Austerity. What Is It Good For?

January 29, 2012

Austerity is in the air.

Can you smell it? It’s acrid, like burning hair, with a hint of pungency as if wafting upwards from Satan’s unwashed bum. Unpleasant. Vile. But an absolute necessity in these days of economic uncertainty.

Or so we are being told at the turn of every newspaper page, radio channel, and at every level of government. Prepare for the Big Cut. We’ve been living too high off the hog for too long, living way beyond our means. Poke another hole further along your belt and tighten up.

All a great heaping pile of steaming bullshit, of course, from the root causes right up to the tip of the stiffy we’re being screwed with.

[Don’t believe us? Put Alex Himelfarb, Trish Hennessy and Sol Chrom on your immediate reading list. – ed.]

What I don’t understand about this coming age of austerity is how it’ll help anyone other than those who’ve already benefitted most from the supposed bacchanalian descent into debt that we’ve all been participants in. How will everyone spending less turn things around and grow our economy? I get the whole government cuts reduce deficits pitch but that’s only a part of the whole equation. Those cuts result, usually, in lost jobs and, ultimately, further lost revenue to governments in the form of taxation. Lower revenue means more cuts. A vicious, downward cycle; the snake eating its own tail.

Austerity2Prosperity is another mythical kingdom bordering on the Republic of Debtfreetopia that baffled Urban Sophisticat here earlier this week. Sounding good on paper or up on a blackboard but how exactly does it work in real life? It would be nice if someone could point to an actual occurrence of this theory working in practice. And if you’re about to write ‘Canada in the mid-90s’, don’t bother. You’ve already pounded back the koolaid and are blindly singing along to the set playlist.

We here in Toronto are looking down the barrel of some serious labour disruption next month entirely because we have a mayor who wants to dismantle city workers’ unions in order to contract out city services to private companies that pay their workers less, provide fewer benefits. The goal, we are told, is to save the taxpayers’ money although the case for that in many circumstances is actually quite iffy. For every example of, say, contracted out waste collection, there’s a counter example of municipalities contracting waste collection back in house. It’s a wash.

Instead of busting up unions on the theory that private sector workers can do any job more efficiently for less money, prove it first. Being wrong about that will wind up costing us all much more in the end. Mistakes always do.

Even if a case can be made that contracting out government services does save the said government money with the savings passed along to taxpayers, what is the bigger societal cost that comes with workers making less money? For the sake of pocketing 25, 50 cents per weekly curb side collection, how does a community benefit having workers make half of what they were paid before? I’m catastrophizing, you say? That won’t happen. Fearmonger.

Exhibit A. Caterpillar Inc. A company tax incentivized up the wazoo and how do they pay the economy back? Demand to cut themselves some $30 million in labour costs, thank you very much. Take it or leave it, and by leave it, we mean, the province for a more pro-low wage jurisdiction.

“That’s the game. That’s just the way the game is played,” claimed Metro Morning’s business commentator, Michael Hlinka. [Just a ‘yo’ away from claiming gangsta character status on The Wire. It’s all in the game, yo.— ed.] To Mr. Hlinka’s point of view, organized labour is a monopoly. And poor ol’, put upon free marketers like Caterpillar Inc. with only their 58% 4th quarter earnings increase and record revenues have no choice but to freely move their capital elsewhere if their workers insist on demanding their fair share of the wealth.

That’s the game. That’s just the way the game is played. Which leaves us with this kind of headline on a regular basis: More Canadians in low-paying jobs.

I am old enough to remember and to have voted in the 1988 federal election. It was the Free Trade election, and those standing in opposition who said that it would be the start of a rush to the bottom were labelled knee-jerk, parochial, backward-looking nationalists. [If you say so, old man. – ed.] Free trade was the way of the future. Glorious wealth will be sprinkled on more people. Don’t fight the future. It is inevitable.

Yet here we are, nearly 25 years later and more Canadians in low-paying jobs. Income inequality has grown to a degree that has not been seen here since the 1920s. And now we’re being told to prepare for austerity.

