Monthly Archives: September 2009

Raising EI Premiums

So, always incompetent finance minister Jim Flaherty is conceding deficits until 2015 ‘eh? And to mitigate these deficits, the fucking stupid asshole proposes to raise EI premiums!

The Harper government’s plan for whittling down Ottawa’s deficit by 2015 includes collecting billions of dollars more in payroll taxes than it pays out in Employment Insurance benefits over a three-year period.
This is stoking fears that overcollection of EI premiums, starting in Ottawa’s 2012-13 fiscal year, could hinder employment growth by unduly burdening companies as they are trying to recover and grow.

This is obscene. Both the Liberals and their “conservative” alternative, whether Progressive Conservative or the dog’s breakfast of closet-case Jesus freaks and greedheads that constitutes the various incarnations of stephen harper’s gang of idiots, have built their careers on screwing over workers and rewarding the parasites in the financial sector and this is no different.

Once again, our problem with deficits and debts was caused by the creation of high interest rate monetarist recessions which broke inflation by breaking workers through unemployment. These recessions lowered government revenues while raising government expenses. To bridge the gap, governments were forced to borrow large amounts at a high rate of interest. Sickeningly, business and government elites blamed the victims for these deficits and said that unemployment was caused by the attraction of unemployment insurance benefits, general welfare assistance and other assorted programs. To wean workers off of these programs, governments slashed them under the rationalization of deficit reduction.

It was the Chrétien and Martin governments that first seized upon the Unemployment Insurance fund (renamed by Martin as “Employment Insurance” in the same silly way that death benefits are called “life insurance”) as a cash cow. By hiking eligibility requirements and raising premiums the Liberals could collect money off of working people and use it to pay down the debt. While they were doing this, Martin cut income and corporate taxes which mainly benefited the wealthy. The wealthy, for the most part, “invested” their money in the farcical clusterfuck that is the North American financial sector, giving Canadians the worst possible outcomes. Insane financial products seeking to wring maximum earnings out of a stagnant, gasping, increasingly indebted consumer base. It was the attempt to square this circle that brought about the gigantic financial meltdown and subsequent recession in the United States and then the rest of the world.

Because of this recession, the harper government has been forced (under extreme duress) to go into deficit spending to keep the economy from going into a tailspin. The moronic Flaherty, having a 19th-Century grasp of economics wants to slam on the brakes as quickly as possible in the ignorant belief that we’re headed for a crash caused by deficit-induced inflation and all sorts of other doomsday scenarios that just aren’t true. (From the link:)

The net financial liabilities of all levels of government combined in Canada are projected to be just 27% of GDP this year, compared to an OECD average of 51%. Our net debt is down hugely from the peak of 71% in 1995. (See OECD Economic Outlook Annex Table 3.) General government net debt servicing costs stand at an extraordinarily low and indeed almost trivial level of 0.2% of GDP, compare to an OECD average of 1.7%. The fact of the matter is that we are in great fiscal shape, and can well afford to borrow more and invest much more now that times are tough and public investment is needed to sustain jobs and set the stage for a more productive future economy.

What is harper’s miserable explanation for such ass-backwards behaviour?

But the Tories defend the measure as necessary to ensure the EI program breaks even, particularly given a current freeze on premiums that’s keeping them artificially low right now.

The Harper government said it’s merely trying to ensure that the EI program balances out over time. It wants to recoup shortfalls in EI collections that it expects will have built up over the next few years as a result of the recession – which has sent unemployment skyrocketing.

“We committed to freezing EI premiums as part of the economic action plan to help Canadians weather the recession,” said Chisholm Pothier, spokesman for Finance Minister Jim Flaherty.

“We are keeping that commitment and rates will remain frozen until 2011.”

The problem is that while he’s frozen premiums he hasn’t expanded eligibility. Furthermore, the damned “fund” (which doesn’t exist as premiums go into general government revenues and the Supreme Court has ruled that the government doesn’t have to pay it back) had been in surplus since 1995 and all the way to 2008! All that time over half of unemployed workers (including two out of three women workers) have been facing rising average levels of unemployment and receiving no benefits, … all part of the process of stagnation and desperation upon which the parasitical financial sector demanded maximum returns from. So, in response to a recession caused by the collapse of the economy due to the implosion of a financial sector bubble built on the backs of indebted, underpaid, overtaxed consumers, fuckhead Flaherty grudgingly embraces deficit spending but hopes to curtail it as soon as possible by raising taxes on that same consumer base that’s been gasping for breath for over the past two decades.

A better option would be to raise income taxes on the wealthiest and the corporations. Our business world had at least a decade of low taxation, stagnant wages and a cheap currency (making our exports attractive and keeping imports artificially expensive) and they did little to raise productivity. Our wealthy, as I said, for the most part, “invested” their money in Bay Street and Wall Street snake-oil. They have more money than they know what to do with and the REAL ECONOMY could use it.

The Winnipeg General Strike: 90 Years On

Since this year is the 90th anniversary of a pivotal event in labour history in Canada, I thought it warranted a front page article.

The Winnipeg General Strike happened in 1919. It was in the aftermath of WWI when soldiers were returning home and had trouble finding work, and many people were struggling in poverty. Immigrants, as always, were popular scapegoats. In particular, immigrants from Eastern Europe were feared in particular, due to the recent Bolshevik Revolution in Russia. The ruling class of the day feared that such an event was imminent here in Canada as well, so they refused to consider the grievances the strikers raised. As a result, workers from literally all sectors of the city, even those not in unions, called for a General Strike, which took effect on May 15th. Since many of these affected workers were also responsible for essential services, the strikers themselves arranged to keep those services in place during the strike. As this was a general time of social unrest, sympathy strikes broke out in other places, such as Calgary and Brandon.

The business class of the day formed a “counter-strike,” called the Citizen’s Committee Of 1000. They refused to negotiate, and saw the strike as nothing short of a conspiracy to overthrow the government. The Canadian government eventually intervened on the side of the Citizen’s Committee. On June 21 the Northwest Mounted Police moved in (Winnipeg city police had walked off in support of their striking brothers and sisters), resulting in 30 casualties and 1 death. The strike ended on June 25th.

Despite the arrests and jailing of several labour leaders, the strike had a major impact that would be felt for decades. It gave birth to the labour movement, and as a result of their struggle the Co-operative Commonwealth Federation was formed in 1933. The CCF, which would later become the NDP, fought for a better life for all Canadians regardless of wealth. The results of this struggle can be seen in such things as the Canada Pension Plan, medicare, and the right to form trade unions. And just in time for this anniversary, the musical Strike! is scheduled to play during the August Long weekend. The plan is to make this an annual event. A fine tribute to an important event in Winnipeg history.