Two huge issues for Canada

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The Canadian people desperately need someone who can and will save Canada.

Prime Minister Harper’s plans, if not stopped, will destroy the Canadian economy.

The ordinary working people of Canada know what has to be done.  They are looking for a leader who will do it. 

The first issue is that we have to stop all sales of Canadian companies to foreign entities.  There is absolutely no benefit whatsoever to the Canadian people or the Canadian economy in selling a Canadian company to a foreign entity. 

The other huge issue where Canadians are desperately looking for leadership is Harper’s delight in making big business deals with China, and also with the European Union.  Again, the ordinary working men and women of Canada know that these deals are disasters for Canada. 

The reasons why these deals are bad for Canada are two-fold:

o  We are tiny Canada (in terms of population) getting into a deal with a huge entity, China or European Union.  It is a deal between an elephant and a mosquito.  The mosquito never comes out ahead in this type of deal.

o  Rather than getting closer to China with the latest Harper deal, we should be cutting ties with China.  Our imports of manufactured goods from China are five times our exports to China.  This situation cannot continue.

We are at a crossroads in Canada now, created by Harper's proposed deals.  We are facing a stark choice.   Either we go forward with Harper to destruction of the Canadian economy, or we find leadership to stop Harper and put Canada on a path to economic recovery.

A funny/sad story

I want to tell you a funny story.  About three weeks ago I received a statement from the Liberal Party, stating how good the Liberal Party is and how bad the other parties are.  The criticism levelled at the NDP was that the NDP is against all sales of Canadian companies to foreign entities. 

In other words, the Liberal Party is saying that sales of Canadian companies to foreign entities are very good for Canada, and any party that does not support these sales is doing a disservice to Canada.

The funny aspect and the very sad aspect is that unfortunately the NDP is not against selling Canadian companies.  In a recent NDP policy statement I received today, there are comments made by Ms Helene LeBlanc, NDP MP for Lasalle-Emard, and Industry Critic, referring to issues of determining net benefit to Canada of the proposed Nexen sale, and also the issues of whether jobs will be protected and whether the head office will remain in Canada.

Ed Farkas comment to Ms LeBlanc:  If you are worried about these issues, then obviously you should come out strongly against all sales of Canadian companies to foreign entities.  In this way you will achieve the best chance of maintaining jobs and head offices in Canada.  If you discuss the details of a proposed takeover with the Conservatives, you legitimize the idea of takeovers.

The NDP statement also includes a statement by Mr. Peter Julian, NDP MP for Burnaby-New Westminster, and Natural Resources Critic.  Mr. Julian is quoted as follows:  "Foreign investments are crucial for reinforcing our economy, but we must ensure that these investments are not made at the cost of quality jobs and the sustainable development of our resources".

Ed Farkas comment to Mr. Julian:  My comment is the same as my comment to Ms LeBlanc.  In addition, I am very unhappy to see your statement "Foreign investments are crucial for reinforcing our economy."  Where did you get this statement?  What factual basis do you have for this statement?  Have you received instructions to use this wording?  Are you aware that this is the same wording used by the Conservatives and the Liberals?

Where is the left-leaning party that is supposed to be acting in support of the ordinary working (or unemployed) people of Canada?


Further discussion of sales of Canadian companies

The Conservative, Liberal, and NDP parties (alphabetical order) appear to accept “foreign investment” as a good thing.

 

“Foreign investment” is code for “selling a Canadian company to a foreign entity”.   A code phrase is used because it sounds better.

 

After decades of infinite repetition, many people use this code phrase without thinking of its real meaning.

 

Regardless of terminology, the fact is that a foreign purchase of a Canadian company provides no benefit whatsoever to the Canadian economy, to the Canadian people, or to Canada itself.

 

Often we hear

 

+   “…the need for foreign investment to grow our economy and create jobs.”

 

+   “We need foreign capital to develop our resources.”

