Wanna Sell in Canada? It's Contingent to Job-creation!

Independent non-ideological studies, of the past fifty years of socio-econo-political events in this country, suggest that the established system of governance is structurally not set up to resolve its long list of socio-econo-environ-ecological problems.

So when General Motors determined to close its Oshawa plant at the end of 2019, laying off the last remaining 2,600 personnel in the process, as reported last November – the same plant that had employed more than 23,000 in the 1980s – it was no surprise that there has been no serious attempts on the part of governments to intercede on behalf of the employees or public. And this was for a good reason; they couldn't.

The constitution/charters/social contracts actually do not provide regulatory power for governments over corporate decisions and actions. Therefore, corporations are all but autonomous. And, once the market has dried up, they just move on like nomads. Corporations though, do indeed respond to their shareholders and they had better do, or else shareholders will also just move on to more prolific global grounds.

The taxpayers of this country – who lent corporations scores of billions to stay afloat earlier – have nowhere to go, as they are expected to hold the fort and pay the piper. Faced with the grim realities of this era – as practically the last batch of major industrial corporations (beyond GM) flee this country, leaving behind social-economic, environmental and climatological desolation – many justifiably worry about the bleak future.

Federal party leaders are once again busy – in light of the upcoming federal election – trying to shore up their dismal track record, having been branded by critics as either "deficit spenders" or dogmatic practitioners of "austerity" measures. (See more about the policies of deficit spending and austerity in our other blog posts.)

Veteran, non-ideological problem-solvers – with a "one in a million calibre" classing – have found that the governing socio-econo-political decision-making system and processes lack direct input/control by employee/labour (the productive elements of society), embodying the majority of the public. Hence the process cannot be considered democratic. This void, produces autocratic decisions, causing catastrophic results in the process.

In this context, a few points of advice to the wise political leaders, who strive to become the next PM:

• Democratize the socio-econo-political governance/decision-making system/process – that ignores labour/employee input – to avoid further deterioration of the already grim situation;
• Declare a Wanna Sell in Canada? It's Contingent to Job-creation policy;
• Pledge to enact a "Livable Income" law to cover all standard costs of living – i.e. $42,000 p.a., for an established household of two adults, residing in the Waterloo, Ontario region, and the like – that would render employees/retirees and others practically "self-reliant";
• Pursue policies of collaboration vs. disruptive, hostile and costly competition, at all levels;
• Reject "austerity" as a folly that further worsens the country's problems (and instead);
• Apply "deficit spending" – which is a proven/productive way to mend the country's many social-economic ills and infrastructure needs – since the process "creates new assets";
• Resolve the country's governmental "revenue deficit" problems by:
• Optimizing the "income/wage-scale", considering all social-economic factors and the interests of all three sectors (i.e. government, corporate, and labour/employee/consumer);
• Revising the tax-formula to suit all necessary governmental fiscal policies;
• Present a realistic socio-econo-political agenda – complete with cost-benefit analysis – that addresses the crucial issues the country is facing, and spells out how each leader intends to resolve the same.

By adopting and following through with the agenda above, the elected PM should be able to elevate this country from a "pseudo-democratic" status to a "real democratic socio-econo-political system" and resolutely deal with this country's problems.

Probing the public sentiment on this country's state of affairs, has generated the following observations,narratives and questions:

• Pundits insist that the economy is doing fine. The jobless rate is low and there are positions waiting to be filled.
• Reality, however is that:
• Business owners, in scores, along with middle and working class people are losing all they have been long working for. Some of these MORs turn to their elders and – in a not so subtle manner – prematurely claim their inheritance; hoping against hope to survive.
• Corporations have billions of “excess cash" – by paying exploitative wages at the supply side, yet charging excessive prices at the retail end – and are willing to share the lucre with their shareholders. What about "us" employees and consumers?
• Proxies/lobbyist for corporations/business, demand an action-ready competitive/submissive "labour-force", suited for the era of globalism. What's next? A return to slavery?
• Government leaders – having taken a "facilitator" approach, as the socio-econo-techno transformation role unfolded during the past 50 years – still haven't formulated a sound "proactive" program to address the tragic aftermath, as:
• Millions of adults without post-secondary education are considered unsuitable for employment. So, how will they earn a living? Is there nothing to do in this country?
• Over 50 percent of the employed live from "pay cheque to pay cheque”, without any financial reserve to rely on;
• Home-ownership is no longer affordable for the vast majority of the public;
• Families earning less than $40,000 p.a. cannot pay their rent;
• Innovation – an essential element of the much needed progression – must be utilized, not simply as a "money-maker", but as an instrument to deal with the country's many needs. 
• A few renowned scholars – in this intellectual vacuum – in a "joint venture", should produce a "Socio-econo-political Guide" and save the future of this country.

Summary

To avoid a future of economic and social crises, this country needs a negotiated system of governance that is in a coequal position with corporate/business and labour/employee/consumer elements of society if it wants to survive.

Must Read:

• Capitalism, by author Jonathan Portes, a UK economist who writes about "how and why capitalism works." On the other hand, he also describes a “pretty dismal prospect.” ... "The real test, (as he put it) will be whether our political and social institutions are up to the challenge."

Overdue for a Reality Check

The federal government is 17 months away and the Ontario government is just days away from facing the electorate. For those who appreciate the present options, it's time to enter the political arena, watch, listen, read, and get involved. Then, on voting day, either endorse the incumbent rep, or choose a rookie candidate who hopefully shall deliver the goods, or just stay away from the entire affair altogether.

Concerned veteran, non-ideological researchers and problem solvers – with noteworthy background in applied engineering, microeconomics, systems analysis management techniques and a host of other disciplines – have been quietly monitoring the unfolding socio-econo-fiscal and political events in this country from the sidelines throughout the past five decades. Having charted and analyzed the resulting data, paid attention to the realistic views of a wide variety of the general public, as well as to the insights of notable insiders and members of the media, the ensuing account lent itself to series of thought-provoking questions and comments as follows:

