Corporate Crocodile Tears: A Guest Post

In response to my post yesterday about CBC bias in its reporting on Ontario's minimum wage increase, the Mound wrote a detailed commentary that I am featuring today as a guest post. Following his piece I reproduce a letter from a Star reader pillorying corporate hypocrisy.

"Government should function on the expectation that corporations will act in their own economic self-interest." That point is inarguable. The corporate self-interest, however, has to be subordinated somewhat to the public interest. The political caste is elected to represent the public who voted them into power and those voters who preferred someone else. They are not elected to put corporate interests ahead of the public interest but to balance the conflicting needs of labour and capital recognizing, as Lincoln said, that "labour is by far the superior."

That principle, stated by Lincoln, is especially relevant today in this era of early-onset automation that is going to become a more dominant factor in our industrial economy. Galbraith addresses this in "The Predator State."

Ours is a consumer economy and there's really nothing else we can substitute for that. The corporate sector collapses without access to markets sufficiently large to purchase and consume their wares. Henry Ford knew that it was essential that his workers earned enough to be able to afford to buy his cars.

Commerce today engages in nihilistic pursuit of unsustainable profits at the expense of even its own mid- and long-term interests. Executive compensation is based on what the company takes in today, not how it may be positioned to fare in the next decade or the one after that.

A month before the Republican tax cuts were passed, corporations were gearing up for the anticipated windfall. They weren't hiring new employees or adding additional machinery, they were organizing share buy backs. They were using the newfound money to buy back outstanding shares sending share prices soaring, hence increasing executive compensation. And the US government is funding this nihilism with an additional 1.5 trillion in borrowings. Call it "the art of the deal."

In the era of globalism our neoliberal political caste thought they could finally wash their hands of responsibility for the balancing of public and private interests, delegating this fundamental responsibility to "the invisible hand of the marketplace." Only that hand no longer works as they fantasize.

We think fondly of the era of Pearson and Pierre Trudeau, the vision they brought to our country. That began to wane under Mulroney and Chretien but it was crushed under Harper and, sadly, now Trudeau the lesser. Now when we desperately need leaders of vision again, leaders who can navigate us through these enormous challenges of the day, that quality is no longer on offer.

And from Robert Bahlieda of Newmarket:

Starting salary for top CEOs? $2,489 an hour, Wells, Jan. 2

Kudos to Jennifer Wells for exposing the other side of the coin. The sadness of the headline is that we have all accepted and internalized the bizarre logic of capitalism and can see no way out. We read the article and then move on.

The logic of a free market is to convince everyone that extreme wealth is good and necessary, so extreme relative poverty must be its alternative. But even here, there is deception. This is reflected in the salaries of CEOs and of the minimum wage for workers. The $14 minimum wage is held out as either a pariah or a godsend.

The business community warns of job losses while it pays its CEOs handsome salaries and perks. But if paying a living wage is that critical, businesses that are stretched so thin should close their doors. The whole point of business is not to create wealth for the business but also a good quality of life for workers. If businesses cannot pay good living wages, health care, pensions and other basic aspects of daily living, they should not be in business. It’s a false capitalist logic to say we can only operate on minimum wages while profits are booming and the senior suite is golden.

CEO salaries are the same. They have increased every year for the past 40 years while workers’ wages have remained stagnant. Everyone knows this lie. The Credit Suisse Global Wealth Report (2016) noted that the top 1 per cent owned more than half of the worlds’ assets and the bottom half owned virtually nothing.

The real irony is that taxpayers are paying for the minimum wage and CEO increases. The federal government is cutting small-business taxes by 0.5 per cent immediately and another 1 per cent cut is coming. They have also modified the corporate tax penalty on small business to make it non-existent. Provincial governments have chipped in cash to ease the transition as well.

But still the wailing and gnashing of teeth goes on in the business community. So stop the whining and change the system.

UPDATED: A CBC Bias?

I will be the first to admit that I get only modest amounts of my news from television. However, due to the severe cold we have been experiencing for too long here in Ontario, I have been doing very little walking, usually a mainstay of my daily routine. To compensate, I have been spending some time downstairs where I have a small treadmill and other exercise equipment. Because of exercise's intrinsically boring nature, I have taken to watching CBC News Network. Because I am not a regular viewer of such news sources, please bear in mind that the following is only my impression and may, in fact, be a distorted perception of what the network is offering.

My sense is that there is a real effort on the part of the network to placate the right-wing. Two stories, although perhaps too small a sampling to demonstrate a genuine pattern, suggest this. The first, an interview also placed on the CBC's website, examines the impact of minimum wage increases that took effect in Ontario on January 1.

Farmer Kevin Howe of Howe Family Farms in Aylmer, Ont., a small business that has been in operation for five generations, said he's already reducing the amount of crops he plans to plant this year, and fears he won't need as many workers because consumers won't be willing to pay the higher prices he'll have to charge to cover wage increases.

"Costs are always going up and we need to be able to pass these costs on to stay in business," he told CBC News in an interview Tuesday.

Some summers he hires up to 400 people to pick his strawberry crop, but this year there will be far fewer hours available as the farm has reduced its strawberry acreage by 30 per cent as a precaution. "It's definitely going to impact the amount of work available," he said. "It's going to make for shorter days [and is] definitely not going to be good for the community."

While Andrew Nichols certainly offered a sympathetic ear to young Kevin Howe, notably absent was any offer of a countervailing view by Nichols, for example, the fact that most economists seen the increase as ultimately yielding a net benefit to business because of the increased buying power customers will have. The host, instead, seemed content with feeding Howe leading questions that bolstered his position.

