[Occupation] Rethinking Grotesque Inequality

I went out on Saturday to support the Occupy Ottawa movement. Notwithstanding the slow decision-making process of the protesters (in order to ensure all ideas were heard and to make the most of fairness and democratic order), it was interesting and inspiring to be taking part in a movement which is essentially about social and economic justice. Despite all the ridiculous rhetoric from Canadian politicians regarding how great this country is because it 'weathered the economic storm' much moreso than other nations; and despite the fact that the situation (both the financial situation and the picture of inequality) is not quite as severe in this country as it is in some others - Canada has some serious problems that make the protesters' cause a worthy one north of the 49th.

Inequality has grown in Canada since the 1970s. The rich have gotten richer while the incomes of poor and middle class families have not seen any considerable growth. In fact, one study by the Conference Board of Canada found that those in the top income bracket saw an income increase of over 16% between 1980 and 2005, while those in the middle income bracket saw no growth and those in the lowest income bracket witnessed a decrease of 20.6%!

An economist at the CCPA found that one third of all income growth in Canada went to the richest 1%. The average family in Canada earned $63,800 in 2009 – after tax. The average individual earned $31,500 after tax. Meanwhile, the 100 richest CEOs in Canada earned $6.6 million on average in 2009! 

Finally, people are entertaining the idea that such absurd income inequalities just shouldn't be allowed!

Now, there are lots of great articles out there written about wall street. Below I've pasted two that I've found particularly insightful - one by Jeffrey Sachs and the other by Justin Podur focussing more on the Canadian context. Enjoy!

Message to Wall Street

by Jeffrey Sachs 10/17/11

The Wall Street elite seems completely befuddled by the Occupy Wall Street movement. The demonstrators are called "unsophisticated," or misguided, or much worse (mobs, communists, and more). Here's a short note to the titans of Wall Street to help them understand what's happening.

Let me start with the Wall Street Journal, which seems to be the most confused of all. In its Friday edition, the Journal editorial board couldn't understand why the protestors would want to protest JP Morgan and hedge fund manager John Paulson. The Journal also couldn't understand why the protesters were failing to champion something as wonderful as the Keystone Pipeline, which the Journal assures us would create many jobs.

The Journal can be forgiven for this basic confusion. It must be hard work to channel Rupert Murdoch's cynicism, greed, and ideology every day, so here are some answers so that the editorial board doesn't have to knock itself out with fresh research.

The protesters are annoyed with JP Morgan because it, like its fellow institutions on the street, helped to bring the world economy to its knees through unprincipled and illegal actions. The Journal editorial board apparently missed the news carried in the Journal's own business pages that JP Morgan recently paid $153.6 million in fines for violating securities laws in the lead-up to the 2008 financial collapse. JP Morgan, like other Wall Street institutions, connived with hedge funds to peddle toxic assets to unsuspecting investors, allowing the hedge funds to make a killing at the expense of their "mark," and the world economy.

The protestors are not enamored of Mr. Paulson either, since he played this role together with Goldman Sachs. Paulson made a fortune by teaming up with Goldman to bundle failed mortgages, which Goldman then peddled to its customers, in this case some unsuspecting German banks. Paulson shorted these assets and thereby profited as the bank's investments collapsed. For this little maneuver, Goldman paid $560 million to the SEC in fines. Of course this is a small amount compared to the profits that Goldman reaped for years playing in toxic assets. On Wall Street, misbehavior pays, at least up until now.

Mr. Paulson actually made some extraordinary statements in the New York Times on Friday (hard even to believe the nonsensical quotations are correct, but there they are, in the paper of record). He too expressed befuddlement about the protests against his business dealings. Didn't the protestors know that he had created 100 high-paying jobs in NYC? 100?

What the protestors do know is that Mr. Paulson's success in shorting toxic assets bundled for gullible investors has netted him billions. In 2007, he reportedly took home $3.7 billion by betting against the U.S. mortgage market. And the protestors can also do their arithmetic. Paulson's take home pay was enough to cover not just 100 jobs at $50,000 per year but rather approximately 70,000 jobs at $50,000 per year. Nice try, Mr. Paulson, but the people in Liberty Plaza don't think your hedge-fund play is really worth the compensation of 70,000 people. Nor do they understand why hedge fund managers pay a top tax rate of 15% on their hedge-fund earnings.

The Journal, Paulson, and others who accuse the protestors of being "unsophisticated," somehow have forgotten a basic point. It's not just Paulson, or Goldman, or JP Morgan that parlayed their unethical behavior into vast fortunes at the expense of hapless investors. Just name a big name on Wall Street in the past decade, scratch the surface, and uncover a financial scandal. Bank of America, Goldman, JP Morgan, AIG, Merrill Lynch, Countrywide Financial, Lehman Brothers are only the start of the list.

Maybe the Journal forgot to mention this because it itself is enmeshed in a series of scandals, ranging from hacking phones in the U.K. that has created a full-fledged crisis for its parent News Corporation, to last week's resignation of the European publisher. Murdoch is not just running an organization of corporate propaganda, but a criminal enterprise, at least in the U.K.

