Part 17 - A Case for a Democratic Socio-Econo-Political System

In the fifth year of the ever-deepening recession, independent, knowledgeable analysts and problem solvers have been questioning for years the direction that this country's economy is heading.

In the opinion of these professionals, the ongoing economic policies, guided by austerity, need to be urgently reexamined and corrected to reflect the following three recently publicized revelations:

1. Canadian Corporations have on hand a cash reserve to the tune of $526 billion, famously dubbed as "dead money". This amount happens to be the equivalent of one third of the annual GDP of this country.
   
   Reacting to the latter public disclosure, business policy advisers were quick to respond with their own brand of recommendations as to what to do with this newly found and unprecedented largess.
   
   Surprisingly, no one involved bothered to scrutinize the source of this over $0.5 trillion cash surplus. A cash surplus? Had anyone conducted a causal investigation, they would have found the source in the annual "income class" statistics, i.e. in 2008, over 50% of taxpayers in this country had an income of less than $30,000 gross. Translation: about 65% of the workforce of this country have been grossly underpaid and locked out from the marketplace, effectively causing an econo-fiscal-revenue implosion.
2. The role of entrepreneurs is no longer job-creation. Their role is to generate profits.
   
   This is an about-face to the several decades-old understanding between governments and the entrepreneurial class. An understanding whereby governments had a responsibility to create favourable conditions -- such as subsidies, grants, tax shelters, minimal or no regulations, etc. -- for entrepreneurs to run the economy and create jobs in the process. But, now this understanding is over and done with.
3. Collective agreements are no longer negotiated between unions/employee associations and employers to gain higher wages and benefits for workers. Instead, they minimize the degree of wage/benefit rollbacks and the avoidance of the two-tier wage-system.

However, in the midst of endless wage and benefit cuts, has anyone figured out just:

• How much savings the automotive industry can expect to gain from an e.g. 20% wage reduction? Considering the fact that labour costs represent between 5% to 7% of the manufacturing cost in the auto industry, the total savings will be about 1.0% to 1.4%.
• How, and to whom these wage-busting employers are going to be able to sell their products, by drastically reducing the purchasing power of their customer-base? Especially, if these cuts are going to be applied across the entire spectrum of the economy.
• How workers, as potential debtors/mortgagors will be able to pay off their debts to their respective creditors/mortgagees?

Just curious.

So, what happened? How did this country get here and why?

Well, some knowledgeable analysts recently summarized the explanation as follows:

• Corporations have been complaining for a few decades to successive governments that Canada is too small of a market to operate competitively and profitably. Not recognizing that many, much smaller countries in Europe have been successfully serving their own mini-economies;
• Governments were eager to oblige, and eventually negotiated and implemented ten FTAs (Free Trade Agreements) between 1994 and 2011, to widen the economic horizon, without noticeable advantage to the public;
• Corporations -- having recognized the on average 1:26 f.o.b. price advantages between the exporting countries and Canada, -- decided to participate in a series of government sponsored "technological transfer" programs. The result of these programs was -- as referred to by a former leading government official -- a "hollowing out” of the manufacturing sector of this country;
• Governments, -- since 2008, as a direct consequence of the devastating loss of hundreds of thousands of manufacturing jobs -- have been facing simultaneous challenges due to significant tax revenue loss, and a growing demand for E.I. and welfare benefits payments.
• Corporations, -- in spite of the recently disclosed mysterious "dead money" -- are still demanding tax reductions, less government interference, and further wage and benefits cuts, as a condition to remain in this country at all;
• Governments, -- in response to relentless corporate pressure to eliminate public deficits and debts -- are experimenting with the idea of reducing, and/or even eliminating, as many public services and social programs that the public will accept;
• The Bank of Canada, -- to facilitate this country's economic recovery -- keeps the prime interest rate artificially low to enable banks to provide low rate loans to their entrepreneurial clientele, in the hope that the latter will take out loans, expand their operations, and be ready for the next upswing of the business cycle.
• The entrepreneurial clientele is not taking the bait. If they are borrowing, it's because they are having difficulty paying their regular bills. In fact, what they really need is larger customer-base at a time when businesses are still reducing wages and laying off employees.
• Retirees, in the meantime, see their RIFs and savings, along with their buying power, losing billions of dollars in value yearly, due to the ongoing low interest rate policies of the central bank.