 

These statements are completely and totally incorrect.

 

How could our economy get larger by selling one of our companies?  If we now own a smaller number (by one) of billion-dollar companies, our economy must in fact be smaller!  We have a one-time wad of cash, but profits and dividends formerly going into our economy from this company are now whisked out to the foreign entity.

 

The real and correct meaning of “foreign investment” applies to a case where a country does not have the capital needed to build a facility.  Examples:

+  A country borrows money from a foreign entity for use in constructing facilities that are needed immediately.  The country sees the interest payments as an acceptable price for having the facilities available at an earlier date.  The borrowed money is ultimately paid back to the foreign entity.

+  A foreign company comes in and builds a facility, such as a railroad, using its own money, and is compensated by receiving the profits from operation of the facility.


The issue of capital

Canada is a fully-developed country with plenty of capital. Based on the Vanier Institute report “The current state of Canadian family finances 2011-2012”,Appendix C, with data from Statistics Canada on number of households, Canadians own investments totaling over one trillion dollars. 

The dark side is Canada’s growing trade deficit in manufactured goods.  The trade deficit is real money sent out of Canada, never to be seen again.  This money is a true waste of capital.  Under a wise, rational, intelligent, government (have we had one of these in the last 50 years?), the capital we send out to foreign countries to pay them to do manufacturing for us could instead be used in constructive ways here at home.

 

When a foreign entity comes to Canada to buy a Canadian company, it is cherry-picking the best companies, not investing in Canada.  This process is the financial version of the one night stand. There is no commitment.  Even if a purchaser provides promises, usually the promises are broken.  Again same as a one-night stand!

 

A further result of a purchase is that control is put in foreign hands.  As one modest example, a foreign company purchasing a Canadian store chain will not be interested in ensuring that Canadian-made goods are on the shelves.

 

More serious is foreign purchase of a resource company.  Twenty years from now, the price of that resource, oil, coal, natural gas, or other, may be five or ten times higher than now.  Canadians may desperately need that resource for their own use.  But the mining rights are in the hands of a foreign entity that probably will not wish to sell to Canada.

 

Why have successive governments allowed the sale of Canadian companies to foreign entities?  Top officials of Canadian companies receive millions if their company is sold.  Maybe these officials influence the government to allow the takeovers. The shareholders also receive windfall profits.

 

In summary, when a foreign entity purchases a Canadian company, there is absolutely no benefit to the Canadian economy.  The only benefit is to the foreign entity, and to the country where that foreign entity is located. 


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Government for all the wrong reasons

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My wife and I recently returned from a brief holiday visit to Prince Edward Island.  We found the holiday extremely pleasant.  We enjoyed the beautiful scenery and found many opportunities to learn about the interesting history of Prince Edward Island as well as current trends.

We visited two family-owned small businesses that are manufacturing and exporting.  Very encouraging to see this type of development.

Inevitably, visitors find themselves in gift shops.  It is not encouraging to see Chinese-made items in gift shops.  The visitor to Prince Edward Island wants a souvenir of Prince Edward Island, not a souvenir of China.  But it is the usual dilemma.  The gift shop can make so much more money from a Chinese item, than from the same item made in Prince Edward Island.

I am not criticizing Prince Edward Island.  Anywhere you travel in the western world, you see Chinese items in gift shops.  I bet if you visit Japan you will find Chinese items in gift shops!


Manufacturing in Canada

In 2011, Canada exported manufactured goods to a total value of $280 billion.  This statistic sounds good and it is good.  The little niggling problem is that our imports of manufactured goods in 2011 totalled over $372 billion.

A very good measure of the health of an economy is the quantity

Exports minus imports

(All referring to manufactured goods, not crude oil, raw logs, coal, etc.)

For Canada in 2011, the calculation "exports minus imports" gives you the result:

Minus $92.4 billion

Conclusion: We have a large trade deficit, also referred to as negative balance of trade.

