The Wealthy Banker’s Wife Essay, Research Paper

Synopsis & Book Critique of Linda McQuaig s The Wealthy Banker s Wife .

Synopsis of the author s main argument and rationale:

Linda McQuaig in her piece focused on our welfare state performance and status, The Wealthy Banker s Wife, discusses the current status of our social transfer systems, their efficiency and the fear of their dissolution by various government actions.

The argument is kicked off with the criticism of the usual comparison of our social economy with the US s and how irrelevant that should be. McQuaig describes her own personal experience witnessing American social failures, and illustrates data highlighting the level of inadequacy the US welfare system has reached.

She describes how the US has turned away from an egalitarian approach to free market standards where social welfare and various social benefits are targeted strictly towards the poor. She argues this not only makes the actual systems weaker and weaker over time since the poor don t have much leverage defending themselves, but also weaken the total economical structure of the country as a whole over time.

In response to allegations that a strong welfare state is a burden on the economy and weakens the general output, the author provides example of the western European and Scandinavian nations where social spending is in some cases above half their GDP and still have flourishing economies. She wonders how can such economies make it, while the world second highest GDP per capita, Canada, supposedly cannot!

The author stresses that while the US with all its might is managing to suppress the poorer classes and slowly but surely put the social transfer systems in the hands of private organizations, Canadians in general do have a different view of how they d like their state s systems to run. The hated concept of Big Government in the US is not such an awful factor to Canadians who are happy in their welfare state status and have grown to appreciate it. For instance, families under the current system do not have to worry about simple food and shelter as they did in the 1930 s.

In other common causes like infant mortality, child welfare, education and Medicare where the US rates the worst in every level, Canada while doing better than the US, is slowly slipping into the US level and currently far under its European peers. A Swedish economist, according to the author, did not even know what the concept Food Banks was.

The author highlights how families in Europe all share the benefits of the welfare state system without exception, even the queen in Sweden collected child benefits. She states that this would not only promotes an egalitarian society, but also removes the clich s and embarrassment in receiving welfare and it being tabooed as for the poor only.

There are five major points the author stresses as important aspects to preserve since Canadians do want their welfare state:

+ Child benefits.

+ Welfare payments.

+ Employment Insurance.

+ Education.

+ Healthcare.

The author stresses the need for Canadians to keep the programs alive and efficient for the welfare of Canadian society. She highlights the various threats by the government to dissolve these programs in many ways including some misleading ones.

For instance, the Mulroney government preached reforming the Child Welfare program and adding to the payments 500$ per annum. However, what many have missed out on is the fact that under the reformed proposal, the total payments were only partially indexed to inflation which means that with the years going by, and the general price level of goods increasing, the actual numbers become lower from what families really need in those times in the future to buy their usual basket of goods. Therefore, the author is stressing that one must study in detail their government proposals since it is more influenced by the business sector and tends to mislead people to get its agenda implemented.

For Education, the author stresses its importance and how it is rather unfair to be born part of a social circle where you cannot afford the quality education of other kids but do not lack in potential. Se highlights the example of Edmonton where the better public schools are in the wealthy areas taking money out of the funds for the rest of the schools. The public school there becoming like the town s private school.

McGuaig gives data that black men in Harlem have life expectancy levels lower than many African countries in starvation. If Canadian governments want to follow a strategy leading in that direction, Canadians should look into whom they vote for. The author mentions data proving that millions of Americans cannot afford their private health insurance, and many companies in the US offer cash replacement arrangements in compensation for insurance. That leaves a large number of the population at risk of no health care and subsequently bankruptcy from medical bills, or chronic illness or death. These are very common in American societies, however rarely mentioned in American media or movies the primary medium advertising American lifestyle and culture.

Author s Conclusions:

In conclusion, the author recommends the following:

1. The social welfare systems should be universal. The programs should be egalitarian in approach and secure a decent standard of living for all Canadians of all social levels. In short, these programs should not be exclusively targeted at the poor.

2. Establishment of a Universal Daycare Program: The author believes that by establishing a universal daycare program, less children would grow up poor and therefore giving them an equal chance at a high standard of living.

3. Gender equality.

4. Fight unemployment.

5. Reform to a fairer tax system.

Reader s Critique:

One can agree or disagree with the author s opinion, depending on their views of an ideal state, and more importantly their current social standing.

Clearly someone of the higher classes with no interest in general growth except for his own would drift towards an pure competition on all levels of social interactions, from commerce to transfer systems.

However, what this upper class citizen is missing on is how far can such a system be sustained. If he s been fortunate in this lifetime, his offspring might encounter a wheel turnaround and they would wish an egalitarian system existed where they could have another chance at a better standard of living.

In my view, the wealth accumulated by the rich has come from general society. The rich had started a business, sold a product, made money, grew horizontally and vertically, and the money poured in. Where from? The general public s pocket. What most major companies keep ignoring is that this same public there are denying their share of public services, welfare, education, Medicare, etc is their actual market. In other words, their customers.

The author in my opinion fails to demonstrate how the welfare states of Western Europe and Scandinavian countries enjoy a flourishing economy while spending more than half their GDP on social transfers. I would say a major part of the reason is simply that the purchasing power of the general population is always evened out, and the revenues are redistributed to maintain everyone above a minimum level. This keeps companies always in business, and prosperous, since their customers can still afford their products.

From a different angle, when discussing education, it would be the biggest shame for Canada to join in with the US at such a low standard of a public school system where the dropout rate is steadily increasing, and in-class frustration is leading to increased criminal activity.

In Canada we enjoy a somewhat stable educational system where everyone has a shot at quality education should they be serious about it. This production of high quality human capital is essential for the economy to achieve its goals. We are constantly trying to import quality human capital since we do not produce enough; taking measures to reduce the local production of human is clearly not the right choice.