Observations

Since the inception of the March 2012 austerity program -- introduced by the feds to encourage public and private fiscal responsibility -- the economy is still quietly shedding tens of thousand of jobs monthly, even within the much touted IT industry, as well as in many segments of the service sector.

Meanwhile, some policy advisers insist that the arrival of an economic turnaround depends on how fast this country is becoming competitive, i.e. how soon workers are willing to work for poverty-line and below poverty-line wages.

By the way, has anyone noticed lately, that:

• China alone -- hardly utilizing 50% of its workforce -- is perfectly capable of satisfying all the current needs of the world's consumers?
• There is a huge demand on the global market, for Canadian products? If there is, then why are the international balance of trade figures of this country written in red ink?
• There is a disconnect between the unemployment rate, which is declining, and the actual number of unemployed, which is on the increase. This is because those who have run out of El benefits are no longer considered as being unemployed; they have opted out of the workforce.
• The devastating unemployment and deficit problems could be resolved in short order by applying the recommendations of The Buerger Alliance, detailed in Part 8 of this blog series?

So, is there a way out of this cataclysmic situation?

In the view of a few, exceptional, independent, multifaceted, practical thinkers and problem-solvers, there is a way to save this country from the current cataclysmic situation, by:

• Democratizing the 19th century, hierarchical style, decision-making process, across the socio-econo-political spectra, namely:
• In the political theatre, it would mean that instead of decisions being made by a government that is put into power by 26% or less of the voters, creating a coalition government that is elected by a plurality, or at least 67% of the voting public. In fact, the coalition governments of Austria, Denmark, France, Germany, Sweden and Switzerland were long noted for managing their respective citizens‘ affairs remarkably well, through many of these past decades. Moreover, many of these governments have been known to call on their citizenry to participate directly in some of the important decision-making process, via referendums.
• In the theatre of corporate economy, the process would be even further refined, inasmuch as a few employees, -- having been elected by their peers -- as board of directors would participate in managing the affairs of corporations along with their corporate counterparts. This would ensure that the interests of the employees are equitably taken into consideration in the course of the decision-making process.
• In the public theatre, the powerless unemployed and the poor need to be organized into one entity, -- potentially by the CLC or the CAW, -- in order to be represented, just like members of trades and professions, because people as individuals don't seem to count nowadays.
• Revising the wage scale for over 50% of the workforce, who, due to having been paid poverty line wages, have been shut out of the marketplace, and to all intents and purposes are unable to satisfy even their basic needs without getting deeply into debt. In many cases they are eventually being driven into bankruptcy. Clearly, this segment of society deserves to share 10% of the, not surprisingly, discovered $526 billion cache.

Importers across the board have had direct access to sources that can supply products at a 10 to 75 times cheaper price than local sources could produce the same. It's not surprising that such a favourable ratio could literally be the cause of the largess, especially if that practice has been combined with a "bare-minimum wage" and a "no-benefits" strategy.

So, some might conclude that the latter two factors could have readily caused the current economic dilemma, from which no one seems to be able to find a way out. Incidentally, The Buerger Alliance has developed and published many viable alternatives to these current policies that are clearly prolonging the endless standoff.

Summary

The Buerger Alliance is not surprised by the recent disclosure that Canadian corporations have a $0.5 trillion cash surplus. It’s quite plausibly the result of wealth taken from a growing segment of the population, low-wage earners and the unemployed, the direct casualties of the current austerity policies and unhealthy business practices.

