Misconstrued Problems Beget Misconstrued Solutions

One would expect that – after about seven years of experimentation with its Quantitative Easing/Austerity Programs, Budgetary/Staff Cuts, Spend/Save Directives, Corporate/Personal Tax Lowering, Deregulatory, Fiscal/Monetary Policies, and Warnings of "Don't Spend Beyond Your Means" – the policy and decision-makers would by now have learned what it takes to put in place an all-inclusive, efficient and thriving economy coast-to-coast; the envy of the world. Yet, the province and country still have not even fully recuperated from the ills of the 2007/2008 recession, and the system very much appears to be in a holding pattern.

Some critics suggest that the authorities are making flimsy excuses – faulting the lack of domestic, consumer/entrepreneurial confidence, strong/falling dollar, high labour costs, global socio-econo-fiscal and political uncertainty, collapsing oil prices, and claims that the entire world is in decline – for their failure to deliver the goods.

Others lay the blame on the prevailing adversarial, roundabout style, exclusionary, unwilling to listen, ideologically divisive and polarizing system of governance, where time and time again, policies cancel out long and hard fought social-economic progress.

The usually cautious, silent media outlets have recently begun paying attention to the plight of the economy and are ready to admit that the "economy is shaky and the future is uncertain". But, in an era of "the culture of fear", even the most daring analysts and journalists are reluctant, or perhaps unable, to spell out the deep-rooted causes of the problem, let alone to offer solutions.

In contrast, several veteran and non-dogmatic problem solvers have been quietly focusing on:

• finding the real reasons for this province's/country's "lack of success" in resolving its economic problems – on the one hand; and
• developing more veritable and realistic solutions for these issues, while frantically seeking out "legitimate ways" of presenting them directly to the decision-makers – on the other hand.

The results of their findings may be summarized as follows:

Misconstrued problems always beget misconstrued solutions.

The Misconstrued Problem: The Canadian market has been traditionally regarded by the policy and decision-makers as being too small for the country's population of approximately 35 million people.

The Misconstrued Solution: The country should become an exporter and take a hint from the frequently flaunted TV ad, "Others have no problem selling to you, why can't you sell to them?"

Reasons for Failing to Resolve the Economic Problem

In-depth analyses of the economic problem in Canada, conducted by a team of largely foreign educated and experienced researchers and problem solvers, has long ago identified the major causative elements, symptoms, facts, convictions and policies related to the point at issue, that is:

• Free-market theoreticians and economists, with just a few exceptions, have not been paying close enough attention to important issues pertaining to the subject of microeconomics – a branch of economics that monitors the data related to commodities and the actions/reactions of companies and consumers.
  While a few of them might have paid attention, however using average "Income Statistics", the  devastating effects of the low income earners' lack of purchasing power on the economy could have not been noticed. Only by resorting to, and analyzing the Income Class Statistics data, the crux of this province's/country's socio-econo-fiscal problems could be realized and resolved.
  (Then again, there is a strict protocol that these professionals have to also consider! Yes?)
  Otherwise, the vast majority of economists' real concern is rooted in macroeconomics, which in essence deals with the GDP, export and import, spending and savings, and investment related factors.
• The Regime has abandoned its leadership and control role, and instead has adopted an accommodating function. As such, it has become an enabler – some would say servant – to the Entrepreneurial Class, allowing the latter to run the free market economy at its whim.
• The Canadian Market can only be considered small because about 50% of the "active workforce" receives less than $40,000 real annual gross income. Such a meager income does not provide sufficient purchasing power to enter the marketplace, not even as an extremely frugal consumer – at least not without several already overloaded credit cards.
• The effects of this "bread-and-butter" reality are being played out, right now, at the marketplace as over 130 major department stores, along with many other corporate entities, are in the process of "throwing in the towel". Their collective exit further exacerbates the government revenue shortage and the under-employment/unemployment crises.
• This province and country simply does not have what it takes to become a successful and highly competitive exporter. It lacks all the essentials: an effective innovative culture; the capacity to develop and produce unique products in demand; a proficient, dedicated and focused management; an appropriate techno-structure; and plenty of venture capital.
• Exporting crude oil, LNG, unprocessed minerals, forestry, and IT products and services for socio-econo-fiscal and technological reasons is clearly impractical and untenable, due to international insecurity and world market conditions, let alone the collapse of the oil price.
• The Importer sector (a.k.a. "Market Society") – having hit the jackpot by hooking up with a host of very low wage paying countries in order to improve its bottom line, in the course of providing this country with consumer goods, products and supplies – cannot be expected to voluntarily abandon its "lucky strike". Especially, since due to the huge wage/profit margin differentials, having gained over 600 billion in "dead money" throughout the past six years alone, clearly no amount of executive and corporate income tax reduction and/or incentives would be attractive enough for the sector to voluntarily reverse the deindustrialization and outsourcing process, and to rebuild an all-inclusive economy in Ontario and Canada that benefits all.
• The Small Business sector – showcased by politicians as the country's "job-creator" – has been given such a title that it cannot afford. While Big-Business, due to the benefits of the "economies of large-scale production/merchandising" is capable of making billions of dollars yearly, the small business sector, in contrast, due to its low volume of inventory turnaround, extreme competition and low profit-margin, cannot pay livable wages, provide benefits and live up to such image. Hence the reliance on the small business sector is hopelessly false; at least without being aided by "big-business" – presently an unlikely possibility. But it doesn't necessarily mean that such problem has no remedy.
• The over 50 FTAs (Free Trade Agreements) in place, have not provided the much propagated benefits to the hundreds of thousands of under-employed and unemployed masses. Let alone to the vast number of the "over 50" crowd that the current culture considers unemployable. In fact, a few of these FTAs are clearly undercutting local efforts to offer direct, bilateral deals to foreign manufacturers that might be inclined to set up plants in Ontario or elsewhere in Canada right now, in order to gain easier access to the North American market.
• The prevailing system of governance – in the view of many – cannot be seriously considered democratic just because it allows "free elections", unless it is validated by two thirds of the entire electorate and allows input from all segments of society.
• The political establishment – with a lengthy history of unwillingness and inability to proficiently deal with major problems of public concern – throughout the decades has become more and more reluctant to meet with, listen to and/or accept validated policy proposals from independent researchers and problem solvers. Thus providing – one might suggest – a ground for tort.
• Public opinion, conducted by pollsters and reported by the mainstream media, creates an impression that many buy into the notion that the economy is too complex of an issue, and as such, had better be left to the "entrepreneurial class" to deal with, and damn those who can prove it otherwise. Hence, there's nothing to worry about despite the under-employment/unemployment, affordable housing shortage and the poverty crises; people just have to get used to tightening their belts more and more; never mind the needless suffering.

