Gambling, philanthropy, sucker punching the poor

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While I was visiting family in Ontario a few weeks ago I heard that a couple had won $50 million on the Ontario Lotto Max. That’s a lot of money. I remember thinking, what would I do with $50 million? That kind of cash can buy a lot of dreams. And I suppose that’s why lotteries are so seductive.

I don’t buy lottery tickets. It’s complicated. I don’t think I deserve money for nothing. Personally, I don’t get any thrill playing the lottery. I’m pretty sure the odds aren’t in my favour. And I don’t think my government should be in the lottery business—which is simply a voluntary tax on the poor.

But lotteries are big businesses for governments. So, you might ask, why did our governments get into the gambling business? Well, how about…because they were running short on cash. Since the 1970s governments around the world were lowering income tax rates for upper income earners, cutting back on estate and capital gains taxes (also to the benefit of the wealthy) and slashing corporate taxes (again for the wealthy), so the money had to come from somewhere.

And that somewhere was from us. Luxury taxes hit booze and cigarettes. HST hit pretty much everything we bought. There’s tax on gasoline. Import duties. Licensing taxes. Land and property taxes. All in all, the average middle-income Canadian family pays out 43.9 percent of its total earnings in taxes.

But even at that rate, it’s still not enough to support our government spending (what with all those tax claw-backs for the rich) on, say, new prisons, fighter jets and warships. So what about gambling? It’s fun. There’s always a big winner to get the suckers, er, players excited. And it literally prints cash for the government. Hell, even the conservative Fraser Institute supports it! Here’s a quote from their online paper, “Gambling with Our Future?”

“Those who participate in gambling activities do so voluntarily and, in return, receive intrinsic benefits from their consumption. If consumers are gambling for entertainment purposes, they are purchasing gambling just as they would purchase cinema or symphony tickets.”

What a humanitarian view. Except that the house is always rigged and the suckers, er, citizens always lose. And lotteries are a growth industry, expanding profits by an unhealthy 15 percent a year.

Meanwhile, the wealthy have no desire to play the lottery. They have money of their own. So they “voluntarily” don’t play. Instead, they invest what they’ve gained from their lower tax rates in other things. Such as off-shore bank accounts. Or investments that earn them even more money as “capital gains” which are, of course, taxed at a much lower rate than ordinary workers’ paycheques. Or charitable foundations.

A charitable foundation is the gift that keeps on giving. It gives the founding donor an income tax exemption for the organization (thus protecting the initial gift), and it gives the organization tax deductions for contributions to the organization (usually benefiting the contributing donor and family).

There are other benefits. The donor (not the government through taxes), gets to choose which social projects will get funding. The donor can also influence recipients in any number of ways, which at its basest level provides free PR for the donor family name. But this influence can also deliver political influence as well as community respect. And I haven’t touched on corporations that get into the philanthropic game, which coincidentally tends to be good for their bottom lines.

Big deal, so what? Well, ‘so what’ is important. Both lottery corporations and philanthropic organizations turn the rest of us into beggars. For example, of the individual grants given out by charitable corporations more than 80 percent are less than $5000, this in a multi-billion dollar philanthropic industry in Canada. That’s a whole lot of scrambling for scraps off the tables of the wealthy.

There are the big donations, too, of course, that are sought by swarms of professional fundraisers. Unsurprisingly, disproportionate numbers of big grants go to big name organizations in Canadian urban centres, especially Ontario, while regions like Atlantic Canada only account for 1.1 percent of total gifts. Perhaps things like hospitals, research centres and theatres in big cities bring more cache to their donors.

This is not to say that lotteries and philanthropies don’t to good work. But at the end of the day the best we could say is they’re a distortion of the social contract. Rather than building a progressive tax system that works to redistribute wealth from the top to the bottom, and to keep generational wealth to acceptable levels, we’ve allowed wealthy dynasties to re-jig our democratic financial system to their benefit.

There is any number of targets to blame, from wealthy lawyers who become politicians to corporate lobbying and old boy networks to maintain a system in which the rich get richer.

But the real blame is ours. If we keep allowing ourselves to be treated like suckers, that’s what we’ll be. The first step is boycotting the government lottery system. The second is electing politicians who aren’t intimidated by the wealthy or afraid to tax their money. Good luck on both counts, I say.

