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."

Warning: "The Old Approaches Don't Work Anymore"

In order to reactivate the Canadian economy, Prime Minister Justin Trudeau has just about done everything he could – protocols permitting – say some.

Having spent part of the first 17 months or 35% of his tenure – meeting with many magnates the world around, prompting them to see that, in these highly turbulent times, Canada is one of the most corporate friendly, stable/secure and proper places to invest in, and/or relocate their businesses in – has finally decided, three months ago, to throw down the gauntlet for ignoring his invitation.

And it happened, according to just a few back-page MSM news reports, when the PM – as this year's keynote speaker, at the most prestigious annual St. Matthew's banquet in the city of Hamburg, Germany, back in March addressing, "400 politicians, business leaders and many notables" – warned the international corporate elite, "it's time to pay a living wage (and) to pay your taxes… It's time to get real about the challenges facing the middle class. (Moreover that the) old approaches don't work anymore."

A few weeks later, in the course of giving a lecture – some think, perhaps, as an act of 'damage control' – Bank of Canada Governor Poloz reportedly reiterated the Fed's long-standing official policies of "openness to more foreign investment, immigration and free trade." Emphasizing that "when trade barriers are falling, when people are coming to our shores, and when investment is rising, Canadians prosper." Beyond that, he also issued a warning to his audience, "protectionism does not promote growth and its costs are steep." However, apparently he did not care to validate any aspect of his message.

The following are views of the country's political leaders from accredited organizations, the MSM, and members of the public on CETA – the latest of the more than 50 FTA's Canadian governments have adopted so far – as it was lately reported:

• Prime Minister Justin Trudeau has recently proclaimed, "CETA is a framework for (free) trade that works for everyone."
• Premiers, along with the leaders of the opposition parties, across the land are said to be seemingly happy with most, or even all, of the various FTA deals so far.
• Researchers at the University of Ottawa have calculated that the "benefits (from CETA) will accrue disproportionately to upper income earners, leaving working-class people behind."
• A recent study published by the IJPE – International Journal of Political Economy – "estimates (CETA will result in) 23,000 job losses in Canada over the next 7 years and 200,000 job losses in the EU."
• The Economist Magazine, in its latest issue, listed the Canadian "current account balance" – essentially summarizing the results of all FTA activities is being "in the red" – at -48.4 billion (i.e. -2.9% of this country's projected 2017 GDP).
• The public is divided into three different factions, namely:
1. The elite is clearly happy with the government's trade policies.
2. Those who do well – in socio-econo-fiscal terms – and/or still are gainfully employed, have no quarrels either.
3. The rest (ca. 50% of the working population) who struggle from paycheque to paycheque, don't complain and know very well that their views don't count.

In this era of chronic social-economic stagnation, a few independent analysts "in the know" are trying to seek answers to questions – raised by many concerned citizens, all over the country – such as:

• Why are governments – advocates of democratic principles – allowed to gain power in this country with less than 67% of the electoral support? Not to speak of 39% or even less? Shouldn't all parties, having reached only a narrow plurality status, be obliged to form a coalition government in order to earn legitimacy?
• Why doesn't the Bank of Canada use its monetary power to directly fund government initiated public projects, such as infrastructure construction programs, and in issuing mortgages for "affordable housing" projects? And, if it doesn't have such power, the Governor of the Bank should acquire it through Parliament retroactively. This would save taxpayers of Canada tens of billions of dollars annually.
• Why aren't all ranking government officials required by law to:
• Publicly validate their policies?
• Gain electoral approval, prior to:
• Entering any international econo-fiscal and political pact?
• Purchasing and particularly selling public properties?
• Why aren't government leaders searching for, or developing alternative economic models, in view of the fact that the operators of the current model don't seem to be able to deal with the socio-econo-fiscal needs of a significantly large segment of society?
• Why is it permitted for the econo-fiscal establishment to have more decision-making power than this country's democratically elected governments?
• Why are MPs, MPPs and other elected public officials allowed to impose a communication blackout on veteran problem solvers – without recourse – in an era where there is apparently a severe shortage of realistic solutions to this province's/country's most critical and long neglected socio-econo-fiscal problems? Especially, since there are veritable remedies for the same.
• Why is protectionism considered so reprehensible in some circles? Shouldn't every government look out first and foremost for its citizenry's interest in this – one might say – ruthlessly competitive world of business?
• Why aren't some publicly supported colleges and universities actively engaged as contributing scientists in the R&D of:
• Effective methodologies for the removal and disposal of contaminants from the country's waterways?
• Effective air and water filtration systems?
• Efficient heating/ventilating/air conditioning systems?
• Efficient technologies for the construction of durable and affordable homes?
• Why are some in a panic upon just sensing the mere possibility of a government interfering with the "natural order" of the labour market and the increase to the minimum wage? If there were indeed veritable negative socio-econo-fiscal effects of such deeds, why aren't such details documented? Supporters of government action argue that in countries where a "livable wage" rule has been in effect, they are collectively better off – business owners included.
• When is the econo-political establishment going to connect the dots:
• between the high level of household debt on the one hand;
• and economic stagnation, low wages, high unemployment and poverty rates, and inadequate tax revenues on the other hand?
  And recognize that it must take the necessary corrective steps to save the integrity of the economy, if not the entire country?
• When is the econo-political establishment going to realize that a knowledge and raw material export-based economy, without a manufacturing sector, cannot possibly support this country's population? Let alone that it is a risk laden proposition.
• When is the establishment going to acknowledge the fact that the current economic system – based on a competitive/destructive MO – needs to be supplemented with a cooperative one, in order to make the system more fair, inclusive and efficient?

