CBC opts for PR over journalism in coverage of record-breaking bank profits
Two important records were reached this past year; different sides of the same coin. On the face of the Loon, there’s household debt, which stands at a collective $1.7 trillion, mortgages excluded. On the face of the Queen, there’s Canada’s big banks, and their record-breaking bank profits. RBC clocked in at $11.5 billion in 2017 alone. Alone.
$11.5 billion in profit doesn’t happen by magic. It’s a potent mix of user fees, downsizing, low union density in the industry and pro-bank fiscal policies that allow them to dodge paying the kinds of taxes that you and I pay. In short, it’s greed expressed through public policy.
User fees have been steadily rising in Canada. A 2014 report from the Financial Consumer Agency of Canada found that between 2005 and 2013, steady transactions covered by a banking agreement have risen at about the rate of inflation. But variable fees, those that fall outside of your bank account agreement, have sharply increased. Any transaction that fell outside of what your banking plan covered, like, using an ATM, probably rose by 46 per cent.
At the same time, banks are laying people off and closing down branches. In 2017, RBC managed to both make record-breaking profits and announce that it would lay off 450 workers, mostly located in Toronto.
There are many interesting options that could stop these profits from accumulating. And, there are many elements you could choose to examine in an article about bank profits. From a national public postal bank to nationalizing the big five banks, from encouraging the use of credit unions to promoting no-fee bank accounts, from reporting on how little tax these corporations make to drawing a straight line between their profits and our generalized suffering, the frame one might employ in analyzing this news depends on your goal.
As someone who abhors greed and human suffering, I choose the frame that questions the economic policy that has enabled the bank profit/personal debt coin to exist.
Peter Armstrong at the CBC has a different approach.
In a profound example of comforting the comfortable and afflicting the afflicted, his Dec. 4 analysis about how bank profits are actually good for average humans is yet another example of CBC commentary that is powerfully bad.
Let’s start with his conclusion:
Aside from not being true, which I’ll get to, it’s a giant slap in the face of anyone reading this piece and who is mad about grotesque greed. There’s a reason why people are mad at income inequality, or at the news of profit hording in the Panama and Paradise papers. How much of this money that apparently benefits us is being stashed away? How much do we lose in opportunity cost because the banks pay such a low marginal tax increase? Why does this article conclude with a line that assumes we’re too stupid to understand how these forces are all linked, while ignoring the factors I’ve just mentioned? The only silver lining is that most people wont reach the end of the article.
Armstrong’s lede introduces RBC’s $11.5 billion in profit and concludes:
The article was written in anticipation of the rest of the big banks reporting their profits today and acknowledges that, yes, this amount of money might make you mad. Last year, the big five made $36B, so for argument’s sake, let’s imagine that the 2017 numbers will be closer to $40B. That’s indeed staggering.
Not quite, Pete. In fact, it’s the job of someone offering analysis to help us get our head around this sum. But, he doesn’t help us. My colleague Virginia Ridley came up with some examples of what this money could pay for:
Back to the CBC article.
Petty, but there is a grammar issue here. It’s hard to not to be petty when you’re witnessing your taxes pay for someone to make propaganda for the banks so I’m allowing it.
Right, petty is also the word to refer to the fees that banks keep charging us. Petty and annoying are words you use when you can afford to pay these fees. But when paying the banks to access your own money is part of what is pushing you to rely on record-level consumer debt, this is engineering social class: it’s normalizing theft as mundane and annoying, rather than one of the factors that is deepening social inequality and everything that comes with it.
Maybe that’s what he means when he says that this is complex. Driving household debt to nearly 170%, mortgages included, does give us complex relationships to these corporations. Roll your mortgage, your credit card debts and your RRSPs into the RBC and they’ll say you’ll pay less. But you’re also more beholden. Complex indeed. But Armstrong doesn’t analyze what this does to us.
Instead, we get the most important message of the article from Bill, managing director of Mt. Auburn Capital.
Conor Bill is a regular commentator on CBC TV’s business show The Round-up.
Arguing that the banks create jobs and are therefore right to make enormous profits is weird, at best. We know that they’re laying people off. Are Canadian jobs among what the sector is exporting? Can we for once not worship at the altar of the GDP?
Armstrong goes on to argue that we are personally both at fault but also benefit from these record profits because we invest in mutual funds and the CPP. We love to hate these banks but don’t bite the hand that feeds!
There is a critical gap in Armstrong’s analysis. Two-thirds of Canadians don’t invest in mutual funds. And, for an article that doesn’t even half mention a nationalized solution, claiming that Canadians benefit from bank profits through CPP is laughable. We would also benefit handsomely if we didn’t need to pay these fees at all. Or, if this money was all given to the state. Or if half of it was given to the state. The link is tenuous at best and at worst, reads as a defensive rant to calm us from smashing bank windows and seizing their (haha, our) assets.
We need journalists to do the bare minimum of reporting. Instead of extolling the virtues of greed, why not examine what mutual funds are doing: how they drive land exploitation, oil and gas extraction and overheat housing markets, or how they justify war industries, or just how they make it such that Canadians have a hard time seeing what exactly their money is funding, and what that does to perceptions about capitalism and our economy.
Buried at the bottom is a boring few paragraphs about whether or not the banks are too cozy with their own regulator, but it’s a slog to get to and missing broader, more glaring issues. And, it’s intentional. Because when the conclusion is: don’t worry, be happy (for them), it’s clear what the point of the article is.
The CBC is wrong: we don’t own the banks. If we owned the banks, these profits wouldn’t exist. We wouldn’t gouge ourselves to use them. We wouldn’t be held hostage to shareholders who want maximum returns. And we own the CPP but the CPP doesn’t own the instruments in which it has invested. I’m looking for an adage here … something like: if it smells like a pile of trash, it’s probably a pile of trash. That’s this article.
Unless you’re Armstrong, who relies on a different adage that he also probably made up on the fly:
A classic adage indeed!