The protestors are not envious of wealth, but sick of corporate lies, cheating, and unethical behavior. They are sick of corporate lobbying that led to the reckless deregulation of financial markets; they are sick of Wall Street and the Wall Street Journal asking for trillions of dollars of near-zero-interest loans and bailout money for the banks, but then fighting against unemployment insurance and health coverage for those drowning in the wake of the financial crisis; they are sick of absurdly low tax rates for hedge-fund managers; they are sick of Rupert Murdoch and his henchman David Koch trying to peddle the Canada-to-Gulf Keystone oil pipeline as an honest and environmentally sound business deal, when in fact it would unleash one of the world's dirtiest and most destructive energy sources, Canada's oil sands, so that Koch can profit while the world suffers. And they are sick of learning how many Republican politicians - the most recent news is about Herman Cain - are doing the bidding of the Koch brothers.

Here, then, Wall Street and Big Oil, is what it comes down to. The protesters are no longer giving you a free ride, in which you can set the regulations, set your mega-pay, hide your money in tax havens, enjoy sweet tax rates at the hands of ever-willing politicians, and await your bailouts as needed. The days of lawlessness and greed are coming to an end. Just as the Gilded Age turned into the Progressive Era, just as the Roaring Twenties and its excesses turned into the New Deal, be sure that the era of mega-greed is going to turn into an era of renewed accountability, lawfulness, modest compensation, honest taxation, and government by the people rather than by the banks.

That, in short, is why Wall Street is filled with protesters and why you should wake up, respect the law rather than try to write it, and pay your taxes to a government that is ruled by people rather than by corporate power.

Jeffrey Sachs is Director, the Earth Institute, Columbia University; Author, 'The Price of Civilization'

[Hack Job] Conservatives Take Out The Knife

This is what happens when we allow the Conservatives to steal absolute power: Not only do they gut valuable public services, but through corporate tax cuts limit the government's revenue stream in the first place. It's the beginning of a downward spiral towards high unemployment, degraded public services, and minimal public revenues. A vote for the Conservatives is a vote for this triad of hell.

http://www.cbc.ca/news/politics/story/2011/08/05/pol-public-job-losses.html

[Sit In] Anti Tar Sands Demonstration

Last month thousands of social justice and environmental activists organized a sit-in in Washington DC in front of the White House to ask the Obama administration not to approve the Keystone XL pipeline. A group of activists in Canada is now organizing a similar event here in Ottawa, scheduled for Monday, September 26th.

Check out the details at OttawaAction.ca

[Trickery] Turning a Minority of Votes into a Majority of Seats

Ma-jor-i-ty [muh-jawr-i-tee, -jor-]
–noun, plural -ties.

1. the greater part or number; the number larger than half the total (opposed to minority): the majority of the population.

2. a number of voters or votes, jurors, or others in agreement, constituting more than half of the total number.

Like any magic trick, it's based on deceiving and tricking the faculties of the audience's mind. The notion that the recent federal election in Canada resulted in a "Majority" for the Conservative Party is a sign of the extreme perversity and absurdity of this country's electoral system - a system that operates just like a magic trick to deceive the electorate into believing that one party has a majority of support. The fact is that a majority of Canadians voted against Stephen Harper and his right wing, scandal-ridden party. Here are some numbers which elucidate the trickery behind this most recent first-past-the-post fiasco:

1. 5.83 million people voted for the Conservatives. That's only 17.3% of the Canadian population.
2. The Conservatives received 39.62% of the vote. A majority of 60.38% of the votes went to other parties.
3. Despite having a minority of the vote share, the first-past-the-post system grants the Conservatives 54.22% of the seats in parliament, which gives them the ability to make political and economic changes that will affect the entire population without concern for oppositional voices.
4. The Conservatives received 8.9% more of the popular vote than the NDP (which received 30.63% of the vote). And yet, thanks to our corrupt system, the Conservatives will receive 21.1% more seats in the house.
5. 576, 221 people voted for the Green Party (that's 3.91% of the vote). Nevertheless, somehow the party only received 1 seat in parliament. That's 0.32% of the seats! 
6. The Conservative Party's vote share increased by 1.96% since the last election of 2008. However, their seat share increased by 16.8%!

What kind of shenanigans is this? And why do we accept this perverse excuse for 'democracy'? As far as I'm concerned, the Harper Conservatives did not receive a majority, and we Canadians should make this fact clear whenever they pass through legislation that affects all of us. There is a serious need for a political system that better reflects people's political beliefs in this country, and yet the irony of the recent election is that a Harper 'majority' (of seats) will likely solidify this undemocratic system.

[Dialogue] Advertorials and Objectivity

The following is from an exchange I've been having with Alternatives, a leading environmental magazine in Canada that brands itself as part popular mag, part academic journal. I initiated my first letter after discovering an 'advertorial' for Suncor in the November 2010 issue of the magazine. The magazine has published two shortened versions of my letters. My words in green.

