03.01.2014 05:46 PM

In Sunday’s Sun: The one time Conservatives like Statistics Canada

Following the great global recession of 2008-2009, the game plan of the Right was clear: repair the tattered flag of capitalism, fight any modest regulation of the banking system, and restore six-figure bonuses to all those 25-year-old millionaire hedge fund managers.

Oh, and vilify the Occupy kids.

The Occupy movement – much like the Tea Party movement, ironically – was anti-banker, anti-bailout and anti-bonuses. Its rallying cry, the 99 per cent versus the one per cent, attracted the support of the majority in every democratic nation.

Occupy was, most agree, the most successful populist progressive movement of the past Century. (In fact, it was probably the only populist progressive movement of the past Century.)

At the time, Frank Luntz, the conservative manipulator of words, confessed to a group of Republican legislators: “I am scared of this anti-Wall Street effort. They’re having an impact on what people think of capitalism!”

So, it therefore became necessary to destroy Occupy. Conservative governments used every means at their disposal to physically drive out the Occupiers – and conservative polemicists literally accused them of everything from rape to murder. It recalled what the Romans did to the Christians, except it was televised on FOX.

While the Occupiers may have faded away, the Occupy message did not. To many of us, Occupy was actually Christ-like: it argued that those who deserved Heavenly reward were those who had nothing (or next to nothing) while here on Earth. Not the aforementioned 25-year-olds driving pimped-out Hummers to private clubs to expense magnums of Cristal.

This week, the Canadian Occupy-haters found a statistical basis for their greed. Statistics Canada issued a report, and it seemingly suggested that the middle class is doing just fine. Income disparity, crowed the capitalist-fetishists, had been proven a myth! Stats Can is useful after all! Who knew?

Except the report didn’t say that. Sure, Statistics Canada dryly noted that the median worth of Canadian families had jumped some 44 per cent over the past seven years or so – from $168,700 to $243,800. And, yes, the mythical middle class increased its share of the country’s $8.07 trillion personal net worth by slightly less than two percentage points.

But, there’s this: had Stats Can asked Canadians if they felt life was getting in any way more affordable, they would have been laughed at. Most of us citizens, the citizens would say, are always about two paycheques away from the street. To average folks, the standard of living is getting worse, not better.

And, for those who examined the Statistics Canada report carefully, the rise of the putative middle class is a mirage. Or, at best, built on desert sand.

The report explicitly acknowledged two things, and passingly referenced another. One, much of the higher net worth of Canadians has been fueled by sky-high home prices. Two, pension fund gains have helped a lot, too. Three, we have among the highest per-capita household debt in the civilized world.

And that, as no less than Comrade Jim Flaherty and the Finance Department proletariat continually remind us, suggests that there is still plenty to worry about. Indeed, an overheated housing market, undercapitalized pension funds, and too much personal debt all suggest that much of the middle class “gain” could be swept away in the Biblical blink of an eye.

It was amusing to see the Right-wingers waving around a Stats Can report, like Moses descending from Mt. Sinai. But, like Moses, the Right-wingers aren’t going to see the promised land.

We’re not out of the desert, yet, folks. What Stats Can giveth, the bankers can (and will) take away.

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47 Comments

  1. Russ says:

    Assets have increased in value, driven in large part by record low interest rates – making their purchase easier to finance. But once rates begin to rise – and they surely will – asset values will drop as will the ability of people to service the debt. This keeps finance ministers, central bankers and even 25 yr. old hedge fund managers awake at night.

  2. doris says:

    Gord
    If you didn’t exist the goddamn PMO would have to invent you – what crap and tripe do you believe in? What are your kids doing to pay off their debts that they have accumulated trying to emulate your obvious success.Do you ever tell them how lucky they are to be able to have mortgage rates of less than 5% when you probably had none less than 11%. Those mortgage rates now allow them to buy a house 200K more expensive than the one you bought with the same amount of disposable income thus inflating their median worth.

    When was the last time they got a raise to pay for all the expenses larger than inflation – hydro, gasoline, insurance, groceries?

    Now tell me you bleed for the middle class when it’s obvious you don’t care because you have pulled up your ladder and fuck the rest.

    Just my two cents worth Gord you make me so fucking angry with your Ayn Rand rantings and selfish self-righteous drivel.

  3. !o! says:

    beautiful article. this is my favourite thing that you’ve ever written Warren.

    and we’ve already won in one sense, in one very important sense: ‘They’ are talking about the middle class, ‘they’ need to couch their words in the language of the 99% vs. the 1%. This has changed, and it doesn’t just change back. ‘They’ are on the ideological defensive for the first time in a very very very long time.

  4. Iris Mclean says:

    The topic today on Cross Country Checkup will be ‘Does the the middle-class need a better deal?”.
    Unfortunately the host reacts badly to callers who are critical of the Harper Cons, so the conversation will be limited, as usual.