Tell me again, how that’s going to make everything better.

lavishly submitted by Acaphlegmic


Running On Empty

October 16, 2010

Sitting alone (again, naturally) on a Saturday morning in the office, my 2nd cup of tea still refusing to warm me up. I will not turn on the electric baseboard heating and give our landlord the satisfaction or the cash. I will not!

I am pondering the rightward tilt the race for mayor seems bound and determined to follow and for the life of me, I cannot figure out why. OK, so people are angry. I get it. The recession lingers on like the first autumn cold that will not quit regardless of what you throw at it. (My suggestion? Plenty of booze and cigarettes. Take it out for an all-night bender. Show it just how unwelcome a host you really can be.) We’re told that we’ve weathered the blow but that the turnaround is going to be painfully slow and drawn out. There’s still some bloodletting to be done in order to get us back to fighting weight.

We’re looking for somebody to blame for this mess and who better than government? There is an orderly process in place for us to make our displeasure known: voting. The alternative is dicier and slightly more involved as it would mean gathering together in groups and tearing some shit up. But, judging by the reaction to things in June during the G8 meeting here, such recourse is frowned upon in official circles.

For us in Ontario, the first crack we’re getting at expressing ourselves at the ballot box is at the municipal level, by-elections aside and who really counts those? The thing that’s baffling me about how it’s all playing out, at least in Toronto, is why are people reacting so, well, reactionarily? We’ve been down this road before, people. Remember?

That hapless and spendthrift Bob Rae government at Queen’s Park in the mid-90s? We ushered in the fiscally austere and oh-so competent Mike Harris Conservatives to clean up the mess. They didn’t. Or how about the corrupt and profligate Jean Chretien/Paul Martin team up there in Ottawa, blowing through all our hard earned dollars on pet projects like… what was it called again? Shawinigate? Time to bring in the restrained and prudent sensibilities of the conservative Harperites to restore order. Except, ooops, they didn’t.

Modern day conservatives never solve problems. They only exacerbate them, deepen them and create ones where none existed. It is a bankrupt ideological movement that successfully achieves two objectives, and two objectives only. One, to roll back any and all social and economic gains made over the last 80 years or so. Two, to dismantle the mechanisms of government in order to render it inoperable for society as a whole so they can turn around and parrot the empty words of their patron saint, Ronald Reagan. “Government is not a solution to our problem, government is the problem.”

After that? They’ve got nothing but a dog whistle to call forth the furies of outrage and resentment lurking just below the surface.

Rather than spend time and space today running down the shortcomings, lies and delusions of the anti brigade vying to retake City Hall for us here come October 25th, let’s take a glance south of the border to our American neighbours who are taking neoconservative/libertarian thinking to its illogical extreme.

Watching the last couple episodes of Real Time with Bill Maher, we encountered 3 cases in point. There was P.J. O’Rourke, the satirical lion of Reagan era libertarianism now simply looking old and tired, stating emphatically that ‘governments don’t create jobs’. When questioned by co-panelist Andrew Ross Sorkin, author of Too Big To Fail, an account of the economic meltdown of 2008, that if by choosing to build, say, a bridge, wasn’t government creating jobs? O’Rourke’s response? Don’t get him started on bridge safety. He was all for bridge safety. Aren’t we all, P.J.? Now, would you please answer Mr. Sorkin’s question.

Next up on the same show was one S.E. Cupp, a shiny-faced conservative pundit star on the internet. In the midst of a discussion about America’s need to start investing more fully in developing alternative sources of energy, she declared that alternative energy solutions were a rich country’s concerns. Again, somewhat flummoxed, Sorkin pointed out that China had surpassed America in pursuing alternative energy solutions which only seemed to prove Cupp’s point. For her, China is now a rich country because it owns a big chunk of U.S. debt and it was the U.S. that was broke. So no alternative energy for America. By reducing a complex economic system to one single factor, this conservative mind believed China was rich and the United States poor. O’Rourke then piped in with the view that we couldn’t do anything about climate change anyway because everyone in China ‘wanted a Buick’. Seriously, kids. He used to be funny.

