Taking It To The Street

Taking It To The Streets: The Upside Of Down For Democracy in 2012

by Susanna Kelley

Susanna Kelley

Reading the many, well-researched predictions of what's in store for our province and country over 2012, concerned Ontarians could be forgiven for wanting to go to bed, pull the covers over our collective heads and stay there until New Year's Day 2013.

Expert after expert says this next year is going to be tougher than the last, certainly for Europe and likely for North America as well.  And last year was an awful one for many people.

But looking at life as a glass half full, there are a number of silver linings coming up as well.

Grand opportunities, actually.

We have a lot of facts now we didn't have a year ago.

A just-released report by the Canadian Centre for Policy Alternatives (CCPA) says the top 100 Canadian CEO's compensation package in 2010 averaged $8.4 million - a 27 percent increase over the $6.6 million average a year before.

In contrast, the average Canadian yearly wage was $44,366 - an actual decline from 2009 when inflation is taken into account, and lower than during the worst of the 2008-09 recession, according to the CCPA.

In another study released last fall, figures showed median income for the middle class had increased only 5.5 per cent from 1976 to 2009 - 33 years.  Meanwhile the top 20 percent claimed 32 percent of Canada's income due to high salaries.

No wonder the voters were "cranky" in both the federal and Ontario elections last year.

The timing of the report's release isn't exactly auspicious for Premier Dalton McGuinty, who is asking public sector workers to settle for no increases and for PC leader Tim Hudak, who is calling for a public sector wage freeze.

It will also make it harder to push any austerity measures recommended by former TD bank chief economist Don Drummond, expected to release a report this month that Finance Minister Dwight Duncan will use to inform Ontario's next budget.

On top of this, the economic crisis of 2008 that seemed to pass when governments backstopped the financial sector has morphed into a debt crisis for many countries, including those in the Euro zone.   

As Michael Lewis explains in his new book "Boomerang," bailing out the financial sector has only delayed and made worse an inevitable sovereign debt crisis in the Euro zone.   

That's what's now upon us, and it's a very scary prospect.

The ties that bind Ontario to the debt crisis in the euro zone are real. They may be once removed: it is U.S. banks that have more direct linkages to euro zone banks than Canadian ones.  But as Craig Alexander, the chief economist of the TD Bank Financial Group has explained, Canadian banks are exposed to American banks.  And should Greece default (which he believes likely) and banks there fail (also quite possible), the danger is a swift domino effect that spreads across the world like lightning.   

On top of all this, it appears many in the U.S. financial sector that run the global economy still haven't learned the hard lessons we all must.

For example, look at this recent report by Jeff Cox at CNBC about compensation for CEO's in south of the border in the very sector that started it all in 2007-2008:

"Banks may have gotten hammered this year in the stock market, but the CEO's who run them are doing just fine.

While the nation's biggest financial institutions saw their market capitalization drop by an average of 11.1 percent, bank CEO compensation averaged $7.74 million, according to calculations by Rochdale Securities analyst Dick Bove.

That means banking heads earned 50 to 100 times more than the average worker and did much better than their shareholders, who saw bank stocks as a group plunge about 26 percent this year. "

In Canada, despite concerns business is sitting on its profits rather than investing to create jobs, the Harper government is bringing in corporate tax cuts.  The same are scheduled by Ontario.

To be fair, in both cases the governments are fulfilling promises made long before the economy went south.  Both governments say they believe corporate tax cuts create jobs.

So, with all that bad news, how can there be  "grand opportunities" for our democracies?

A wise politician once noted to me that the time has long passed when citizens in Ontario and the west will allow governments to tell them what kind of a society they will live in.  That ended when the "Greatest Generation" came back from World War II and re-built entire countries with many new programs, including the all-important public education for the middle class.

That public education has been crucial. 

Writing in the Globe and Mail this week, the esteemed Michael Higgins, former president of two universities, detailed how a liberal arts education safeguards societies from tyranny.  He juxtaposed North Korea's relatively uneducated former leader, the late Kim Jung-il, and Vaclav Havel, the Czech intellectual who peacefully brought about the so-called "Velvet Revolution.  Dr. Higgins wrote:

"...the capacity of a writer and political thinker like Mr. Havel to usher in a new and bloodless era by symbolizing the conscience of freedom-enamoured Czechs would be unthinkable were it not for his exposure to a tradition of learning that is not subservient to a prevailing political ideology, that is deeply humanist in its core, steeped in the writings extraterritorial thinkers not held hostage to the orthodoxy of the moment."

When faced, then, with incontrovertible proof that the middle class has been spinning its wheels or falling behind, the Occupy Wall Street movement emerged.  It is made up of many young, educated and unemployed youth, with no loyalty to "the orthodoxy of the moment" that Higgins talks about,  

OWS spread to Ontario and around the world, but not before thousands had protested against the G20 meeting in Toronto.

In the middle east, the "Arab Spring" was led by young educated youth who were also jobless.

Both movements are still struggling to ensure meaningful change, and don't appear to be going away despite being shot and killed by dictators' armies in Arab countries or wounded with rubber bullets in the U.S. and tear gassed here in Ontario.

And herein lies the grand opportunity.

This momentum provides governments the political cover they need to make sweeping changes, and companies with opportunities to change a system that's not working for the majority of the people, including their own shareholders.

The right and left may disagree on how to reform the system.

The left wants to increase taxes on the so-called "one per cent," and especially on the 0.01 per cent who are being compensated exorbitantly. It also wants tighter regulations for corporations on a number of fronts.

The right says the problem is one of corporate governance, and shareholders should be driving the reforms. At the same time it is pushing austerity measures in the public sphere.

Either way a more equitable distribution of income would be accomplished, making the system fairer, which will stabilize our society.

A grand opportunity that should bring a more equitable society.

Our well-educated citizens, in Ontario and all around the western world, won't stand for anything less.

You can find Susanna here: @susannakelley

Posted date : January 03, 2012
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