Changes Required to Resolve All Ontario's/Canada's Major Problems

Having listed above some of the reasons for failing to resolve the economic problem, the next step is to define the changes required to enable Ontario and Canada to resolve its major problems.

1. Considering the fact that the electorate is greatly divided, and that the prevailing system of governance is antagonistically ideologically based, and that:
• just about every decade, governments trade places, drawing questionable plurality from one end of the political spectrum to the other in the process. Nevertheless, neither of the choices seem to eventually represent the interests of all segments of society; a critical distinction that sets apart a democratic system from a totalitarian one; and that
• the opposition parties' MPPs and MPs are treated as "nobodies" by the governing party. As such, they have practically no power to influence the decision-making process, even though the opposition parties collectively represent the majority of the electorate (Therefore – one might argue – they may as well be dismissed).
2. The latter innate disparity within the system should be corrected by replacing the current, basically "single-party" model with a "coalition" system of government, in case election results don't produce a two thirds majority for any of the political parties.
   (Note well: the Legislative Assembly/Parliament should have a different set of rules of behaviour from those of a battleground.)
3. In view of the dire state and perspective of the economy, and the fact that the system is essentially in a six year plus "holding pattern", one would hope and expect that the Premier of Ontario, as the CEO of the largest province in Canada, would:
• On the home front:
• Call a conference – under the auspices of OES (Ontario Economic Summit) – and invite prominent business and labour leaders and policy advisors for a trilateral conference, as equal partners, to present and discuss their all-inclusive/self-reliant and secure plans/models for resolving Ontario's long neglected, structural economic problems. After all – contrary to some odd beliefs – the truth is that the prerequisite of a prosperous entrepreneurial activity is a product of proficient management and workforce, both working together in harmony for the benefit of all involved elements.
• Issue a directive to Cabinet Ministers and policy advisors to lift the unprecedented embargo in place against the few highly skilled, independent and experienced socio-economic problem solvers, who are best qualified to present veritable solutions and models for many of Ontario's aforementioned long unresolved problems.
• On the international front, in partnership with the Premier of Québec and other concerned, like-minded civic leaders would:
• contact the leadership of OECD and the IMF and urge them to call an international conference – with Business, Government, and Labour leaders' participation – aimed at discussing and ultimately formulating an all-inclusive "fair and efficient" global economic system, hemisphere by hemisphere, continents by continent, country by country.
  A system that allows all countries to formulate their own, "exploitation free" economic model, according to their needs. In this context, countries should have the freedom of choosing between either a system based on self-supporting principles, or join with several like-minded neighbouring countries, thereby leveraging their efforts and maximizing the results of their cooperative work for the benefits of all their citizenry.
• Initiate discrete conversations with a number of billionaires and remind this ever-growing group that there is a veritable, direct and causative correlation between their unprecedented success and the failure of the econo-political system, in trying to satisfy the needs of the public, and in maintaining or modernizing the infrastructure, both locally and country-wide.
  This systemic failure is rooted in the age-old income distribution formula, whereby about 50% of the active workforce have been, for decades, receiving less than $40,000 real gross annual income. That in turn has created serious reductions in consumption, employment and in government revenue; let alone the considerable increase in the need for social services and benefits.
  However, by increasing the participation or contribution rate of the wealthy in the econo-fiscal productive process, the benefits of the "multiplier/accelerator" effects on the economy would provide a sizable revenue in return, along with a countrywide and a worldwide socio-econo-fiscal stability.