    • smelter rat says:

      I can’t even bother to tune in any more. Rex has destroyed any credibility it once had.

      • Iris Mclean says:

        It’s a bloody shame that CBC has allowed this Harper shill to ruin a once great program.
        “National Broadcaster” indeed!

    • Domenico says:

      Rex Murphy is odious embarrassment to the 4th estate. Just give him his senate seat already so we can be spared his constant fluffing of Harper.

  5. Swervin' Merv says:

    If anyone still doubts the downward spiral of the Conservative brand, the case was again made in the last 48 hours by two of Canada’s most articulate column writers.

    Andrew Coyne: “Harper loyalists…say whatever the leader wants said, even if that means abandoning every core conviction the party has ever held. In its place is Harperism, less an ideology than a set of behaviours: the nastiness, the ruthlessness, the almost universal gracelessness.

    Conrad Black: “There is no flair, no panache, no humour, no vision, and not much charm or empathy…. The whole regime is starting to look like it is simply waiting to be defeated.

    • Iris Mclean says:

      Very good. Not a Bono fan, but he nailed it.
      When the mansion, or even a reasonably comfortable life becomes unattainable, the population becomes restless.

  6. Cameron Prymak says:

    I thought the Great Oracle of Red Deer was limited to 10 comments per day…

  7. Cameron Prymak says:

    I think you’re right on here, “The report explicitly acknowledged two things, and passingly referenced another. One, much of the higher net worth of Canadians has been fueled by sky-high home prices. Two, pension fund gains have helped a lot, too. Three, we have among the highest per-capita household debt in the civilized world.”

    I vividly remember the tech boom and occurs to me that when wealth is created there’s also a tax event. Yes some markets have high home valuations and folks may have higher pension valuations but these gains are not realized unless you sell your home or retire today. Lots of us folks in tech back in 2000-2001 converted options to stock and sold stock to do whatever with the proceeds – but part of them had to go to taxes. The US Treasury was so flush with unexpected tax revenues that the economists projected surpluses way into the future and the Fed developed contingency plans for operating in a surplus budget environment, all of which went into the trash can when the surplus was erased by GWB’s tax cuts and unfunded wars and Congress’ crazy earmarks spending. Your post last week on the need for both restraint and growth was right on the mark.

    Now I don’t sense the same kind of wealth or tax revenue experience in Canada today despite Conservative attempts to convince us. There’s no irrational exuberance, as Allan Greenspan called it, perhaps because the net effect of selling an overvalued home that has a large mortgage attached to it leaves relatively little by comparison. And there are no super surpluses either. The surplus projections we have are attached to very modest growth and spending cuts, not some kind of magical economic growth recipe.

  8. steve says:

    Al least its not as hypocritical as waving the amnesty international flag. Or the Ukrainian and Israeli partisan vote catching flags.

  9. Paul Brennan says:

    I beleive wall street and bay street are major problems – they do not help build , discover – anything they hold our money and charge us to get it back , they only lend to companies who dont need it but love personal loans through credit cards because of obscene interest they collect – they love mortgage lending because people typically with do anything to save the roof over their head …Canadian banks operate with little competition – pay only senior employees obscene salries ,options and benefits and treat tellers very poorly , not to mention replace CDN workers with cheap foreign labour …

    The boss at TD , who only made $12M last years wants higher taxes and beleives Canadians have too much debt ..talk about a hypocrit

    There will be a tipping point on currencies as the entire world is having issues – Canada is not immune from this …if Europe and US crumble we will not sit her surviving on lumber , maple syrup and beaver tails….

    The mess we are in can be traced to fed , wallstreet , IMF , Bank of Canada and many others

    There will be another occupy movement – we are not unemployed bums …but folks who are being crushed by greed , stupid policy and the cyclical nature of economy, currency etc

    What a mess

  10. Steve T says:

    One point of agreement, and one point of disagreement.

    I agree that Canadians are over their heads in debt, and this may be artificially propping up the economic picture.

    I disagree that just because the middle class “feels” they aren’t as well-off financially, doesn’t mean they aren’t. Part of the problem is that the concept of perceived wealth has become an ever-rising bar.

    For our parents’ generation, a modest (1200 sq ft) house, one car, and a basic television were hallmarks of a good middle-class lifestyle. Now, it seems we need a 2000 sqft house, two cars, a big flat-screen TV, and the latest iPhone to make us feel “ordinary”.

    So, it is quite possible that Canadians are better off financially than they used to be. They just aren’t as happy with the same level of wealth as they were before.

  11. Good column. I found one argument you made very compelling. Crowing that everybody is better off is a DUMB move for the Government when Ontario is in the crapper. Those who are actually better off will shrug their shoulders. After all, they will be convinced that their favoured position was acheived through their own efforts. Those people who are actually worse off, or even those who are better off but FEEL worse off will be outraged at being told that all is well with the world. And in Ontario, there are a LOT of people who are far worse off, and THEY mostly live in the 905.

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