This is your world on crisis management mode

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It’s been suggested that, if I’m so eager for good development, I should run for mayor of our small town. As the joke goes, “I already gave at the office.” In other words, I’ve already tried putting together a free town development function, which met with less than marginal cooperation.

But I still think about sustainable development. The town in which I live needs 3.2 million calories of food a day to keep its population fed. To do that we use 32 million kilocalories of fossil fuel every day, or over 360,000 gallons of fuel a year to produce and deliver our food.

We all know that two things are happening. One: burning fossil fuel is leading to dangerous climate change. Two: we’re beginning to run out of fossil fuel, especially light crude oil, the easiest stuff to extract and burn. Which leads to the third: we won’t be leaving our children the same opportunities we inherited.

So why aren’t we innovating as if the world is on fire? (Because it clearly is.) Why aren’t we passing legislation to restrict the use of fossil fuel and developing energy alternatives as rapidly as we can?

Because “we” are no longer a production economy. We’re a service sector economy. Over the past four decades we’ve handed off real production to “developing” nations in Asia and South America. Our country is primarily a management and consumer society. We’re maintenance people, not producers. For the most part we run distribution systems.

Our modern global economy runs on three principals: centralization, management and risk aversion. All three of these driving forces are based on a shift away from national policies and toward maximizing risk-free international profits. And this has created a fourth dynamic: finance-as-industry, which is now seen as its own independent economic force.

Where finance was once a mechanism for transactions, it’s now a profit generator…independent of production. Over the past 30 years new financial “instruments” such as derivatives have been invented to create cash. What, in fact, has been happening (although most of us don’t seem capable of understanding this) is that monetary wealth is being created directly from concept. Financial institutions have become magical entities that create digital cash out of thin air and then loan and trade this digital cash for even more cash. If it seems crazy, it is.

And our schools are filling up with business students who plainly see where the future lies. Science and innovation are for nerds and losers. Besides, if the nerds do come up with something, the new generation of managers will simply buy it and put it to work. In theory, anyway.

But clearly the system is not working. Unemployment in North America is at an all time high. Canadian manufacturing businesses are struggling to keep ahead of the high Canadian dollar, which is making their products less competitive internationally. Meanwhile, the Canadian resource sector, most notably the Canadian tar sands, is booming; in effect turning us back into a nation of hewers of wood and haulers of oil. This is not exactly the path to innovation.

In fact, since the 1970s the world’s economy has been operating in crisis management mode as corporations and governments strain to maintain the fossil fuel economy. It’s been recession following recession as bubbles form and burst. There was the OPEC oil embargo followed by the inflationary bubble followed by the Japanese asset bubble, followed by the Asian financial crisis followed by the dot.com bubble followed by the sub-prime lending bubble which finally led to the current financial collapse.

I won’t even touch on the military interventions over the past 50 years, most of which have direct connections to either nationalized central banking systems, nationalized oil reserves or other nationalized resources which, coincidentally, Western-based corporations seek to control. Now that Libya is done, it looks like Iran will be next.

But was has this got to do with our little town in our little corner of the province? Well, everything as it turns out. All of our food and manufactured goods come from somewhere else. We are totally dependent on a very complex global system that is becoming increasingly unstable and unsustainable. We are, all of us, operating without an insurance policy. We don’t produce enough of our own energy locally. We can’t grow enough of our own food locally. And at every level our governments are in “management” mode, rather than innovation mode.

If ever there were a time to reevaluate our governments, now’s the time. For starters, I’d suggest that New Brunswick set a new direction for itself: as the leading model for sustainability, both environmental and economic.

But first one would have to ask: “where’s the leadership?” We certainly seem to have a lot of managers but very few visionaries. Well, we’re not about to find them. Why? Trust me on this. The last thing risk-adverse managers want are creative, risk-taking innovators.

It seems we’d rather go on managing crises than envisioning a bright new future.

Addendum:

By "visionaries, leadership and innovators" I don't mean to suggest that we look toward heroes. As John Ralston Saul correctly points out, the rush to heroic leadership is an error equal to or exceeding technical management as an ultimate solution.

Visionary leadership lies somewhere between the hero and the technocrat, or in actual fact outside those two frames altogether. Visionary leadership embraces the actual situation of ordinary citizens, consults with them and others on what the present situation may mean for the future, and builds both a vision and a consensus on what should be done.

