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Her Majesty's Official Enablers

On the other, other coalition between unseemly bedfellows

by Stephen James Kerr

Cup your hands around your mouth, and say it with me slowly: “CO-A-LI-SHUNNNN.” Say it again! Yeah, that’s it. Oh, so scary!

Who’s afraid of the NDP and the Liberals making sweet love while the Bloc looks on approvingly? It’s not Stephen Harper, who keeps bringing up the two-years-dead political agreement, stillborn and repudiated. “Did I mention that coalition?” Only 30 times.

The real coalition is one neither Harper nor Ignatieff want to discuss.  

It doesn’t matter what he looks like, only that he obeys. Such is the relationship between Bay Street and the leader of the Liberal Party of Canada. No matter who the leader may be, corporate Canada sends him love letters, “advice” and support payments. They love the support payments.

It is to the Liberal Party that the “financial industry” owes the more than $15 billion in interest payments they receive annually on Canada’s market debt, a giant free lunch catered by you, the gentle taxpayer.

Accumulated compound interest is the largest component of Canada’s national debt. How it got that way is something neither Liberals nor Tories want to talk about.

Back in 1977, a certain Finance Minister named Jean Chretien began to wind down what had been an extremely successful and cost-effective method of paying for government programs.

Between 1938, when Mackenzie King nationalized the Bank of Canada, and 1977, the Government of Canada would borrow funds to cover any spending deficit from the Bank of Canada. Since the BoC is owned by the Canadian people, only a nominal amount of interest was charged, less than one percent. Citizens owed the national debt to ourselves.

The line “we owe the debt to ourselves” is still trumpeted, though the meaning depends on whom we include in the term “ourselves.”

Most of Canada’s market debt (bonds and Treasury Bills) is purchased by so-called “Primary Dealers” and resold to bond traders, private banks and insurance companies, who owe allegiance to Mammon, not to any country. Citizen holders of Canada Savings Bonds hold a very small stake. Are the big banks corporate Canadian citizens? If so, their votes trump yours and mine.

Chretien then turned to the private banks to finance government spending at higher interest. This is why Canadian public debt skyrockets in a “hockey stick” curve starting in the late 1970s and early 80s as bank interest rates dramatically increased.

The Canadian Council of Chief Executives and the Canadian Taxpayer’s Federation love to use this stick to beat the government of the day to “pay down the national debt.” The Liberals handed it to them.

The bankers and bondholders love it when we pay down the debt, because they get paid. And we pay. Citizens now shoulder the majority of the tax burden, and so also contribute the most to debt payments from tax revenues.

By 1993 Canada owed $37 billion in principal, and over $386 million in interest. The government went from paying 12 percent of revenues on unproductive interest payments to 35 percent. The percentage has since declined.

These interest payments are a tax, a massive wealth transfer from working Canadians to non-productive financiers, who created the money out of thin air when they leant it, thanks to our “fractional reserve” fiat money system.

But they don’t create the interest. That money must be appropriated from our labour, as taxes. In the 90s the interest share of the “total return to capital” in Canada rose above 50 percent, while real investment in production and jobs declined. Real wages also declined. This is how the FIRE economy (finance, insurance and real estate) bleeds the real economy of wealth.

You can thank a Liberal for that. Is it any wonder that nobody in Ignatieff’s Liberal Party brain trust is suggesting that a sovereign government might simply refuse to pay these odious interest charges, and finance its own operations via the Bank of Canada at a low interest rate, as it’s empowered to do under Article 18 of the Bank Act? This tax cut is not in the Red Book, 2011 edition.

It was not in the Red Book 1993 edition either. Red Book co-author Paul Martin threw it away as Finance Minister and as Prime Minister.

Canadians confuse the election or defeat of a party with a change of government. In fact, the faces change, but the policy of enriching the rich remains. In fact, Liberal drag allows Canada’s permanent government a left cover that the Tories can’t claim and don’t want.

Martin was far more daring with the scalpel than Brian Mulroney. His 1995 budget cut federal share of Medicare to 14 percent from its historic 25 percent. The political uncertainty around stable Medicare funding began in 1995. Liberals gave the National Citizens Coalition and other “free market” think tanks the legitimacy to argue for private medicine.

Liberal Prime Ministers drink deep draughts from this fountainhead. Martin was following advice contained in the C.D Howe Institute’s 1994 report, “The Courage to Act”, and permanent agitation by the Canadian Council of Chief Executives when he axed Unemployment Insurance payments, upped premiums, poured tens of billions of EI surplus into interest payments and changed eligibility rules so that most unemployed people no longer qualified for benefits.

Martin then offered Canadian corporations a $6.3 billion tax cut, from 28 percent to 21 percent. Corporate investment in factories and jobs continued to decline, as billions in tax savings were diverted to speculation in foreign markets.

C.D. Howe gave Martin an award for his handing over of management of the Canada Pension Plan to an “independent board”---independent of democratically elected representatives, but not of banks.  

Martin gushed to the Institute: “If I had a political role model, it was C.D. Howe…”  

The election of Stephane Dion as Liberal leader was a surprise to the corporate Liberal party. He literally came “out of left field” and he wasn’t as quick to take directions from you know who. That was a problem for the people who really run this country.

Dion’s 2008 election disaster and his coalition with the NDP were an even bigger problem. Tory Minister Lisa Raitt let this cat out of the bag.

Secretly tape-recorded in a taxicab in 2009, Raitt revealed what prompted Michael Ignatieff’s abrupt December 10th repudiation of the coalition agreement he had signed only nine days before as a member of the Liberal caucus.