Comments on Government Policies and Establishment Practices

Higher Education

Educationists, politicians and some notables, have been advocating "higher education" for decades as a surefire remedy for the country's major socio-econo-fiscal ills, such as poverty and unemployment. Many parents, heeding the call, have done everything they could to see their offspring succeed. While years ago, it was mostly up to each youngster – one might say – to carry the ball past the goalpost, recently the social/psychological pressure to compete and excel has made failing an unacceptable option for some, as more and more tragic reports of college student suicides comes to light. Some say that these are casualties of a rat race.

One might wonder, why isn't there a systemic, mutually beneficial "voluntary mentorship" – students helping students – program in place, across the entire education system, to ensure that nobody is left behind?

Similar programs should also be implemented for immigrants as well, in the course of seeking and getting validation of their qualifications obtained elsewhere. This process should end with all qualified immigrants finding suitable employment.

Immigration

For more than a century, governments have been promoting immigration in order to "populate" the land and to ascertain that the country will prosper through having the right mix of a productive workforce. However, apart from the mostly heartfelt generosity of the system towards new newcomers, there has always been an undertone of "exploitative intent" present in every sector of the economy, nowadays even more so – say many.

Innovation

Political leaders, concerned about slow economic growth, are being advised by some economists to encourage innovation by investing in R&D in order to stop the trend. While such advice, on the face of it, appears to be sound, however, in the opinion of several veteran innovators/inventors, R&D is considered to be a rather time-consuming venture and certainly not an "on-demand" process. A process that in most cases requires connections and huge amounts of capital in a risk averse, unscrupulous, dog-eat-dog, and a tall-poppy syndrome-laced environment that blocks many of the best "creative elements" of the country from contributing to the advancement of society. As a result, the country is losing an immeasurable worth of economic/employment opportunities both in the short and long term.

Current Economic Model: Import/Export Corporate System

Corporations, in the course of searching for export markets a few decades earlier, – having noticed that doing business overseas is far more profitable – unilaterally decided to convert this country's economic model into an all-out "import oriented" one. Clearly they overlooked the prospects of:

• The loss of many hundreds of thousands of well-paying manufacturing jobs; and
• The collapse of purchasing power affecting a large block of consumers.

Alternative Economic Model: a Cooperative (Parallel) System

A group of alienated, creative elements of the workforce who, – for utter lack of access to financial resources, have been left out of the entrepreneurial loop – if provided the ways and means under the aegis of a cooperative (parallel) system, could function very well, at least within any of the following sectors of the economy such as:

• The R&D (innovative/inventive) sector.
• The manufacturing sector, with a built-in potential of providing:
• The service industry and their consumers, who are in need of replacement parts and/or aftermarket products that have been unavailable, or difficult to come by in a timely manner, therefore causing serious interruptions in the marketplace.
• Members of the underemployed/unemployed, skilled workforce with much-needed well-paying high, medium and low-tech employment opportunities
• The housing construction sector focusing on:
• providing affordable home ownership, with the ultimate intent of;
• reducing the chronic poverty and unemployment rates.