Dear Editors,
I was thoroughly shocked and disappointed to discover that Alternatives has allowed the publication of a full-page Suncor advertisement, which misleads readers by presenting itself as a regular magazine article. In doing so, you have allowed one of the country’s largest corporations to use the journal’s reputation as an objective, insightful source of environmental reporting to sell itself as a ‘steward of nature’. The decision to publish this ad has now largely ruined that reputation in my view (and likely that of many others). Alternatives should have a strict policy forbidding adverts that dishonestly portray themselves as regular, edited components of the magazine.

Editor replies

The Suncor advertorial that you refer to exceeds the Canadian Magazine Industry's advertising-editorial guidelines. It is labelled as an "Advertorial," uses a different font and the company's logo is prominently displayed. In accepting this material, we retained editorial control, had it peer-reviewed and required that the company meet a number of requirements with regard to its approach to sustainability.
At Alternatives, we encourage dialogue among all interested parties. We recognize that achieving sustainability requires that industry improves its practices, while not supporting greenwashing(check out "Footprint" on page 4). In the series of advertorials that will be published in Alternatives and given our editorial line up, you will discover that we challenge Suncor and the oil sands while recognizing good practices.

My second response:

I really appreciate that Alternatives published my letter about the Suncor advertorial in the January issue, and I equally appreciate the time taken by the editorial board to respond to my complaint. So thank-you!

To be completely honest, I found the response surprising. It implies that Alternatives was closely involved in the production of the Suncor advertorial, and that advertorials are openly welcomed by the publication. I think this is problematic.

Clearly advertorials are nothing new; they are age-old marketing tricks. My point is that they should be seen (by Alternatives’ editorial board) for what they are – deceptive marketing tools profiting from the magazine’s respected reputation. They are deceptive because they attempt to portray an advertisement in the form of a written article. Sure the font may be slightly changed and the logo displayed, but this does not negate the fact that the advertiser (and it doesn’t really matter which firm is advertising) is trying to benefit from portraying their ad as a written piece in the magazine.

The accuracy of the material presented in the advertorial is not the point. Rather, the point is this: Suncor used the advertorial to sell something (their image, their brand, their shares, and their synthetic oil all come to mind as potential candidates), and the response to my earlier letter suggests to me that Alternatives has actually stepped in to help them sell it!

I am certain I am not the only reader of magazines who is frustrated by advertorials and finds their purpose somewhat insidious. I recall a 2008 ‘advertorial’ in Harper’s Magazine by British Airways which used the magazine’s famous ‘Annotation’ feature. The magazine was flooded with angry letters from readers who felt the editorship should have prevented the use of its own style as a marketing scheme.

My belief is that Alternatives’ advertising policy should forbid any form of advertorial…but I guess that is where we disagree!

Thanks for listening...

Following the publication of my second letter, Alternatives sent out the following call for questions by email and on-line:

Have a burning question about the tar sands?
Now is your chance to ask an expert.
Submit your questions about the tar sands and we will send a selection of them to Gord Lambert, vice president of sustainable development for Suncor Energy Inc. His responses will appear in our June issue of the magazine: In the Key of G – Music and the Environment.
At Alternatives, our goal is to engage readers in thoughtful dialogue about issues that matter. This Q&A with a vice president of Suncor Energy Inc. is a continuation of a year-long series of advertorials in which Suncor Energy is explaining its position with regard to the tar sands and energy policy in Canada, and hoping to better understand yours.
Please submit no more than two questions per person and include your name and address. Send your questions to editor (at) alternativesjournal.ca no later than Monday, May 2.

My most recent response:

As you might expect, I was somewhat alarmed when I read that Alternatives is planning to provide Suncor Energy with yet another venue to market its product and brand directly to the magazine's readership. In my view, the idea of Alternatives having a corporate executive from the fossil fuel industry answer 'burning questions' about the environmental impacts of tar sands development is akin to a health magazine having a spokesperson from Philip Morris answer questions about lung cancer.

As David Suzuki has recently written, "the priority for people who run oil companies is to maximize profits. We know their words and actions are largely guided by a commitment to shareholders, and so we consider them in that context." It appears that Alternatives' editorial board is failing to adequately consider the context in question. Offering industry a mouth piece is not a way to achieve a 'balanced' discussion on the environmental impacts of bitumen development. It ignores the fact that Suncor's primary purpose is to sell oil and shares, not to enlighten Canadians about their 'noble' efforts in sustainability (any efforts in the latter should be exposed as an attempt to achieve the former); It further ignores the way that this 'debate' is highly unbalanced to begin with (given that the fossil fuel industry has millions of dollars at its disposal for public relations, marketing, lobbying, and research).

There are lots of informed academics and journalists out there who have the knowledge and skills to provide your readership with far more objective answers about the environmental impacts of bituminous sands development. I can't understand why a publication that "walks the line between a popular, but intelligent, consumer magazine and an academic journal" would instead seek answers about such a contested issue from someone who clearly has underlying motives (no offence to Mr. Labert, but that's just the nature of his positionality; a similar critique could be leveled against someone from an ENGO).

Somewhat dismayed, but still reading...

I'll be sure to post any responses I might get!