Prime Minister Harper has totally mismanaged our economy since he came to power in 2006.  Evidence for this statement is that our trade deficit has more than tripled since 2006, to the 2011 figure $92.4 billion mentioned above.

Tripling of the trade deficit is a direct measure of how many manufacturing jobs have been lost under Harper and how the totally uncontrolled import of manufactured goods has increased.


What could we do with $92.4 billion?

This figure $92.4 billion is real wealth pouring out of our country, going to foreign countries.  It is the net amount we pay to foreign countries to do manufacturing for us.  It amounts to over $2500 for each Canadian man, woman, and child.

If we could keep that $92.4 billion in Canada, it could provide factory equipment and wages for one million Canadian manufacturing workers.  One million Canadians going back to work in manufacturing would be a tremendous shot in the arm for the Canadian economy.

There is a multiplier effect of manufacturing that would create additional employment.


How to move in the right direction?

We have to eliminate the trade deficit of $92.4 billion.  It is impoverishing our country and our economy.  My proposal is simple.  To each country we trade with, we say that we will allow imports from your country only up to the level of your purchases from us, to be phased in over three years.  (Again referring to manufactured goods.)  There would be a special arrangement with the United States.

How much of a reduction in imports are we talking about?  We are talking about a reduction of 25% in total imports.  We are not talking about building an isolationist firewall around Canada.  We only want to bring imports under rational control, rather than the wild-west free-for-all we have now.

How would it be determined what goods would come in to Canada and what goods would not?  It might be entirely determined by the foreign countries, or it might be determined by interaction between Canadian business and foreign countries.

Maybe gift shop souvenirs would not come in so readily from overseas, giving Canadian craftsmen and craftswomen more of a chance.


What is the kicker in all this?

If we look at the detailed numbers and do the arithmetic, we find that imports from China would have to be reduced by 80%, to bring imports from China into balance with Canadian exports to China.  This dramatic figure underlines how China has taken over.

If my proposal were to come into serious discussion, the fury of China would have no bounds.  I don't know what they would do.

China is a serious threat in ways other than imported manufactured goods.  One example is a systematic program on the part of China to take over port operations in dozens of countries.  Prime Minister Harper and other western "leaders" are totally asleep at the switch in relation to the multiple threats posed by China.

But in-depth discussion of the real situation and the real reason for the economic problems in all western countries does not occur, because there is censorship. Obediently, newspapers, magazines, TV, etc., do not allow mention of the need to cut imports from China.  Even "alternative" radio, newspapers, etc., do not allow in-depth discussion of China.

Politicians and many other people in western countries are beholden to China in various ways.  In addition, thousands of columnists, analysts, commentators, and authors continually pump out fantasy explanations of why there is so much unemployment and why our economies are failing.  The objective is to take attention away from the real cause, namely uncontrolled imports from China and other foreign countries.


Honest discussion

Until we get past this censorship, we will never have an honest and real discussion, and we will never bring imports under control.  A depressing situation, since reduction of imports, and corresponding increase in domestic manufacturing, is the only way to solve our jobs and economic problem.


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Canada a slave of China

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When Canada started sending manufacturing jobs away in the 1960s, believe it or not nearly half a century ago, I predicted the huge unemployment we see today, in manufacturing and in many other employment areas.

What I didn't predict, and what no one predicted, was that China, the most aggressive source of our imported goods, would ultimately be able to control Canadian government policy, so that we become slaves to China.

Every day we see TV advertisements for new medications, accompanied by long lists of side effects, including death of the patient.   The insane idea of sending manufacturing away to foreign countries also has side effects, including enslavement to China and death of the Canadian economy.

The fact is that China owns a major portion of the Canadian economy.   But what evidence is there that China controls Canadian government policy?


Our hemorrhage of wealth

A country may hire foreign mercenaries to fight its wars.  We hire foreign countries to do a major part of our manufacturing.  The reverse would be much better.  Hire mercenaries for pointless wars such as Afghanistan, and do our manufacturing at home.

