they add, as they have been overpaying into EI for years. As evidence, Employment Insurance currently has a robust surplus of $57 billion (2009-10), which our own auditor general has described as excessive.

The net effect of Harper’s New Year 2012 package is yet another transfer of several billion dollars in annual income from Canadian workers and small business to the largest of corporations, which are already reaping the highest profits. To add salt to the wound, these big players that Harper is generously rewarding are also significantly held by foreign-ownership (some estimates are that foreign ownership holds more than 50 per cent of the petroleum and gas industry shares and more than 50 per cent of all manufacturing in Canada).

Without any justification, for there is no economic analysis pointing toward any type of capital exodus out of Canada (to the contrary, we are traditionally considered a safe haven in turbulent periods), this New Year’s Day package pinches hard-earned dollars out of the pockets of low- and middle-class workers and pads the war chest of corporations and the wallets of their shareholders, among whom disproportionately are the wealthy, the elite and the foreign financiers.

For the last 25 years in the U.S. and Canada — under both Conservative and Liberal administrations — economic policy has been dominated by the economic philosophy of neoliberalism, emphasizing the primacy of market competition while vilifying government intervention and regulation of markets. Neoliberals insist that price adjustments ensure full employment.

In contrast, to quote Thomas Palley, what we have witnessed has seen “a slip between the cup and the lip” as the wealthiest have concentrated their power; a fall in real wages, the undermining of unions and the erosion of workers’ rights, and growing problems of poverty alongside an increase in wealth amassed by a very small minority. What neoliberalism has failed to account for is the abuse of power that accompanies the control of media and the funding of politicians.

Money does not have a conscience, and those who act to increase their personal wealth at the expense of their neighbour will find their rationalization within neoliberalism.

Harper and his cadre of conservative ideologues share this collective denial. In these hard economic times where concern is growing about the disparity of wealth, when one in nine Canadian children live below the poverty line while fewer than 4 per cent of the households hold 67 per cent of our total financial wealth (estimated total holdings of $1.8 trillion), he is thrusting us back toward a harsh Dickensian world and hopes we will be grateful for the crumbs we receive.

Stephen Douglas, Toronto

Caterpillar, Inc. - A Reprehensible Corporate 'Citizen'

When I think of caterpillars (which, until recently, I have to admit, has been rarely), I think of a slow-moving yet determined creature on its way to metamorphosis, often into something quite beautiful. Unfortunately, that gentle imagery must be cast aside when considering Caterpillar Inc., an ugly corporate entity intent on wreaking havoc to those in its employ.

As previously noted, Electro-Motive Canada, a subsidiary of the company, has made untenable demands of its workers, resulting in a lockout at its London plant. In The Star today, David Olive writes on how the gutting of contracts is a practice well-documented in Caterpillar''s American operations, employing a tactic best described as a war of attrition against its employees:

The firm has a practiced skill at “taking a strike” for as long as required until workers straggle back to work across their own picket lines.

Indeed, the usual excuse of seeking increased productivity during difficult times doesn't even apply to its ruthless tactics:

Well ahead of the Great Recession, during a banner year for the world’s largest maker of construction and mining equipment, Cat insisted that its managers gird for a worst-case scenario of an 80 per cent plunge in sales over two years.

And on a single day in 2009, Caterpillar blithely laid off 11,000 employees, or 9 per cent of its global workforce. Like most U.S. employers, Cat has a hair-trigger for layoffs at the first sign of tough times.

Despite this well-documented practice, it was given permission by Industry Canada in 2010 to purchase Electro-Motive Canada in London, for generations the North American locomotive arm of General Motors Corp.

And yet silence over this outrageous corporate behaviour, which would assumes violates the terms of the foreign takeover, ensues from both the Harper government in general, and Industry Canada is particular.

Where is the outrage?

What were the terms, if any, that Industry Canada stipulated for Electro-Motive's purchase?

Where are the leaders of the opposition parties, who have thus far observed the same stony silence as the government?

Who will speak up in defense of good-paying Canadian jobs?

One shudders to consider the answers.

More Good News For the Corporate Sector

While corporations continue the arduous task of union-busting and contract-gutting, their efforts are being amply rewarded. Not only has a beneficent and ideologically-driven Harper government cossetted them with a record-low tax rate, but the captains of industry who lead these voracious job-destroying entities are also prospering quite nicely thanks to compliant and obsequious boards. To put their good fortune into perspective, according to a report published Tuesday by the Canadian Centre for Policy Alternatives, by lunchtime today, Jan. 3, the highest-paid chief executives officers in Canada will have earned as much as the average Canadian makes in an entire year.

As announced in The Star today, while the majority of Canadian workers are struggling with either stagnant, eroding or minimum wages, in 2010 those toiling as corporate CEO's, regardless of company performance, garnered an average 27% increase in remuneration over the previous year, while by comparison, the average Canadian earned $44,366 that year, or 1.1 per cent more than in 2009.

I ardently await the renewal of the Occupy Movement.

American 'Rocket Scientist' Pronounces on The Electric Car

[Sigh,] and some say this is the best the Republicans have to offer in the next election.

Our Prime Minister's Great Economic Plan Seems To Be Working .... For the Corporate Sector

In light of the ongoing dismantling of our industrial base by our corporate 'masters,' coupled with the latest reduction in the corporate tax rate engineered by the pseudo-economist Stephen Harper, this video is worth viewing:

Caterpillar Locks Out Employees at London Plant

After unilaterally imposing the terms of its last contract offer on its workers, terms of which entail the halving of wages and a substantial reduction in benefits, Electro-Motive Canada, a subsidiary of U.S. industrial giant Caterpillar Inc., has locked out its Lomdon-based workers.

The Harper government, which permitted the company's sale to an American corporate entity through Industry Canada, remains silent on the performance guarantees given by Caterpillar as a condition of the sale.

A great beginning to 2012, one that follows a pattern well-established in 2011.

One final note: Caterpillar's earnings for the third quarter ending Sept. 30 totaled US$1.14 billion, up 44% from a year earlier.

Michael Ignatieff on the Politics of Fairness

Many of the worst excesses of the age of greed occurred in markets that were anything but free, anything but transparent. Government must be there to clean up markets riven by fraud, corruption, insider trading and toxic products that made risk systemic. Competition demands that governments are prepared to use their anti-trust, anti-monopoly functions to dismantle institutions that have become “too big to fail.”

The above excerpt, taken from a piece recently written by Michael Ignatieff, sounds great, doesn't it?

Unfortunately, like his other suggestions found in the article, none will ever become reality for one simply reason: Today's political parties and their leaders are usually much more concerned about their own fortunes than they are about those of the larger society they govern or aspire to govern.

A safe prediction for 2012: Nothing will change.