Questions/Comments

• Should the current model of ideologically based, and alternating “Left” - “Right” - “Left” ... system of governance – periodically cancelling out each others' socio-econo-fiscal policies, that vary between “doing nothing”, ineffective “deficit spending” and debilitating “austerity measures” – be considered democratic? Especially, if the party in power is only endorsed by 19% of the eligible voters? Moreover, shouldn't democracy amount to more than just ‘allowing’ electors to vote in or out a government every four years?
• Shouldn't all employees/labour have a constitutionally guaranteed right to form an association/union, and via such elected representatives have a say, and even veto-power in the course of the socio-econo-fiscal decision-making process, the company/corporation they engaged with, in every shop/office/boardroom, like in a few of the more democratically advanced countries? Shouldn't, in fact, denying such fundamental rights be considered discrimination against millions of people who do the actual work?
• Shouldn't competition – one of the most costly, wasteful, destructive, disruptive, and hostile MO has ever been formulated – be judiciously replaced with cooperation? Isn't it long overdue that cooperation, as one of the most cost-effective, economical, constructive, orderly, and amicable practice, be globally adopted, especially nowadays?
• Why are government leaders and others:
• Flagrantly excluding employee/labour representatives from their respective "inner-advisory circles"? Are they – the vast majority of the population – considered (by these leaders) to be slaves, whose opinion does not count?
• Unaware of the fact that many millions live on near, or below poverty-line income, let alone those who live on $700/month social assistance? Could it be that counting the over one-million millionaires, who reside here, and with the reportedly shortly accumulated "dead money" at $800 billion stored here the resultant high “average income rate” renders the magnitude of poverty invisible? Shouldn't the latter facts be rather a proof of unfair income distribution, that must be corrected?
• Inadequately versed about the fundamentals of microeconomics? To correct such shortcomings in the system wouldn't a "professional development” program be a boon to that effect, a prerequisite for all in leadership positions? In fact, this type of a program should include the following particulars:
• The Henry Ford doctrine, to inform employers that employees are not only workers, but they are consumers too. Therefore, low wages/salaries commensurate with low consumption. Keeping the latter findings in mind would surely help to overcome the province-wide pandemonium over raising the “minimum wage” by 21 percent in Ontario. Stunningly, clearly no one seems to be upset over the seven or eight-digit salaries paid for principals at the upper end of the income-scale. Apropos to prove his point, the automaker had raised the minimum wage by 400 (four-hundred) percent at once, a century ago. H. Ford's resolve thus enabled his workers to "own” a car within a year, and a house within five years. A feat, that does not seem to fit into this establishment's agenda.
• The truth about deficit spending. Businesses/corporations and governments – as the need arises – regularly turn to lenders to bankroll the costs of expanding their operations. This process is referred to, respectively as "investment" and "deficit spending". Corporations couldn't exist in absence of lending. Contrary to some "myth”, there is absolutely nothing wrong with responsible deficit spending by governments. If it is utilized strategically, it has an innate “multiplier effect” on the economy. As a rule, the return on deficit spending – measured in GDP growth – is approximately twice the rate of spending. This rate could be further increased by borrowing directly from The Bank of Canada. Applying deficit spending, governments could resolve the current shortage of affordable homes – just as they had done so after WWII for homecoming members of the military – and significantly reduce the present poverty, unemployment and homeless rates of this era.
• Promising income tax reduction, in place of raising the "minimum wage"? Aren't they aware of the fact that such a deed would:
• Cancel out the promised wage increase? Clearly, low wage earners would very unlikely pay income tax;
• Reduce federal/provincial tax revenue? At a time of an already debilitating revenue shortage that prevents governments from providing essential services.
• Complacent about the state of the economy? After all:
• The precarious job and real estate market conditions –that deny access to permanent, meaningful, reasonably paying employment and “affordable home ownership” – do not support the official claim of having a strong economy. Not to mention that poverty and homelessness deserve more creative solutions than lowering the dress-code for the "elite” and fellow-travelers;
• Just to launch an effective countrywide infrastructure program – according to notable experts –  it would take an inflation plus 5% GDP growth-rate.
• Aggressively promoting the export industry? When, in reality:
• Apart from the NAFTA automotive works program, the wholesale of fossil fuels and ferrous/nonferrous ingot/sheet metal products, the trade adds no measurable positive value to the country's socio-econo-fiscal well-being. Let alone that the "current account balance" is at a dismal negative $49.4 billion;
• Due to a – reportedly – systematic deindustrialization program, the country's practically only remaining LRT manufacturer have been unable to meet its local deadlines, due to a series of technical "snafus". And there are more long delays to follow. Could it be that the country is in a "techno-cultural” demise?
• Keen on underwriting further 'FTAs’ with any country so willing, under the aegis of creating worldwide prosperity for all? When so far, the over three decades old practice reportedly have mostly given rise to:
• Wholesale exploitation of the participant countries' labour force;
• Massive profit-taking by importers and other actors, whose collective actions have been referred to – by MSM sources – as "shocking and, if the public knew about it, they would certainly be up in arms";
• Endless hollowing out of the already shattered industrial sector;
• Countering international agreements to reduce worldwide air/land/river/lake/oceanic pollution. Could it be that pollution has suddenly lost its critical status?
• Not contacting their economically successful foreign peers, aimed at seeking out joint R&D and manufacturing opportunities? Possibly with countries like: 
• Denmark, Population: 5.8 million; GDP: $346 billion; Natural resources: sand; Unemployment: 4.1 %; Current account balance: $24.5 billion;
• Germany, Population: 82.7 million; GDP: $3.874 trillion; Natural resources; n/a; Unemployment: 3.6 %; Current account balance: $311.8 billion;
• Not having a "one-on-one" conversation with major corporate leaders, about the voters’:
• Frustration with the economy, that is "rigged to advantage the rich and powerful”;
• Call for new political leaders “who can take back the country from the rich and powerful”;
• Opposition to growing corporate direct/indirect demands for:
• Reducing all operational costs – including wage hikes – that “make it hard to compete";
• Eliminating all regulatory/legal/licensing restrictions that thwart business activities;
• Cutting taxes that “make it harder to turn profit”.
• Concern about the loss of the industrial/manufacturing sector.
• Not calling on the OECD – if that's what it takes – to formulate a global economic plan to equitably distribute production amongst its member countries, as per their respective resources and technological capabilities? In doing so, the problems of social-economic unfairness could be peacefully resolved, continent by continent, applying cooperation as a MO in a strategical and timely manner. Thereby allowing all countries to enjoy the benefits of their own efforts.

Summary

Analysis of the accumulated data – gained from the past five decades, belatedly supported by many MSM articles – indicates a significant degree of public dissatisfaction with the system of governance and its handling of this country's socio-econo-fiscal affairs. Not mentioning the system's exclusionary MO, that disregards the civil rights and views of the vast majority of the working population, in the course of the decision-making process within the private and public sector.

Recommended Books

• The Effective Citizen: How to make politicians work for you, by Graham Steele Rhodes Scholar, lawyer, and a former NS Minister of Finance. In his book he provides answers to many questions like: Who really runs the (political) parties? How politicians think, behave speak and … what they do? They are running a business and the business they're in is re-election.
• Economics by Dr. Thomas Coskeran, who works at Durham Business School. His book explains both the microeconomics and the macroeconomics as to how the markets work, why they fail, and how economists had made grievous errors.
• Edge of Chaos: Why Democracy is Failing to Deliver Economic Growth and How to Fix It, by Dr. Dambisa Moyo who is an Oxford University graduate and a prize winning economist. In her book she argues that liberal democracies cannot deliver the necessary growth without reforms.

Articles about NAFTA

as reported by The CP, 9.11.2017

• Canada has about 127,000 auto jobs today, the same as in 1993;
• Employees working at a car parts manufacturing plant in Mexico, six days a week, receive a weekly salary of about $61.
• Canada's auto-parts association says these jobs won't ever return to Canada

New Government: Improvement or Just a Changing of the Guard?

After a near decade-long hiatus, due to the October 19th, 2015 federal election results, based on FPTP "calculus", the Liberal government – albeit a mostly youthful and gender-equal brand – has once again returned to power.

Although we are now eleven months into its tenure, considering the depressed state of the country, one would expect that by now significant efforts to resolve Canada's many decades of much neglected and most critical problems – such as, the endless economic stagnation, massive shortage of affordable housing, high poverty rate, plant closures, coupled with runaway underemployment/unemployment – should well be in progress. But, it's clearly not happening – say many critics.

But, Why Is It Not Happening?