Comprehensive Solution

In order to bring about a comprehensive solution for the problematic economy, a multifaceted "trilateral plan of action" that is cooperatively formulated by government, business and labour is urgently needed, whereby all aspects of the underlying causalities of the calamity should be directly addressed. Hence, by correcting the unjust income and wage scale; poverty, the affordable housing shortage, and the under employment/unemployment crises would also be automatically eliminated. Beyond that, a sufficient amount of tax revenue would be generated and could pay for the reconstruction and modernization of the crumbling infrastructure of this country.

So, why is the system in a holding pattern? Whose assent is required to put the stamp on these highly realistic and even profitable solutions for the socio-econo-enviro-fiscal problems of this province and country? – One might ask.

Summary

Since, throughout the past decade, it has become more and more evident that the governing system has been lacking either the will and/or the capacity to deal with Ontario's and Canada's structural socio-econo-enviro-fiscal and political problems, in the preceding paragraphs it was necessary to remind the decision-makers of the facts that, within this province and country there is a largely ignored/blocked pool of talents in the form of veteran, foreign educated, socio-econo-fiscal researchers and problem solvers who have the capacity to provide veritable solutions.

In the words of a handful of government officials and experts, these "one in a million" problem solvers are entitled to be listened to if the country as a whole wants to survive.

Food for Thought

• "When Aristotle (the Athenian philosopher, in the fourth century BC) examined the economic process, he differentiated between "economics" and economic activity that had as its motive and end not use, but profit" – The Economic Problem by Dr. Robert L Heilbroner, Professor of Economics.
• "The G20, following the lead of OECD, has now accepted that income inequality impedes growth" – Columnist Thomas Walkom, February 11, 2015.
• "There is a growing recognition across the political spectrum, including among some business owners, that the current minimum wage is too low and that higher pay may speed up economic growth." – Editorial, The L. A. Times.
• "Watch what you say in your living room. Samsung's Smart TV could be listening. The potential for TVs to eavesdrop is revealed in Samsung's privacy policy available on its website." – The Associated Press, February 11, 2015.
• "We are tired of hearing people tell us that you have a say, when in fact we do not. We have been silenced, ignored or kept in dark throughout every step of this process." – Connor Young, 4th year student, Wilfrid Laurier University, February 26, 2015.
• "I believe our institution is in trouble. We are being taken into a new Dark Ages." – Associate Prof. Gary Potter, WL University, February 26, 2015.
• List of Socio-Econo-Fiscal Articles – The Buerger Alliance

Election: A Democratic Right or an Exercise in Futility?

Once again it's election time in Ontario and the electorate is called to exercise its democratic right to vote. Many take the call very seriously, and will vote according to their socio-econo-political interests. However, the disenfranchised, apathetic masses, convinced that their vote is not going to make a difference, will most likely just stay away from the polls. Cynics, in the meantime, will be pondering as to what else is there to democracy?

Yet a few others, the independent thinkers of society, are becoming increasingly concerned about the ongoing trend of socio-econo-fiscal degradation that is deeply affecting the middle class, (a.k.a. working class) and they are searching for its causes. In doing so, they wonder if the causes are systemic and note that:

• While there are rigorous prerequisites for getting and keeping a blue-collar, or a white-collar job, there are practically no requirements for becoming an MPP candidate, beyond the point of unquestionable loyalty to the party. Once elected into the Legislative Assembly, some of the MPPs of the winning party will be appointed to one or more Cabinet posts during their tenure to manage the affairs of millions. Although these decision-makers are assisted by armies of specialists, they frequently appear to produce amateurish, or outright reckless, and crippling results.
• This previously described model of governance, hallmarked by some of its MPP's background deficiencies, further complicates the situation for at least five reasons:
• One is that, in theory, responsibility as a managerial function is non-transferable. That is to say that, lack of proficiency should not excuse offhand, let alone irrational decisions. In this context one can cite the following typical examples:
• While the Ontario Government has recently offered a corporation a six-digit figure bonus for every job it is willing to create -- to the tune of $120 million -- it had ignored various, validated, potentially election-winning proposals, that could have alleviated even the entire country's socio-econo-fiscal problems.
• Cases, when major "bread-and-butter" issues, such as the latest rate of "minimum wage" were hastily decided on, at seemingly staged, election-campaign style, back-alley gatherings by a few misinformed individuals, and/or lobbyists, without presenting a single piece of evidence to support their claim.
• Two is that, once a political party is in power, the system is legally enabled to table and mete out punitive laws and measures against the interests of even the plurality of society, such as the working class, or any other group for that matter.
• Three is that, besides not knowing how to resolve major socio-econo-fiscal problems, blatantly ignoring the warning notes of those who are veritably in the know, is an entirely different and inexcusable matter. History books refer to such acts as political gamesmanship, with potentially scandalous and catastrophic consequences.
• Four is that, while the present protocol allows direct access for lobbyists to Cabinet members, these same rules block independent researchers and validated problem solvers from even contacting backbenchers. Some might also say that this raises the issues of how this 21st century representative democracy really does work? And if it does, for whom?
• Five is that, being concerned about Ontario's Public Debt/GDP ratio, (presently at 40%) is understandable. Especially if one assumes, that "personal debts" and "public debts" are all the same. But, they are not! Personal debt sooner or later must be settled. In contrast, public (government) debt, just like business debt, due to a unique "multiplier effect", generates revenue. This revenue, in turn enables business and government debtors to repay their debts. By the way, almost all business and government debts are settled by using this age-old principle. Other methods, such as the lately applied austerity programs always lead to prolonged, serious socio-econo-fiscal and political breakdowns, from which the recovery can be very long and very messy.
• Since this election may result in a nearly equal, three-way split of votes, the prospects of replacing the current one party-based system of governance with an all-inclusive multiparty coalition government model, looks very promising – with many precedents around the world.