The question is, who should initially fund the cooperative economic system? Since governments have been routinely funding corporate entities, to the tune of many hundreds of millions of dollars and beyond each year, – including those who outsource and/or layoff many thousands of their employees – it seems totally fair that a system committed to alleviating the country's socio-econo-fiscal problems be publicly funded, at least initially.

Mythical Notions About:

Cost Efficiency: Private Sector Vs. Public Sector

There is a never-ending debate in this country as to who can perform a given task more cost-effectively; the private or the public sector? Comprehensive socio-econo-fiscal cost benefit analysis indicates that since private sector firms need to add a considerable amount of "profit" factors to their cost summary, the public sector would be more cost-effective.

Small Business Operators Cannot Afford to Pay Minimum Wage

Researchers – as a result of a few decades of observation – have identified only two truly justifiable conditions where a business cannot afford to pay a minimum wage to its employees, namely when:

• Either the firm doesn't have a sufficient customer base; or
• The firm is grossly mismanaged.

In any case, shouldn't such a firm consider the alternatives? Otherwise, case studies, without exception, indicate that paying a liveable wage has many widely ranging direct and indirect social-economic benefits, including greater profits.

Summary

In view of the facts that the present federal government has, up to now, used about 42% of its mandate, and in spite of its best efforts has not been able to make a significant dent in this country's outstanding critical socio-econo-fiscal and political problems – according to some critics – it would be advisable to consider taking the following actions:

• Implement a coalition system of governance in order to reach a minimum of 67% of the electoral representation and proportionately shared cabinet posts.
• Develop a socio-econo-fiscal program to:
• Implement an alternative economic model (as a cooperative, parallel system).
• Modernize the country's infrastructure.
• Reconstruct the country's economy by focusing on manufacturing and affordable housing construction.
• Finance the latter program through the Bank of Canada.

Food for Thought

• "It's no coincidence that the most successful western developed economies are the deepest in debt. Debt crises are built into our deeply flawed privatized monetary system." – states Robert McGarvey, economic historian and author of "Futuromics: A Guide to Thriving in Capitalism's Third Wave".
• "Populism is on the rise worldwide due to the failure of the globalist economic experiment. Wealth inequality is at an all-time high, unions have been destroyed and livable wages are extremely hard to find." – writes M.S., Moncton, NB, in MacLean's Magazine, May 2017.
• "Never underpay or overcharge and your business will thrive" – Saying
• "By living wages, I mean more than a bare subsistence level – I mean the wages of decent living" – F.D. Roosevelt

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.

Austerity Vs. Deficit Spending

The 2015 Canadian federal election campaign had been fought aggressively by the country's political party leaders and their surrogates – as they tried to solicit votes from the 25,638,379 electoral base – pledging, as MPs, to become faithful representatives of their constituents. Eventually the campaign ended on October 19, with the Liberals having gained 184 seats, the Conservatives 99, the NDP 44, the Bloc Québecois 10 and the Green Party one seat; thereby filling the 338 seats of the House of Commons.

As to the issue of how these results were arrived at: 39.5% of votes produced 184 seats, 31.9% 99 seats, 19.7% 44 seats, 4.7% 10 seats and 3.4% of votes delivered only one seat respectively, with a 68.5% voter participation rate.

Of course, those who are trying to make sense of the aforementioned results, couldn't find any, aside from, "that's how the parliamentary seats have always been calculated, ever since 1867."

Apparently, that's good enough for many. And when asked how they feel about the calculus of the voting process, they just shrug and say that, "Well, it's not my role to judge."

Probably that's why the newly elected, reform-minded PM Justin Trudeau, during the election campaign, has promised to change the electoral system from the age-old first-past-the-post to something that is potentially more fair and realistic.

However, according to some of the editorial writers: "there is no evidence our voting system is broken." Moreover, the ranked ballot system is said to be favoured by the newly elected PM "because it ensures every vote counts."

One would think that by now all the excitement should have evaporated and the remaining members of the new Official Opposition would have accepted the "voter's verdict." But it ain't happening. Obviously, they cannot forgive or forget the loss of their prestigious, social-political power and status, cum opulent lifestyle – formerly reserved only for rulers – and promise that they regroup under a new leader and that they'll be back. And who can blame them for not giving up easily. After all, that's about the only office whose occupants, apart from "party-loyalty", don't require much credentials, if any – according to cynics.

