Positive sorting or unequal distribution?

Ever since the election 9 days ago I have been considering the conservative majority win. I'm going to leave aside the fact that our democratic system allows for a minority (40%) of people to decide our nation's leader, instead I would like to focus on who this minority has chosen to be Canada's leader for the next 4 years. If it wasn't clear so far, I really did not want the conservatives to be in power.

To start, I think I need to recognize that 60% of voters were supporters of the left as we know the liberals lean somewhat to the left of the political spectrum and the NDP is an even more socialist party. So really I would like to challenge the 40% of voters who did cast a vote to the right on May 2nd. I can't really say anything about why the majority of these folks voted conservative, but I do know a significant portion of them voted on the idea that Harper was good for our economy. People believe he has been doing well handling the recession and his tax cutting tendencies are good for Canada's long term economical growth. Well allow me to explain why Harper's approach does not help the struggling class and in the long term it does not have Canadians in its best interest.

I think any Canadian would agree that what Canada needs during these tough economic periods is a plan that grows the strength and resilience of our economy. Our economy is not just banks and corporations, it is based on people and natural wealth. How we produce and distribute our natural wealth is key to the future strength of Canada's economy. Having said all this let me bring up a very strong period of economic growth. Between 1997 and 2007, Canada saw very healthy economic growth, up until the most recent recession. During this period the top 1% of the population got 1/3 of the gains of this prosperous period. This is not unexpected as we can find that historically prosperous periods often benefit mostly the wealthy, this is somewhat natural and it is usually balanced by a recession that reduces this gap to some extent. However, the last time we've seen this level of growth was in the 60's, back then the top 1% only got 8% of the share, so we're looking at a much more concentrated distribution of resources. Statistics say that in this decade the richest 1% doubled their share of the total income in Canada and the richest 0.1% tripled their share of the national income. Now the bottom third of the population only got 8% of the economic growth of the decade in question. This is very much an uneven distribution of gains, and they present a much deeper problem then the fact that the rich are getting richer a lot faster than the rest of us.

In order to really show how this unequal distribution affects everyone negatively, we might as well look at the middle class, since we Canadians like to claim it as our strongest class. The median income is the income where half the population makes more than that and half makes less than that. In 1976 this median was around 46k (adjusting for inflation) and in 2008 it was 48k. So during this entire 30 odd years, the average household has become more educated and in a lot of cases now, both parents need to work. So in this entire period of economic growth, we have not seen much in terms of progress in the middle class. To accompany this trend we have also seen jobless benefits and social insurance get watered down.

Since the beginning of this most recent recession, unlike what is seen historically, measures to get the economy back to it's feet have not affect the top earners. The fact that social assistance for the unemployed has been stripped down, people lose their jobs and grab what they can to stay afloat, including much lower paying jobs and self employment. This causes the % unemployment numbers to deflate despite the reality of the situation, which is people are earning much less than before. Not only this but there has been a lot of downward pressure on wages, pensions and benefits as if the middle class is what caused the recession. This isn't as apparent in Canada, but in the US there have been plenty of high profile debates on these issues, such as the teachers unions in Wisconsin. I don't understand how these kinds of measures are seen by the population as acceptable. I don't understand why more people are not completely outraged by what right leaning politicians see as valid measures to help the economy.

Maybe I'm too harsh on conservatives and republicans, but what do people on the right say about what drives this increase in social gaps? A lot of them like to point out marriage inequality, basically the rich marry the rich, and poor marry the poor and this is a social phenomenon that creates more inequality. This is often called positive sorting, and it is just a nice way to justify a problem they don't like to address. It's a way to avoid the real cause which is that during prosperous periods the rich gets richer and during recessions the poor gets fired. Statistics also show that the average household with children now works 200 hours more a year then they did a decade ago. The biggest increase in working time is at the bottom earners. This makes sense because if your new job doesn't pay enough to keep things afloat, then the parents have to work more. So despite the increased amount of hours worked at the bottom, the increase in wages happened at the top where there were no increase in hours worked during the same period.

What many people see as the strength of the conservative party is their measures to ensure economic success in Canada. What are some of these measures then? Well a very common right winged approach is to lower taxes. This is a great way to be popular among the general canadian, who is dumb enough to think that these lower taxes will help them. Apparently a couple of hundred dollars in their pocket will help them solve their financial troubles. I wonder if someone unemployed sees it that way too. To complicate the matter even further, there are these corporate tax cuts that have been occurring since 2007. Now where is the rationale for those?