Our net cash outflow to foreign countries to pay for manufacturing was $92 billion in 2011.  This figure is more than triple the figure that existed when Prime Minister Harper first came into office in 2006.  Each and every year since then the net cash outflow has increased.

Any rational and thinking Prime Minister would look at those figures and sound the alarm bells.  Our economy is permanently crippled by a net cash outflow that grows larger every year.  A hemorrhage growing larger every year.

But no one talks about this net cash outflow.  The Head of the Bank of Canada somehow omitted to refer to the net cash outflow to foreign countries in a recent economic analysis and prediction. I don't know how anyone can talk about the economy without referring to this net cash outflow, and yet you see examples of this omission in newspaper articles every day.  This net cash outflow, this hemorrhage of real wealth going out to foreign countries, is a true elephant in the room that everyone pretends isn't there.


The squeaky wheel gets the grease

China was the lucky recipient of 41.5% of our 2011 net outflow of cash to foreign countries to pay for manufacturing services.  Our purchases of manufactured goods from China in 2011 totalled five times more than China purchased from us.  The word "trade" does not apply when there is such a large disparity.

Prime Minister Harper devotes his energies to support of two clients, the Alberta oil industry and China.  No actions are taken that would benefit all Canadians in the area of the economy and specifically jobs.

Effectively China controls Canadian government policy because Prime Minister Harper does everything China asks him to do, i.e., accedes to all requests from China.

The refusal to recognize the seriousness of the yearly hemorrhage of wealth to foreign countries is part of the program to keep China happy.  Any attempt to control or reduce this hemorrhage would be a threat to China's manufacturing sector.

Harper has a naive, child-like view of China.  In fact, China is an aggressive adversary, not a friend.  China's objective is to take over our resources and raw materials, and to take over more and more of our domestic manufacturing, facilitated by an obedient Prime Minister.  The logical end result of this process is that Canadians who don't work in the Alberta oil industry will be impoverished and will not be able to buy Chinese manufactured goods or in fact any goods.


Chinese intrusion into our economy

As an example of obedience and subservience to China, recently there were news reports that China will participate in telecommunication activities in Canada.  No one in his right mind would allow China to work its way into our communications systems and gain access to sensitive high-technology information, and yet apparently it will happen.

Harper's visit to China some months ago can be accurately characterized as taking candy from a baby.  The Chinese must have privately laughed their heads off at how easy it was to gain further access to the Canadian economy.

On July 23, 2012, related or not to the visit, we heard the announcement that China has purchased a Canadian oil company for $15 billion.  This transaction is another addition to China's ownership and control of the Canadian economy, and is another serious error by the Canadian government.  When we sell companies, mines, land, etc., to China, or any other foreign country, we create a potential for disaster.  In future we may need the oil, gas, coal, raw logs, for ourselves, but won't be able to get at them because China and other foreign countries own everything.

The above discussion demonstrates China getting its way on multiple aspects of our economy.  How else can we take this situation other than evidence of control of Canadian government policy?


Where do 34 million Canadians fit in?

The only economic action undertaken by our PM that applies to all Canadians is "cuts".  Cutting government expenditures is unimaginative and often counter-productive.  It throws a chill into people and contracts the economy, making things worse.

The net cash we send to China, in 2011 just a shade under three-quarters of a billion dollars per week, is used by China to come right back and buy up our economy.

Do 34 million Canadians really want to be slaves of China?  I doubt it!


Balance imports/exports to save Canada

I have proposed a practical plan in which Canada would break the chains of enslavement to China and other foreign countries, in which Canada would regain control of its destiny, by reducing imports of manufactured goods down to balance with our exports, for each foreign country we deal with (special arrangements for the U.S.).

This plan requires elimination of 80% of our manufactured goods imports from China, based on the 5 to 1 ratio in 2011.  A real "Chinese revolution", but the only way to put Canadians back to work and save the Canadian economy.