It's not happening – in the views of several audacious/cognoscenti writers, retired academics, politicians, and a few independent veteran problem-solvers – mainly because:

• The system of governance is simply not set up to monitor this country's sad state of affairs. To quantify the current conditions, one might resort to the latest "gross annual income" stats. More explicitly, in Canada for 2013, the average gross annual income gained from employment was at $43,574. However, further review of this category of data reveals that 32.6%, i.e. 5,820,570 employees had a gross annual income of less than $25,000.
  In contrast, the "top 100 CEOs" in the same year had an average gross income of $9.2 million, including stock options. And that's as good as cash.
  All in all, there is simply not enough purchasing power in the hands of a significant segment of employees/consumers to sustain a healthy economy and an adequate government revenue base. An intrinsic fault that the system is either unaware of ... or doesn't know how to correct.
• The "laissez-faire doctrine" of "free market economy" – in the absence of government oversight – enabled corporations to make decisions that have been harshly affecting the vast majority of the public. Namely, throughout the past three to four decades, corporations have gradually converted this country's fairly multifaceted and somewhat self-sufficient economy to an "import-based" and "import-reliant" one. In doing so, they took advantage of the unemployed masses, readily available from the "global labour market". Simultaneously, many thousands of facilities/offices were closed down and millions of good paying jobs got eliminated in the process here in Canada, along with a multi-level revenue base – so essential for the upkeep and modernization of the country's infrastructure.
• Government leaders' endless vacillation on whether to apply or not to apply the "power" of "deficit spending". A perfectly legitimate/essential financial catalyst, which – contrary to some grossly false tenets – should be fully applied by any government as a "sector" toward building a healthy, all-inclusive, self-sufficient economy. An economy that effectively utilizes this country's available human and natural resources, along with its innate "multiplier effects" of a deficit spending. Moreover, each program should have a significant revenue generating element in it.
  Currently though, a "minimalist strategy" appears to unfold; which is possibly the worst path to take since it can lead ultimately to an unjustifiably large debt load.

What Would It Take to Resolve the Current Multifaceted Crises?

In view of the seriousness of the overall situation in this country – evidenced by reports of nearly 50% of wage earners living on their week to week paycheque – sooner or later, the administration must begin to act according to the interests of all segments of society, in terms of:

• Lifting the unprecedented, all out communication blockade that prevents the few, highly qualified, veteran, non-dogmatic foreign educated "problem solvers" – who have been literally "there before", having solved identical or even more complex problems – from offering their unique, non-ideological, fair, realistic, comprehensive, affordable and "veritable solutions".
  Problems that are clearly unknown to most, if not all members of the legislative body, due to being isolated from the public and living the "good life" – during and especially after their political tenure, as a result of getting academic/corporate posts/appointments or becoming consultants – allotted to the upper 10% of society.
• Integrating labour/employees – the vast majority of the electorate, in qualitative and quantitative terms – into the decision-making process. After all, most in management positions are also the products of by and large the same education system. So what's the angst/opposition to integration all about? Excluding these productive elements of society from the latter process, the system cannot possibly be considered, let alone be called democratic. Actually, the concept of democracy should mean more than just the "freedom" to "vote in or out" either of the two major political parties every four years. Ultimately, participation in the decision-making process should be a "self-determination issue", and a constituted as such.
• Developing/implementing comprehensive programs aimed at resolving:
• The endless economic stagnation. And to that aim governments – as trustees of the public – should:
• Cancel their "facilitator" role – they have quietly assumed to deliver the right conditions for the self-ordained "operators" of the "free enterprise system" – and become active participants in managing the economy;
• Supplement their policy advisory staff with one expert in microeconomics and one in production engineering – who understand what it takes to solve major econo-fiscal problems – and appoint them to participate in the overall planning/management of the economy, as co-equal partners, working together with the current operators of the same, for the benefits of all Canadians.
• The massive shortage of affordable housing. While it's not a new phenomenon, it is now a problem that is "out of control", with serious socio-econo-fiscal upshots – reinforcing the fact that the "free market" is unresponsive to the needs of about 50% to 70% of buyers seeking affordable homes – and the system at all levels is unable, or unwilling to intervene.
  Some researchers, of the "concerned/thinking" brand, have been offering a few realistic solutions based on a "rent to own" concept – as an effective way to significantly reduce poverty as well – whereby paying affordable rent would count as an instalment towards the mortgage, and eventually lead to home-ownership as a ticket out of poverty. But bankers have refused to finance such proposals, presumably with governments' nod.
  It's time to revisit these plans and put them into use, as a gigantic "semi-subsidized" and "revenue-generating"  construction program, building "new towns" across the land – if that's what it takes, to overcome this serious and multifaceted problem – under the direction/oversight of federal/provincial/regional agencies. Especially, in anticipation of a likely increase in immigration.
• High poverty rate. Throughout the years, there have been several less than "half-hearted efforts" to raise the "minimum wage" as a more direct way to reduce poverty and to boost the economy. However business, by its proxies, has always won out against all initiatives on the grounds that such a measure would destroy jobs and ruin businesses. Strangely enough, no one in authority has ever "arithmetically" and/or "precedently"challenged such claims. Had anyone done so, it would have been found that raising the minimum wage to the level of a "living wage" is indeed:
• An arithmetically provable and effective "ways and means" to quell poverty. Furthermore, such measure would increase the consumer base, expand the economy, reduce the unemployment/underemployment rates, increase all governments' revenue base, let alone that it would improve the "bottom line" for business;
• A precedent based method developed by Henry Ford, the late automaker of 100 years ago, as he raised his workers' wage by 400 percent, to the chagrin of his cohorts. As a result, his workers owned their car in one year, and their house in ten years.
• More recently, workers of Denmark have become beneficiaries of a "living wage" law, as their lawmakers legislated an hourly "living wage" to nearly $20. Although they did it at the peril of being labelled "socialists" by some. And that's a very scary label that many Canadian politicians are not willing to wear on their lapel.
• The underemployment/unemployment crises. For a few decades now, leading educators – having sensed that it's potentially a hotbed of vice – have been offering higher education as a remedy for poverty and unemployment. An unprecedentedly large number of young people took the advice, secretly hoping that in doing so, they could buy admission into the "middle/upper class" and the "good life" that comes with it. But, after spending 3 to 6 years or more at the "halls of higher learning", and having piled up as much as $30k to $90k in debt, they now find themselves living at their elders' home, as pauper/unemployed grads, sending hundreds of CVs via the Internet in pursuit of burger flipping jobs.
  Actually, unemployment is a totally unwarranted phenomenon, and the easiest to reverse. In fact – according to research – several governments have been made aware of a surefire "formula". And if the talk about just one major corporation's plan to transfer its plants to a low-wage paying country in three years holds true, another 25,000 employees/households could be saved from certain disaster by using the formula. But judging from the administration's tone, they trust that the market will respond in due time. And the narrative is: "It's going to take the time it does." Apparently nobody is in much of a hurry to take timely preventative action. Translation: they are not in a hurry to interfere with the "market forces".

From things as they stand these days, it's fair to conclude that "real change" is needed, because as one analyst has so succinctly put it in the MSM earlier: "(The) Brexit referendum should act as a warning to the (three) amigos – and other members of North America's political and economic elite – and other leaders around the world. Globalization is a wrenching business. Sometimes, people just get fed up."

Here in Canada, while the econo-political elite is presumably still trying to figure out what to do – if anything at all – about this country's faltering economy, and a host of long-ignored problems, in contrast, some "concerned minds" amongst the electorate are raising daring questions, and are even providing realistic answers, worthy to pore over by this country's "actual governing body", as follows:

• Considering the built in limitations of the traditional system of governance – run by alternating political parties whose partiality towards one segment of society, or another per se, precludes them from working for the entire electorate – to resolve the ever-mounting socio-econo-enviro-fiscal problems, shouldn't the idea of replacing or supplementing the same with a technocratic system or element of it be looked at?
  As such, it would be led by an elected/selected prime minister, premiers – each a veteran technocrat, aided  by a cabinet of technocrats – selected from notable individuals with extraordinary acumen and independence, to present the most efficacious/veritable programs to deal with the country's/provinces' aforementioned problems.
  All in all, a technocratic system of governance, undoubtedly would:
• Be much better suited to resolve the ever-growing volume of problems; and it would 
• Serve the interests of all segments of society, with the equitableness defined and guaranteed by the Constitution – just as in several countries around the world.
• Why have all the governments shied away from their duties of participating in the overall management of the economy? Shouldn't  governments as "sectors" have a distinctly defined parallel/equal role, cum "veto-power" in the decision-making process, vis-à-vis the private/corporate sector – just like in many other well-functioning countries?
• Why is the concept of FTA being so energetically promoted by every informational outlet? Has there been any "evidence" for its success? That is to say, apart from the much suspect $600 plus billion and growing corporate jackpot? Otherwise, it has been a socio-econo-enviro-fiscal disaster for this country and others, especially in terms of job, income and government revenue losses. Sadly though, it has been even worse for workers on the supply side, who have been badly exploited throughout every step of the process for decades.
  And as one MSM columnist recently reflected the public sentiment, "Canadians want trade. But they also want to be protected from economic chaos and run their own show."
• Why is there so much chatter about changing FPTP, demanding that a referendum be held? But what about signing dozens of FTAs, let alone submitting to "global integration"? Shouldn't such important life altering schemes also be subject to public referendums?
• Why aren't individuals – as members of the workforce – allowed to join employee/labour organizations/unions/guilds, to protect their rights and take advantage of the "power in unity" in the course of employment contract negotiations, and other social interactions, just as businessmen/women, professionals, and others in the course of operating a business, practising a profession, etc., are free to join their respective associations?
  Is it possible that such a prohibition is a "carryover" from the "era of slavery"?
• What were some politicians thinking earlier this year, as they tried recently to beg/lure Californian corporations to "set up shop" in the Cambridge-Toronto-Waterloo "innovation/tech-corridor", to ease the economic, underemployment/unemployment crises?
  In doing so, they downgraded the country's "economy" to a "zero-sum game", wherein jobs can only be created here at the cost of eliminating jobs elsewhere. Or vice versa.
• What's so attractive about international trade, or globalization for that matter? That is to raise the following subsequent questions:
• Why would any country – to begin with – join other countries, governed by practically the same econo-political system, facing the same problems, and expect that just by joining forces, such syndication would spell success?
• What's in it for Canada – a totally self-sufficient country – to gain from a pact offering a "zero-sum game"? Translation: eliminating one job "here" in order to create one job "there"? That's called "job transfer". One side loses, the other gains, the result is zero! There are more effective methods to develop an all-inclusive economy, create jobs for all and eliminate poverty. But maybe that's not in the cards? So what's in the cards? It seems that nobody in Canada  is willing to tell, and nobody is willing to ask.
• What's the point in importing locally available livestock, grain/vegetables/fruits, and dairy/meat products? Is it to challenge Canadian producers to compete, or to reduce consumer prices? Or, is it to force them into bankruptcy and to sell their land, either to automated corporate factory farms or to land developers/builders? By the way, much of the imported vegetables/fruits have very little nutritional value in them, due to the premature harvesting requirement for long-distance shipping.
• How does international trade square with the participating countries' "commitments" to reduce land/water/air pollution, as billions of tons of supplies are moved across the globe back and forth on land/water/air each year? Are importers/exporters/shippers – who happen to be the largest beneficiaries of the whole affair – exempted from these pacts? Or has pollution then become acceptable?
• What does the "balance of trade" report look like? Is anyone watching the numbers at all? Those who do, say, "Canada is in the red. In many ways!"
• What's the point in promoting/rewarding automation in an era of already high level underemployment/unemployment? Automation is practical where consumer goods/services cannot be delivered at the required quantity/quality/affordable price in a timely manner.
• Why should Canadians endure further economic slowdown, between 2019 and 2025 – as reported by The CP – in exchange for nebulous CPP reform? Shouldn't the Ministry of Finance develop an economic program, aimed at first expanding the workforce, paying a living wage, building an adequate tax base, and then implement a well formulated and sustainable pension plan reform?
• Why do mayors – seeking answers for their constituents' problems – get free access to federal and provincial cabinet ministers, but veteran problem-solvers that are capable of providing answers for those very same problems cannot? Is it a social class issue?
• Why are government executives acting like intercontinental travelling sales reps, trying to sell Canadian skills and resources to anyone, anywhere, at sub-market prices? That is to say, shouldn't government leaders – considering their leadership positions – meet privately with major corporate executives and work out appropriate strategies for reversing the "deindustrialization" process, here in this country?
  And, when all is said and done, such meetings should end with an understanding that:
• Corporations cannot for long hope to sell their products to a rapidly diminishing consumer base – made up of a growing number of jobless and mostly low income earning, part-time employees with near, or poverty-line purchasing power – even if these products are manufactured elsewhere at a fraction of the local cost factors; and that
• Governments have ultimately at their disposal a regulatory tool called the tariff.
• How can paying workers/consumers near poverty-line wages be justified, in an era when $620 billion of "dead money" is being amassed? Is it not a self-defeating practice?
• Shouldn't labour/employees – as members of the productive class – be emancipated at long last, and given full equal status within society? That is to say: the socio-econo-political elite should realize that workers/employees/voters/consumers should not be ignored nor excluded from the decision-making process.
• Shouldn't all federal/provincial political party leaders of this country declare a truce – in view of the fact that none of the usual annual meetings with the principals of international organizations have produced any tangible results as to how to deal with the individual states' social-economic problems – and with the participation of representatives of all segments of Canadian society, work out a comprehensive, non-ideological plan to revive the country's economy, without delay?
• Shouldn't "competition" be replaced with "cooperation" as a countrywide/worldwide modus operandi? After all, throughout history, competition has been the root of devastating bankruptcies, cataclysmic events, international conflicts, and the collapse of civilizations and empires. And to borrow a sentence from an MSM editorial: "Who knows, where it (all) might end?"
  In contrast, comprehensive cooperation, in fact could prove to be the panacea for most, if not all, of the socio-econo-enviro-fiscal problems through prudent planning.
• Shouldn't political party leaders, prior to the election debates, be provided with a list that reflects the country's/provinces'/regions' critical socio-econo-enviro-fiscal problems – prepared by an independent "election committee" – requiring the candidates to present their validated/budgeted/timelined programs and to address/resolve the aforementioned critical matters, as opposed to engaging in bravado and personal insults? And only then, let the real debate begin!
  It's predictable that such a format would instill clarity/substance/rationality into the debate.
• Why is it that the more changes promised by government leaders, the less get implemented? Isn't there a better way – other than waiting for the next election, and in effect "throwing the rascals out" time and again… and yet, getting nowhere?
  What about implementing an automatic recall, acting as a virtual Damocles' sword?
• What would it take to achieve real socio-econo-political change? A change that would go beyond election reforms, to ensure equal voice – for all segments of society: business/employer, employee/labour and the public at large – in the course of managing this country's affairs?
  But in this country, apparently no political leader appears to be ready to talk about, let alone to bring about significant change, based on real democratic principles that have been constitutionally guaranteed by a handful of "truly democratic" countries elsewhere, long ago.

Summary

After over eleven months of presumably searching for the right ways and means, that has – according to media reports – included "three professional development" sessions for a "crew of mostly rookie cabinet ministers" at some luxurious, remote retreats, and numerous failing attempts to solicit investments from members of the world's financial elite, there is a widely expressed view out there that, the current combo of "laissez-faire" doctrine of free-market economy and the political party based minority system of governance, marshaled by business interests, cannot deal with this country's long unresolved and ever worsening socio-econo-enviro-fiscal problems.