The idea behind corporate tax cuts are to give to those who have more and they will give to those who need it. Tories say that cutting corporate taxes increases profit meaning more jobs may be created and not only that but foreign investors become interested in our country as a potential investment opportunity. It sounds good, but the reality is not quite as colorful. It turns out the CEOs of large companies are not as giving as conservatives might expect. The average income in 2009 of the top CEOs was 6.7mil, which makes them worth 155 times the average worker, while before the recession the top CEOs were worth 104 times the average worker. I may be reading too much into these numbers, but something about cutting taxes to the rich doesn't seem to be helping the general population. This trend of social gap increase during good times and decrease during recessions is not the case anymore. The top earners are getting benfits during tough times while the average family is keeping their salary in the best cases. Not only that but government deficit is growing at an alarming rate.

So people need to wake up, Harper's measures are not there to help the middle and the lower class. People voting for Harper need to be aware of this because tax cuts don't help the working class and if that's how they buy your vote, I have to tell you, you've been fooled. I worry for future generations, families are already working close to their full capacity. It is almost a necessity nowadays to have 2 working parents, and this obviously has implications on families, if this situation gets worst, how will it be possible for future generations to survive? How will this working class be able to buy a home, or save money for their children's education or even for their own retirement? This is serious, if we keep going in the direction our right wing politicians want we will see Canada become more and more segregated into rich and poor.

on 2011 elections

We are getting close to Election Day in Canada, and candidates and parties are working very hard to earn our votes. This is unfortunately the first time I am actually getting informed and I would like to share my opinion.

All parties ultimately have the best interest of the country in mind (ideally) but the bottom line is that you can’t make everyone happy. Furthermore, we don’t live in a world with perfect political structures or ideal economic policies. I may come across somewhat socialist to some, but I wouldn’t want anyone to judge my opinion on those premises since that would be a logical fallacy and would go completely against my goal here, I just want to paint the picture I see and let the reader be the judge. I would love to get some feedback as well, maybe learn something as well.

As I said above, there is no perfect form of government, to quote Churchill “Democracy is the worst form of government, except for all those others that have been tried”. I agree with that statement that democracy is the best we’ve come up with so far. In Canada, unlike many other developed nations such as the USA, we use a parliamentary form of democracy which has many great aspects as well as some drawbacks. From observing discussions and how politics are made in Canada, I believe the parliamentary system allows more areas and communities to express their voice, as well as it allows parties that are not in power to still have the opportunity to participate in decisions made in the House of Commons. On the other hand, this also causes politics to move very slowly and sometimes irrelevant rhetoric occurs just for the sake of gaining popular support over some particular issue. I will point out Jack Layton here, since watching him over the past 4 years or so, I began to realize I have no idea what he wants or what he believes. His opinion is ALWAYS just the opposite of the majority, it gets very annoying and it perfectly illustrates the problems with parliamentarism. I do have to point out this type of party leader is not very different from what you see in other countries, the only problem is that Layton has a much more active political role than John McCain for example. On the other hand, Stephen Harper has a very distinct way about conducting himself since he’s been in power. He is often not very interested in the opinion of the opposition; he often makes decisions on his own and keeps much of the important information away from the public. I can use a few examples of how Harper is more of a guy that doesn’t care much for our parliamentary system. In some ways that’s not a bad way to rule a diverse country like Canada, but it does require decisions to be made which reflect the will of the people. I have to say most decisions I can use as examples here don’t reflect what I think is best for our nation. Some people may like his style, and I can’t argue much with that, but his disobedience to the Supreme Court in the Omar Khadr case is a perfect example of how he is not great at playing in a team. I grew up hearing that the best leaders are the leader that can hear what others have to say, Harper is just not that kind of leader. The other example I would like to bring up is the purchase of our CF-35s in recent months, this was a decision that had very little input from the opposition, and the information given to the public before the purchase was false, stating just about 50% of the actual costs of such decision. Personally I do think there are good reasons to invest in our military, but I also feel that given our current political state and relations with other nations, we may not necessarily need such an expensive upgrade to our air force at this time. However, given the current state of our economy, national debt and ultimately the world economy, I definitely believe there is a large need for investments in related areas.

