Suddenly, the politicians and bankers are listening

Three years ago, it would have been unthinkable for Finance Minister Jim Flaherty to say, “Income distribution is important and there is a concern that a very, very small group of people have very large incomes and that others do not have those same opportunities.”

Only misguided critics of capitalism and their followers used that kind of language.

It would have been even more surprising to hear Bank of Canada Governor Mark Carney defend street protests against income inequality as “entirely constructive.”

Central bankers seldom speak out in public — certainly not on sensitive political issues. Moreover, Carney spent 13 years as an investment banker at Goldman Sachs.

Conditions have changed, of course. The world has gone through a devastating recession and hovers on the brink of another one. The high-flying financiers who caused the meltdown in 2008 and received massive government bailouts are back on top, raking in gargantuan performance awards. And no one could legitimately argue, as every member of Stephen Harper’s government did three years ago, that the global economy is performing satisfactorily.

It is notable that the Prime Minister has not gone as far as his finance minister or the bank governor. But he has let them get out ahead of him; that is unusual for a boss known for exercising iron control over members of his cabinet and public officials.

Cynics dismiss the youth-led movement as leaderless, unfocused, badly organized and unlikely to have any impact. But it already has changed the conversation in Ottawa.

Optimists hope the Harper government will respond by tackling the widening gulf between the wealthiest 1 per cent of the population and the rest. But neither Flaherty nor Carney has actually proposed that.

 • Both men confined their comments to Occupy Wall Street — not its Canadian offshoot. In fact Flaherty went out of his way to point that Canada has a more progressive tax system than the U.S.; its financial institutions are more tightly regulated; and that no Canadian bank ever needed or receive a taxpayer-funded bailout.

 • Both men were circumspect when asked what policy-makers should do to reduce income equality. “It’s incumbent on governments, I think, to ensure there are opportunities for people to exercise their talents,” Flaherty said. Carney was even less precise. “There’s a frustration that things are going to go back to business as usual,” he said. “That’s not going to happen.” To back this up, he pointed to the ongoing efforts of global leaders to “change the game for Wall Street, for Bay Street, for the way the financial system functions.”

 • Both men remain confident a rising tide lifts all boats. By reining in the excesses of the marketplace, they believe, world leaders will get the economy back on track, creating jobs and growth.

 • And until the Occupy Wall Street movement became too big to ignore, neither man ever mentioned the gap between the earnings of corporate executives and their workers. The disparity is not new. In 2005, for instance, the average Canadian worker earned $38,010. The country’s highest paid CEO took home $74.8 million — 196 times as much.

All that said, there is a recognition in the corridors of power that too many talented graduates are unemployed, too many middle-class families are struggling to pay their bills and too many Canadians are losing ground. There is an understanding that people won’t indefinitely tolerate policies that benefit a privileged elite at the expense of everybody else.

The story is still unfolding. The demonstrations may fizzle out. They may splinter. They may turn ugly.

Or as time goes on, they might prompt the silent majority to ask why there are many more losers than winners in the globalized, low-tax, cost-efficient economy that was supposed to boost economic growth and raise living standards.

There are always jeers, sneers and predictions of failure when a disfavoured group challenges the status quo. The union movement, the women’s women, the environmental movement and the gay and lesbian movement all faced disdain. But they changed history.

Origin
Source: Toronto Star