Occupy Vancouver – my experience

I was in Vancouver for the weekend and spent some time at the ‘Occupy Vancouver’ tent-city.  I read much of the material they had posted around the location, some of which, at a casual glance, was grossly erroneous; Canadian banks don’t have minimum capital requirements?  Guess no one read Basel III before making their signage or (in Canada) the Bank Act.  One sign had a suggestion that building tunnels between major urban centres to house a mag-lev train which could travel at 4000km per hour (yes, 4000) was more cost effective than continuing on with the airline system.  Now I’ve read a bit about mag-levs (I think they have some in Japan, China and Germany) and while they can be powered by electricity generated by alternate energy power-plants, even when full-cost accounting is taken into consideration, I can’t see how a tunnel underground between Vancouver and Toronto (let alone closer cities like Seattle or Calgary) could possibly be less costly.  Anyway, I digress.

I had a chat with the communications director for fifteen minutes – nice guy and very articulate.  He was quite candid with some of his answers.  Turns out he didn’t actually stay in the tent city but rather lived in an apartment in Yaletown and just came down to the site on evening and weekends.  I didn’t realize that the majority of the tenters, according to this guy, are actually homeless people and are not directly involved in the ‘Occupy’ movement.  Anyway, this fellow worked for a food distribution company, driving a rig and said Occupy Vancouver has had some problems with the organization of their ‘members’ – ‘too many chefs’ was his expression.  Everyone wants to be at the top of the pile and there is so much in-fighting they can’t get around to actually codifying their goals and objectives.  He hopes the winter will cull the herd, leading to a more focused group next spring.

I must admit that I’m still not entirely sure what the ‘Occupy’ movement is fighting for right now.  I’ve read numerous articles, news releases and blogs but many have varying opinions or platforms.  Here are a few words from the Occupy Wall Street website:  “Occupy Wall Street is leaderless resistance movement with people of many colors, genders and political persuasions. The one thing we all have in common is that We Are The 99% that will no longer tolerate the greed and corruption of the 1%.”  What does this mean?  I haven’t been able to find a definition of the 1%; for instance, if they mean the wealthiest people I would have to 100% disagree with them as two people I’ve personally met (Warren Buffett and Bill Gates) are in the top five wealthiest people in the world (ipso facto in the 1%) and one can’t really say they’re greedy as they’ve already given away billions.  In fact, if I look at many of the wealthy people I know personally (and due to my line of work, I know a lot), most of them worked hard for their wealth, managed their finances and were prudent and these same people are extremely generous with their dollars, supporting a massive array of causes, organizations and groups.  Are they part of the 1%?  Are they not to be tolerated?

Does the 1% refer to countries?  If so, we’re in trouble as Canada is definitely in the 1% of the world’s wealthiest nations?  Does this mean Occupy isn’t going to tolerate Canada?  What form of resistance does that take?

Don’t get me wrong; I think that some things need modification in our current global situation.  One need only look at the absurd lending practices around the world.  A more targeted change might include a cap on executive compensation, as long as it was across the board – every industry, every company.  Hmm..I might take that back as I’m CEO of my company and I don’t want to limit my compensation.  However, we could extrapolate this to celebrities?  Sports stars?  Where does it end?  While we’re at it, I find it ironic that a number of the most outspoken supports of ‘Occupy’ are Hollywood actors, many of whom would easily fall within the 1%?  I read an interesting article today regarding Michael Moore (click here) – it seems as though he is playing both sides of the fence on this whole issue.

I don’t know what solutions are proposed by Occupy Vancouver; indeed, as mentioned they don’t really have their platform solidified yet.  I do know, however, that the government cannot give to anybody anything that the government does not first take from somebody else.  I’m still trying to get my simple brain around the whole concept but whatever your personal point of view, the ‘Occupy’ movement makes for a lively conversation.

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7 thoughts on “Occupy Vancouver – my experience

  1. Jon Boisseau

    I guess it depends on whether you view tax as a “penalty” or as a “cost”. If you see it as a penalty for being wealthy, then I can see how it might be demotivating. I’m more inclined to consider the payment of taxes as an expense – taxes buy me civilization (to paraphrase Mr. Holmes).

    You’ve built wealth partly using your initiative and hard work. But how would you have done without decent public schooling and subsidized post-secondary schooling? Banking and investment regulations? Public infrastructure such as roads, bridges and airports? How about law and order to make sure nobody takes your wealth away? Maybe you don’t take use the more highly visible government services such as welfare and health care, but I would argue that you’re using up more than your share of the regulatory, legal, law enforcement, and educational services provided by your government (you freeloader!).