Out with the Old, in with a New System of Governance – or Is It?

Now that this country's electorate, much to the surprise of many, has once again put an end to the previous regime's decade-long rule – noted for their austerity, budget/service/tax-cutting, deregulatory, devolutionist, ill-advised policies, combined with a stay-the-course, "damn the torpedoes" mentality – some believe that it is high time for the newly elected federal government leadership to consider establishing an "Economic Council" as described in the previous blog article titled "Quo Vadis Canada?" as a pre-election, 10 point "Public Wish List." Let alone of forming a Coalition Government as a declaration of inclusivity and power-sharing.

This government's potential legitimization of an Economic Council – due to its tripartite composition, namely corporations/business, government and labour/employees – would be an all inclusive, welcome and clear, albeit not the first historic manifestation of democratic governance in action. The lacking attribute in the current socio-econo-political system – in the view of many.

In this context, there are numerous areas wherein expertly counsel of such tripartite Economic Council would right now be a welcome relief to some cabinet ministers of this government, as they are confronted with many long-neglected/ignored, crucial and debilitating socio-econo-enviro-fiscal issues, namely:

1. Economic Stagnation – some say caused by politics of appeasement – evidenced by the  deindustrialized/asymmetrical/dysfunctional roller-coaster economy, relegated to:
• Offering to export unprocessed minerals, fossil fuels, lumber and agricultural/dairy products, hardly saleable even at break-even-point prices – due to a worldwide economic slump/overproduction; and
• Importing all consumer goods and manufactured products – and paying exploitively low prices in the process – from remotely located low-wage paying countries and thereby:
• Accumulating astronomical sums of profits/"dead money" as a result of the FTAs, with very little benefits, if any, to this country's economy, consumers and the public purse;
• Adding a huge magnitude of air/ocean/waterway/land pollution in the process of transportation, thereby further exacerbating the world's environmental problems;
• Undermining current/future generations' industrial/manufacturing faculties/culture; and
• Due to an unstable geopolitical situation, endangering the existence of this country.
2. Poverty, and near-poverty-line conditions, due to unduly low-wage-paying policies, sanctioned by the econo-political establishment. Antithetical to the principles of a "market driven economic system" whose lifeline is a country of wall-to-wall, cash/credit-worthy consumers.
3. Affordable housing shortage, created by inappropriate, or lack of, socio-econo-fiscal concerns, standards/policies/control, making home ownership a privilege in the process.Although an unfortunate phenomenon that, by the way – if the methodology were planned well – would lend itself to a huge opportunity to restart the economy and generate a series of activities in the process, as follows:
• In the R&D/design sector, the development of an efficient/affordable housing construction technology to suit the needs of moderate/low-income segments of society;
• In the housing construction and associated supply industries, it means new business/employment potential; and
• In the financial sector, facilitating home-ownership – through a government assisted mortgage program – the poverty rate would be significantly lowered, as people of moderate/low-income would be able to "build equity", instead of living in government subsidized rental housing compounds.
4. Unacceptable rate of under-employment/unemployment, an unnecessary and relatively easy to remedy phenomena, the upshot of econo-political oversight, lack of planning, and indifferent governmental policies – could be fixed on the basis of proffers, that have been shared with four subsequent provincial and federal governments.
5. Income tax cuts, favoured and frequently offered incentive, however often enough do not stimulate significant enough consumer spending, particularly among the majority of the public, namely the "low-income earning" masses, who pay very little or no taxes at all, to have any measurable dynamic effects on the economy.

What's with this Country? What's with its New Political Leadership?

Has anyone wondered about, why this country – populated with well-qualified human resources and endowed with a wide variety of natural resources – seems incapable to formulate and implement a comprehensive socio-econo-fiscal program for the benefit of all 36 million plus of its population? A program aimed at alleviating and ultimately resolving the aforementioned debilitating issues. Critics claim even the new leadership is frightened of "deficit spending".

Fearful of Deficit Spending? Well, Fear No More!

In the opinions of notable academics and others in the know: governments as a "sector" – just like business as a sector – contrary to some highly propagandized myth, can borrow as long as the spending produces a significant volume of reasonably well-paid employment opportunities, growth in productive public assets, GDP and corresponding tax revenue. Due to its built-in "multiplier" effects, the process enables governments to repay their debts related to deficit spending through the method of fair and progressive taxation. One might add that without the latter defined ways and means the business sector would have been greatly limited, and even stopped in its pattern of growth.

