Statistical recovery, human recession — McNally

We are in a statistical recovery but a human recession, says author and academic David McNally, speaking May 28 at the Students for Medicare conference in Toronto.

While the statistics show economic growth, jobs, personal income and public services are failing to recover.

“Medicare and public health care are one of the key social justice issues of our age,” says McNally. “We are in an entirely new historical moment.”

He says there is a more subtle set of strategies to undermine public health care, including privatization. It comes at a time when we need health care the most.

According to the Ontario Medical Association, Canadians are spending less on food, exercise and pharmaceuticals – three areas that will impact on the delivery of public health care.

McNally said that public services are now under one of the most unrelenting attacks in several generations, leading to what some are labelling “the age of austerity.”

These attacks on public services are having an impact on countries such as the UK where they are about to fall back into recession.

Whereas government had previously told us that programs such as universal child care or national pharmacare were not possible, it suddenly became possible to use enormous sums of money to bail out banks and other corporations, he says.

McNally estimates that the worldwide cost of the bailouts and stimulus – largely to construction firms – is $21 trillion, or about a year and a half of the entire economic output of the United States.

“When it comes to bailing out capitalist institutions, the cupboards are not bare,” he said.

“It tells us a lot about global elites and their governments.”

The age of austerity effectively found its beginnings at the Toronto G20 summit, where governments decided to direct belt tightening at public and social services. That belt tightening does not apply to police, military and prison building, tools governments will use to stifle unrest from these policies.

McNally says the process has already begun, pointing out that Latvia has fired 30 per cent of its teachers, Ireland has cut public sector wages by 15 per cent. Greece has cut public pensions. In the U.S. the State of Michigan has closed half of its schools, taking the average class size up to 60 students. California has cut health insurance for 900,000 children. Arizona scrapped all public health insurance for children.

Ontario is not exempt, noting the province has already cut the special diet program for individuals on social assistance.

While this is taking place, corporate taxes are being cut internationally.

McNally points to Mervyn King, Bank of England Governor, who has expressed surprise that there is not greater anger over the price of the economic crisis being paid for by the very people who did not cause it.

Instead governments are creating myths about out of control costs, blaming public employees.

This statistical recovery overlooks an unemployment and underemployment rate in the US that is more than 17 per cent. Among black and Latinos, it is between 24-25 per cent.

“Half of U.S. school –age children will be reliant on food aid at some point in their childhood, and among African-American children it will be closer to 90 per cent.”

The “Great Recession” has driven 64 million more people into poverty world-wide, many affected by spiking food prices created by speculators. 47 million will be driven into conditions of absolute hunger.

McNally says we are only in the first phase of this new age. Quoting Naomi Klein, he says governments are using the shock doctrine to push through this roll back of social programs.

The goal, he says, is a lower wage economy, low tax, and a low cost investment climate.

McNally compares the present era to the 1930s. People forget that while there were great changes in the 1930s, these didn’t happen until the latter half. Under Canadian Prime Minister “iron-heel Bennett” life was miserable for many Canadians until a coherent social movement forced changes.

He says there is hope in social movements, but this is a process that will take time.

“We need to think about a longer horizon that next week or next month,” he says, certain that the “last laugh will not belong to the Stephen Harpers and Rob Fords of this world.”

David McNally is author of Global Slump: The Economic and Politics of Crisis and Resistence. He teaches at York University in Toronto.

David McNally speaking at the Students for Medicare conference May 28.

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