    Here are some stats for you. The median income for the bottom 20% of earners in Canada dropped from $19,300 in 1980 to $15,300 in 2010 (all in 2010 Canadian dollars). The median income for the middle 20% of earners in Canada has not moved in 30 years.
    However, (and you knew this was coming) the richest top 20 per cent of Candians found their salaries rise by 16 per cent to $86,200. In 1980, 3.4 per cent people reached that value. By 2010 this value jumped to 6.5 per cent. (again, all using 2010 dollars for sake of proper comparison).
    Are you really prepared to argue that the top 20% of people showed 16% more initiative than in 1980? Did the bottom 20% get $4000 lazier? Or is the game just rigged a little more for those top earners than it was back then? Shouldn’t prosperity float all boats?

    Speaking of demotivation, what would it be like to wake up in the middle of the night after working a dead-end job for 20 years and worry about how you’re going to retire or ever buy your own house? Then you lose your job in the downturn which was (partially) caused by financial shenanigans on Wall Street? If it was me, I might be tempted to pitch a tent in a park and let people know how pissed off I am.

    Here’s the crux of my argument: the top earners should pay more, not just because they can afford it, but because they have benefitted more from our collective society than the lower earners. We’ve taken more out, so we need to give more back to make sure that those who’ve had less opportunity are taken care of and have a shot at a decent future for themselves and their kids. Canada has it more right than the US, but we’re going in the wrong direction.

    The Occupy movement may have lost the thread of the argument somewhere along the way, but before the waters got muddy their message was this: they are tired of the rich getting richer and the poor getting poorer. It’s a good message and we need to listen.

    • Sorry for the slow reply – work got in the way. It’s a good debate but not simple. I agree that taxation represents a cost not a penalty and I’m definitely all for paying my share. I don’t follow how, according to you, I am using/used more than my fair share of various government services. I definitely did not use the medical system, I didn’t receive any money for post-secondary, I used the school system (as did the 87% of Canadian children who graduate). Don’t worry, I know you were joking about the freeloader comment (or maybe not..hahah…gulp!) but I don’t follow how I might use more services than another? Maybe I’m not seeing the broader picture.

      I think where I am stuck right now is who comprises the 1%? Is someone who has a net worth of $500,000 part of the 1%? Is the threshold $2 million or more? I have no idea and I think this is a frustration of many of the people with whom I speak. For instance, in real dollars, as you state, salaries of many people (including teachers, some health care professionals) have not increased in years. From a wage perspective, with regards to your stats, these would be classified as part of the 99%. Would my parents, people who managed their affairs very prudently, be classified as part of the 1%? They certainly didn’t start off that way but through hard work and sacrifice have moved into that top percentile on a global basis. Should they now be asked to contribute more because their years of ‘doing without’ resulted in a strong increase in their net worth? That would actually be an interesting side topic for debate; what happens to someone who is in the 99% but gradually works into the 1% – how does Occupy classify them?

      Closer to home, let’s look at my situation. Again, I don’t know if I am classified as part of the 1% but for arguments sake, let’s say I am. I worked hard in high-school, I didn’t take out student loans in university, I bought property and paid it off, I started several businesses using my own capital with no government grants – should I now be asked (hypothetically of course because who knows where Occupy would classify me!!) to pay a greater share, because, as you state “the top earners should pay more, not just because they afford it, but because they have benefited more from our collective society than the low earners”. I am successful in business not because of regulation (which applies to everyone in Canada) or education (I pay and I pay!!) or because we have good roads and hospitals but because I am good at my job, I work extremely hard and I treat my clients well. I’m just using myself as an example but the same is true of every successful business; success by it’s very definition has to have elements of what I just described because if it didn’t a business would not be in business very long.

      I understand that some people are disenfranchised, they just never had a chance in life, and for these people, I am absolutely happy to support them financially and I think our society has a duty to do so. In fact, my business has an annual five figure budget for just that purpose. My problem, and perhaps this is the origin of my issue with the Occupy movement, is that I am tired of people feeling that society owes them something. The UK right now is in dire straits because fifth and sixth generations of families have lived on social assistance; it has become a way of life – why work when the state will support you? Immigrants from Eastern Europe move to Britain specifically for this reason. Greece, Spain and Portugal are spiraling down the toilet because of entitlement – no one wants to work. Did you know in Greece people got bonuses just for showing up to work? Or that the transit system was paid for with EU money for the Olympics and that the Greeks decided to have fares collected on the honour system? Needless to say, revenues were nil but that didn’t stop the average Greek transit worker from collecting a salary equivalent to about $90,000 CDN. I guarantee you someone in the 1% who owned a business wouldn’t have made the same mistake. Here at home, to look at things with a ‘local’ view, there are people with whom you and I went to high school who made decisions that have resulted in them living off the system, complaining how unfair life is – we all started on roughly the same footing but we made different decisions which have resulted in us having more or less wealth. They had the same rule of law, education opportunities and regulatory structure but did not use this infrastructure properly. I’ve had high-school work experience kids come to my office and say they won’t start work unless they are paid $25/hr – this while the minimum wage is $9; they don’t want to work, they feel they are entitled. Anyway, enough ranting from me!!

