The Corporate Welfare State vs the Social Welfare State

The corporate welfare state is not a new phenomenon, despite the notoriety it has achieved only recently. Unlike its counter­part, the social welfare state, its gestation period has been largely unobserved by interpreters of social events. And while social welfare legislation has been subjected to the most crit­ical scrutiny as to its costs, benefits and consequences, the attention of Canadians has been deflected from any examina­tion of the other face of the mixed economy, Canadian-style: the corporate welfare state. (1)

In the above cartoon from former NDP leader David Lewis's book, The Corporate Welfare Bums, we see a mouse hole for 'small tax breaks' and a trap set to take what little they have, while the vulture of the 'corporate welfare bums' stands behind the government official to steal any morsel they can. "For Pete's sake don't waste your time on the crum [sic] eaters"

The large pie that the corporate welfare bums are feasting on, DREE, stood for the Department of Regional Economic Expansion, a government agency that was supposed to promote business, but instead for the most part, just propped up businesses. And often those already doing very well.

What's interesting, is that those words were written in 1972, and for 40 years the corporate welfare state has been allowed to expand, with very little notice.

The nature of the corporate welfare state has been obscured by the traditional moralizing of big business about the virtues of free enterprise. While they publicly denounce increased government expenditure, particularly in the form of social welfare, these champions of free enterprise actively lobby the government for incentive grants, research grants and tax concessions, and all manner of assistance at the individual taxpayer's expense. And because they have drawn a sympathetic response from Liberal and Conservative governments, which subscribe to the myth of "business confidence," their appetite for welfare continues to increase.

The traditional use of the term "mixed economy" acknowledges the co-existence of private and public enterprise within one society. In Canada, the mixed economy has advanced beyond the co-existence of the public and private spheres: it has reached the stage where private business is increasingly being supported by the public purse.

As a result, Canadian businesses, whatever their public pronouncements on the matter, not only acquiesce to government involvement in the economy but have come to depend upon it. Their "welfare cheques," in the form of grants and tax concessions, have become an integral aspect of their operation. The corporate welfare state did not emerge overnight. We may be inclined to regard the establishment of the Department of Regional Economic Expansion (DREE) in 1969 as the birth-date of business government, simply because the handouts to business during the past four years have dwarfed all previous programs. (1)

Now almost 40 years later, people are starting to take notice. When Stephen Harper called Canada 'a Northern European welfare state in the worst sense of the term', he left out the word 'corporate'. Intentionally, no doubt, since he was then heading up the corporate funded National Citizens Coalition.

David Lewis's campaign against the corporate welfare state, reduced the Trudeau government to a minority in 1972, but more importantly, because the NDP then held the balance of power in the House, they were able to move the Liberals to the left.

In a bit of irony, the National Citizens Coalition, was incorporated in 1975 on the advice of Ernest Manning, father of Reform Party leader Preston Manning, in response to what he saw as a left-wing conspiracy. Prior to that, the NCC mostly just took out ads in newspapers against social programs, especially medicare.

The connections between the National Citizens Coalition and the Reform party go back a long way. Their political agendas are virtually identical: deficit reduction, restriction of immigration, ending universal social programs, lowering taxes for corporations and high-income earners, and ending national medicare.

..."At the same time, Ernest Manning and his son were launching Ernest's book, Political Realignment, calling for a social conservative party. According to Norm Ovenden of the Edmonton Journal, Ernest was one of the 'moving forces behind the creation of the NCC ..." (2)

The corporate welfare bums were fighting back, and they had the money to do it.

Another bit of irony, is that Lewis's campaign had the support of a grassroots movement, called the Committee for an Independent Canada, led by Canadian treasure, Pierre Berton.

But this wasn't the first time that Berton caught the attention of the Western based Reform movement. In 1963, the Anglican Congress sought out this prolific writer, to create a book on Christianity in Canada. 'It was inspired by Vatican II, a modernizing of the Catholic faith, they wanted to also change focus, and become a "listening" church, "hearing" things the world around them was saying.' (3)

The book was met with outrage by Ted Byfield, one of the founders of the Reform Party, planting the seed for the Canadian Religious Right. Byfield was also involved with the Civitas Society, a right-wing group that directs much of the Harper government's policies, especially in foreign affairs.

And if you're not too dizzy, there is one more irony. Jason Kenney is also a founding member of the Civitas Society, but more importantly an active opponent to Vatican II and the modernizing of the Catholic Church. Though not born when it was implemented, he attended St. Ignatius, a Catholic high school in San Francisco, which was started to oppose Vatican II.

So we have come full circle. But we are now armed with the truth.

The social welfare state was good for Canadians, and while the corporate welfare bums are suggesting that it was that, that caused so much deficit and debt, the fact is, it was them.