The Conservatives are not as right winged as the Republicans in the United States, however in a comparative scale; they are the party most similar to them. In terms of views of how an economy should work, they share some of the same core values, these include:

- Lowering spending in social programs
- Lower taxes
- Increase military budget

Unlike the US, fortunately for us, they are not as enthusiastic about increasing national debt to allow for economic growth, which in my opinion uses similar principals to a Ponzi scheme.

I think there is enough debate on why republicans and conservatives hold such views. I think people should be allowed their opinions of course, but I can’t refute the fact that some opinions are just wrong. I could go on all day giving examples of how these economical strategies causes an increase in the gap between social classes, and I could even more easily talk about examples of how the vast majority of underdeveloped nations adopt these forms of strategies, but the relevance of those examples would be too easily contested. On the other hand we have a perfectly good example of a world super power of the 20th century slowly becoming more like a developing nation with a huge economy. I’m talking about the USA, with its significant increases in uneven distribution of wealth, increases in poverty as well as a massive decrease in the level of education of its population. America has been moving towards this kind of nation since the 80’s. There are many opinions on why this is the case, and I’m not going to get into much detail on this, but perhaps Cold war propaganda, corporate greed and the fantasy of the American dream are some of the factors. It is shocking to me how socialism is almost a swear word in the USA, “No, we don’t want equal opportunities, look at Russia and Cuba”. Unfortunately, they fail to see that socialism is not communism, and socialist tendencies have been very effective in countries that are actually growing sustainably. By socialist tendencies, I would use examples such as increased taxation which can then be used in the development of infrastructure as well as social programs, and even the management of essential services being a national affair (ie. Universal healthcare, policing and education). Now what are some examples of nations that are managed in a more socialist way? I would like to point out Scandinavian countries such as Sweden, Denmark and Norway which have consistently been on the top of charts of best nations to live in. These nations are well managed, all of them have some form of universal healthcare, and the gap between social classes is nowhere near what you find in developing nations and the US. These are countries with smaller but stronger and stable economies, and a lot of attention to research and infrastructure.

Now let me talk a little bit about tax cuts. In theory, Harper’s plans of cutting taxes has good intentions, which is to help people out in difficult times by giving people a little bit of extra spending money, which in turn should go back into the economy helping it get back on it’s foot. Sounds good doesn’t it? However, the part that is not entirely illustrated in this picture is the fact that taxes are paid by people who are employed and people who are making money; therefore you really aren’t addressing the problems of unemployment and sustainable growth. Implementing things like infrastructure spending, incentives for low income students to be able to afford higher education as well as more interest free student loans on the other hand are more long term plans that would actually help economic growth as well as unemployment. Also, it is not very politically advantageous to do too much long term projects because if the other party gets to power before you can reap the benefits of these projects, then other party can take all the credit. That’s very unfortunate, and much like what is seen in microeconomies, sustainable growth is a result of a long term strategy, band-aid solutions are just good for getting elected. This brings me to one of the first points in Michael Ignatieff’s campaign; which was to increase funding for higher education in Canada. This is a long term project, unlike Harper’s tax cuts.

++ Now let me talk a little bit more about the Liberals. I have to say I am not the biggest fan of Michael Ignatieff, and I just don’t think he is necessarily the right leader for the party. My opinion of him has improved somewhat since he started his tour last month, but I’m still not convinced. The thing is, I can’t say I like Stephen Harper and I specially don’t like Jack Layton for reasons I’ve already pointed out. Elizabeth May is likeable but she has no chance and I wouldn’t want to waste my vote on her. I also think her party is not necessarily minority material anyway. So based on that I have to look past the leaders and into what party I believe can do the best for Canada. Historically, the Liberal Party has been the most influential party in Canada with notable leaders such as Lester Pearson and Pierre Trudeau. Paul Martins mandate was tainted by a scandal, but I would imagine that a lesson had to be learned from that, unfortunately that scandal is definitely part of the reason Conservatives became popular. Cretien was another decent leader, perhaps not the most revolutionary politician, but one that was honest and kept the country in the top of the list of best countries to live in during his time in power. Since the Conservatives took over with their minority government Canada has slowly dropped in the ranking, and I feel Canada has moved somewhat to the right during this period. Therefore, these are some of the reasons I feel that it is important for me to vote this May 2nd, and it’s important for me to vote for the option I feel could make the best option available. I hear a lot of people say “I won’t vote because I don’t like any of the parties/candidates”, and I’ve said that a lot in the past. However, that is not a great way to exercise my opinion; a better way is to weight out the available options and vote for the best one, even if it isn’t perfect.