The concept of ensuring that the total value of imports each year approximately equals the total value of exports is plain common sense.  This concept is fair and reasonable.  This plan adheres to the true meaning of the word "trade".  This concept shows our belief in free trade, but balanced free trade, rather than exploitation.


Benefits and perils

We would have to abrogate trade arrangements to take control in this way.  So be it!  Do we value a pile of paperwork more than we value Canada?

How would we fend off a furious China?  I don't know, but we can't go on in the way we're going now.

Canada breaking the chains of China would provide leadership and example to other western countries to do the same.

Reaching the objective of approximate equality between exports and imports would have interrelated positive effects:

• Eliminate the lethal net cash outflow ($92 billion in 2011) related to foreign countries doing manufacturing for us
• End the sending of net money to China that they can play with and use to enslave us
• Create conditions for a large increase in manufacturing, putting millions of Canadians back to work in manufacturing and in many other employment areas
• Great increase in tax revenue from newly employed workers and newly operating factories in Canada, thus reducing government deficits

Bottom line:  The only way to avoid enslavement to China, and the only way to save the Canadian economy, is to greatly reduce imports of manufactured goods, down to approximate equality with exports.

If anyone has a better idea on how to accomplish the objective of greatly reducing imports, let's hear it and discuss it.

But it is Orwellian truespeak to try to solve the problem of the economy and jobs by hiding, and censoring mention of, our lethally high level of imports relative to exports.  

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No One Talks Revenue

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What about REVENUE?

Why is it that no politicians talk about the REVENUE side of the deficit problem?

Instead of massive cuts, we should be looking at INCREASING REVENUE by getting Canadians back to work in manufacturing.

The only real, reliable, way to cut deficits is to cut imports and greatly increase the amount of manufacturing that is done in Canada.

Put people back to work.  They will have income and will have to pay income tax!

There will be increased tax revenue, and therefore reduced deficits.

An easy and immediate action is to put in place the principle that all levels of government, and all quasi-governmental and public agencies, such as transportation commissions, MUST purchase Made-in-Canada only.  If no manufacturer available, set up a manufacturing facility for present and future requirements.


Why can't politicians understand?

Why is the importance of manufacturing in Canada so difficult for all politicians of all parties to understand?  Why aren't politicians talking about getting Canadians back to work in manufacturing?  This issue is THE central issue in efforts to solve our economic and unemployment problems, yet no one is talking about it.

Getting Canadians back to work in manufacturing is not an option among various options.  It is the ONLY way to cut deficits and save the economy.


Our trade deficit

Our trade deficit in manufactured goods has more than tripled since Harper took office in 2006.  A truly dismal record.

Here is a deficit we can cut to our heart's content with only good results for our economy and our country.

Our trade deficit in manufactured goods was $92 billion in 2011.  This is real money going out of our country, impoverishing our country.

Think what we could do with $92 billion kept in our economy and kept working in our economy, rather than sending that money out to foreign countries.

Sending $92 billion out to foreign countries is sheer waste and THIS IS WHERE WE SHOULD BE CUTTING!


Foreign military expenditures

If Prime Minister Harper wants to cut expenditures, the place to start is our military activity overseas.  We should bring all our soldiers home from Afghanistan immediately.  Despite the heroism, devotion, and sacrifice of our soldiers, it is not possible to accomplish anything in Afghanistan.  Spending money on our Afghanistan effort is sheer waste.  In recent months, there has been a small but steady incidence of NATO soldiers getting killed in Afghanistan.  Every death is the loss of a good man and a disaster for a family that will never be forgotten.  Why do politicians continue the pointless presence in Afghanistan?  Why is it that politicians don't care about soldiers being killed for no reason?


Foreign non-military expenditures

Here is a simple and fair proposal for cutting our huge yearly expenditure to pay foreign countries to do our manufacturing for us, while our own workers stand in line at unemployment offices and welfare offices.