And now that the corporate welfare bums have a leader in Stephen Harper, we see that they have created a record deficit and debt, which is being blamed on 'the economy'. But the mess that the economy is in, was because of gambles taken by the corporate welfare bums.

And yet they suffered no setbacks, because they stood outside the mouse hole with a vacuum cleaner and sucked out anything they could reach. We are the only ones feeling the effects of their poor judgement.

Mad Yet?

I'm glad that this is now being brought to the forefront, as we face, hopefully, another election.

Michael Ignatieff dominated the first Question Period of the year, hammering the Prime Minister over his government’s response to the crisis in Egypt and accusing him of giving tax breaks to rich corporations while ignoring Canadian families.

“They don’t see their priorities reflected in the priorities of the government,” the Liberal Leader charged Monday afternoon. “When will the government start listening to those families where the elastic is [pulled] tight and start doing something for them instead of corporations that don’t need the help.”

And remember, a recent poll showed that 90% of Canadians are opposed to more corporate tax cuts. 90%. And yet the Harper government is still going through with them, further proof that they are simply not listening to us.

It's time to return the favour.

Sources:

1. Louder Voices: The Corporate Welfare Bums, By David Lewis, James Lewis & Samuel, 1972, ISBN: 0-88862-031-4, Pg. 1-2

2. Preston Manning and the Reform Party, By: Murray Dobbin Goodread Biographies/Formac Publishing, 1992, ISBN: 0-88780-161-7, Pg. 95

3. The Comfortable Pew Revisited, By Michael Creal, Catholic New Times, January 16, 2005

The Holy Grail Has Arrived. My Election Manual

After reading about former NDP leader David Lewis and The Committee for an Independent Canada, who had a huge impact on the 1972 election, by campaigning against Corporate Welfare Bums, I was on a mission.

I tracked down Mr. Lewis's book, that started it all. Louder Voices: The Corporate Welfare Bums, finding a copy on Ebay. It's four decades old but the problems then are the same as now. The loudest voices are the corporations, who refuse to even slide over an inch as they feed off the public trough. Once in a while if we're lucky, we can catch a few crumbs that fall out of their mouths, but don't let them see you, or you'll be tackled to the ground.

In Canada, as in the United States, this has reached catastrophic levels, and if we don't turn this around, taxpayers will never have any voice at all.

From the preface:

For many years, democratic socialists have recognized that despite Canada's enormous wealth and the native compassion of its people, gross inequities have continued to exist in our social and economic structure. We have laboured to make Canadians aware of these inequities. We have voiced them in Parliament; we have fought for legislation to correct them; we have knocked on doors to tell the people, and we have worked with other concerned organizations in the struggle to make our message understood, so that Canadians would take action to bring an end to these inequities.

Our message is not new. It is one of commitment to social and economic justice that others have shared for centuries. Perhaps the new element about our message is that we have found a way to help people understand. We have given them the information, the precise and irrefutable evidence they need to comprehend fully the extent of injustice in this great country.

It has been a difficult undertaking, but the rewards have been many. We know now that people are listening, becoming aware, judging. And this is the first step in the struggle to eliminate those injustices that no humane society will knowingly tolerate.

Months of research have gone into compiling the evidence on which we base our case against free-enterprise governments and their corporate allies. I cannot adequately express my gratitude to the many dedicated people who have contributed so much time and effort ...

DAVID LEWIS
Toronto September 24, 1972

I think Mr. Lewis would be quite surprised to learn that things in Canada are now worse than they were when he wrote those words. Our current government ascribes to the political-economic theory of Socialism for the Rich and Capitalism for the Poor, whereby corporations get to keep all the profit, while taxpayers assume all the losses.

His book arrived today and I think it was a sign because it's the same day that I read John Ibbitson's column in the Globe: Corporate tax cuts could bring down government. Michael Ignatieff has already said that we cannot afford them, taking his message to the business community, and the NDP is on the fence.

But what makes me boiling mad about all of this, is the fact that the taxpayers, the us's were left out of the equation.

Harper and Flaherty claim that they have it on good advice (from the corporate sector) that more tax cuts for the rich will be good for us. But when in the hell did this government ever take advice from anyone? They were advised not to cut the GST and did it anyway. They were advised not to scrap the mandatory long-form census, and did it anyway. The list goes on.

The ones that they should be listening to is us dammit.

... polls have shown huge public opposition to the tax cuts. A Leger Marketing poll commissioned by QMI News reported Sunday that only one Canadian in 10 favoured lower corporate taxes, while four in 10 wanted to see those taxes go up.

And yet Ibbitson goes right to the political. He says that Harper is gambling that his supporters, who don't want the wealthy to be given more of our money, will still vote for him,

WHAT IS WRONG WITH YOU PEOPLE?