Last night’s episode featured another conservative internet star, radio show host and proud member of the Tea Party party, Dana Loesch, “… the sweet Midwestern goth version of Laura Ingraham.” Railing against the bailouts and stimulus spending as un-American, she was unimpressed by the notion that the move probably helped staunch the bleeding and ward off another Great Depression. “Why does the government get to decide who succeeds and who doesn’t?” she responded. Uhhh… well, I guess since the private sector was collapsing in on itself, somebody had to step up and try to avoid long breadlines and overcrowded soup kitchens. When Dan Neil, a Wall Street Journal writer, corrected her earlier assertion that more money was spent on the bailout and stimulus then on the war in Iraq, she countered that ‘there are a lot of figures out there that dispute that’.

Ah, yes. Those mystical, magical ‘figures out there’ used to dispute whatever needs disputing in order to keep the belief system going. Or what rational people call, clutching at straws. Because that’s all modern conservatism is capable of anymore. Clutching at straws.

And yet, we keep turning back to it attempting to solve our problems. Our delusion seems to be mutual.

consternatedly submitted by Cityslikr


NYC Postmortem

April 28, 2010

So I step in after my colleague’s hard crash, like a child coming back down hard to earth after a mad sugar rush, he could be out for days by the look of it, to wrap up our New York City sojourn.

As any good trip away should, we return home with a heightened appreciation of where we live. At least, most of us do. Acaphlegmic went missing Monday night, staying aboard the uptown bound N train as the two of us hopped off at our stop. He had a plan, he said, that did not include us. With that, he was gone, destined for the upper regions of Manhattan or, quite possibly, Queens.

In terms of vibrancy and self-assurance, there really is no other place that compares to New York. It is the centre of the known universe and is well aware of that fact. To bask in its aura even for just a few days, is to acquire a taste, ever so fleetingly, of what it is like to wield true power.

That’s fun for awhile but the responsibility becomes a bit much for us mere mortals to bear. We make our way back home with the knowledge that we are not, ultimately, made of the sterner stuff needed to survive a serious go in such an unforgiving environment. Failure is not an option, as the movies tell us, so we retreat to our slightly more humble surroundings.

Where we have a little more space. A little more tranquility. Where the food is just as good and less pricey and precious. Where we have long since abandoned the idea of building subways.

Did you know that New York City is still building subways? How is that possible? I thought our American neighbours took it in the economic cojones much harder than we did. Especially at ground zero of the meltdown, home to your Lehman Brothers and Goldman Sachs. So how are they going about such extensive public transit infrastructure spending while we fiddle and fart over extending LRTs?

Then I came across this little tidbit in the Wall Street Journal yesterday at the airport:

Top New York real-estate executives and the City Council speaker will make an 11th-hour push Wednesday to persuade the White House to back federal funding for a second subway station as part of the extension of the No. 7 line in Manhattan.

Officials from the Real Estate Board of New York, a trade association, and City Council Speaker Christine Quinn will meet in Washington with Vice President Joe Biden’s staff in hopes of securing hundreds of millions of dollars to build a station at 10th Avenue and 41st Street.

What’s that then?! A New York City councillor and some members of the real estate association have an audience with the US Vice-President, the second most powerful man in the world, trying to secure federal funding for one subway station!? I mean, wasn’t he just over in Israel trying to kick start peace in the Middle East? Remember when Toronto was trying to secure some federal infrastructure money last summer and were told by the Honourable John Baird, Minister of Transport, Infrastructure and Communities to go fuck ourselves because we hadn’t crossed our Ts and dotted our Is to their satisfaction?

Maybe cities get the respect they deserve. As long as we continue to grovel at the feet of senior levels of government, begging them to pony up cash they took from us in the first place, we’ll continue to be second class citizens. By taking seriously would-be mayoral candidates who call financial negotiations with the province ‘going cap in hand’, Toronto is simply acknowledging the fact that we’re an after-thought, a voter rich zone with little actual power and zero influence.

I’m not proposing we be like New York. That’s impossible and undesirable. What I would like, however, is to occasionally strut like New York, swing some serious pipe like New York. To simply stop acting like we’re not worthy to be treated like a world class city by the very politicians we elect to serve us. I’m not alone in appreciating where I live. It’s time to demand our elected officials do the same.

stridently submitted by Urban Sophisticat