Where Barack Obama represents a manifestation of the hero and technocrat combined, examples of Canadian visionaries would include Lester Pearson who correctly interpreted the Canadian sensibility and envisioned Canada as one of the world's true peace-keepers, or C.D. Howe who envisioned a Canada united through public works such as the St. Lawrence Seaway. Both Jefferson and FDR in the States also characterized visionary leadership noticeably devoid of heroic ego or self-serving behaviour.

These are the kind of leaders who seem to be in such short supply in an ever more managerial-technocratic power structure. Yet this is a time in which we need visionary leadership more than ever.

“Leave it to professionals...” what professionals?

(A local look at development: ultimately all development is local.)

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Like Elvis, the Atlanticade motorcycle event has finally left the building, well, the region at any rate. No doubt pub owners here are shedding a tear, as are local motorcycle enthusiasts. As for the rest of us, we’re probably split into two camps: those who wouldn’t like the region to miss out on the estimated $3 million in annual revenue, and those who won’t miss the sound of those bikes at all.

But one has to wonder, how did we actually get Atlanticade in the first place? I mean, there wasn’t any prior public consultation. And it wasn’t a planned part of any tourism strategy as far as I can tell. It was more or less opportunistic for both parties: the Atlanticade organizers who’d recently left Moncton and the Town of St. Andrews administrators who were looking for more tourism business.

A significant reason for hosting the event here was the financial support of the Flemer family and their Kingsbrae Garden operation. Without that commitment Atlanticade would never have happened here. But this year there was no money to be had to advance-fund the event (for whatever reasons; we haven’t been told by our civic leaders), so Atlanticade departed for the greener pastures of Prince Edward Island.

This issue brings up, once again, the whole idea of coordinated regional tourism and economic development planning. Or lack thereof.

I read in last week’s paper that former mayor Chris Flemming (1998–2001) is running again in St. Andrews. And he is clearly on a mission. “Council needs to encourage development in an organized way,” Flemming said. He also suggested that the town needed to “allow the professionals who work for the community to do so without being slowed or hindered in their work.”

That, to me, translates into having economic development professionals leading the way for town development. That might work except for the fact that the town has no economic development professionals on payroll. Nor does it have an affiliated development board like the one in St. Stephen.

Flemming goes on to invite others to run for council, especially “people who would offer without a set agenda…willing to listen to a wide variety of opinion and understand the need to operate in an environment of good governance.”

This is Flemming’s take on leadership: good governance. But governance, while excellent for control (and making sure staff shows up on time, potholes are filled and bills paid), is no substitute for community vision. And economic development is all about the citizens’ collective view on their own future.

So what is it about Flemming and his fixation on governance and professional services? One might point out that Flemming is an employee of Kingsbrae Garden and the Flemers. And the Flemers are big financial contributors to the community. They and their management team have a great deal of influence on the development focus of the town, much more so than the average citizen. So how much of Flemming’s agenda of governance and professionalism are related to his day job? One wonders.

In short, Flemming has his equations backwards. Governance has never been in short supply in stuffy, hidebound St. Andrews. But vision certainly has been. One would argue that development has never been fully embraced as a collective public activity here. Most development in St. Andrews has been done through the auspices of philanthropy or individual business people. Not that there’s anything wrong with that.

But if St. Andrews, or any other town, seriously wants to develop, it needs to have a council that understands its own culture and what that culture can accept. It would need a real commitment to development that would include hiring a full-time development person, creating a development budget and building a community development plan with the community and not only with its pushiest citizens.

Such a development plan would include a hard look at global trends and economics, including the future of trade, energy and fossil fuel, as well as local-regional options such as coordinating and building on key, core strengths: in St. Andrews’ case, its existing knowledge-based economy which includes the government biological station, marine science centre, salmon federation office, botany garden, visual arts centre and community college. These building blocks, and fine old railway hotel, are already in place. What needs to happen is a development plan based on integration of these pieces.

And something more inspiring.

Passamaquoddy Bay is the reason these communities in Charlotte County exist. First the fishery and later tourism and aquaculture defined the economy here. Whales are now a prime tourist attraction. So I will say it again. The region would be well-served by the idea of an international marine park here to build an international focus on marine science, our knowledge-based economy and ecotourism.