Austerity too has an innate multiplier effect, though a negative one; resulting in a downward spiral – according to the same academic sources.

Admittedly, there are others – such as financial organizations – who object to deficit spending. Their somewhat legitimate concern is that international credit rating agencies may downgrade the country's/provinces'/municipalities' credit worthiness as a result of excessive, non-productive deficit spending.

Therein lies the imperative for having a tripartite representation – business/employer, government, labour/employees – in the course of securing an all-inclusive decision-making process, whereby all sectors of society are equitably represented and eventually make the right call, based on serving the interests of the public vs. trying to avoid at all costs getting downgraded from an AAA to an AA status.

What's Holding Back This Country?

Apparently, in the views of some insiders, it's this country's rigid 21st century socio-econo-fiscal and political structure, and its medieval protocol that is holding back this country from effectively functioning for the benefit of all its citizenry.

A Protocol of "Welcome" for Business Lobbyists; and a "Keep-Out" for Veteran Problem-Solvers!

In spite of their lack of success to deal with the aforementioned problems, elements of the econo-political leadership are unwilling to take the time to listen to the veritable proposals/solutions produced by veteran problem-solvers. In fact, the latter group have been not only ignored, but discredited by the gatekeepers of the system. At the same time, business lobbyists are having a field day as they loudly walk freely in and out of the cabinet ministerial offices and virtually dictate/write government policies.

As a result, many tens of billions of dollars value of innovative ideas, systems and business opportunities never see the light of day each year. These have the innate capacity to re-energize the economy, improve the lives of millions and even balance the budget.

Memorandum

In case this new federal government and others – the media included – find themselves shorthanded and at one point decide on espousing an "open door protocol" toward a few living veteran socio-econo-fiscal problem solvers, their message is loud and clear:

All five of this country's aforementioned major problems can be resolved, and they are ready to oblige.

Food for Thought

• There are some in the hierarchy who cautioned that the best thing to do about the faltering economy – incredibly – is to wait and "let the system repair itself."
• Apparently, abolishing slavery in some countries was initiated by the realization that there were not enough "independent consumers". Something the establishment might consider reflecting upon.
• Very often politicians are misled by lobbyists and "professional naysayers" who make bogus claims, e.g. that raising the "minimum wage", or "paying living wage", etc. would result in business closures and the loss of tens of thousands of jobs. Or, "deficit spending" leads to econo-fiscal fiasco. There should be a sign on every cabinet minister's desk: "Only scientifically/mathematically verified claims will be considered for discussion."
• Homelessness is a difficult problem to solve, according to many. Not according to the city of Albuquerque, New Mexico. They decided to train and employ the homeless at the Public Works Department. Now the once homeless are off the streets, off the welfare role, work for a liveable wage, receive benefits, and live independently. City mayors take note!
• Some suggest that governments should farm out certain public service operations to private enterprise. They claim that it would cost less for the taxpayers. Others say, that when counting all factors, the markup included in the overall amount – not including the social costs – may prove to be more expensive.
• Interesting random questions from Main Street:
• If Waterloo region is the cleverest community of all – as it has been declared a few years ago – why have this country's most crucial socio-econo-enviro-fiscal problems not yet already been resolved?
• Knowing that the municipal water supply is typically contaminated with chemicals, pathogens and poisonous substances, why are scientists, engineers and technologists not developing and manufacturing purification systems, to be applied at the waterworks and/or at the point of use?
• When is the establishment going to realize that Canada – all considering – should have a fully diversified economy, applying all the country's wide range of human and natural resources for the benefit of all?
• What is the purpose of driving labour wages down and thereby undercutting the purchasing power of the consumer society?
• Corporations complain that they cannot pay decent wages any longer and provide benefits to their employees. How come, just in Canada alone, they have accumulated over $600 billion of profit in just a few years?
• As corporations continue to outsource production to low-wage countries, leaving behind a massive unemployment in this country, where are they going to sell their products?
• Do governments have the right to ignore/reject veritable/realistic/affordable solutions to major socio-econo-fiscal problems, offered by outsiders "in the know"? And, does the public have a legal recourse? Some say that the realization of the "pecking order" provides them immunity.