One might further infer that a three party (or four party) coalition government would actually unite a public -- that is divided along a deep socio-econo-fiscal fault line -- hoping that politicians are finally making serious efforts towards resolving this province's problems equitably.

Subsequently, once an ensuing debate has settled, – over the myths about, "what does it take", "who is able", and/or "who deserves to be enabled, and at what cost" to create a healthy, resilient economy that would offer work and decent income for all – a thorough planning process should begin. This process should have the participation of qualified business and Labour representatives as equal partners, guided by a host of experienced, independent, interdisciplinary problem solvers in the know.

At the same time, the "new regime" should also reconsider several billion dollars in value of recommendations – presumably stored in the vault of two former Premier's Office, that includes a validated and potentially election-winning "Proposal for Full Employment Without Any Loss of Income" and several others.

After all, is it not time to shelve the current socio-econo-political dogma, manifested by, "winner takes all", "perish the loser", "nomadic", "cut and slash", "do away with minimum wage", etc. etc. MOs and related "austerity" policies that are not working for anyone, especially in the long run.

In fact, this social experiment, if successful, may be offered as a model for many other countries whose citizenry are struggling to devise a winning formula for "participatory" democracy.

Recommended Reading:

• The Economic Problem: Personal Debts and Public Debts (page 301) by Dr. R. Heilbroner, Professor of Economics; Prentice-Hall of Canada Ltd.
• Public Notice: The Economy is Not A "Zero-Sum Game"
• Raising the Minimum Wage: A Definite Win-Win

Food for Thought:

• "Europe's 'austerians' need a lesson in macroeconomics", by Christopher Ragan, Professor of Economics at McGill University -- The Globe and Mail, July 17, 2013
• "Canada finished the Second World War with public debt, equal to over 150% GDP", by Dr. Jim Stanford, Economist -- The Globe and Mail, October 16, 2013
• "In this country the vote is not the bottom line; bottom line is" -- by R. M. Gross
• "Money buys access; access buys influence" -- Elizabeth Drew, Talk Show Host

Raising the Minimum Wage: a Definite Win-Win

In spite of all its various attempts to revive the economy, the Establishment must soon realize that it is in a catch-22 situation, insofar as:

• On the one hand, the Canadian marketplace is severely handicapped by the extremely limited purchasing power meted out to the ever-increasing number of near and below poverty line wage recipients, and doled out to the unemployed and underemployed masses.
• On the other hand, governments cannot balance their own budgets, due to this country's rapidly shrinking tax base while simultaneously increasing need for all types of welfare services. One might also add that Finance Ministers – presumably looking for solutions to deal with the problem – appear to favor cutting vital services as opposed to finding ways to increase their respective revenues.

Since the socio-econo-fiscal and political establishment has demonstrated that it is no longer willing to listen to the sound judgment and proposals of the few and far between, out-of-the-box thinkers and problem solvers – clearly the only remaining potential source of scientifically proven solutions – now it's up to the public to decide what the future will hold. Will it be the acceptance of the status quo, represented by belt-tightening and increased sacrifices; or will it be an honest effort made through a series of non-dogmatic programs to rescue this province and country from the current impasse or implosion?

In view of the previously described depressive state of the economy, the government of Ontario, after a few years of hiatus, recently decided to increase the minimum wage from $10.25 per hour to $11 per hour, to the chagrin of opponents who consider this change as a blatant interference with the 'delicate' mechanism of the "free market" system.

Somehow, the proponents – in the course of demanding the reinstatement of the "minimum wage" legislation – were unaware of an important precedent. Namely, that a century ago, Henry Ford made an important discovery: the economy is not a "zero-sum game". He decided to raise his workers' minimum wage from a dollar a day to five dollars a day. The automaker's valiant act enabled his workers to accumulate enough cash to pay for a $650 "Model T" motorcar within a few months. And, they could even afford to own a home in just a matter of a few years.

Incidentally, Ford's decision was mostly based on his realization that every employee has two parallel social-economic functions. Each employee was not only a worker but also a consumer. Apparently, he understood that income and consumption go hand-in-hand, i.e. low-wage earners are always shut out of the marketplace.

Evidently, leading North American economists and their disciples seem to have been either unaware of this "basic law" of economics, or have decided to ignore it – for clearly political reasons.

Ardent defenders of the status quo argue that there is no textbook formula for establishing a minimum wage. Others suggest that there are no written, set principles for executive remuneration either. Amazingly, many corporations have been quite inventive through the years in finding ways to 'negotiate' astronomical salaries, bonuses and severance payments, even for their failing 'top' executives.