90% of Canadians DO NOT WANT MORE CORPORATE TAX CUTS!!!! Those are the only voices anyone should be listening to, because that money belongs to us.

I don't give a flying fig who is going to get political leverage with this, although If Layton goes along with these tax cuts, it will be the end of the NDP, and both David Lewis and Tommy Douglas will be turning in their graves.

Because it means that their "commitment to social and economic justice" will all have been for nothing.

Stephen Harper: More Private Profits and Socialized Losses

Despite saying otherwise, it would appear that Stephen Harper is considering pouring millions of dollars of taxpayer money into helping to build a professional hockey arena, the operative word being PROFESSIONAL.

This is another example of 'Socialism for the Rich and Capitalism for the Poor', a political economic theory that allows for the "privatization of profits and socialization of losses."

Because although WE will be paying for the arena, THEY will be netting the rewards. Millionaires profiting on our tax dollars. No money for social housing, but apparently we have money to fund for profit sports teams.

The Harper government is leaning toward pouring millions of dollars into an NHL-calibre arena in Quebec City despite the political risks of using taxpayers' money to support millionaire hockey players. The Conservatives are signalling their willingness to pick up part of the tab for the politically popular project in Quebec from an unused $1.25 billion federal fund.

That could open the way for Ottawa's support for similar projects across the country.Saskatchewan wants help building a $430 million domed stadium in Regina for the CFL's Roughriders and Hamilton is trying to put together a $154 million renovation of fabled Ivor Wynne Stadium to keep the Tiger-Cats in town. Calgary may be looking for help before long to replace the 28-year-old home of the NHL's Flames.

And during the last public backlash over his scheme, Stephen Harper did indicate that what he did for one he would have to do for another. And yet he claims that Michael Ignatieff is being reckless with our money for wanting an election during 'hard times'.

We need an election, because we can no longer afford to keep Harper in the lifestyle he's become accustomed to.

The New Canada: Socialism for the Rich and Capitalism for the Poor

Robert Kennedy Jr., son of the late Senator Robert Kennedy and nephew of JFK, has suggested that America is now a land of “socialism for the rich and brutal capitalism for the poor”.

And he is not alone in that assessment, as it is now shared by many progressives and critical thinkers, giving it a proper place as part of a larger political-economic argument.

Income disparity is on every one's lips these days, though American pundits believe the affliction is unique to the United States. Paul Krugman, as I mentioned before, blamed it's origin on Ronald Reagan and claims it has only happened once before outside of the U.S., in Britain, under Margaret Thatcher.

I've written to Krugman to let him know that he might want to start paying attention to Canada, because we have now replicated the Reagan/Thatcher government for the wealthy. And we are also now in a situation where a small minority hold the bulk of the wealth, while the rest of our population has stagnated, or fallen so far behind their only hope is to win a lottery.

And while Jim Flaherty and the gang are on a taxpayer funded tour, to sell Canadians on the notion that we should give the wealthy even more money, it's time to take a step back, scratch our heads and think. If their statements don't make sense to you, it's because they don't make sense.

The concept of Socialism for the rich and capitalism for the poor, which we can shorten to So Rich/ So Poor, is based on capitalist societies, whose policies assure that more resources flow to the rich than to the poor. This is done with transfer payments, as we've seen with the tar sands and the enormous amounts of our money that the Harper government has funnelled to them. It is also done with relieving them of their duty to pay their fair share of taxes.

And it is a capitalist state that bestows favorable treatment to corporations by the government, who adopt a wink and a nod approach to protecting the environment, by eliminating "red tape".

But perhaps the most compelling attribute of the So Rich/So Poor political thought, is the "privatization of profits and socialization of losses." When the economic crisis first hit, who got all the money? Wall Street and Bay Street gambled and lost, but still walked out of the casino with their silk shirt on their back.

It reminds me of a joke I heard from an ex-gambler, who said that he cleaned up in Vegas. "I travelled to Vegas in a $20,000 car and came home in a $100,000 bus."

We were all crammed into that bus, while the wealthy refused to part with even one of their Mercedes. And we are being told that we will have to tighten our belts even more, while the rich are at the back door with their hands out, and getting them stuffed with our money (their pockets won't hold anymore)

And this notion of "corporate welfare" and financial corruption, is not new. In 1834 Andrew Jackson said:

"I too have been a close observer of the doings of the Bank of the United States. I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the Bank. ... You are a den of vipers and thieves."

"Vipers and thieves", and our government is providing not only the getaway car but the safe house. It's time to get this country back for the middle class, because when the middle class dominated, social programs were brought to the table. And that's because the middle class has a heart and a soul, two things carved out of the corporate sector and neoconservative politicians.

I am not anti-capitalism and I believe in a healthy business structure. But gluttony is not healthy. It's time the rest of us were thrown a few crumbs.

And that's not socialism. It's democracy.