January 22, 2014

How austerity works for some

People's Voice Editorial

How does our society measure what "works" and what doesn't? The economic crisis which broke out in 2008 provides a classic lens to examine this question.

On a global scale, the major shareholders of the most powerful corporations and banks have recovered, and much more. Huge bailouts squeezed from the working class covered any short-term losses suffered by the rich, and then profits and stock prices rebounded past pre-crisis levels.

Here in Canada, studies on the "Rich 100" bear out this analysis. As one media commentary said in November, "because these people have been at it for decades, they keep getting fabulously, obscenely, gloriously richer."

Collectively, the individuals on Canada's Rich 100 are worth $230 billion, more than the total gross domestic product of many countries. This year alone, their combined net worth surged by more than 15%, the biggest increase since 2000. The cutoff for making Canada's Rich 100 list is now $728 million, compared to $309 million in 1999.

Here's one example. While the retail and grocery sectors in Canada have been challenged by Target and Walmart, profits in these sectors have seen big profit increases. Companies controlled by two Rich 100 families, the Westons and the Sobeys, have bought up Shoppers Drug Mart and Safeway Canada. The net worth of these families shot up by $2.1 billion and $598 million, respectively, for gains of about 25%.

So, does capitalist austerity work? The bottom line is that it serves the "one percent" quite well, while working people, the so-called "ninety-nine percent," keep getting shafted. It's time for a system that works for the vast majority, not the ultra-rich.

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