Be that as it may, by developing a few computer models, field experts should be able to recognize that raising the minimum wage from the current rate ($10.25 per hour in Ontario)  to 20%, 30%, or even more to achieve a reasonable living wage would produce highly beneficial results all around. Additionally, this could potentially restart the stagnant economy, as demonstrated by the example below:

THE Y3Z COMPANY

Consolidated Statement of Income

Product and Services Sold		$1,000,000	$1,011,210	$1,015,925
	Rate of Wage Increase	Current Rate	20%	30%
	Minimum Wage	$10.25/hr.	$12.30/hr.	$13.32/hr.
Cost of Operation
	Products Purchased	$600,000	$600,000	$600,000
	Rent	100,000	100,000	100,000
	Utilities	15,000	15,000	15,000
	Services	30,000	30,000	30,000
	Vehicle	35,000	35,000	35,000
Cost of Employment
	Wages
	Employee 1	$40,000	$40,800	$42,000
	Employee 2	30,000	30,600	31,500
	Employee 3	20,000	24,000	26,000
	Payroll Costs	13,500	14,310	14,925
	Miscellaneous Costs	$16,500	$16,500	$16,500
Total Costs		$900,000	$906,210	$910,925
Income		$100,000	$105,000	$105,000
Required rate to compensate for raising the minimum wage, either by increasing the volume of sales, or by raising prices		N/A	1.12%	1.59%
Rate of income benefits to employees, derived from raising the minimum wage		N/A	(Empl. 1) 2% (Empl. 2) 2% (Empl. 3) 20%	(Empl. 1) 5% (Empl. 2) 5% (Empl. 3) 30%
Rate of income benefit to owner derived from raising the minimum wage		N/A	5%	5%

Conclusion

The act of raising the current minimum wage does not pose any harm to anyone nor to anything. However, it clearly represents a timely opportunity to correct an age-old and unjust wage scale – rooted in the era and mentality of slavery.

And, if a new minimum wage were formulated properly, perhaps along the line shown above, it would become a win-win proposition in socio-econo-political terms to all. And yes, even business owners could profit from it.

PS: Naysayers are welcome to prove the aforementioned proposal wrong.

Public Notice: The Economy Is Not a "Zero-Sum" Game

In the wake of the endless transformation of the Ontario and Canadian Economy – a process which has been playing itself out over the past several decades – it might be necessary to review and offer improvement to the "modus operandi" of its "partners-in-management", namely:

• The Corporations, which are still operating in a nomadic mode. They continue being heavy-handed on downsizing, shutting down entire plants, warehouses and stores, fleeing the country, leaving behind devastation, cutting hours and wages, nixing social benefits for temporary employees, and unduly outsourcing jobs to low-wage-paying countries. Not surprisingly, these maneuvers have enabled many corporations, during the past 12 months, to hold onto and further increase their collective stockpile of "dead money" from $526 billion to nearly $0.6 trillion.
• The Federal Government, which remains seemingly detached. The government is willing to wait out the aftermath of this never-ending – what it amounts to – socio-econo-fiscal "transformation" process, no matter what. As if this hands-off style of governance does not cause enough damage, governments are still sticking to their "stay the course", "balanced budget commitments", "austerity", "left to fend", "spending lapse", "deferred maintenance", "do more with less", and "do-away-with regulations" policy dicta. All of this because, "now is the time for fiscal discipline" along with additional corporate "tax-reductions". As a result, just in 2012 alone, the feds reportedly amassed $13 billion in "discretionary" and "EI benefits" savings. Were we to add these savings to the mysterious flight of $3.1 billion, it's all but enough to balance the budget.
• The Bank of Canada, as a credit and currency regulator, is still sticking to its 1% prime interest rate policy – and toying with the idea of further reducing it – to encourage further borrowing, hoping to stimulate economic development. However, the downside of such a "top-down" strategy penalizes the 25% of taxpayers (i.e. RRSP/RIF and other annuity beneficiaries) who are losing billions of dollars worth of their purchasing power each year. This line of action has put the brake on much-needed "bottom-up" economic activities that could have been initiated if this "low prime interest" policy had not been implemented in the first place.
• The Ontario Government, recently retreated for its 10th Ontario Economic Summit (OES) – meeting on November 6, 2013 at Niagara-on-the-Lake for three days – to seek consensus as to how to "lead and shape" its economic agenda for the future. Julia Salzman – in her Public Policy Publication – a few weeks ago summed up the event as follows: "This year's summit played host to an impressive lineup of speakers including the Minister of Economic Development Dr. Eric Hoskins, the President and CEO of the Ontario Chamber Of Commerce Allan O' Dette, the President and CEO of MaRS Innovation Raphael Hofstein, and Premier Kathleen Wynne. These leaders, along with other industry visionaries, initiated insightful discussions (at the latest) OES theme of Convening for Success."

Potential Remedies to Resolve the Ongoing Crises

The OES, along with the many previous federal and provincial top-level conferences, have not yet been able to resolve this province's or country's socio-econo-fiscal crises. Therefore, it is worthwhile to list the myths and facts, along with their supporting evidence, in order too figure out what remedies could be applied to the "modus operandi" of each of the aforementioned "parties-in-management" of the economy, to obtain the desired results.