Not yet convinced that this is anything more than a particular host's handling of an issue? Then take a look at the following, in which Diane Buckner interviews Ian Lee, a professor at the Sprott School of Business. Start at about the 2:12mark, when they begin to duscuss the disgraceful behaviour of Coburg's Tim Hortons, bullying behaviour that now appears to be spreading.



You will note that while Buckner gamely sets up the story with a context that might provoke some anger at the franchisees' mean-spirited actions, and attempts to provide balance throughout the interview, Lee's sympathies clearly lie with the owners and their massive profits. For him, the costs entailed by labour seem to be one of those unfortunate and dirty realities to be lamented as loudly as possible. Indeed, he even goes so far as to claim, at the end of the piece, that the wage increase will result in 60,000 layoffs, an absolute misrepresentation of the Bank of Canada report. Clearly, the CBC knew what they were getting when they hired Ian Lee to occupy a pundit's perch.

My final evidence for CBC bias is an opinion piece by
Robyn Urback, a columnist for the National Post who was hired in 2016 to write and produce for the CBC's Opinion section. Entitled Of course businesses would act like businesses in wake of minimum wage hikes her view is also one of total sympathy for business owners.

Businesses exist to make money. Government should function on the expectation that corporations will act in their own economic self-interest. Instead, in the case of Ontario, officials feign shock and outrage when a business tries to maximize profits, and release silly statements like the one Premier Kathleen Wynne did Thursday afternoon, accusing one of the vacationing Tim Hortons heirs of being a "bully" for eliminating paid breaks and other benefits.

Sure, eliminating paid breaks is not very nice. But what, exactly, did the premier think was going to happen? Employers would just absorb the added costs? Dip into their own personal profits? OK, and maybe my prom dress still fits, too?

The article goes on in a similar vein for some time, but I imagine you get the flavour of it from that excerpt.

So is our national broadcaster providing fair and balanced coverage of a crucial social and economic issue? My guess would be it is not. For that, you may wish to go to this piece entitled Relax, Ontario’s minimum wage increase will not lead to massive job losses, found on the Vice website, or this thoughtful essay by Michael Coren entitled Why Tim Hortons doesn’t deserve your sympathy, on the TVO website.

UPDATED: The Hamilton Spectator's Deidre Pike also has an interesting reflection on minimum wage increases.

What Humanity Has Wrought

Only moronic literalists (a.k.a.Trump and those who are similarly incapacitated) will see this current deep freeze as a refutation of global warming. The rest will see it as part of an increasingly obvious pattern and, hopefully, weep.

A Dirty Job

But Bill Nye is up for it as he continues his often thankless crusade against abysmal ignorance. Hmm, I wonder if the evangelicals, who generally fall into the latter category, are tempted to practice voodoo on him when he demonstrates that science trumps stupidity.

An Object Lesson For Canada

Since the avowed aim of legalizing recreational cannabis is to keep the product out of the hands of kids by driving out the black market, our federal and provincial governments would do well not to get too high anticipating huge tax revenues from its sale. The trick, of course, is to find the sweet spot, one that the black market will have a hard time combating.

The country’s finance ministers have agreed on a marijuana excise tax of 10 per cent of the product price, or $1 per gram, whichever is higher.

Sales taxes, ranging from 5 per cent to 15 per cent across provinces, will also be applied. The federal government has agreed to hand over at least 75 per cent of excise tax revenue to provinces for the first two years after legalization.

Whether that is a reasonable level remains to be seen, but I doubt there can be too much disagreement about the massive mistake unfolding in California, where recreational cannabis became legal on January 1.



In today's Globe and Mail, Andre Picard breaks down California's taxation regime this way:

... the in-store price – about $50, similar to the street value – of an eighth-ounce (3.5 grams) of top-quality product will reach $65 after taxes. Canada is looking at a minimum price of $8 to $10 a gram, plus a $1 a gram excise tax and federal and provincial sales taxes.

Given that the black market has thrived for many years in California and elsewhere, it is likely the onerous tax regime imposed on California will have to be reduced; otherwise, it seems hard to believe the majority would choose to pay so much more for their pot simply because stores offer more convenient shopping opportunities.

Marijuana, I read, is not an addictive drug. Let's hope that in Canada, our governments do not become addicted to the tax profits legalization will provide.

A New Year Offers New Opportunities

One of the reasons that a new year excites people, I suppose, is that it offers a psychological opportunity to start anew. Our personal world beckons with a fresh slate awaiting our new and improved imprint.

The truth, however, is that despite our seeming addiction to redefining ourselves through resolutions, the majority of them are quickly discarded as the realization dawns that we have either been too ambitious or insufficiently motivated to bring our goals to fruition. New diets and exercise regimens are often among the first causalities.

The city of Montreal, however, begins today with a law that shows what is possible when we have both the personal and the political will and the courage to act for the common good. Although it will barely put at dent in the worldwide scourge of plastic pollution, it is a good start and should inspire all of us.



Happy New Year.

Voter Suppression And Gerrymandering

Robert Reich does his usual fine job of warning about threats to American society and democracy posed by the entrenched interests who care nothing for principle and everything about the acquisition and retention of power:

Voting rights are under attack. States across the country have adopted voter suppression laws and the Trump administration could try to implement similar measures at the national level. We must stay vigilant. The right to vote is the cornerstone of our democracy.