When it comes to a nationwide policy maker, I believe the government elected by the people must pursue what is in the people s interest and keep away from misleading actions such as introducing increments to certain benefit programs to get them passed, but hiding in the formula that most people ignore the fact that its not fully indexed to inflation. While agreeing with the general ideas of the author, I wonder whom the publication was addressed to. It s sold in general bookstores, so I m assuming to the general public. I would have liked to see recommendations as to what the public should do and the kind of research they need to make in order to avoid falling in these government traps, and knowing who to vote for to preserve their welfare state healthy and efficient.

Certainly the author made solid recommendation as to what the government should do. I will touch on a couple that I feel are particularly important.

A universal daycare system and making gender equality a top priority are very related. If gender equality is not very obvious in our society today, its simple due to the fact that women by nature feel the need to care for their children and companies tend to avoid having to deal with their missing work and lack of motivation since their top priority, in general cases, becomes their children. Men on the other hand generally are focused on their work, with or without children.

To bridge the gap into a more acceptable level of gender equality, a universal public daycare system would certainly relieve many companies feeling that part of labor investment (women) will increase substantially in productivity. Proof? Many companies offer those daycare facilities on their own premises nowadays.

Our tax system I haven t studied in detail. The Alliance party s proposal (I m studying this in another course simultaneously this session called Economics in Canada & Institutions. Together with this course makes the session very informative and interesting!) is very interesting in terms of tax system reform, but I would disagree with them in bringing Canada closer to the US system. Our tax system is rather less important once we have the universal welfare system, daycare, education and Medicare in mind. The tax system has to be the fairest one that can afford these programs, period.

Fighting unemployment will always be an issue, especially in the transition period where we would make reforms for a stronger welfare state. But let s take Europe as an example, they did end up with low unemployment rates and are currently doing well. With a stronger welfare state, where its citizens are all healthy, educated and above the poverty line, companies will prosper more and will need to hire more people. They will have a solid local base to enable them to take on international markets and employment will most probably look in a better shape.

The idea of reforming the social programs system to become more efficient and the initial recommendation of making them universal are pretty much related. They are efficient in my opinion, in part, when they are universal as well.

Making our social programs universal will ensure equity to some extent among the citizens of the state and will give Canada more of a national identity and feeling of belonging. The general feeling in Canada, I ve noticed so far, is that it almost does not exist. Citizens belong to either some province or some native country, and are following some Canadian system, simply because they have to. This breakdown in loyalties partially due to federalism where citizens are loyal to two form of governments, and the feud over Quebec in particular gives this province s citizens a particular feeling that they do not fully belong to Canada, but to Quebec, or their native countries. My personal view is, the weaker the state s influence over people s daily lives, the more this feeling of disloyalty will grow and the consequences can be severe.

This conflict among provinces for sharing revenues of their respective resources is sad. We see countries grouping in Europe, in the Persian Gulf (GCC) and in America (NAFTA) but provinces in Canada argue over sharing revenues of their resources. There are benefits of belonging to one country, very important benefits. These provinces manage to prosper from their resources by sharing a large free trade Canadian market. Our natural resources, no matter where they come out from, are the natural resources of Canada and must benefit all Canadians. That in mind, we can go on to reform our government s influence over legislation in all provinces in an attempt to bring everyone closer and establish a universal welfare system where our revenues are redistributed among all in society. It might be a big cost initially, it s called a transition phase, and however with all of Canada s citizens benefiting from the general revenues, quality of human capital will increase to produce the minds that will lead our future. The Brain Drain syndrome towards the US will reduce slowly but surely since a secure environment to fulfill your aspiration, especially when establishing a family will always be more appealing than the risk of a free competition in a place like the US. It might be a joyride and some quick money for some, for some time, but they would always come back to establish themselves in a high quality of life state like Canada for the interest of their future and their families.

A universal system will ensure no child will grow in poverty and therefore miss out of the potential this individual would have and the sort of benefits the society could have gained from supporting them since birth.

People are our most valuable resources, for both production and consumption. By providing a social transfer system that ensure our people are al healthy, live comfortably, enjoy quality education and have the incentive to bring more children into our society thru child benefits and a universal public daycare system, we can slowly but surely build a secure and prosperous Canada for years to come with the threat from the southern border fading in importance.

It is a long shot with our southern border neighbors influence growing internationally and locally. Something we should learn from our Quebec citizens then, and press for Canada just like they press for Quebec. The government elected should smartly do business with the US, set regulation that will encourage US money into Canada, but limit its social influence. A stronger purchasing power is in the US interest. A strong welfare state will give them that. They ll have more customers for their products; they ll have more tourism from Canada. I encountered many Swedes while on my vacations in Cyprus, Egypt and while living in Florida; the author was very right about their long vacations and many of those tourists told me it was like the state was paying them to go on vacation so as they can come back more productive. One thing we cannot ignore is the high suicide rate in Sweden and many believe its due to the fact that the welfare state is so efficient, they feel they have nothing to accomplish. But I d like to reach a state when my citizens are all comfortable, before I start to worry about them committing suicide from being too comfortable !

The message I d like to send out to an author like McQuaig is to publish awareness that Canadians need to keep themselves informed. The only way, if she is right about their preference for a welfare state, for them to achieve that is through exercising their right to vote. Getting informed, studying all candidates and their proposed plans etc. will help them vote right (not politically, but right meaning correctly) and bring governments into power that will accomplish the people s agenda. Its doable, the only ones against a stronger welfare state are the rich. Well those are no majority, and in our society democracy thru the majority s vote will prevail.