• The Corporations
• Myth: To remain competitive, corporations must reduce costs and move to wherever the road to the "highest return on investment" takes them, otherwise their shareholders will abandon them.
• Facts: Corporations and their stockholders, even according to "maximalist" standards, are doing very well. Since the year 2008 alone, corporations have accumulated $0.6 trillion of "dead money". So far they have yet to find a way to spend it.
• Evidence: Throughout the past three decades, corporations have imported practically all consumer products at between 1/10th to 1/75th of the price that Canadian sources could produce locally. (Therefore, it may be said that corporations have created a success story on the "supply side" economics and now need to work on how to resolve the issue of "diminishing demand", caused by the fact that about 50% of taxpaying consumers receive less than $30,000 gross yearly income.)
• Remedy: Establish a "Save the Economy" relief fund. This should be managed by a combined private and public consortium. The fund could be quietly built up by canvassing holders of the $0 .6 trillion of "dead money", with the aim of amassing $60 billion within the next 24 months (one might call it a "voluntary corporate tax" for the purpose of eliminating poverty and resurrecting the deathly economy). The objective of this "relief program" would be to issue monthly cheques of $2,000 payable to each of the about 1.25 million unemployed individuals in Canada, until they become full-time employees, or for a maximum of two years.
• Results: The entire economy would be gradually resurrected by the infusion of this allowance within just a few months, and subsequently the corporate bottom line would also experience a gain due to the "multiplier effect". Let alone that such a gesture would rebuild the public's confidence in the private enterprise system.
• The Federal Government
• Myths: During recessionary times, austerity measures are necessary to halt public sector deficit-based expenditures and to curb private, credit-based spending that could further jeopardize the country's econo-fiscal stability.
• Facts: By curbing public and private spending, consumption is reduced. Reduced consumption leads to cutbacks in production. Cutbacks in production, in turn, create a domino effect that causes further layoffs across the entire economy. Historical evidence suggests that there is no end to this downward spiral, as long as austerity remains in place. Only increased productive spending and consumption can lead us out of this econo-fiscal debacle.
• Evidence: Comparable examples – verified by independent experts – indicate that countries that were subjected to a lesser degree of austerity, or to no austerity measures at all, fared far better than those who were. Furthermore, even the most enthusiastic abettors of austerity are now backtracking on it. Instead, they either introduce a "proper minimum wage", or raise the existing ones, aimed at increasing the buying power of the low-wage earning masses. Proactive leaders of the latter countries also recognize that the advantages of exporting to other countries no longer exists, therefore they focus on producing for their respective domestic markets.
• Remedies: Targeted spending, and massive productive job-creation programs aimed at rebuilding the crumbling infrastructure. This would expand and modernize the public transit systems to ease traffic congestion. These activities – due to the resulting increased earnings and consumption – have the built-in capacity to resuscitate the ailing economy.
• Results: Balanced public-sector budgets and reduced expenditure due to: the lower demand on EI and welfare benefits; the increased tax base and tax revenue; and the diminished need to rely on private, risky, credit-based spending.
• The Bank of Canada
• Myth: Prime interest rate must be kept low to allow corporations and other businesses to access affordable credit.
• Facts: Corporations are saturated with unproductive cash. Private businesses do not need, or want, more loans, they are most likely in deep debt already due to slow consumer traffic. What is collectively needed is millions of customers who were long on cash. At the same time, the folks who have been diligently saving for their retirement years, are seeing their RRSP/RIF etc., being diminished or evaporated by many years of low prime interest rate policies.
• Evidence: A large segment of seniors are overwhelmed with bearing the costs, and being coerced to take responsibility for the debts of their insolvent offspring. A whole generation of young people – who after graduation are faced with tens of thousands of dollars of unpaid student loans and unable to find steady employment – are now adding an extra layer to the underprivileged class of this country.
• Remedy: A return to a standard currency and regulatory policy-making role, and the formulation and implementation of a mechanism to control real estate speculation, a traditionally causative factor in endangering this country's econo-fiscal stability for many decades.
• Results: Econo-fiscal stability.
• The Ontario Government
• Myths: Employers cannot afford to pay higher wages. Employers would be forced out of business and many jobs would be lost if the minimum, or living wage, let alone livable wages, were to be paid to employees (a frequently repeated, but never proven and unsupportable, self-defeating argument that needs to be publicly refuted).
• Facts: there is not enough purchasing power left in half of the employees' wages, who earn less than $30,000 gross annually, which is the reason for the cyclic economic stagnation, the rampant poverty, the unemployment, along with the high rate of youth underemployment. These are caused by corporations that withhold hundreds of billions of dollars from their employees' payrolls.
• Evidence: Henry Ford shattered the previously described myth a century ago, by demonstrating that the economy is not a "zero-sum" game. He decided – to the chagrin of his business advisors – to raise the minimum wage at all of his plants from one dollar a day to five dollars a day. The automaker's calculated decision enabled his employees to buy a Model T for $650 in under a year, and to even own their own home in just a few years. One might also add that Ford had actually proven that employees have two functions: they are not just workers, but also consumers, and low-wage earning employees are meager consumers. So, through his action, Ford ultimately revitalized the marketplace, and as a result, he contributed to a more just society.
• Remedy: Increase all annual wages of employees earning below $35,000 a year by 5% to 30% in a reversed order of the "income scale". (Refer to our blog article on this topic for full details).
• Results: Improvements due to a "multiplier" effect on consumption, and an expansionary feedback of 3.5% on the economy, along with gains in business and government revenues.