This situation is the result of an economy starving dance between the government and corporations, reinforced by the Bank of Canada. Corporations want access to more markets, governments pave the way with Free-Trade Agreements. Corporations want to leverage out-sourcing, governments partner to accelerate the collapse of local manufacturing. Corporations cut jobs and benefits, governments lose critical tax revenue while paying more in EI and welfare benefits. Corporations press for reduction in costs, governments are forced to cut services and benefits to the public. The end result, a downward spiral that creates undue public suffering and pushes the entire economy further towards the cliff.

But there are solutions. They include direct participation in the decision-making process.

• In Government: Shifting to a model that represents a 67% plus plurality of the voters, even if it takes a Coalition Government format, combined with Referundum.
• In Business: Employee representation in the Board Room.
• In Public: Effective, equal representation giving voice to Low-Wage Earners and the Unemployed, just like members of trades and professions in society.

After all, these are the qualifying distinctions that make a Socio-Econo-Political system democratic.

Read More

• "Ayn Rand Nation, The Hidden Struggle for America's Soul" - Gary Weiss, 2012
• "Plutocrats, The Rise of the New Global Super Rich and the Fall of Everyone Else" - Chrystia Freeland, 2012

Food for thought

• On Job Creation: “Corporations are not employment agencies, and judging them by that metric is a mistake" -- Chrystia Freeland, Editor, Thomson Reuters Digital, The Globe and Mail, October 12, 2012
• On Growth: "The first priority, clearly is to get beyond the crisis, and restore growth, especially to end the scourge of unemployment" -- Christine Lagarde, IMF Chief, The Associated Press, October, 2012
• On Austerity: "Europe must realize austerity doesn't work" -- Reuters Breaking Views, The Globe and Mail, October 12, 2012
• On the Free-Trade Agreement: "If the goal was truly more and better trade, then the free-trade clearly hurt Canada more than it helped" -- Dr. Jim Stanford, economist, The Globe and Mail, October 8, 2012

Part 16 - WANTED: An All Inclusive Economic Model

Introduction

Just over a year ago, in our first blog titled, "Can We Revive the Canadian Economy?", we theorized that, "In the view of the dismal state of this country's affairs... one might infer that in spite of all its best efforts to revive the economy, the establishment must realize that is in a catch-22 situation, in so far as:

• On the one hand, the Canadian marketplace is severely handicapped by the extremely limited purchasing power meted out, to near or below poverty-line wage recipients, and doled out to the unemployed masses.
• On the other hand, governments cannot balance their respective budgets, due to this country's rapidly shrinking tax base, and the simultaneously increasing need for all types of welfare services.  One might also add that, Controllers and Treasurers -- looking for solution to deal with the problems -- appear to favour cutting vital services, as opposed to finding ways and means to increase their respective revenues."

A Year in Review

So what has changed over the past year?

• Literally all sectors of the economy, private and public, have been busy eliminating tens of thousands of jobs and management positions monthly.
• Many industries, previously proudly showcased as the jewels of the country, are either still being off-shored, on the chopping block, disintegrating, or vanishing altogether from the theatre of Canadian economy.
• Concurrently, the shrinking tax base is unable to keep up with the increasing demands placed on the social safety net, and is being dismantled, under the aegis of lack of affordability. 
• All in all, people are suffering tremendously and needlessly. Needlessly, because in spite of the potentially catastrophic situation, the ideologically bent establishment still turns a deaf year to realistic and scientifically proven proposals. Proposals that have the innate capacity to stop the downward economic trend and revive the economy.

But, Why Can't the Economy Recover?

There are a variety of contributors to explore:

• One reason is the fact that the economy has reached its saturation point and there is no incentive for further expansion.
• Another reason is that, throughout the years about 50% of consumers, that have an annual gross income of less than $30,000, have been steadily losing their purchasing power. As a result, the economy no longer requires as many workers to produce and deliver goods and services to the marketplace.
• Yet another reason is the ill advised entrepreneurial effort to reduce labour cost; not realizing that there is a direct correlation between the rate of wages and purchasing power.
• Let alone the fundamental reason, which is that the country's largest demographic group, labour/employees are totally excluded from the socio-econo-fiscal policy and decision-making process.
• On top of all of this, there is a deferential indifference in the public arena toward the economy.

