The 60% Solution


Civics class taught me elected governments should work for all the people. So, should we be surprised when Tory governments promote policies that appeal only to their base, which is only one-third of the electorate? Not really, given the electoral system allows 38-40 per cent of voters to prevail.

Many Canadians think political parties transform when they become governments. They think these parties will then compromise between opposing views. Such compromises have, in years past, resulted in programs that produced Ontarians and Canadians instead of winners and losers. But, this is not the case today.

Conservatives, in particular, play to their base and ignore the rest of us. Pick a topic that matters and you will see how they are on the wrong side of it. Think about same sex marriage; the right for women to make decisions about their pregnancy; public service cuts; decriminalization of marijuana; our peacekeeping role; evidence-based government policies; and the role of unions.

By expressing views contrary to public opinion Tories show they do not intend to govern for all. They rely on their base and use it to reshape Canada through message control and media spin. Polls show people still think Harper's crew make good economic managers, even after big cuts to public services, unprecedented corporate tax cuts, big deficits and 46,000 lost full-time jobs in the final part of 2013.

Good managers? No way, given their economic philosophy based on low wages and taxes. That"s why they hate unions. Unions fight for living wages. They promote a strong middle class. Unions also promote equality and prosperity.

Let's look at the facts. Tax cuts, especially for corporations and the rich, do not create full-time jobs. Instead, they create big corporate profits. Conservative inequality has brought us to where we are today: stormy waters. Tories are now latching onto potentially positive economic changes as indications of their intelligence…changes that they had no part in creating. One example is recent changes to the value of the Canadian dollar.

Ontario has long been a major exporter, and should remain so. For this to happen the Canadian dollar needs to be valued in a "sweet spot" compared to our major trading partner, the US. Most economists across the spectrum think this exists when the dollar is worth about 81-85 US cents.

Recently we have seen the dollar head in that direction. This change does not mean that we should accept statements that this will quickly lead to increased manufacturing and jobs. That will take time. The lag time results from corporations having put aside profits rather than reinvesting in the last five years. This has meant less money for investments in technology, research and training. These past years, when the Canadian dollar was high, was a great time for spending. A lot of computers, equipment could have been purchased and a lot of training could have happened. Instead, the private sector didn't do it and governments didn't demand it.

So, as we wait for our fortunes to change from the lower value of the dollar, Ontarians will pay more for import goods with no domestic substitute…or go without.

What can be expected from right-wing politicians as our dollar drops further? We'll hear that government debt is out of control because a low dollar means higher debt repayment costs for foreign debts. They will say this requires greater austerity even though more than two-thirds of our government debt is owed to pension funds and rich people in Canada, in Canadian dollars. Given this, their statements are just plain wrong!

In addition, expect cries from Canadian employers who use American inputs for their products. They will claim they can't afford to pass on increased input costs to their customers. Worker wages will have to be held in check instead until things improve.

Wrong again! There are many other places to get that adjustment cash. For one, corporations now hold huge reserves of "dead money." They've had their taxes decreased a lot in the past, leaving these added profits in their pockets. Also, when exchange rates make imports more expensive, manufacturers can source Canadian instead. The benefit is increased employment and economic activity that outweighs these short term adjustment costs.

Right-wing corporate falsehoods are designed to promote a low-wage economy. A low-wage economy is essential to their goal: the continued undermining of governments' role in society. A low-wage economy cannot lead to prosperity or equality. Only a strong economy and active government will do this.

How so? Government exists to ensure that no group in society is left behind, without the basic standards we all need. This depends on its ability to collect revenue fairly, from many places, including a progressive income tax system. When it comes to income taxes, lower wages mean lower tax revenues. This puts a lot of pressure on for cuts to services. This brings us austerity, further reducing government's role as an opportunity and economic "leveler" in society. The rich just keep their money and corporations are less likely to have their power challenged. The flow of life, the economy and corporate profits continue. That circle of inequality is destroying Ontario's prosperity and its middle class.

We need optimism, an ingredient in every economic recovery. The truth is that the dollar's depreciation will have a positive effect on Canadian manufacturers' profits. That should lessen the downward pressure on wages and jobs. It could even set the stage for new investment, bringing some of that "dead corporate money" into the economy. We must see past the corporate spin and self-serving statements from right wingers. Their cries of hardship are self-serving and deceptive

It's time for a wake-up call, a call for action and a lot of clear thinking. It is time for everyone to be heard and respected by politicians. Let's fight for equality before it is too late. Remember, we are the majority. Unions built the middle class. We are a powerful voice that won"t be silenced. Time for the 60% solution!

In solidarity,

Warren (Smokey) Thomas

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