Furthermore there is a growing sentiment among among many "in the know" that it's time to:

• Lift the unprecedented, all out communication blockade that prevents veteran problem solvers from offering their unique, affordable and veritable solutions to the econo-political leadership, regarding this country's/provinces'/regions' vexatious issues.
• Consider supplementing or even replacing the traditional political party-based system of governance with a technocratic model, that by its characteristics would be better suited to resolve this country's problems and serve the interests of all segments of society.
• Supplement the government's Counsel  of Economic Advisors with an economist and an engineer with a solid background in the fields of "applied  micro-economics" and "production engineering" respectively.
• Formulate a comprehensive/autonomous economic model from the "bottom up", using the country's human/natural  resources, and paying living wages and significantly reduce under-employment/unemployment/poverty, and increase the government tax base, in the process.
• Work out and implement a gigantic, "semi-subsidized" and "revenue-generating" construction program to build new towns across the country, to address the massive shortage of affordable housing.

In doing so, with such a resultant GDP growth – which is a "sine qua non" – for a sustainable economic model could be attained.

Food for Thought

• "When the government bureaucrats allocate the taxpayers' money, all the rich guys get mad about it. But when the rich guys are allocating their shareholders' money, they seem to think that God gave them that right." – Warren Buffett, American magnate.
• "Several difficult issues must be dealt with now, that require hard decisions and real actions that cannot be put on hold any longer with vague promises and fancy words."– Geoffrey Stevens, political science lecturer, The Record, September 26, 2016.
• "The most important issue facing Canada is the economy." – Keith G Sutcliffe, Dartmouth NS, Maclean's Magazine, October 3, 2016.
• "In the trade agreement, the big corporations  are spelling out their own rights and protections, but they shy away from much responsibility.  Those corporations expect nations to give up part of their sovereignty in favour of investment." –  Ursula Litzcke, Vancouver BC, Maclean's Magazine, October 3, 2016.
• "Homelessness in Canada affects about 200,000 people and comes with a $7 billion price tag." Source: "State of Homelessness in Canada (2013)"– By Stephen Gaetz, lead author and director of the Canadian Homelessness Research Network, The Canadian Press.
• "Why are Corporations Hoarding Trillions?" – By Adam Davidson, January 20, 2016, The New York Times Magazine.
• "The more the dollar drops, the more foreigners will want to open branch plants here, but that's a race to the bottom." – Former BlackBerry co-CEO Jim Balsillie; Economy, Maclean's Magazine, March 7, 2016.
• "(Canada's) trade deficit in May was $3.28 billion." – The Canadian Press, July 7, 2016.
• "More than 200 Canadian companies recognize that the minimum wage may not be enough and new measures might be necessary to help the country's working poor. It not only helps people make ends meet, but can also benefit businesses and their communities." – The Canadian Press, July 15, 2016.
• "(While some experts are concerned about the level of consumer indebtedness in Canada, the fact is that) it's not the banks are at risk, but the individual consumers and the broader economy that increasingly depends on their borrowing and spending." – Economy, Maclean's Magazine, April 4, 2016.
• "At the meeting of the G20 nations (Prime Minister Justin Trudeau)  pressed for international efforts to stimulate the flagging global economy." – Thomas Walkom, columnist, September 8, 2016.
• "Since natural resources are globally traded commodities that already move tariff free, free trade would provide absolutely no benefit resource exporters (like Canada). On the other hand, removing tariffs on manufactured goods would put our manufacturers at even greater disadvantage." – Gwyn Morgan, former director of five global corporations, September, 2016.
• "A world in which one percent of humanity controls as much wealth as the other 99 percent  will never be stable. A pervasive sense of injustice undermines people's faith  in the system. So the answer cannot be a simple rejection of global integration. Instead, we must work together to make sure the benefits of such integration are broadly shared." – US President Barack Obama, at the UN G.A., September 20, 2016.
• "(I) had come to China to warn leaders that unless they did something meaningful soon, they may condemn their citizens to a long period of slow economic growth." – Christine Lagarde, IMF Managing Director; Maclean's Magazine, September 19, 2016.

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 10 - Political Party-based vs. Social-based Government Systems

Political-Party Based Government

Once again it is provincial election time in Ontario. All political party candidates are geared up to make their case to the electorate as to why they deserve to be elected.

The problem though, is that many promises are made hastily and very often, once in government, some of the most significant ones might not even be kept. Add to this the vagueness of the entire electioneering process, combined with the, “what's the use" and "who cares" attitude of about 40% of the electorate that refuses to vote, then the relevancy of the whole time-honoured practice becomes questionable. Let alone the fact that eventually, the party receiving only about 30% of the eligible electoral votes can create policies that could deeply inconvenience, or even afflict the lives of millions

So, what could be done to make the debates, the election process, and the government system as a whole, more relevant, credible, and responsible to all its citizenry?

Well, for one thing, each Political Party Leader should prepare and present to the electorate a clear, well-defined, comprehensive program at the start of the campaign. Specifically, the program should contain:

• A tabulated summary and prioritized account of all the socio-econo-enviro-fiscal problems of the day; plus 
• A formula as to how, to what degree, when, by what means, and at what cost, these burning problems would be addressed.

This well-defined program could then become a base for a series of serious discussions and debates between the party leaders, as opposed to the current method of engaging in personal attacks, rhetoric, and elusive retorts. Most importantly, this latter format would clarify the party leaders' positions regarding the issues in question, resulting in election campaigns that may even draw more attention and higher participation rates by the voters.

Then, in this era of deep socio-econo-enviro-fiscal crises, disunity, and mistrust, shouldn't the very nature of the current government system be also part of the discussions?

Furthermore. could it be that the current political party-based regime has reached its apogee. That it's too divided to come to a consensus on any issues, due to the leaders' doctrinarian and adversarial mindset? This woeful situation, of course, still leaves Canada with 1.367 million, and Ontario with 541.9 thousand unemployed, plus hundreds of thousands of others who had either withdrawn from the 'labour' market or have joined the 'temps corps'. Not to mention the plight of the many "over qualified," who are unable to find their 'niche'.

Therefore, an independent onlooker might just suggest that the current party-based government system has outlived its usefulness, without anyone within the inner circles even realizing it.

But what about the private enterprise, the other half of the establishment, the 'job-creators', who ran the economy into the quagmire?

Well, they had decided to set up shops, at any place, where the cost of operation is much lower and the profit margin is five to tenfold. So much for solidarity toward the folks of the country in which they reside.

Be that as it may, in this context there is the following food for thought:

Social-Based Government System

Since neither the private enterprise, nor the government has been able to come to grips with society's fundamental problems, due mostly to its “keep out" protocol and a “we know what's the best for the public" platitude, it's probably time to look for options. Options that would allow direct input from concerned, experienced, out-of the box thinkers who are capable in alleviating and even resolving many of today's problems.

One such option is a social-based system -- in essence a Government of the People, by the People, for the People -- wherein government representatives would be elected from all three social entities: Management, Employees (Labour) and the Public. Therein lies the guarantee that everyone's interests are equally represented and dealt with, as opposed to the current practice where the governing party follows the dictates of one segment of society.

In practical terms, citizens of each social entity would form a number of federally/provincially incorporated associations and from their respective membership would, every four years, elect and send into the Parliament/Legislative Assembly an equal number of members, or a total of 90 highly qualified representatives at the federal level, and 60 or less at the provincial level, to manage the country's affairs.

Members of the Cabinet, including the Prime Minister would be elected by, and from, the elected members of the Parliament. The position of the P.M. would be filled on a rotating basis from the elected representatives of the aforementioned three social entities.

Cabinet portfolios would also be equally distributed and would be rotated with each term. Thus, all three entities, Management, Employees, and the Public would each have its own turn.

It is envisaged that this government concept would fulfill most of the qualitative requirements of an ideal system, especially in democratic terms, inasmuch as it would:

• Become the most direct system of representation. Literally, all three social entities would be represented by the best and the brightest, public-spirited elements of the country.
• Replace the current multi-party representation system that does not serve all segments of society equitably, and whose modus operandi is divisionary and adversarial in its nature.
• In all probability, fit a substantial number of countries around the world very well, especially in the view of the recent socio-econo-political developments

This system would provide a more seamless operation of the economy through the new level of cooperation between government and business.