So, What Should Be Done?

Several groups have struggled to address this question:

• Pro-establishment policy advisers, in response to this question, would adamantly insist that the economy is looking just fine and it should be left to its own devices to recover.
  To substantiate their claim, they would typically use an average statistical data, like the one that was published on July 17, 2012 in the "Folio, Net Worth" section of the Globe and Mail. This article indicated that, "the average Canadian household has $363,291 in net worth". The policy advisers hope that such answers will suffice. After all, the quoted amount of wealth should appear impressive to the casual observer.
• Independent analysts, however are not going to be impressed by the latter figure. They want to gain access to the entire spectrum of the "net worth folio". But such data is normally not available for the general public to scrutinize.
  Nevertheless, these no-axe-to-grind professionals know very well, that a percentile based "net worth" data set would reaffirm what their research, based on "income class" statistics has long revealed. Namely, that 50% of the active workforce, due to its limited purchasing power, is literally banned from the marketplace. Therefore, they suggest that it is time to seriously think about establishing an all-inclusive economic model, or face the possibility of an economic implosion.

In Search of a New Economic Model

For those who are resolutely committed to creating a new, all inclusive or socially responsible economic model, the concern is not about how to formulate such a model, but whether or not the subject is at all legitimate for public discussion.

So, in order to clear the decks, they intend to put the following question to this country's legal scholars: Is Canada democratically governed, or constitutionally ruled?

Are We Governed, or Ruled?

If Canada is democratically governed, then all segments of society – labour/employees, the unemployed, retirees, the disabled and other significant social groups, just like businesses/employers, professionals – should all equally have the right to form their own associations, to represent their respective members' interest directly, and to participate in the econo-political decision-making process as equal partners.

However, if labour/employees et al. – representing about 70% of society – are denied the right to form their respective association, then society cannot be considered free, and to all intents and purposes the excluded groups are discriminated against. And that, one would think, is patently illegal.

Competitive vs. Cooperative Model

Reviewing the history of business, it's difficult to understand why a century or so ago, presumably prudent leaders sitting at the helm of gigantic corporate empires, had not collectively decided to phase-out the competitive business model and phase-in a cooperative one. A model that is void of the combative "dog eat dog", "winner takes all", destructive conduct that has been responsible for innumerable catastrophic events… and even for international conflicts. As a result, who knows what's next in store?

An All-Inclusive Economic Model

To formulate an all-inclusive economic model, one might be tempted to look for inspiration from around the world, and synthesize such a model from some of the existing ones. In doing so, it might prove worthwhile to look at the examples of Switzerland's referendum system, Sweden's welfare arrangement, along with the socio-econo-fiscal policies of Singapore, Norway, Germany, France, Austria, and Australia. We could review this data to see how these countries have succeeded in creating an across-the-board, comfortable, and healthy standard of living for their respective citizenry.

Codetermination Difference

While remarkably, all the aforementioned countries have achieved their current, cut above, social economic status through rational and Democratic Ways and Means, some states have even to one degree or another, incorporated the principles of codetermination into their constitutions.

In essence, the Codetermination Law, as it has become known, has elevated these countries from a constitutionally ruled status to an all-inclusive and truly democratically governed one.

Mechanics of Reviving the Economy

In order to effectively revive the Canadian economy, the socio-econo-political establishment should:

