Why do Social Democrats do what they do?

May 01, 2010

A MESSAGE FROM THE COMMUNIST PARTY OF CANADA, May 1-15, 2010 issue of People's Voice

(The following article is from the May 1-15, 2010 issue of People's Voice, Canada's leading communist newspaper. Articles can be reprinted free if the source is credited. Subscription rates in Canada: $30/year, or $15 low income rate; for U.S. readers - $45 US per year; other overseas readers - $45 US or $50 CDN per year. Send to: People's Voice, c/o PV Business Manager, 706 Clark Drive, Vancouver, BC, V5L 3J1.)

PART 1 - Round 2 of the crisis: whose "recovery"?

The corporate-owned mass media greet us daily with upbeat economic reports about how the global economic crisis is over and that `recovery is now well underway'. This is all very comforting, but it's also a gross perversion of the truth.

In reality, there is no recovery for most working people in this country. Unemployment and job insecurity remain high, with over 1.5 million (8.2%) out of work according to official statistics; real unemployment is closer to 12%. Since 2003, more than 500,000 well-paying manufacturing jobs HAVE been wiped out, 290,000 in the past two years alone. Soon EI benefits will be running out for hundreds of thousands of these unemployed workers.

Nor is there any recovery for young people trying to find work or to complete their education. Or for Aboriginal peoples who continue to suffer systemic joblessness and grinding poverty. Or for new immigrants and their families trying to build a better life. Or for pensioners and others on fixed income.

So what kind of recovery is this? It's a recovery for the profits of the biggest banks and corporations, and for those who own and control them.

Think back. For more than two decades, the largest banks and monopolies had been phenomenally successful in amassing wealth. Stock markets soared and net profits went through the roof. They achieved this through "restructuring" their activities - by laying off many of their workers, while making the rest work longer hours; by holding down real wages and benefits while increasing labour productivity; and by gouging consumers through inflated prices.

And they were aided and abetted by right-wing, pro-corporate governments (whether `liberal' or `conservative') which brought in `business-friendly' policies like privatization and de-regulation, which weakened labour standards making it more difficult for workers to organize and defend their rights, and which cut corporate tax levels, shifting the tax burden more and more onto working people.

But this set the stage for inevitable crisis. In due course, more goods and services were being produced than working people could afford to consume. To maintain high consumption levels to keep the super-profits rolling in, big business cajoled and forced working people to sink deeper and deeper into debt. And they went on an orgy of speculation to artificially drive the value of their assets even higher.

Eventually, the debt bubble had to burst, and ever since the `meltdown' of September 2008, the largest transnationals and banks have been manoeuvring to protect their wealth and maintain profit levels by getting working people to pay for the crisis which their greed had created.

Big business accomplished this by using their control of the media, their `think tanks', and their friends in government to convince everyone that the "sky was falling" and that governments had to come to their rescue in order to save the system of capitalism. As a result, over the past 18 months governments around the world poured trillions upon trillions (more than $10 trillion in the U.S. alone) into massive corporate bail-outs and buy-outs of `toxic' loans, while relatively little was spent on short-term infrastructural and other job creation projects. In fact the real purpose of these bail-outs was to protect the unsecured wealth of finance capitalists, rather than to stimulate new economic growth.

And it worked out all rather well for monopoly, as shown by the spectacular rebound in their profit margins. Canadian corporations reported $60.1 billion in operating profits for the last quarter of 2009. The banks alone raked in some $15.2 billion during those three months, including $1.5 billion for the Royal Bank and $1.29 billion for TD Bank. The oil & energy giants made another $7 billion in profit over the same period. During 2010, corporate profits will likely top $250 billion.

This `golden parachute' for monopoly - the largest single `theft' of public wealth in history - came at a heavy cost. The corporate bail-outs and subsidies, along with generous corporate tax cuts, are largely responsible for the massive government deficits and increases in accumulated public debt we witness today.

One of the biggest gifts to monopoly has been the steady cuts to corporate and capital gains taxes, down from 28% a decade ago, to only 17% today. The Harper Tories plan to further reduce corporate taxes (to 15%) by 2012. In 2009/10, Canadians paid $108 billion in personal income taxes, while the corporations paid just $22.3 billion. The 2010 federal budget alone included $6 billion in corporate tax cuts. Right-wing provincial governments have also been guilt of cutting business taxes, to the point that Canada now has virtually the lowest corporate tax structure in any of the advanced capitalist countries around the world.

And now we're entering Round Two of the crisis. The dominant sections of capital - the same ones who were so quick to urge state intervention when it served their interests - are now clamouring for governments to rein in their `free-wheeling' spending, eliminate operating deficits and control the public debt.

That's what is behind the recent Harper federal and the provincial "austerity" budgets. Right across the country, pro-business governments are launching an attack on the public sector and on the wages and benefits of its workers. The ruling corporate and financial circles know full well that by driving down the wages and conditions of public sector workers, this will put more downward pressure on the wages of all workers in both the public and private sectors.

This is the real strategy of the monopoly capitalists and their willing servants in governments, especially the Harper Conservatives. They want to further erode public services, gain greater access through another devastating round of privatizations into lucrative sectors like healthcare, education, and pensions. And they want to weaken and destroy the resistance of organized labour by attacking one of its main pillars - the public sector unions.

Working people simply cannot afford to take this lying down. We need to respond in unity - "Enough is ENOUGH! We will not be forced to pay for your crisis!"

PART 2 - Resistance, not retreat!

Faced with a long-term "jobless recovery" and the continued destruction of social safety nets, working people have two basic options: retreat or resistance.

Big business and their minions in government constantly urge us to keep our heads down, give concessions to the bosses, and wait for "better days."