Is Labour an Underclass in a 'Classless' Society?

While not much is known as to what exactly went on at the 10th OES, and for that matter at the previous gatherings, the sessions were attended by typical Corporate and Government leaders to the exclusion of Labour representatives. This is unfortunate since Labour is the largest socio-econo-fiscal and political factor in the country. Hence, the 10th OES could not have been a true consensus, could it? This has become a very systemic problem. Perhaps a reminder of the fact that, in certain circles, the spirit of slavery is just waiting for its chance to return.

Message from the 10th OES

According to an independent analyst, there was a common thread running through the message given by the speakers, visionaries, and leaders at the OES. This message was, "Invent, innovate and export, or you will all be left behind" by the global economy.

Is Ontario and Canada Really Fit to Become an Exporter?

To provide a credible answer to this question, it is necessary to consider the following facts:

• 30 years ago we used to be a well-to-do, exporting country. All the provinces used to have their own multifaceted, nearly self-sufficient economies. However, after 30 years of intensive "technological transfer", a.k.a. dis-industrialization process, currently with a few exceptions – such as agricultural, forestry products, and minerals – this country totally, or some would say dangerously, relies on imports. And now, export is offered as the only option for our survival?
• No matter what, Canada as a whole has lost its entire industrial culture. It would take way more than a decade to rebuild it from the bottom up, at a prohibitive cost.
• Furthermore, how could the workforce of this country compete with their counter-parts that work for less than two dollars an hour and have no Social Security and no corporate tax system in place?
• Since about 60% of the workforce in Ontario and Canada regularly live on borrowed money, the question is: Are lenders – along with everyone else up the food chain– willing to devalue these debts? Otherwise, the entire country becomes bankrupt.

So, What Does the Future Hold?

No one seems to know, or at least no one is willing to talk about it. If the previously described scenarios were not disturbing enough, consider what a few futurists are suggesting as the reality for the vast majority of the public: By the year 2025 – just a mere decade from now – all jobs will disappear. Does this mean that everyone in Canada will be on the dole? And, where will the funding come from? From oil or LNG? (Clearly a series of all-inclusive, public consultations are imperative!)

Are There Some More Realistic Options?

Of course there are, but each of these options are antithetical to the prevailing, unmitigated free-market-based ideology, namely:

1. First, the economy could be restarted anytime simply by initiating a huge, well-planned public works program. We could rebuild the crumbling infrastructure of this country and modernize our age-old transit system, having it funded by the $20 billion EI budget. In fact, the Bank of Canada could even directly finance such a program, analogous to the financing of World War I and World War II.
2. The second option is a program that has the innate capacity to provide "full employment without any loss of income to everyone willing to work". (A validated, self-financing program, that is already in the hands of the government, but apparently due to ideological reasons, they are hesitant to act on it. In this context, one might ask the following legitimate questions: Do government officials have the right to refuse proven proposals that have the innate capacity to resolve the problem of unemployment? Isn't this a borderline case for malpractice?).
3. The third option is a much needed and highly cost effective "Affordable Housing Construction Plan". This plan could be financed by reverting funds From a $7 billion per year government program – that provides temporary shelter for between 30,000 and 200,000 homeless people across the land – and construct permanent homes.

Labour: Servants or Decision-Making Partners?

Several experienced researchers "in the know" – having spent decades on closely studying the various  socio -econo-political systems around the world – have found that in Denmark, France, Germany, Norway, Sweden, and Switzerland, public participation in the decision-making process to various degrees is constitutionally guaranteed by referendum and/or by other means.

Among these aforementioned countries, Germany's "Basic Law", enacted in 1949, is probably the most comprehensive and unprecedentedly democratic model. It not only protects Labour Rights, via the "Works Constitution" and the "Codetermination Law", but also renders Labour and Corporate participants as equal partners in the decision-making process.

Yet, on this side of the pond,  while we are in the midst of endless socio-econo-fiscal crises, only two entities are present at the table, namely Corporate Business (employers) and Government, with the latter acting more like a timid "aide-de-camp", rather than a decision maker vis-à-vis its "partner-in-management".

For all intents and purposes, even now in the 21st century, Labour is being considered by many to be like those servants who had served at gentry estates during the Dickensian era,

Why Do We Require a Codetermination Law?

Simply because only the enactment of a Codetermination Law has the innate capacity to:

• legally close the door on the era of slavery once and for all, and prevent the possibility of a facsimile system being reinstated, albeit gradually step-by-step.
• Render Labour/Employees – the largest socio-econo-fiscal and political factor – an equal partner with Business/Employers as decision-makers and thus empower the two to cooperatively pull our province and country out of its ever-deepening, economic quagmire. (After all, some might say that these days, the contrast between employees and employers can be measured by more of the latter group's financial standing than by anything else.)
• Convert Democracy into a meaningful, socio-econo-fiscal and political system; potentially under a Coalition System of Governance, wherein the views of every faction are proportionally represented, equitably considered and implemented, and the exploitation of Labour/employees is outlawed.