• Abandon all of its costly efforts of competing on the global market, since by applying "2010 average hourly compensation costs in manufacturing" (aka labour costs) – as per US Bureau of Statistics – the odds are 35.67 to 1.36 against Canada.
• Formulate and implement a Codetermination Law. This law would guarantee the rights of all segments of society – including labour/employees, retirees, the unemployed, the disabled, and significant others – to become active participants in the econo-political decision-making process of this country.
• Phase-out the current economic model, which is based on competition, and phase-in a cooperative one, starting on the home front and then making a case for its international acceptance at the UN. Especially, since it is common knowledge that competition fosters domination, exploitation, destruction ... And all around waste. In contrast, cooperation delivers mutually acceptable and equitable results at a high degree of efficiency, through planning and division of labour.
• Concentrate on economic self-sufficiency, geared to the full use of the natural and human resources of this country, while keeping environmental protection always at the forefront – at least until the age-old "divide and conquer" system is replaced with a "divide and cooperate" policy.
• Diversify the economy to its fullest extent.
• Seek out markets for our surplus raw, semi-finished and finished products. This should be an organized carefully calibrated activity, but only as a sideline to the points above.
• Eliminate poverty and unemployment by:
• Applying the power of volunteerism to make home ownership affordable for the masses. Furthermore, this method could also yield many on-site job training and job creation opportunities.
• Putting EI funds into productive use by creating meaningful public or private contractual job creation programs.
• Increase the pay rate of low-wage earners by 30% to 5% across six lowest income classes to a maximum of $35,000 gross annual income. This measure alone, has the capacity to expand the economy and generate about 500,000 jobs within one year, without a significant change in the inflation rate.
• Introduce our scientifically proven plan for creating "full employment without any loss of income".
• Reject and renegotiate unfair trade agreements that interfere with codetermination principles and self-determination rights.

But, What If This Country Is Constitutionally Ruled?

If the legal scholars find that Canada is constitutionally ruled, then of course laborers/employees, the unemployed, the retirees, the disabled, and other significant social groups have no direct decision-making power to speak of.

That is to say that, about 70% of the public should just submit to whatever the ruling class decides for them; which may or may not include a gradual return to an era of slavery.

Summary

The "a year in review" section above clearly reinforces the initial findings of The Buerger Alliance, namely that the establishment is still in a catch-22 situation. And, the ongoing austerity program does not appear to have helped either.

However, the situation could easily be turned around and remedied by adapting an all-inclusive economic model, and by applying the principles of  the "codetermination and cooperative management model", aided by a host of mechanics to revive the economy, defined in detail through the articles published on our blog at buergeralliance.blogspot.com.

Read More

• Eric Reguly's article "Legends of Sleepy Hollow" – Report on Business, The Globe and Mail, July 2012. 
• Derek DeCloet's article "Clear the Track" – Report on Business, The Globe and Mail, July/August 2012.
• "The Unfair Trade: How our Broken Financial System Destroys the Middle Class", by M.J. Casey.
• "Power Inc." by Dave Rothkopf

Food for Thought

• On Free Trade: "The potential for abuse of the system is enormous" – Anthony Fell, Pres. of Dominion Securities Inc. 1987 – Report on Business, The Globe and Mail, July/August, 2012.
• On the US - Canada Free Trade Agreement: "This deal may be quite beneficial to business, especially to multinational corporations. But greater returns to business might not necessarily be in the best interest of the country." – Frank Stronach, Chairman, Magna International Inc. – RoB, The Globe and Mail, July/August 2012.
• On the Issue of Who Creates Jobs: "Customers create jobs. Middle-class customers with proper purchasing power" – Nick Hanaver, US Venture Capitalist – Fareed Zakaria, GPS, CNN, July 8, 2012.
• On the Subject of Tax Evasion: "Wealthy individuals may have been hiding as much as US$32 trillion offshore", according to Tax Justice Network, a UK-based organization – AFP/ Report on Business, The Globe and Mail, July 24, 2012.
• On the Topic of Recession: "Increase consumer purchasing power and the recession is over", Bill Moyers, Broadcaster - Aid to former US President, Lyndon Johnston.  – Public TV KCTS9, August 5, 2012.

Part 15: A Manifesto for Economic Recovery in Canada

There are a couple of conflicting theories, not counting the radical ones, floating amongst the experts, as to how to restart this country‘s economy -- which has been hard hit by the last three years of recession -- that is on a very slippery slope.

Nevertheless, the official verdict is that Canada is on the right track. Apparently the austerity program is working and it should stay in place until the country purges itself of all its deficit and debt-loads.