This retreat strategy didn't work in the Dirty Thirties during the last "Great Depression," and it won't work today. The economic crisis has not hurt the wealthy, but they are using it as a club to drive working people deeper into poverty and debt. The same corporations which demand lower wages and pensions are reporting profits in the billions.

To survive this attack, working people must fight back. Our sisters and brothers in Greece, Portugal and other European countries are showing the way, organizing mass demonstrations and general strikes to resist the corporate offensive.

But there are many similar struggles right here in Canada. Most of this resistance goes unreported in the corporate media, but workers across the country are standing up for their rights, despite intensive pressure to surrender.

The most powerful example is in Quebec, where the Common Front of public sector workers is battling the Charest Liberal government to win better wages and working conditions. On March 20, 75,000 public sector workers and supporters marched through the streets of Montreal. More huge rallies have followed, as the Québécois show opposition to the Charest government's pro-corporate budget. This massive struggle may well escalate into a Quebec-wide general strike.

In British Columbia, the Campbell Liberal government is also in deep trouble with working people. A province-wide campaign is underway to force a referendum on the "harmonised sales tax" (HST) which would shift nearly 2 billion dollars each year from working people to the business sector. Angry protests have erupted across the province against brutal cuts to public education. The "Coalition to Build a Better B.C.", initiated by the trade union movement, has been joined by Aboriginal peoples, arts groups, seniors, students and many others, to build a strong, united struggle against the government's anti-people policies.

Opposition is beginning to grow in Ontario as well in response to the McGuinty government's imposition of a wage freeze on provincial workers, to cutbacks in services, and plans for privatization.

Solidarity is growing with the heroic struggle of the miners fighting Vale Inco in Sudbury, Port Colborne and Voisey's Bay, and with the Journal de Montreal journalists and clerical workers at one of Quebec's largest daily papers. These lengthy battles against highly profitable employers prove the determination of workers to stand up against attempts by the bosses to slash wages and wipe out gains achieved through decades of collective bargaining.

In fact, there are many recent cases of working people across Canada who refuse to surrender to corporate blackmail. These are crucial struggles for our jobs, our families, our communities. This is a fight for our hard-won healthcare, education and other social programs, and indeed for the future of Canada.

But none of these valiant struggles can be won in isolation. Our watchword must be "an injury to one is an injury to all." We can't succeed by fighting one battle at a time, against bosses and governments expert in divide-and-rule tactics. Today there is an urgent need to build a united, labour-led fightback at every level, including the grassroots. But we also need a Canada-wide response to the crisis. The leadership of the trade union movement can and must take the initiative, by convening a cross-Canada People's Summit of the entire labour movement and its many allies - Aboriginal peoples, youth and students, women, farmers, seniors and all democratic forces engaged in the struggle for peace, the environment and for labour, democratic and equality rights - to map out a united, coordinated and militant counter-offensive.

PART 3 - There are Alternatives! A People's Recovery plan

Stephen Harper and the big corporations want to make working people pay for the "economic recovery", through lower wages, higher unemployment, and huge cuts in social spending. We say: those who reap billions in profits must pay! Unite and fight for an emergency program to put Canada back to work and protect social programs. A genuine "People's Recovery" plan should include the following:

* expand EI to cover all workers for the full duration of unemployment, with benefits at 90% of former earnings;

* protect and expand manufacturing industries on the basis of a comprehensive value-added industrial policy, and introduce plant closure legislation with teeth;

* stop evictions, mortgage foreclosures and utility cut-offs due to unemployment;

* raise the minimum wage to $16/hr., and social assistance rates; increase pensions through the Canada Pension Plan to ensure a living pension for all retired workers;

* take emergency action to improve the social and economic conditions of Aboriginal peoples;

* invest in a massive public construction program to build affordable social housing, rebuild Canada's infrastructure, and protect the environment;

* expand Medicare, invest in education and cut tuition, introduce a universally accessible affordable system of quality public child care.

Some would argue that we "can't afford" such radical changes. Here's how it can be done, without adding to the burden on working people:

* shift the tax burden from working people onto the corporations and the wealthy;

* restore the federal corporate income tax to 28% which would bring in over $30 billion annual revenue;

* immediately withdraw from the disastrous war of occupation in Afghanistan and cut military spending by 50%, saving another $10 billion every year.

These immediate "people's recovery" measures should be strengthened by more transformative steps:

* nationalize the big banks, insurance and other financial institutions and place them under public, democratic control;

* nationalize the energy industry to guarantee domestic supply and to provide the material basis to rebuild Canadian industry and create hundreds of thousands of jobs, especially in renewable energy and mass transit;

* place the "Big Three" automakers under public ownership and democratic control, and build a small, fuel-efficient, affordable and environmentally sustainable Canadian car;

* immediately withdraw from NAFTA, and adopt a diversified, multilateral trade policy based on mutual benefit;

* introduce a liveable, guaranteed annual income (GAI), and a shorter work week with no loss in take-home pay.

Such a plan would move our country in a fundamentally new direction, by placing the needs of working people and our environment before corporate greed, establishing a foreign policy based on peace and disarmament, and reversing the erosion of our sovereignty. And our efforts to forge unity around such a People's Recovery plan can give rise to a powerful People's Coalition of labour and democratic forces which can press for even more substantial social and economic transformation.

The Communist Party of Canada, the party that led crucial working class struggles which won unemployment insurance and other gains, pledges to do everything in our power to help build and win such struggles. We urge you to take up these issues in your unions, your workplaces and schools, your communities. If you agree with our proposals, contact us today. Join and build the party that combines today's urgent fightback with the vision of a socialist future, one in which unemployment, hunger, exploitation, racism and oppression, are ended forever!

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