“They did it at the Canadian Council of (Chief) Executives, there was three presidents of major banks who stood up in the room---and this is not from cabinet so I can talk about it---stood up and said, ‘Ignatieff, don’t you even think about bringing us to an election,’” said Ms. Raitt. “‘We don’t need this. We have no interest in this. And we will never fund your party again.’ That was very powerful. So he heard it from very powerful people in the industry. He was definitely muzzled.”

And so the Liberal Party was suddenly somersaulting over its own constitution to replace Dion with Ignatieff in time for the re-opening of the prorogued Parliament, where Ignatieff played the probation officer who voted to parole his charge – the government and its budget, every time---or whenever he bothered to show up to Parliament.

A few months later, in the fall of 2009, the very lawfulness of the Harper government was tested by the revelations of Richard Colvin that Canadian governments had transferred Afghan prisoners to detention where they were tortured, and that the government knew about it but did nothing.

If true, it would mean that Canadian politicians and military commanders were un-indicted war criminals. Would Michael Ignatieff have the courage to call a potentially criminal government to account?

Not a chance.

In Afghanistan, Canadian forces “transferred six times as many detainees as the British, who had twice as many troops in the theatre… We did not monitor our own detainees after the transfer…” We left that to the “useless” Afghanistan Human Rights Commission, and the Red Cross, which could only inform the Afghan, not the Canadian authorities. Detainees were beaten, whipped and electrocuted, raped and burned, sometimes over a period of months according to Colvin. It was “standard operating procedure.”

But the newly minted Leader of the Opposition was a long time apologist for such procedure. As the advocate, in books and articles, of “humanitarian intervention” in the affairs of Third World states, Michael Ignatieff was not about to mount a serious challenge to crimes that he himself might find it convenient to commit as a future Prime Minister. And he didn’t.

In a 2004 interview on the Charlie Rose show, Ignatieff declared that: “I’m not sure we can keep to a pure, civil libertarian position all the way. We might have to engage in the preventive detention of suspects on lower standards than we would use in a criminal case. We might even have to engage in certain forms of targeted assassination of terrorist enemies.”

When Rose asked him if he thought the Iraq war was worth the price, Ignatieff replied “I think so Charlie. Iraqis were no longer tortured, beaten… they are freer than at any time in their history.” Except that Iraqis were tortured and beaten, and they cannot be free by definition under a foreign occupation and its puppet government.

Sensing a potential co-conspirator in Ignatieff, the Harper government cleverly proposed to show the secret Afghan documents it claimed must not be made public to a committee of MPs who would be sworn to secrecy. Michael Ignatieff’s Liberals took the bait and became officially complicit. Only the NDP resisted. Canadians still await the facts.

The unresolved Afghan war crimes file is probably the most serious issue facing the country. It raises fundamental questions of constitutional government that go back the Glorious Revolution of 1688, which among other things, established Parliamentary supremacy over the Crown, forbade torture, and forbade the government to spend money without parliamentary consent.

It was the issue of secret government spending over which Michael Ignatieff’s Liberals could at last strike a moral pose. But their vote of non-confidence risked nothing. To take a true moral stand means to take a concrete risk to one’s self. This is something Ignatieff’s Liberals are unwilling to do.

The issue of government spending is indeed a serious one, and the Harper government deserved to fall over it. But Ignatieff’s Liberals, if they truly represent a substantial alternative to the Harper regime, should have voted non-confidence in the government because its leaders may be war criminals. They should have done it a year ago.

That the Prime Minister and his top generals might qualify for a private suite at the Hague is a far more serious possibility than that the Tories may be profligate spenders---no secret there.

But this is a reality the most powerful people in the country do not want you to examine. A full airing of our crimes in Afghanistan would also threaten an examination of other social problems: who’s getting rich while the rest of us just get by, for example.

The Liberal Party once governed this country in a coalition, not with any third party, but with the 1 percent of the Canadian population that monopolizes 32 percent of the national income. In “Opposition” they serve rather as loyal “enablers,” playing the role of the “courtier-out-of-favour,” a favour they seek to regain.

And so the Ignatieff Liberals talk out of both sides of their mouths. On one side they have supported the Conservatives in 114 confidence votes as well as other initiatives that will further enrich the rich, such as the Canada Colombia Free Trade Agreement, the Combating Terrorism Act, and the HST.

When speaking to their friends they remain firm supporters of further corporate tax cuts and whatever it takes in Afghanistan. To the public, however, they make vague motherhood statements touting Red Book promises they’ve betrayed for twenty years. Take me back honey. I’ll be good to you this time.

We fancy ourselves a democratic country because once every few odd years we stuff a marked ballot in a paper box, and by means of this magic ritual we grant “democratic” legitimacy to governments who take direction the rest of the time from persons safely anonymous to the average Canadian.

It’s a coalition, yes, but not as we know it. (X)

Stephen James Kerr writes about deep politics, constitutional and classical history, energy and the environment, and whatever strikes his fancy at stephenjameskerr.ca. He is currently writing a book with the working title, "The Secret History of Democracy" which explores the classical roots of modern anti-democratic and democratic thought. He formerly co-hosted the Newspeak radio show on CIUT 89.5 FM, and edited the now sadly defunct Atkinsonian newspaper at York University. He has a day job in the solar energy industry, and is devoted to his organic vegetable garden, his bike and classical literature, not necessarily in that order. He can be reached at stephen.kerr@sympatico.ca.
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