Braving lashing rain, a full house of Toronto’s non-commercial elite—retired and active writers, broadcasters, academics, and public administrators—gathered at The Gardiner Museum last Wednesday to hear Canada’s highest ranking retired public servant, former Clerk of the Privy Council, Alex Himelfarb.
Something exciting, it was thought, might happen: his presentation was advanced as a thinking person’s war-cry:
“How did ‘taxes’ become a bad word?”
The brochure elaborates, “Was it our loss of trust in the government, in one another, or does it run even deeper: a loss of trust in the future? ‘When we believe progress is not possible, we live in the present, and we lose our commitment to tomorrow,” Himelfarb says.”
We were in for a bracing lecture.
Indeed, his introducer effused about the “bravery” of the presenter. However, Himelfarb quickly invited the entire room to relax. He would take sides—their side on almost every sighed cliché since the financial crisis of 2008.
He compared Canada favorably to “anti-tax” America. Apparently, Canadians—unlike Americans—are smart enough to understand Oliver Wendell Holmes’s observation that taxes are the price we pay for civilization.
He identified equity as the focus of his concern, repeating the phase “The very rich and the rest of us.”
(The demagogue hidden inside a very smart man who ghosted for politicians for 30 years must have got the best of him. In the version of his speech that was printed in The Globe and Mail, he dropped the two words “of us.” In the Globe, he asserted in closing, “All great change starts outside conventional politics and right now the ‘other 99 per cent’ are saying no to more of the same on Wall Street, in the oil sands and beyond.”)
Himelfarb argues that neo-liberals (in particular, America’s Milton Friedman) corrupted public tolerance for taxes and support for positive government over the last thirty years and that unless this is challenged “we will sleep walk toward a smaller, meaner Canada.” In his remarks, he gives Friedman direct responsibility for the ridiculous winsome lie: “Tax cuts are free.”
Neo-liberals and neo-conservatives haven’t monopolized the public square over which Himelfarb helped govern for the last thirty years and are they are quite able to defending themselves, and their Nobel Laureate, Milton Friedman. However, there is much that Himelfarb said about the nature of today’s problems in public trust and public finances that ill-serves constructive debate.
Rather than talk about our civilization and how strong governments and a robust free markets can work better, rather than even demonstrate that there is a structural deficit that needs new taxes in Canada, he adds his voice to the inchoate protests in the park—modern government is hostage to the one-percenters and their extreme good fortune caused the perilous state of US public finances and stagnating middle-class incomes throughout the developed world.
The notion that stagnating middle class incomes is caused by right-wing governments and, therefore, can be reversed by ramping up taxes on one in a hundred and redistributing income via central governments is as fanciful as anything assigned to Milton Friedman.
The central problem of reconciling a more open and peaceful world economy with rising middle-class incomes in the most highly developed societies has not been solved by laissez faire right-wingers or interventionist leftists.
The middle classes are just too big to be bailed out by the state, whether the wealth of the top 1 percent is more heavily taxed or not. The middle classes and the lumpy new 99% are open to lies from either side of the ideological spectrum. And Himelfarb is on the mark when he calls out those who keep promising even further tax cuts to make up for stagnate incomes.
However, it’s passing strange that an experienced pragmatist like Himelfarb would suggest that we need a new movement outside of conventional politics when the economic problems today so clear require compromise, collaboration and technical discipline—skills the existing machinery of modern democracy still have the capacity to deliver. It delivered political change in 2008 and it also rescued the world economy from possible collapse.
While the powerless sidewalks of Wall Street were the focus of world attention last week, the US Senate was left largely scot-free to block a job-creation package that would have relieved some of the hardship faced by millions.