By Henry McRandall
Prime Minister Stephen Harper has made it clear that when the G20 next meets to try to repair the shattered global economy, Canada will oppose a global tax on bank transactions or any rigid new regulations on the activities of financial institutions.
Harper argues, correctly, that Canada’s financial sector is better regulated than most and that its financial institutions are in relatively good shape. But he makes a great psychological leap, incorrectly, to the conclusion that further taxation or regulation are not needed.
First of all, Harper continues to try to camouflage the fact that despite the relative health of Canada’s financial sector, his government did indeed come up with a massive, unnecessary bailout that has already cost Canadians more than $200 billion. Specifically, he had the Bank of Canada make $200 billion available to relieve the banks of the mortgages they were holding and since then he has had the Bank of Canada lend money to those same financial institutions virtually free (0.25 percent).
What have the financial institutions done in return. Well, first of all, they have used that free money to play the markets instead of lending to small business and consumers at reasonable rates. And, secondly, they have jacked up the interests on most of the money they are lending out.
Imagine this: The banks get money from the Bank of Canada at 0.25% interest. They then turn around and charge as much as 23 percent and more on their credit cards and some other credit facilities.
That’s a mark-up of 9,100 percent. If any retailer ever tried to impose a 9,100 percent mark-up on the goods it sold, it would be out of business in an hour.
It’s no wonder that at a time of the greatest global recession since the Great Depression of the Dirty Thirties, our major banks are reporting record multi-billion-dollar profits.
But, no, Stephen Harper does not think a global tax should be levied on the transactions of the financial sector.
And at a time when the Harper government is drowning in the largest federal budget deficits ever, it is also stubbornly refusing to kill billions of dollars more in tax cuts and handouts it has already promised to the banks and other corporations.
No, Conservative Stephen Harper, aided and abetted by Liberal leader Michael Ignatieff – Iggy The Enabler, is determined to perpatuate the biggest swindle and the biggest upward redistribution of wealth ever perpetrated against the poor and the middle classes in the 500-year history of capitalism.
Yes, there will be drastic cuts to vital health care and social programs. There will be public service layoffs. There will be a new windfall in federal revenues from the sordid HST (Harmonized Sales Tax) that will soon come into effect. Yes, middle- and lower-class wages will continue to fall even as high-income salaries and corporate profits continue to soar. Yes, the masses will continue to grow steadily poorer even as the socioeconomic elite – the top five percent of income-earners – continue to bask in the lap of luxury. And, yes, there will be more massive federal deficits if Harper remains in power.
But we must not – ever – under any circumstances – ever ask the corporations and the socioeconomic elite to pay their fair share of the tax burden.
Like Ignatieff and the NeoLiberal Liberals, Harper and the NeoConservative Conservatives know which side their bread is buttered on. Their masters are the banks, the corporations and the pampered socioeconomic elite and they just will not tolerate any dissent.
Harper government bows to its masters
By Henry McRandall