Strangely enough, no one appears to be concerned much about the plight of over 1.5 million registered and unregistered unemployed in this country. This significant demographic should be working, receiving a "living wage", paying their bills, and normally would even be paying taxes. But, the policy-enforcers don't seem to be bothered by creating major collateral damage; they just soldier on and keep cutting many indispensable budgetary items. Slashing 5% here, and 10% or more elsewhere, in order to make up for the self-induced revenue shortage, regardless of the consequences.

Meanwhile, out in the real world -- under the auspices of The Buerger Alliance -- a group of experienced, independent, out-of-the-box thinkers and problem-solvers have taken every measure to convey their message to the establishment.  This message is namely this: "There are much more humane, effective and painless ways to solve our country's socio-econo­-fiscal problems."

We're wondering, what exactly does it take to get auditioned?

Observations

At this juncture, in order to break the current deadlock and produce a realistic economic policy that would benefit all the stakeholders, the establishment must take action. They need to apply the "levers" of  Near-Full-Employment, Living Wage, Increased Tax Revenue, and a Productive Expenditure. Then, and only then, will it become possible to effectively and expeditiously deal with the Debt/Deficit, Economic, Education, Energy, Environment, Healthcare, Housing, Infrastructure, Poverty, Transit and the Unemployment Crises.

As to the questions of who has the capacity to extract this country from the worst recession since the 1920s, the answer is, Employers, Employees, and Government, conceivably working together as equal partners. Incidentally, it's difficult to fathom how a meaningful, expeditious and permanent economic recovery could ever occur without such a prerequisite.

Taking the latter observation one step further, one might even infer that, generally speaking, the establishment appears to view the citizenry and employees as subordinates chattels, rather than equal partners. What's needed is a system where the objective is to work together in unison, toward a better tomorrow for one and all.

Recommendations

In the interest of creating a favourable and collaborative environment for an effective and expeditious economic recovery, and subsequently resolving this country's numerous Socio-Eoono-Fiscal Problems, The Buerger Alliance puts forward the following recommendations:

1. All Employers, private and corporate, must urgently recognize that,
• Employees have an innate, parallel role to play in the economy, inasmuch as they are not only workers but also consumers in the same person; and that
• Low-paid Employees have very limited purchasing power at their disposal and therefore cannot become full participants in the marketplace.
  Furthermore, realistically speaking, a combination of Minimalist Wage and Benefits Policies:
• Do not really serve anyone, not even the investor class, "we all work for"; and
• Should be considered as the primary causes of the current crises, manifested by high Unemployment, Stagnant Economy, Private and Public Debts/Deficits.
• A Reasonably Well-Paid Workforce -- in its collective role as Consumers - on the other hand, is enabled to fully participate in the marketplace to satisfy its personal needs, without resorting to public assistance, or being overtaken by unmanageable personal debt.
  But like it or not, in both of the latter instances, the unsettled debts are absorbed by the public, either at the cash register or through taxes, or very often both.
• All Costs incurred in the process of the Production and Distribution of Goods, and for Providing Services, is paid directly or indirectly by no one else, once again, other than society as consumers;
• An across the board Pay-Rate Increase of 30% to 5% for Low­-Wage earning Employees with incomes of up to $35,000 per annum (i.e. 55.3% of the total taxpayers), would create a 3.4% economic expansion rate, generating over 500,000 new employment opportunities in Canada, described in our article "Mr. Scrooge Can't Fix the Economy"
2. Governments, in lieu of their Regressive Austerity Program, should:
• Partner with Employers and Employees, and participate in the overall planning of the economy, to maximize the utilization and efficiency rates of our human and natural resources. This needs to be done equitably and with the ultimate objective of revitalizing the economy and eliminating poverty and unemployment in the process;
• Revise the Corporate Taxation Policy by linking the tax rate of each corporation to the performance rate of it's respective efforts to revive the economy and in dealing with the unemployment and poverty crises;
• Reallocate 25% - 50% of the $20 billion Employment Insurance Budget toward funding a series of provincial job-creation programs. Do this by offering a $5,000 to $10,000 tax credit, as an incentive to employers for each additional employee they hire, for a minimum of one year period. Full details in "A Comprehensive Proposal for Economic Revival"
• Reduce the Working Hours, aimed at literally eliminating unemployment, without any loss in personal income. Full details in "Full Employment Without Any Loss of Income is not a Pipe Dream"
• Establish a series of Volunteer Corps Programs. These programs have the built-in capacity to effectively assist with specific issues like; the lack of affordable housing; the plight of the innumerable unemployable school dropouts -- who need training -- and the problem of high poverty rates in every province across this country. (See Option 3 in our article on "Rescuing the Canadian Economy")
3. The Bank of Canada should urgently reconsider and modify its Low Prime Interest Rate Policy. Clearly, this policy destroys the value of RSPs and RIFs, which provide financial security for millions, and discourages certain forms of savings. A possible remedy would be to set up two categories of Prime Rates:
1. One category for business/personal loans and mortgages at a low rate; and
2. The other perhaps 3% higher than the first one, for RSP investors and RIF annuitants.