Must Reads for Every Socio-Econo-Fiscal and Political Officeholder

• "The Only Game in Town", Central Banks, Instability and Avoiding the Next Collapse, by Dr. Mohamed A. El-Erian – former Deputy Director at IMF, and CEO of the Harvard Management Company – "explains how and why (the US) central banks became the critical policy actors, and why they cannot continue in this role alone."
• "The Economic Problem", "Understanding Microeconomics", and "Understanding Macroeconomics", by Dr. Robert L. Heilbroner, Professor of Economics.

Part 18 – The Austerity Program -- A Warning or a Social Experiment?

One might wonder that when the entire country is impeded by multitudes of long neglected, debilitating, socio-econo-enviro-fiscal and infrastructure problems, should an austerity program pass as a policy of preference?

Especially since the establishment has been made repeatedly aware of a few, scientifically proven, realistic and socio-economically much more desirable choices.

In this context, and in the views of many in the know, it seems necessary to publicly seek and receive answers to the following random but rather important questions:

1. What is the real purpose of this misconstrued and discredited, if not ideologically motivated, austerity program?
• Is it to warn low-income earning elements of society, who cannot survive without a credit card, that its overuse has consequences and leads to tragic bankruptcy? By the way, what's the use of warning the victim?
• Is it to pressure the unemployed and the welfare recipients that, due to the ever shrinking tax base, they should no longer expect to rely on a taxpayer subsidized social safety net, but instead should become self-reliant?
• Is it a social experiment aimed at conditioning the public, and at the same time testing the limits of tolerance toward the rapid erosion of their standard of living, affecting about 50% of the workforce who earn less than $35,000 gross per year?
2. What is the point in granting over $10 billion of unwanted yearly endowments to corporate members of the $526 billion "dead money" club? Particularly, since New Agey, corporate proxies have already made it known to the public that the role of corporations is no longer job creation. Their primary role is to generate profits for their shareholders.
3. What is the point in spending $19.9 billion on E.I. benefits when there are more beneficial ways to invest in idling human resources for this allotment?
4. What had motivated the establishment to seek out and ratify FTAs (Free Trade Agreements), with 50 countries so far, and to join the World Trade Organization? Was it a political or economic decision? Let alone the question of which sector has been benefiting from these accords? Because, it's certainly not the skilled unemployed nor the underemployed college graduates!
5. Could anyone explain what the real advantages of globalization are? Despite the fact that:
• Importers acquire and pass on tens of millions of tons of low-cost merchandise yearly through the innumerable agents of commerce to consumers of this country without adding much, if any, measurable value in the process. Yet they gain unprecedentedly high profit margins during the course of every transaction.
• There is a lack of strict control that legitimizes the free flow of capital and monetary gains from one jurisdiction to another, with much of it reportedly ending up in various tax havens.
6. What is the point in the wholesale sell out of Canada's nonrenewable natural resources, especially oil, gas and water? Is anyone expecting some magical, technological breakthroughs to show up on the horizon that will replace these assets? Some serious thinking is required for the benefit of future generations!
7. When is the establishment going to realize that:
• True labor peace can only be achieved if all three sectors, namely government, business and employees, harmoniously work together in a partnership as co-equals? As demonstrated in quite a few advanced democratic countries around the world.
• As corporate accumulative earnings have reached $0.526 trillion, shouldn't employees' wages and benefits reflect such generous earnings? It certainly should!
8. When are members of all governments going to recognize that:
• In the course of parliamentary debates, adversarial demeanor is not conducive to resolving this country's debilitating problems equitably?
• In the presence of a majority government, the opposition parties' representatives may as well pack up and go home since they are rendered totally ineffective?
9. Why is it that, while some mature corporations can afford and are willing to pay $40/hour in wages and good benefits to skilled workers, others of similar caliber demand a 50% wage cut, (e.g. reducing wages from $26.75 to $13.35 per hour), just to remain in Canada?
10. Why aren't political party and civic leaders – in the course of election campaigns – required by law to formulate and publish their own comprehensive, itemized, timelined and costed programs for dealing with the country's critical problems? In the absence of such requirements, clearly the entire election campaign is meaningless.
11. Why do governments prefer to provide subsidized "rental housing" – albeit in very limited supply – as opposed to housing that is based on "rent to own homeownership"? Especially, since the latter choice would reduce the rate of poverty as well.
12. Why federal and provincial governments are so eager to provide grants to well established corporations, but refuse to underwrite forgivable loans for affordable, much needed residential/retirement housing construction pilot projects?
13. Why is the establishment – having demonstrated its inability to resolve the country's major problems – not resorting to some form of crowd sourcing? After all, does it really matter which sector succeeds in restoring the country's econo-fiscal soundness, as long as the results were to the satisfaction of all stakeholders? Apparently it does matter. Because, in the experience of independent experts, in the halls of the establishment, their counterparts would simply dismiss such a proposal by ruling that, "if it were feasible, someone would have already implemented it."
14. Why is the Bank of Canada holding down the primary lending rate? As a result, the purchasing power of all forms of savings is significantly reduced; thereby shortchanging retirees, and even the marketplace.
15. Why do corporations keep employees out of the decision-making process? Don't employees deserve to have a say – as in many countries they do – and beneficially participate in managing the companies?
16. Why do the leaders of the cooperative enterprise system sit on the fence and not expand their system to create new subdivisions, capitalized through the credit union concept, using the crowd financing principle? Thereby, proactively participating in a much needed job creation process.
17. Why are TV programs – under the aegis of promoting the innovative process – presenting a panel of bidding investors in a Roman circus-like setting, and verbally beating up, embarrassing, ridiculing, and occasionally even bringing their guest inventors to tears? Some might wonder if mockery is really the best method for encouraging innovation. Certainly, it doesn't help this country's efforts to reduce its invention deficit, which is not exactly a laughing matter. It seems that this promotional TV program needs a professional makeover, by featuring more serious contents and participants, under a more fitting title, such as, "Let's Make a Deal".