We conclude this topic with the following thoughts:

• "That government is the strongest of which every man feels himself a part" -- Thomas Jefferson, former U.S. President
• "From the beginning, capitalism has been characterized between laissez-faire and intervention. Laissez-faire representing the expression of its economic drive, intervention its democratic orientation. That tension continues today, a deeply embedded part of the historic character of the capitalist system." -- Dr. Robert Heilbroner, Professor of Economics.
• "Never underpay or overcharge, and your business will thrive" - Anonymous

Read More

• Part 9 - The Key to a Thriving Economy: Eliminate Poverty
• Part 11 - A Review of Current Popular Economic Proposals

Part 8 - Full Employment without Any Loss of Income is not a Pipe Dream

Fifty years ago, in order to calm Labour's fear of automation, the then U.S. President J. F. Kennedy made the following statement: "We believe that if men have the talent to invent new machines that put men out of work, they have the talent to put those men back to work."

Well, in Canada, Prime Ministers apparently have shied away from making such a bold pledge. Nevertheless, the grim reality is though that ‘men’ apparently don't have what it takes to deal with the unemployment crisis here, or elsewhere in the world, for that matter.

In the views of many observers of the North American economy, the events of the late 1960s started a new era that could be characterized by simultaneous unemployment and inflation rates running amok. A phenomenon that appears to have contradicted the revered Economist J. M. Keynes‘ "General Theory of Employment, Interest and Money".

Leading Canadian economist, Dr. John Kruger, summed up the narratives of that period as follows: "The world has changed but the economists have not caught up with it. It's like a technician walking around with a standard manual on repair and maintenance and all of a sudden he finds the machinery, he was accustomed to repairing, has been replaced and his book does not give the proper answers anymore. So he is lost." Since then nothing has really changed.

However, a few nonpartisan, interdisciplinary thinkers suggest that anyone, seriously concerned about the socio-econo-fiscal state of this country, should focus on reducing the high rate of unemployment. They recommend that approach of scrutinizing the relations between three basic economic factors: Productivity, Consumption and the Average Number of Hours Worked per Week.

In the collective view of the latter group, unemployment is a totally unwarranted phenomenon. It could have been entirely avoided had government, business and labour leaders recognized the need for adjusting the duration of the workweek, to compensate for the high productivity rate and the saturated market conditions that have been so prevalent for the past 40 years, or so.

In a recent interview, Dan Akerson, -- CEO and Chairman of General Motors -- was asked how to deal with the ongoing economic stagnation. In essence his response was: Corporations should invest in innovation and R&D activities. That should eventually lead to economic expansion and job creation, but it could take a few years to see the results.

The trouble though is that, business consultants had already found a way to increase the GDP, without creating new jobs. And they even dubbed the highly profitable process "jobless recovery", to the delight of business owners and stockholders. At this point in time, the responsible approach is not to manipulate, but to solve the age-old unemployment problem. A problem that has, throughout the decades, grown into a gigantic socio-econo-fiscal crises.

Indeed, the solution could be based on the need to harmonize the aforementioned three basic economic factors: Productivity, Consumption and the Average Number of Hours Worked per Week, in order to maximize the size of the country's Active Labour, and Consumer Force.

The table below, -- detailing step by step this job creation process, -- was originally designed to address this country's 1992 unemployment enigma, the same premise could serve as a viable formula to deal with the current problem of crisis proportions, as well.

Analytical Summary

Canadian Unemployment Related Economic Indicators

Economic Indicators	Economic Indicators Viewed from
	The 1992 Unemployment Rate of 11.3%	An Unemployment Rate of
		8%	5%
		and an Economic Expansion Rate of
		2%	4%
1. Population	27,402,200	assumed static	assumed static
2. Labour Force 2.1 Total 2.2 Employed 2.3 Unemployed	13,797,000 12,240,000 1,556,000	assumed static 12,693,200 1,103,800	assumed static 13,107,200 689,900
3. Gross National Product 3.1 Total 3.2 Per Capita	$664,092,000,000 $24,328	$667,373,840,000 $24,815	$690,655,680,000 $25,301
4. Personal Income 4.1 Total 4.2 Per Capita	$619,293,000,000 $22,687	$631,670,860,000 $23,140	$644,064,720,000 $23,595
5. Wages and Salaries 5.1 Total 5.2 Per Person (Employed)	$390,741,000,000 $31,923	$398,555,820,000 $31,399	$406,000,370,640 $31,004
6. Income Tax Paid by All Employed Persons 6.1 Total 6.2 Per Person	$83,893,600,000 $6,854	$85,571,472,000 $6,742	$87,249,344,000 $6,657
7. EI Benefits Received by All Unemployed Persons 7.1 Total 7.2 Per Person	$17,599,441,000 $11,311	$12,485,081,800 assumed static	$7,803,458,900 assumed static
8. Average Wage and Salary Net (After Income Tax) (line 5.2 minus line 6.2)	$25,069	$24,657	$24,347
9. Average Number of Hours Worked per Week	37.7	37.1	36.6
10. Tentative Average Wage Loss Due to Shorter Work Week (line 8)	N/A	$412	$722
11. Reduction in Government Expenditure Due to Decrease in EI Benefit Payments (line 7.1)	N/A	$5,114,359,200	$9,795,982,100
12. Tax Credit Payable to All Employed Persons Due to Reduction in Government Expenditure (line 11 divided by line 2.2)	N/A	$403	$747
13. Increase in Government Revenue Due to Rise in Total Income Tax Paid by All Employed Persons (line 6.1)	N/A	$1,677,872,000	$3,355,744,000
14. Tax Credit Payable to All Employed Persons Due to Increase in Government Revenue/b> (line 13 divided by line 2.2)	N/A	$132	$256
15. Actual Net Income Gain for All Employed Persons per Year (line 12 plus line 14 minus line 10)	N/A	$123	$281
16. Increase in Government Revenue Due to Rise in GST/PST	N/A	$1,004,000,000	$2,008,000,000
17. Potential Gross Budgetary Saving (line 11 plus line 13 plus line 16)	N/A	$7,796,231,200	$15,159,726,100
18. Total Tax Credit Payable as a Compensation for Wage Loss Due to Shorter Work Week (line 10 multiplied by line 2.2)	N/A	$5,229,598,400	$9,463,398,400
19. Potential Net Budgetary Saving (117 minus line 18)	N/A	$2,566,632,800	$5,696,327,700

For further details as to how the aforesaid objective could have been fulfilled earlier, let's refer to Analytical Summary above, line by line with the ultimate aim of:

• Either, reducing the 11.3% unemployment rate to 8% or preferably to 5%, and accepting a corresponding "average yearly wage loss“ of $412 or $722 respectively (line 10). In doing so, the government of the day would have had access to a potential gross budgetary saving of either $7.796 billion, or $15.159 billion (line 17).
• Or, decreasing the 11.3% unemployment rate to 8% or 5% and compensating for the "average yearly wage loss" (line 10) by the "actual net income gain" per year of $123 or $281 (line 15). In the latter instance the government would had ended up with a "potential net budgetary saving" of $2.566 billion, or $5.696 billion (line 19).

In a nutshell, this brief presentation clearly illustrates that the 1992 Canadian unemployment problem could have been eliminated by simply reducing the average number of hours worked per week from 37.7 to 37.1 or 36.6 (line 9) with a slight gain in yearly income.