In Conclusion

Throughout the previous six months, our group has posted 14 articles, and revealed many techniques to effectively, expeditiously and painlessly resolve this country's socio-econo­-fiscal problems.  However, judging from the responses, one might wonder if the establishment is aware of or truly concerned about, where its regressive policies are leading.

It‘s no secret that the austerity program is not working. For sure, hollowing out the country's natural resources and selling them as unprocessed raw material is not going to provide sufficient revenue to cover the cost of even sustaining the already dismal and unacceptable status quo, let alone the need for restoring some level of normalcy.

Other efforts, like offering indiscriminate corporate tax-reductions for setting up shop here in return, have proven to produce negative results in Canada, between the years of 1950 and 1995. (See our chart in the "Corporate Tax Rate Reduction vs. Unemployment Rate" section of our article on "Some Indicators on Canada's Socio-Economic Health")

Then there is this often repeated credo, that this country‘s economic success depends on Canadians' ability to compete with low-wage-paying enterprises the world around. Or that the average person on either side receives huge benefits from such exchange. However, if one considers the shoddy quality of the merchandise we receive in return, added to the horrendous waste problem that the whole world is engulfed in, then the entire dogma becomes a nightmare.

But to begin with, is it realistic to engage in a lifelong, non-stop, marathon style competition, as a condition to gain economic success? Especially since, in competition there is only one winner, and the rest are literally losers! How about applying the principle of coexistence, based on cooperation and division of labour? In this latter model, there are no losers, no animosity, no waste, but with realistic planning, the chances are that full employment, with good pay doesn't appear to be out of reach for all countries' citizenry.

In contrast, the current practice in Canada, manifested by trying to rely on a single tier industry and expect that it will endlessly support this country's economy, is extremely risky and harmful. The reality is that there is no substitute for implementing a well planned industrial diversification program. This mitigates the impact on the entire economy, in the event that the output of a single industry should reach the saturation point of its market.

While more and more are ready to chastise the millions of low-income people for getting into debt, not many seem to question the practice of paying wages that are grossly inadequate.  Wages that do not even cover the basic costs of living, in supposedly the best country in the world.

Finally, witnessing the recently increased and accelerated efforts to "cut and slash" wages and social benefits -- even by as much as 50% and eliminating all benefits, in order to make this country internationally more competitive -- one might wonder how far the establishment is willing to go down the path of recreating a Dickensian era, as opposed to utilizing well-tested, productive techniques to rebuild the economy?

Quote of the day

• On the question of how to revive the economy: "We need a growth rate of 5% and we got to get the jobs back-" -- Jack Welch, former CEO and Chairman of General Electric Co., in an interview with Piers Morgan of CNN, on January 9, 2012.

Read More:

• "Pawns to a big CAT" - The Toronto Star, IN4, January 28, 2012