      I am not against paying a fair share and I think in some cases (e.g. RobinHood tax) that adding to business tax in order to generate more revenue for the public good is OK. This would more than likely extend to the 1%, most of whom are business owners anyway. We do have to remember that government has never generated any revenue – it consumes and distributes it. If we want more public services, more economic equality, some increase in tax may help but allowing business and commerce to flourish actually generates far more revenue, not to mention employment. I redistribute my wealth every time I hire a new consultant or employee; buy a new software system or renovate my office. I think extreme forms of socialism proved that prosperity does not float all boats; despite a system designed to share wealth, the political elite gained, not the common folk (e.g. 99%). Your statement “…we’ve taken more out, so we need to give more back” is fallacious in my opinion; if you look at my tax returns, I’ve paid back far more than I’ve taken out!!

      Anyway, it’s a good debate, I certainly don’t have a solution but I am very open to learning more about what could be done. I hear what you’re saying about the thrust of the Occupy movement; I just don’t agree with their broad brush generalized statements.

      • Jon Boisseau

        This is a good debate, mainly because I think there are a lot of points we agree on. For example, although it served as a powerful symbol at the outset of the Occupy movement, I think the distinction of the “1%” vs. the “99%” is essentially meaningless. You might as well make it about the “23rd percentile” vs. the “68th percentile”. Once you start bogging things down like that, people start splitting hairs about definitions and can’t see the forest for the trees. The point is the inequality of income distribution overall, so it helps to disregard income thresholds altogether.

        I think we also agree on basic principles about taxation. A certain level of taxation is necessary to maintain a functioning society in which everyone has an opportunity to create prosperity, although I think we might disagree on exactly what those services should be, how they are consumed and how much we should be paying for them.

        I also want to add that I don’t mean any of this personally – I know you’ve worked hard to build an ethical business that gives back to the community and that your commitment to social causes is exemplary and heartfelt. Regardless of what percentile you fall into, you are manifestly NOT part of the problem and certainly part of the solution. I’m not saying that YOU should want to pay more taxes – that is not my point at all – but I don’t want to pre-empt myself. Let me explain a few things first.

        My point on the higher consumption of government services by the wealthy is not my main point at all, but I seem to have not explained it very well and it’s distracting you from my main point, so let me try again: in your building, I trust that rent is based on the square footage of the office, correct? The bigger the office, the higher the rent because you are using a greater share of the total resources available. Perfectly logical – you use a greater share, you profit more from that greater share, so you should pay more. That’s how I consider government services – the larger stake you have in society, and the more you’ve benefited from it, the greater responsibility you have to give back. By “benefited” I don’t necessarily mean direct payments like welfare (which is about 2% of the total budget) or even direct services like health care – I mean benefited from the entire gamut of services that your Federal, Provincial and Municipal governments provide.

        For example, how would you run your business if the taxpayers didn’t provide you with police and rule of law to protect your wealth and property (house and business)? You’d have to pay for a ton of private security instead of maybe one security guard at your place of work, right? That’s a huge overhead cost both business and personal, but one that all Kenyan business and home owners have to undertake because the Kenyan government cannot provide decent policing or courts (no training, no vehicles, no radios, all on the take). Just my house in Nairobi has over $22,000 worth of security equipment, not counting salaries for night and day guards and electricity for the high-powered security lights that are on all night. That’s a cost that you don’t need to undertake for your house because the Canadian taxpayer absorbs it for you by providing a reliable, well equipped and well-trained police force backed by a reliable and efficient courts system (and don’t think Canadians are somehow less likely to clean you out than Kenyans – take away the police and courts and watch Canada become Somalia within a year). Other Canadians don’t consume this security and protection of law to the same degree because they don’t have as much to protect (they don’t own businesses and they rent an apartment, for example). You are getting a free ride on the protection of your property, my friend – the more you own, the more you have protected through the courts and the police and the more you save on overhead provided by the taxpayers. When you start thinking about government services in the form of overhead costs saved and extrapolate that to every service the taxpayer pays for, I think my point becomes clearer. And by the way, your university education cost the taxpayers about $140,000 – far more than it cost you.

        You also cited several examples of clear mismanagement of public funds and people who take advantage of the system. I certainly hope you don’t really believe that “The UK right now is in dire straits because fifth and sixth generations of families have lived on social assistance” – the problem runs much deeper than a few people with an overreliance on social assistance (although it does make for good headlines – “Global recession caused by people on social assistance!”). I won’t disagree that some people have an overdeveloped sense of entitlement and I do agree that this is part of the problem, but everyone has entitlement issues – rich and poor.