Summary

The public expectation is that by pondering over these questions, the establishment, and all the parties who have been responsible for the plight of this country, may realize that the time is right to blow off the dust and review those earlier submitted proficient proposals, and to implement them for the benefits of all segments of society, equitably.

Recommended Reading

•  The Buerger Alliance Blog Articles 1-17
• "Deepening the recession by dogmatically implementing austerity policies makes no economic sense whatsoever", Martin Shulze, Eauropean Parliament President, – The AP, March 14, 2013
• "Trade, Technology As Middle-Class Job Killers", by C Freeland – The Globe and Mail, February 15, 2013
• "Supercitizens' Threat to Democracy", by C Freeland – The Globe and Mail, March 1, 2013

Food for Thought

• "I would not exclude that we run the risk of seeing a social revolution", Jean Claude Juncker, P.M. of Luxembourg
• On Capitalism: "Capitalizm is in crisis and increasingly social cohesion will be the biggest challenge", Paul Polman, CEO of Unilever NV

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 14 - Mr. Scrooge Can't Fix the Economy

Austerity Policies Don't Work

According to the latest business reports, the Canadian economy "sheds jobs", apparently in an effort to reduce costs and in response to the diminishing consumer demand. This is very bad news, that cannot be excused or ignored as simply a temporary adjustment. This is particularly problematic for this time of year, when peak business activities normally result in nearly full employment.


But, it must be considered as a clear warning that the austerity program, even after many months, is not working. How could it possibly work when, by definition, full employment for all at reasonable living wages is a prerequisite for a well-functioning market economy.  The current modus operandi is instead continuing to further decimate the very fundamentals of a healthy system.  One would expect that Waterloo -- not long ago declared as the most intelligent city in the world, drawing from its three universities, and two highly esteemed private think ­tanks -- should have been able to produce a single "academically validated" proposal on how to resolve this country's unemployment crisis.

That is not to say that there have been no realistic solutions offered before. To the contrary. Throughout the years, there have been many proffers prepared by less famous private think tanks and forwarded to this country's hierarchy. But apparently, none of them have passed the "ideological test" of the establishment.

That is to say that, according to currently enforced protocols, proposals must be acceptable to the social-economic wing of the establishment. This does not normally include "labour", a term management often condescendingly uses to refer to their employees. This latter segment of society doesn't have very much clout, if any, with the decision­ makers. Labour's place is primarily to follow orders, otherwise they could readily be replaced by plenty of other hungry workers. The whole current environment is getting more and more reminiscent of the Dickensian era. And, at this moment, labour is again ordered to tighten its belt and silently endure the hardships, until it becomes debt­ free.