Summary

• Austerity has proven to be the wrong remedy for resolving the socio-econo-fiscal crises of our province and country; analogous to administrating a weight reduction diet for dangerously underweight individuals, and a weight inducing diet for overweight ones.
• Independent analysis of the "modus operandi" practiced by the current "partners-in-management" of the economy, indicates that they are clearly guided by faulty dogmatic assumptions, Serving a narrow, special interest as to what the purpose of the Ontario and Canadian economy is.
• Studying and adopting Henry Ford's proven theories Could prove to be beneficial to all, namely that:
• The economy is not a "zero-sum" game; and that
• Employees have two functions. They are not only workers, but also consumers. Therefore not paying a livable wages to all employees is a self-destructive socio-econo-fiscal and political strategy.
• It is time to convert democracy into an all-inclusive, meaningful, socio-econo-fiscal and political system by:
• Tabling and enacting a "Codetermination Law", thereby granting Labour/Employees a coequal status to participate in the process of managing the Economy; and
• Introducing a Coalition System of Governance that the Public Affairs of this province/country is managed for the benefits of the entire society equitably.

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

• "The Economic Problem", "Understanding Microeconomics", and "Understanding Macroeconomics", by Dr. Robert L Heilbroner, Professor
• For more information regarding the "Works Constitution" and "Codetermination Law",  refer to the European Foundation for the Improvement of Living and Working Conditions website or obtain a copy of "Facts about Germany", available from the Consulate of the Federal Republic of Germany in Toronto, Ontario.

Food for Thought

• "Europe's 'austerians' need a lesson in macro economics", by Christopher Ragan, Associate Professor of Economics at McGill University – The Globe and Mail, July 17, 2013.
• "What Canada Really Needs Are More Inquisitive Minds", by Todd Hirsch, Chief Economist and Author – The Globe and Mail, September 12, 2013.
• "The next time some business lobby bleats about a government policy that is anti-business, ask the speaker why business itself hasn't delivered despite very favourable government policies." by Jeffrey Simpson, Columnist – The Globe and Mail, January 10, 2014
• "How safe is your job?" by Chris Sorensen – Maclean's Magazine, January 13, 2014.
• "Our ways of democratic governance, invented long ago and resistant to change, do not seem up to the modern world's challenges. We need version 2.0", by Gordon Gibson, Columnist – The Globe and Mail, January 2, 2014.
• "Canada finished the Second World War with public debt equal to over 150 percent GDP … We should accept the growing international consensus that more public debt is helping the recovery, not hurting it. To paraphrase FDR, we have nothing to fear from debt – except an ideological fear of debt itself", by Jim Stanford, Economist with Unifor – The Globe and Mail, October 16, 2013.
• "In 2024, all homes will be 'dream' homes", by Rob Carrick, Columnist – The Globe and Mail, January 9, 2014.
• "A job should keep you out of poverty, not keep you in poverty", by Lambert Villaroel, Chef – Source: "Working for nothing: Canada joins global wage debate", by Tavia Grant, The Globe and Mail, January 27, 2014.
• "I have to decide if I'm going to pay for rent, hydro or buy food. It's not enough to take me out of poverty." by Amelia White, Earning minimum wage. – Source: "Ontario hike widens wage gap", by Adrian Morrow, The Globe and Mail, January 31, 2014.
• "It's time for Canadians to shift gears from managing homelessness to ending it." by Tim Richter, President of the Canadian Alliance to End Homelessness. – The Canadian Press, June 19, 2013.

List of Socio-Econo-Fiscal Articles

Recent Articles

• Misconstrued Problems Beget Misconstrued Solutions
• Election: A Democratic Right or an Exercise in Futility?
• Raising the Minimum Wage: a Definite Win-Win
• Public Notice: The Economy Is Not a "Zero-Sum" Game

Series - Solving Canada's Economic Crises

• Part 1 - Can We Revive The Canadian Economy?
• Part 2 -  Some Indicators on Canada's Socio-Economic Health
• Part 3 - Some Views on the Economy from Prominent Thinkers
• Part 4 - General Observations on Canada's Economic Performance
• Part 5 - A Brief Cause and Effect Analysis
• Part 6 - A Comprehensive Proposal for Economic Revival
• Part 7 - Rescuing the Canadian Economy
• Part 8 - Full Employment without Any Loss of Income is not a Pipe Dream
• Part 9 - The Key to a Thriving Economy: Eliminate Poverty
• Part 10 - Political Party-based vs. Social-based Government Systems
• Part 11 - A Review of Popular Current Economic Proposals
• Part 12 - Hope for Upcoming Graduates - The Cooperative Business Model
• Part 13 - Only Management, Labour and the Public Working Together Can Solve Our Country's Socio-Econo-Fiscal Crises
• Part 14 - Mr. Scrooge Can't Fix the Economy
• Part 15 - A Manifesto for Economic Recovery in Canada
• Part 16 - WANTED: An All Inclusive Economic Model
• Part 17 - A Case for a Democratic Socio-Econo-Political System
• Part 18 – The Austerity Program -- A Warning or a Social Experiment?

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