Instead, what we’ve had is local infighting, cross-community blame, opportunism (such as Atlanticade), lack of coordinated investment and now good governance. And the visionaries among us? Punished, ostracized, slandered and shunned. Just ask Art Mackay.

As for Atlanticade and the professionals operating it, has anyone else connected it to the front page story about Hell’s Angels locating in nearby St. George? In development, the culture you attract is the culture you get to keep.

What is this view from the edge?

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It’s real winter here. There’s a foot or more of snow on the ground. It’s cold, not a damp, coastal cold that lasts for a few days; it’s a dry, mid-continental cold with a frozen wind that sets for weeks and cuts through every layer of clothing.

I’m back in central Canada for my dad’s 90th birthday. The plane touched down at the stroke of midnight on the New Year as the snow blew horizontally across the runway. The planeload of tired strangers made a half-hearted attempt at a “Happy New Year” cheer as we waited to get off the plane. I was ready to reunite with family but not ready to reconnect with the climate I’d left behind years ago.

Thunder Bay is defined by its edges. It’s on the edge of Lake Superior’s north shore, on the edge of the boreal wilderness, the edge of the Canadian Shield, the edge of the U.S. border, the edge of civilization.

I write this column from another edge. Southwestern New Brunswick, where I live now, is on the edge of the East Coast, also on the edge of the U.S. border. My neighbours and I are not at the centre of the modern passion play where the big decisions are made, where the dramatic events happen, where the great art and culture is made and played.

So I don’t write about local events as much as I write about how the world looks from here, about the large features on the distant horizon that will affect us all.

Though I’m sick of writing about it, I realize there’s only one thing on the horizon that matters and that’s our addiction to fossil fuel. Everything we’ve done over the past 150 years is attached to it, everything.

I write about it because I don’t know what to do. I don’t know how to change my own habits or anyone else’s. I write about it because I know that we still don’t understand the enormity of our situation. I write about it because I believe that our view from the edge of things gives us, somehow, a clearer perspective than those who are so embedded into the fossil fuel-driven system they don’t have the time to see where they’re at.

After we got off the plane I walked through the empty terminal and outside into the cold and hitched a ride to a hotel in a courtesy van, checked into the hotel and went down to the bar for New Year’s nightcap. I was alone at the bar except for an old woman in a sparkly dress and her husband dressed like Arnold Palmer. We struck up a conversation. They thought I was “from away” and set out to tell me about the city, its new medical commerce industry and new hospital.

The man told me he was a Conservative. We talked politics and finally I asked him if he knew why we were in Afghanistan. He told be it was because “it’s the right thing to do.” I asked if he knew about the new TAPI pipeline plan to bypass the Russian and Iranian stranglehold on natural gas. He didn’t want to know. In fact he got upset. His parting shot was, “if you ever want to go into politics you’ve got to learn how to lie.” And that was it.

I don’t want to lie. I don’t want to say that we’re in Afghanistan for humanitarian reasons, or anti-terrorist reasons, both of which are in fact getting worse since we arrived. Since the 1960s that country, then a modern and progressive state, has been devastated by war, its civilization bombed back to the Middle Ages.

I don’t want to tell you that biodiesel is the answer to replacing oil. It’s not. Neither chopping down tropical rainforests to grow vast plantations of palm trees nor converting huge North American agricultural areas to corn for biofuel does anything to solve the oil crisis.

I don’t want to tell you that our governments are working hard at migrating to new energy technologies, especially here in New Brunswick, because they’re not. Our Canadian government is hard at work promoting one of the most environmentally damaging projects on Earth, the tar sands, while here at home in New Brunswick we seem to have handed over the entire energy policy to Irving Oil, with the exception of maybe the controversial and ill-advised refurbishing of the Point Lepreau nuclear plant, another potential ecological disaster of epic proportions in waiting.

I don’t want to lie about the hidden corporate influence over our democratic processes, or condone the loss of civil rights like, for example, Obama’s new National Defense Authorization Act that “allows” the U.S. to go into any country and seize any citizen suspected of wrongful activities.

If the refusal to join the mainstream and draw curtains of lies over the rush for the last reserves of fossil fuel means that I’m on the edge, so be it. Unless we acknowledge our actual political situation and remove the veils of deception, any hope of transitioning to viable alternative forms of power is a hollow exercise destined to fail.

I’m going outside now. Damn. I wish I had a warmer coat.