Oddly enough, no one seems to be concerned about the reasons for the high rate of indebtedness among the low­ income segment of society. Are they afraid of facing the truth; i.e. that there might be a direct correlation between poverty line wages and the overuse of credit cards, just to survive?

Another Viable Solution

In this context, one may be tempted to ask, what really is the logic behind the current austerity program? Especially when a few prominent, realistic, corporate executives and others in-the-know, have made it perfectly clear that economic expansion, coupled with full employment is the only way to stop this long, ongoing and self-destructive process. At this point, The Buerger Alliance makes another effort to present one more job-creation program, in addition to two earlier suggested proffers, detailed in our blog in:

• Point 5 under the "Potential Solutions" section of our "A Comprehensive Proposal for Economic Revival" blog article.
• Our solution described in the article, “Full Employment without Any Loss of Income is not a Pipe Dream" 

 In essence this additional proffer is based on the premise that:

1. If the federal government -- applying a small portion of the $20 billion E.I. Budget, parceled out to the unemployed -- would offer 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; and 
2. If employers would strategically revise the pay­ rate of low-wage earners of up to $35,000 per annum, as per Table 1 below, such a measure would result in an economic (business) expansion rate of ca. 3.4 %, and generate over 500,000 jobs in the process; plus
3. If provincial governments would introduce our "Full Employment Without Any Loss of Income" Plan, the economy of this country would gain an almost unprecedented level of strength, and would be on the path of resolving most of its crises in short order.

Table 1

Effects of increasing pay-rate for low-wage earners on the Canadian economy 

1	2		3	4		5
Total Income Class	Number of	Percent of	Total income assessed (in millions)	Total pay-rate increase recommended		Effect on the economy
	Taxpayers			in %	in millions
up to $10,000	3,811,740	15.27	$19,657.4	30%	$5,554.6	0.54%
$10,000 - $15,000	2,597,000	10.40	$32,468.4	25%	$8,117.1	0.80%
$15,000 - $20,000	2,443,640	9.79	$42,665.7	20%	$8,553.1	0.83%
$20,000 - $25,000	1,820,630	7.29	$40,733.5	15%	$6,110.0	0.60%
$25,000 - $30,000	1,547,270	6.20	$42,508.4	10%	$4,250.8	0.42%
$30,000 - $35,000	1,579,550	6.33	$51,253.5	5%	$2,562.7	0.25%
Total	13,799,830	55.28	$229,286.9	n/a	$35,128.3	3.44%

Footnote: Data in columns 1, 2, and 3 were sourced from the CRA "Income Statistics 2010 - 2008 tax year".

Interpreting the data: these calculations illustrate that an across the board pay­-rate increase of 30% to 5% for low-wage earners in Canada with incomes of up to $35,000 per year (55.3% of the total taxpayers), would create a 3.4% economic expansion rate, generating over 500,000 new employment.

In Summary

In the opinion of an increasing number of experienced thinkers, the current austerity based socio-econo-fiscal policies in Canada are not working for the benefit of over 50% of society.

These policies are outright punitive, destructive, and must be replaced with an economic program capable of delivering full employment, paying "wages of decent living", having the capacity to gradually minimize and ultimately eliminate (in  3 to 4 years) our country's socio-econo-fiscal crises.

In fact, in terms of effectiveness, the establishment's austerity program is very similar to an allegorical physician giving counsel to an undernourished, weak and underweight patient to go on a lengthy weight-loss diet.

A Few Words of Wisdom

• "To balance budgets, or to run a budget surplus in the public sector makes little sense when an economy is underutilized, but it is the course of wisdom when there are no idle resources to absorb additional expenditures." - Dr. Robert L. Heilbroner, Professor of Economics
• "Capitalism works when there is a large middle class. There is no free market solution to today's problems." - Jonathan Kay, Author, and Columnist
• "Austerity doesn't work." - David Miliband, U. K. Foreign Affairs Minister
• "Where wages are high, we shall always find the workmen more active, diligent, and expeditious, than where they are low." - Adam Smith, Economist and Philosopher, Author of "The Wealth of Nations" and "Theory of Moral Sentiments".
• "And by living wages I mean more than a bare subsistence level, I mean the wages of decent living." - Franklin D. Roosevelt, former U.S. President.

Read More

• Part 13 - Only Management, Labour and the Public Working Together Can Solve Our Country's Socio-Econo-Fiscal Crises