Now, that the establishment has seemingly no more plans in reserve to revive the long ailing economy, it's time to resort to the aforementioned scientifically proven formula to resolve what has become a socio-econo-fiscal crisis, for the following reasons:

• Employers cannot be expected to hire new employees, unless there is a significant, specific and long term demand for some products or services. And it's difficult to argue such position.
• Governments are unable to balance their budgets due to a rapidly shrinking tax base and the ever increasing demand for unemployment and welfare benefits. Therefore, in the interest of all stakeholders, provincial governments -- in consultation with business and labour leaders -- would be wise to sensibly reduce the average number of hours worked per week, via legislative means. This would lay a foundation for a socio-econo-fiscal system that is noted for its ability to provide full employment without any loss of income along with a balanced budget.

Sources:

• Revenue Canada 1994 Taxation Statistics
• Statistics Canada 1995 Canadian Economic Observer, January Issue.

Read More

• Part 7 - Rescuing the Canadian Economy
• Part 9 - The Key to a Thriving Economy: Eliminate Poverty

Part 7 - Rescuing the Canadian Economy

Clearly, in order to effectively deal with the current socio-econo-fiscal crises, there are four distinct options available for the socio-econo-political establishment:

Option One - Status Quo 

This "do nothing" course offers the same-old, same-old, waiting for and relying on the U.S. economy to recover. Hoping against all odds that such a recovery would result in some degree of short-term economic opportunities for Canada to ride on.

Option Two - Belt-Tightening

A belt tightening ‘strategy’, that translates into slashing wages, reducing the size of the workforce, and cutting back or even eliminating some of the essential social services. This strategy is erroneously percieved by some policy-makers as the only path to getting rid of the red ink and becoming globally competitive. These methods of course will inevitably lead to further economic contraction, more poverty, higher unemployment rate, lesser tax revenue. This comes at a juncture when economic expansion is an absolute necessity for survival. Let alone the fact that, it's not possible to compete in a race where the competition has vis-a-vis this country:

• A substantial scientific and technological superiority; and
• A 10:1 guaranteed advantage, due to its unfair wage structure.

Option Three  - Our Proposal

Our proposal provides a set of realistic actions, -- as described earlier in our previous post, "Part 6 - A Comprehensive Proposal for Economic Revival" -- aimed at advising governments to:

1. Seek out the advice of non-ideological, independent, interdisciplinary thinkers and well-qualified problem-solvers to help revive the economy.
2. Implement an Affordable Housing Construction Program, utilizing the Power of Volunteerism for the benefits of:
• First home buyers, and retirees ready to trade down for a smaller condominium; and
• The currently untrained, school-dropouts.
3. Explore the possibility of partnering with technologically well-advanced foreign companies, of fair wage-structure, interested in setting up shop here to serve this continent's Green Energy Market.
4. Provide grants, and forgivable loans for promising independent, private innovators and inventors to enable them to convert their concepts into saleable products, services and employment opportunities.
5. Offer tax credits, the so-called "patriotic card", and temporary “payroll tax" exemption, using the near $20 billion El in the process, to alleviate the unemployment crisis.
6. Propagate the partnership and cooperative system as a ways and means of creating alternative business models and employment opportunities.  Apply a proven program for eliminating unemployment altogether, without any loss of income;
7. Recommend to strategically raise wages of low income earners, to boost the economy.
8. Legalize the right to form employees’ associations, for all members of the workforce. It‘s demonstrable that such a province-wide system of employee representation would create a much needed stable business and work environment between employers and employees.

Option Four - Emergency Program

This option amounts to a simple realization of the fact, that neither the private sector, nor the government on its own power seems to be able to deal with the current economic recession. Therefore, in order to put an end to further personal and social distress, material and financial destruction, leaders of the socio-econo-political establishment should merge their power and work out an emergency program to re-energize the economy of this country, for the benefit of all its citizenry, applying the proposals outlined in Option Three above.


Summary

In a nutshell, the establishment has four clear alternatives. It appears that in order to successfully deal with this country's problems of major public concerns, the combination of the third and fourth options provide the most viable choice.

So, let's not waste any more time and aim for the best available option. The action that has the innate capacity to provide a reasonable standard of living for this country's entire citizenry, utilizing local natural and human resources, combined with the latest in-house or external technology available, and the most effective management methods required to attain these goals.

It’s not an utopian dream, the citizenry of other countries have have been able to attain it under much less favourable conditions, by applying the proper socio-econo-political policies the people of Canada can realize these same results!

Read More

• Part 6 - A Comprehensive Proposal for Economic Revival
• Part 8 - Full Employment without Any Loss of Income is not a Pipe Dream

Part 6 - A Comprehensive Proposal for Economic Revival

In order to gain a complete insight into this country's current socio-econo-fiscal standing, it appears to be necessary to review a few additional statistics:

• Current (June 2011) Federal Government Deficit: $36.2 billion
• Current (April 2011) Provincial Government Deficit: $16.7 billion
• Current (April 2011) Federal Government Debt: $563.3 billion
• Current (April 2011) Provincial Government Debt: $236 billion
• Unemployment Rate in Canada: 8.1%, or 1.488 million (3 month average ending April 2011). Note: In more than a handful of countries the jobless rate is less than five per cent. 
• Unemployment Rate in Ontario: 7.9%, or 580.8 thousand (3 month average ending April 2011)
• 2010-2011 Canada EI Account, Planned Spending: $19.75 billion.

A close review of the above-listed data leads to several conclusions:

• First is the enormity of the socio-econo-fiscal problems that Canada is faced with. This becomes even more evident and begs for equitable, rational policies, and immediate corrective actions.
• Second is that, much of the stimulus programs initiated by the federal and provincial governments have produced negligible results.
• Third is that, in the absence of a foreseeable marked increase in consumer demand, business has no realistic reason to expand operations, let alone to hire new employees.
• Fourth is that, there are more than a handful of countries around the world, where the jobless rate is less than five per cent; hence one might ask, why doesn't someone study those country's MOs'? -- and
• Fifth is that, the establishment doesn't seem to have an effective plan to deal with the crucial unemployment problem, and the government appears to be resigned to spend ca. $20 billion this year on the El program, essentially keeping the unemployed off the active workforce.

Potential Solutions

Unfortunately there are many within the intellectual circles who regard the citizenry as mere subjects, whose role is to abide by the decisions of the establishment, as their trustees, no matter what the consequences are. However, since there is more than enough proof to conclude that, in order to reduce the unnecessary human suffering and effectively deal with this country's socio-econo-fiscal problems, the establishment must:

