Politicians banding about class issues for all the wrong reasons
DISCUSSION OF CLASS – the middle one, in particular – is a large part of the federal government’s attempts to wrest more tax dollars from Canadians. They’re focusing on loopholes that involve incorporation to lower the tax burden, an issue that particularly rankles the likes of professionals such as doctors.
PM Justin Trudeau, Finance Minister Bill Morneau and the rest of the caucus sent out to defend the changes all talk about tax fairness and the plight of the middle class, never mentioning their own profligacy and how the tax burden increases on the very middle class they claim to be defending.
Of course, the whole idea of a middle class remains muddled. Politicians and bureaucrats carefully avoid defining it, knowing many people see themselves as middle class despite their paycheques being lower than the median family income of $70,000. Many of us are more aspirational than actual middle class earners.
Instead, they prefer to maintain the fiction that as many people as possible will benefit in an “us” versus “them” scenario when invoking class.
There’s lip service to populism making the wealthy and corporations the target of the failing middle-class and growing underclass, the kind of thing that gave rise to Donald Trump in the U.S., where the class distinctions are more pronounced, coupled with more than a touch of racial issues.
What we’re seeing, however, is more faux populism.
What the U.S. – and indeed much of the West, including Canada – needs is more class warfare. Oh, not in the sense of the riots we’ve seen in Greece, Britain and France in recent years, but in the sense that we recognize the system is not as advertised. As with Trudeau’s Liberals, governments attempt to sell us on the idea that they’re protecting our interests when they’re simply selling themselves for the next election – appear to be doing something to garner votes, while actually benefiting those of the more elevated classes.
That reality is precisely what’s missing from political debate, here as assuredly as in the U.S. Today, the framework is based on austerity measures: how much to cut from social spending in order to balance the budget. But that’s really just a distraction from the bigger issue, namely the framework of our civil society. That has more to do with regulatory matters than it does with particular spending choices.
In short, it’s about who benefits from the political and economic systems we’ve created – and let’s be clear: they are manmade, not pre-ordained. For much of the postwar era, it was a large segment of the population. For more than 30 years, however, the number of beneficiaries has grown smaller, increasingly in favour of the wealthy and corporate classes. Everybody continues to pay, but fewer and fewer profit.
Conservative governments, funded by those who’ve seen the most benefits, have certainly led the charge against the types of advances that came out of the Depression/Second World War experience, including regulations governing minimum wages, working conditions, the environment, corporate ownership and financial services, to name a few. But they’ve been joined by their major opponents here (Liberals), in the U.S. (Democrats) and the UK (Labour) as money influences the debate.
Decision after decision that has been harmful to the middle class has been couched in just the opposite terms – supporters knowing full well you can’t sell policies by saying a handful will make out like bandits at everyone else’s expense. From financial deregulation to free trade, from outsourcing to corporate welfare, we’re told the changes will make us all better off. Or, if that doesn’t work, we’re told the sky will fall if we don’t go along with the prescribed course of action. For the latter, look no farther than the billions of dollars funnelled into corporate hands in the form of bailouts following the 2008 collapse, often paid to those responsible for the crisis in the first place. Large sums of that cash were paid out in bonuses, with banks and investment companies quickly returning to profitability while taxpayers were on the hook for the money, all the while suffering from unemployment and underemployment.
The central myth revolves around the free market, which typically boils down to privatizing profits and socializing losses, witnessed time and time again.
In Trump’s America, there’s another recourse to trickle-down economics.
Such voodoo economics – the label of former president George H.W. Bush – is what we’ve been living with for more than three decades. It’s founded on the belief that what’s good for the wealthiest classes is good for everyone. Bank profits are at an all-time high, financial services are raking in billions and corporations have rebounded nicely. Unemployment remains high in much of the West, personal debt levels soar and the standard of living falls. But it’s the latter group that gets to pay for the austerity measures we’re told we need in order to pay for the profits of the former.
“When Barack Obama was president, congressional Republicans were deficit hawks. They opposed almost everything Obama wanted to do by arguing it would increase the federal budget deficit,” notes former Clinton labour secretary Robert Reich in a blog post this week. “But now that Republicans are planning giant tax cuts for corporations and the wealthy, they’ve stopped worrying about deficits.”
He notes a Trump budget will have difficulty reconciling increased military spending, massive amounts of post-hurricane rebuilding and a pledge for
infrastructure improvements with tax cuts for top earners.
“So how do Republicans propose to pay for any of this, and a big tax cut for corporations and the wealthy – without exploding the federal deficit? Easy. Just pretend the tax cuts will cause the economy to grow so fast ... that they’ll pay for themselves, and the benefits will trickle down to everyone else.”
It’s a take on economics that differs in approach from, say, Canada’s, but not in terms of unsustainable spending and false promises to the fuzzy middle of the class system.