        Okay, finally, here is my main point (again). Boil down the Occupy message. Remove 99% of it as nonsense and keep only the 1% that’s left (get the joke?). The important message coming out of those camps is that more and more wealth is being condensed into fewer and fewer hands and it’s stressing people out. When I wrote that “prosperity floats all boats” I was borrowing a bit of terminology from development economics – when prosperity rises, everyone’s “boat” (income, lifestyle) should rise as well. That’s not happening as we can see from income statistics – the rich are getting richer and less and less prosperity is trickling down to the rest. It’s a problem that the private sector does not seem keen on fixing and you can’t blame them – their stated purpose is to create profits for their shareholders, regardless of the lip service they pay to “corporate social responsibility” (again, my intention is not to include you in that statement). So it’s left to government to regulate through fiscal policy. Otherwise, the problem grows over each generation.

        Please don’t exaggerate my point. I’m not looking to take 90% of people’s income or remove your incentive to build a business. Soviet-style socialism is as much a path to failure as a pure market-based approach. I think we both agree there’s a middle ground that’s workable, but neither of us is sure how to get there. Private sector and government both have a role to play, but unless we address income disparity, the problem just gets bigger. Better to address it now when people are politely setting up tents and writing signs. Not to get all Anthony Burgess on you, but it could get much, much worse.

  2. Ben Fitzpatrick

    Hey Ben,

    This whole 99% vs 1% I find baffling as well. I did some “googling” and found a summary of the results of a study done by the World Institute of Financial Development Research in Helsinki from 2006 which from what I can see is where this all originated.

    Anyways, the study found the following (condensed version)

    The wealthiest 1% of the world population (adults) control 40% of the World’s assets. To be included in this group requires $500,000 USD in assets

    The wealthiest 10% of the world population control 85% of the world’s assets. To be part of this group requires $61,000 USD in assets.

    The Protesters prefer the term “rich” which conjures images of Donald Trump and Richard Branson, but that’s clearly not the case. I don’t consider myself rich but I am clearly part of the 10% and not far off the 1%.

  3. Martin

    Thanks for this Ben. I like your well-balanced opinions.

  4. Jon Boisseau

    Ben, thanks for the pictures and the on-the-ground perspective.

    I agree with a lot of what you’ve written on the specific grievances voiced by the Occupy crowd, but I think the whole here is more important than the sum of the admittedly misguided parts. Incoherent as it is most times, the Occupy movement is a signal that the polarization of income distribution is causing serious discontent and real hardship to those at the wrong end of the scale. The answers aren’t easy, but those who profit most from society should be willing to give back a proportionately large share. This is less relevant in Canada where income distribution is less inequal, but increasingly relevant in the US. A lot of 1%ers would agree, including Warren Buffet who has been quite vocal about wanting to pay more tax.

    And one small correction I can’t help but make (forgive me for being pedantic). Canada isn’t in the top 1% of nations either by per capita or nominal GDP. We’re 10th and 13th respectively, placing us, at best, in the top 5%.

    • Good point re: Canada – I guess feeling like we are in the 1% doesn’t make it so!

      I’m not sure where I stand on the proportionately large share. Canada has a progressively scaled tax system in that the more income you make the more tax you pay. The scale has brackets up to about $129,000 income per year – after that, everyone is basically paying the top tax rate which is nearly 44%. My question is that if I am a private citizen, should I be penalized (i.e. pay more tax) if I build my income and wealth by managing my affairs and running my businesses? I’m actually using ‘less’ of the communal resources of the state (e.g. welfare, medical) because I have more money to look after myself. Warren Buffett doesn’t want to pay more tax (I think that is a bit of a misquote) but rather he wants to pay his appropriate tax rate. For example, in 2010, he paid just 17.4% of his income in federal taxes, largely because most of his income was taxed at the 15% dividend and capital gains rate. Buffett’s ‘tax the wealthy’ concept is just that people should pay their fair rate not a proportionately larger share; his suggested plan would increase his tax rate to 35%. In Canada, if his income was CDN $$ he would be taxed at 44%. In my mind, what the ‘Occupy’ movement is suggesting is that the top earners should pay more because they can afford it; for example, a CEO who makes $20 million in a year should perhaps pay $18 million in tax because he can still have a nice lifestyle on the remaining $2 million. To me, this is not only not fair or reasonable, it would quickly undermine the system; why would I work hard or do a good job in my business life if I knew my income was just going to be taxed away?

      Anyway, I admittedly don’t know the whole ‘Occupy’ platform (nor do they either it appears) so maybe I am just barking up the wrong tree. It will be interesting to see how this develops.

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