businesscycle_1   Be it resolved – If the Private Sector is cutting jobs in a economic downturn then the Government of the day should also be cutting Public Sector.

This is my debate point.  You won’t find it anywhere in the Alberta@Noon podcast I’m about to link here.  I know most of you won’t be thrilled to hear about Alberta’s budget from the finance minister so instead, skip forward to 33:50 of the podcast when two guests, one from the Alberta Taxpayers Federation and one from the Parkland Institute are invited to respond to callers and engage in some debate.

The Alberta Taxpayers Federation (ATF) has shades of the Tea Party mixed in with neo-liberal dogmatic imperatives.  Much of their ‘research’ comes from the equally dubious Fraiser Institute, a rightwing corporate skunk-works whose only aim is the complete corporitization of civil society.  Listen as Paige from the ATF gets tripped up because her sloganeering has little to do with fact and much to do with stirring right-wing populist notions.

What I’d like to talk about is the caller ‘Mike’ and the following discussion (36:40 – 41:15).   Mike is a plummer who lost his job and had to take a lower rate of pay with his job because of the downturn.  Mike feels like a faceless drone supporting the ‘queen bee’ of that is the public sector because our recently elected provincial government stated in their platform that they would protect the frontline public workers and public services of Alberta.

Now here is the thing, Mike and other neophytes of the Free Market dogma, there is this thing called the business cycle.  When you *choose* to work in the private sector you are choosing the insecurity that comes along with ups and downs of said business cycle.  In terms of personal responsibility and making choosy-fucking-choices when the economy is good you will be doing good, and when the economy is bad, you’ll be doing bad too, generally speaking.

This is a choice.  Contrast this with the public sector though, whose wages are generally lower and tend not to increase as quickly or dramatically with the ebb and flow of the business cycle.  Public sector work therefore, is also a choice with related benefits and negative attributes.  Stability over profitability, one could say.

Mike, you don’t get to turn around and demand that the people who have chosen to make less than you in good market conditions all of a sudden should share your pain when the economy isn’t so robust.

I’m not totally against Mike and what he has to say but I don’t think he’s looking at the big picture.   Our government, for the last 41 years, has been taking a shit on basic Keynesian market prescriptions.  When times are great, we lower taxes because we want to attract more business.  When times are crap, we lower taxes to keep our businesses afloat.

Do you see the problem here?  Lowering taxes during the Boom times royally screws the government and people of Alberta.  How do we save for the economic downturns when we have lower revenue during boom times coming in; also lowering taxes during boom times increase the rate of inflation and makes the bubble expand that much quicker – recklessly endangering public health, infrastructure, and public services.   The Anti-Keynesian aphrodisiac the old Alberta PC Party snorted by the bucketful, systematically razed the economic flexibility and resiliency of the province by tying the running of the government closely to the business cycle.

Albertaatnoon    The false-populist beliefs that the ATF, represented by Paige on the podcast, are an extension of this seppuku inducing cycle that our old government perfected.  What is fascinating to behold is the scepticism over what beneficial counter-cyclical government economic policy is actually supposed to look like.  The government is supposed to spend more and take on debt to moderate the business cycle during economic slowdowns, conversely, the government must raise taxes during the high times to pay of accumulated debt and to moderate reckless growth and expansion during the boom times.

This is what moderating the business cycle is all about and why it is so important is because when you shave off the peaks and troughs, the people who make up the economy have a better chance of keeping things together and surviving in whichever phase the economy happens to be in.

This basic understanding of Keynesian market management is in the curriculum. I’ve been taught, and have taught it to students in this province.  Why we elect governments (up till recently) that don’t apply this basic economic fact boggles my mind.

 

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