1. Set aside its decade old exclusionary “keep-out" protocol and seek out the advice of the few and far between realistic, interdisciplinary thinkers and experienced problem-solvers, who are in the know.
2. Initiate an Affordable Housing Construction Program aided by the power of volunteerism. This has already proven to be very effective, mostly in the fields of education, health care, politics, and sports. Such a program, if introduced, would fill the needs of a significant segment of the public, particularly: 
• The young singles and couples with limited, but relatively stable financial resources, who would like to create their own nest egg, i.e. buy a home and join the middle class. Or the retirees who are ready to trade down their home for a smaller, yet functional condominium, and gain access to a certain amount of spending money in the process.
• The unemployable school dropouts, who are willing to participate in various construction related job training programs, and are eager to find gainful employment in the industry. 
3. Contact foreign companies, involved in the development and production of advanced, clean electric power generation equipment, energy saving appliances. Offer such companies, interested in serving the North American market, the opportunity to set up manufacturing and distribution facilities in Canada.
4. Provide grants and forgivable loans for promising, independent innovators and inventors,  enabling them to convert their concepts into saleable products, services and employment opportunities.
5. Create a much needed economic expansion plan, to considerably reduce the perpetual unemployment and poverty crises by taking the following steps:
• Grant a $5,000 - $10,000 tax credit to reliable employers for each additional employee they hire for a minimum of a one year period. The introduction of such a tax credit could be financed from the EI budget and would save the federal government a $7,000 - $12,000 per each unemployed individual hired. That is to say that by creating l million jobs, the federal government could save $7 billion - $12 billion a year on El payments, not counting the new peripheral employment opportunities, and the additional tax revenue gained in the process.
• Replace the fixed corporate business tax with one that is prorated to a given company's contribution to reduce unemployment.
• Use the "patriotic card" by asking the business establishment to increase the size of their workforce, in lieu of temporary payroll tax exemption and for other sound fiscal incentives.
6. Diversify the Canadian economy in order to minimize the devastating effects of a potential saturation or even collapse of the IT market.
7. Widen the scope of the age-old concept of partnership and co-op system, whereby individuals with all types of occupational backgrounds could form an alliance, working together to provide marketable services, share the cost of operations, and apportion their revenue according to the rate of their respective input.
8. Apply a mathematically and theoretically proven program for literally eliminating unemployment, without any loss whatsoever in personal income.
9. Raise wages of low income earners strategically, with incalculable positive socio-econo-political results, to boost the economy, create nearly full employment and generate tax revenue for all levels of governments, and yes, even to increase the bottom-line.
10. Legalize the right to form and join employees‘ associations for all members of the workforce, -- just like business is accorded with organizations like the Canadian Federation of Independent Businesses, Chamber of Commerce, Employers‘ Advocacy Council, Home Builders‘ Association and many others -- to promote the interests of its members. It is expected that the legalization of such a right would create a much needed balance of power between employers and employees, just like in many other developed countries and would create a more stable working environment based on mutual trust and respect.
11. Dispose of the age-old myth, and vestige of the era of slavery, that suggests that labour cost and benefits should be minimized in order to make a business operation more profitable. Those who espouse such views should remember Henry Ford's discovery: employers are not only workers but also consumers. That is to say that low wage earning employees will automatically become meagre consumers. A situation that's not in the best interest of business, let alone the economy.

Read More

• Part 5 - A Brief Cause and Effect Analysis
• Part 7 - Rescuing the Canadian Economy

Part 5 - A Brief Cause and Effect Analysis

At the outset of its research, The Buerger Alliance raised an important question: Why does Canada, and particularly Ontario, have so many unresolved socio-econo-fiscal problems?

It sounds incredible that, for example, in this day and age of innumerable awe-inspiring scientific breakthroughs, no one has been able to figure out how to put adequate food on the table and a proper roof over the heads of every person living in this, said to be the richest and best country in the world.

Come to think of it, isn't it the role of the establishment to provide the best possible standard of living for its entire citizenry? Should they not be utilizing the local natural and human resources, combined with the latest technology on hand, and the most effective management methods required to attain this goal? If that's not the minimum one would expect in forming a community of communities, a.k.a. nationhood, than what is it? So what‘s holding us back? -- one might ask.

Regardless of their ideological standing, all levels of governments are always more than ready to please the private sector by cutting red tape, cutting social services and taxes, providing massive fiscal incentives and concessions, and hoping that in tum, the economy will get better. However, nothing seems to be working.

And now, in order to get answers to the aforementioned questions, let's scrutinize each of the formerly identified problem areas. Areas that affect every constituent of this country, such as the economic, education, energy, health care, housing, pollution, poverty, transit, the unemployment and underemployment crises.

The Economic Crisis

First, let's take a quick glance at the Canadian economy, and see what are the basic causes of its failure to perform to its full potential.

In this context, it must be stated that to no fault of its own, and for reasons rooted in its past, Canada as a country has never really had a chance to develop its own, independent, all inclusive, and well balanced economy. Due to the ensuing lack of proper managerial culture and experience to organize and operate an autonomous economy, it's no wonder that former and present leaders have been so enthusiastic to hand over the country's economic management to the internationals. In this way they could in effect disown any responsibility for the ultimate outcome.

But let's stop for a moment or two, and see what has been happening under the aegis of the so-called "technology transfer" program. Was it a strictly honest to goodness, humanitarian act to enable the underdeveloped parts of the world to catch up with the industrialized world — a kind of 'let them share our wealth undertaking‘ -- or were there some nefarious aspects to the deal?

Well, actually the latter puzzle was settled by Premier Wen Jiabao, in the course of a U.S. TV interview last year, when he was asked the question: "When will the Chinese government be ready to raise the artificially kept low value of the Renminbi, in order to level the playing field between the two countries?" In response, the Premier suggested that, "importers shouldn't be too greedy, after all his country's manufacturers sell cellphones at $4 each, that U.S. Consumers buy for $299.99."

Since there are many in high places who swear that this country's road to salvation is in further expanding trade, hence the next question is: How can Canadian companies compete with low wage paying countries? The honest answer is that they cannot. Simply because this country's employees hardly could pay a fraction of their bills when earning an average wage of $2 an hour. After all, even a year-in, year-out full time employment, paying a minimum hourly wage of $10.25 in Ontario, is not enough to cover the cost of living for a single person, let alone a family of four.

But, there are always some super-CEOs who believe that they are able to draw blood from granite.  The latest example of this talent was demonstrated in a newspaper column by an executive who -- in his attempt to beat the 10:1 production cost advantage of foreign competitors -- suggested to automate the engineering process.  Thereby, plausibly cutting 30% of the manufacturing cost.  Admittedly, he is willing to do this, even at the cost of eliminating jobs.  Although it's not clear how he is going to deal with the remaining sevenfold cost imbalance.

On the issue of cost of employment, this country's econo-political policy advisers would tremendously benefit from studying the findings of the late Henry Ford, the founder of Ford Motor Company, along with the cogent views of William Weisz, the former CEO and Chairman of Motorola Inc.

History books indicate that many decades ago, Henry Ford made an unprecedented discovery by recognizing and appreciating the fact that every employee has two basic, parallel roles to play in any economic system; being both a worker and a consumer.

As a practical thinker and employer, in 1914 Ford announced his famous profit sharing plan, and within one week raised the minimum wage in his factories from $1 per day to $5. In this way he enticed, and more importantly empowered his employees to purchase the products of their own making. Since the price of a car was at about $650, practically every employee within a year was able "own" a new vehicle and live better than ever before.

Building on Ford's theories, Weisz in 1986, at a management conference in Chicago, rebuked his fellow executives for focusing on cutting wages. "You fellows ignore the fact that, on the average, burden comes to 45%, materials about 44%, and direct labour cost generally amounts to only 11% of the manufacturing expenses. Therefore, it does not make sense to reduce wages, but strategically raising wages of low income earners does, with incalculable positive socio-econo-political results",  concluded the highly regarded, then Motorola Chairman

Incidentally, in Ontario and Quebec, currently the average labour cost is just about 10% of the total manufacturing expenses; the automotive industry has a ca. 5% to 10% labour cost component. The fast-food industries‘ labour cost is said to be one of the highest of all, at about 20%.

More recently in the U.S., according to a documentary produced and televised by CBS, more and more corporate executives go undercover and seek out the views of their employees regarding the state of the economy. Upon returning to their offices, they formulate new corporate policies to counteract the effects of the current social-economic crises. On the whole, the employees say that these bosses not only listen, but are making important changes.

Meanwhile in Europe, more companies appear to adopt Henry Ford‘s profit sharing plans. And according to DW-TV Berlin reports, in 2011 already a number of firms have paid bonuses between 2,000 to 8,000 euros each, to their low level employees. Not mentioning the fact that in a handful of European countries, the minimum yearly paid vacation is four weeks by law, and employees receive 13 month salaries each year.

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• Part 4 - General Observations on Canada's Economic Performance
• Part 6 - A Comprehensive Proposal for Economic Revival