Look at our trade in manufactured goods with each foreign country.  If Country X purchased $5 billion worth of manufactured goods from us in 2011, then we will allow import of manufactured goods from Country X in 2012 up to a total value of $5 billion.

Beyond that total value, no further imports from Country X will be allowed in 2012.

We demonstrate our belief in free trade, but it is BALANCED free trade, wherein the total value of manufactured goods going in each direction is about the same.

By applying this principle to each and every foreign country we deal with, we will eliminate a lethal economic hemorrhage, namely our huge yearly trade deficit ($92 billion in 2011).  This action in itself will be a huge shot in the arm for the Canadian economy.

Keeping this money in Canada will make it unnecessary to allow foreign capital to come in.  We will be able to finance new projects from our own resources.

In this policy of BALANCED free trade, our good trading partner the United States of America would be a special case.  It appears that we are running a trade surplus with the United States.  It needs to be checked whether crude oil is included in government figures.  Crude oil and and other commodities such as raw logs are NOT manufactured goods.

The oil industry in Alberta employs many Canadians and this is great.  However in terms of putting Canadians back to work all across Canada, resource exports do not solve our unemployment and deficit problems.  Crude oil and other commodities should not be included in calculations of manufactured goods trade surplus or trade deficit.

Prime Minister Harper should think about Canada 50 years into the future.  Maybe we will be very short of some of the commodities we are now rushing to virtually give away to China.


The problem at the top

Our Prime Minister doesn't accept ideas from other people. But his record of trade in manufactured goods demonstrates that he needs advice.  His ministers and caucus have to force him to listen, if they don't want to go down with the ship.

Running around the world to international trade meetings is much more fun for our Prime Minister than dealing with dull old domestic manufacturing.  But only through cutting imports and giving domestic manufacturing a chance to exist and grow will Harper be able to reduce deficits and improve the economy. 


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Big picture

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Introduction

Harper failing on all fronts.


Capital Requirements

In relation to new oil pipelines, or the oil industry generally, a top executive said we have to allow foreign investment (i.e. China) because in Canada we don't have the capital available.

This statement is complete and utter nonsense.

Our trade deficit in manufactured goods with all foreign countries is $80 billion per year.  Our trade deficit with China, included in above figure, is $35 billion per year.

This is real money, real wealth, pouring out of our country. 

We are giving China all the money it needs to buy up Canada, to take control.  I saw a news item stating that China investment in Canada was $14 billion last year.  This little news item is absolutely terrifying.  China will own us soon.  Probably already owns us.

If we did not pour out billions to pay foreign countries to do our manufacturing for us, we would have plenty of our own capital.  We could tell foreign countries we are not for sale.  You can buy oil from us.  You can buy coal from us.  But you can't buy oil fields, oil companies, or coal mines.


Eliminate the Hemorrhage

Here is an  easy way to eliminate a wasteful foreign expenditure of $80 billion per year.  Tell each country we "trade" with that we will allow imports of manufactured goods from that country only to the extent that that country buys manufactured goods from us.  Simple, clean.  We still demonstrate that we believe in free trade, but it is balanced, fair, free trade.  It is not exploitation in the guise of trade.

If we did more manufacturing here at home, we would not be sending so much money out to foreign countries, and then foreign countries would not be able to come right back with the money we just gave them and buy up our coal mines, oil fields, corporations. 

Soon we will be the 35th province of China. Or maybe with Harper's EU trade deal we will also be a new colonial province of Europe.

If we did more manufacturing here at home, we could provide jobs to our people.  There would be a reduction in cost of UI and welfare.  There would be more tax revenue for Harper to waste.  But maybe if he did not waste it all the budget deficit could be eliminated.

Why can no one in government see the sense of doing more manufacturing here at  home, rather than sending billions out of foreign countries to do our manufacturing for us?


Dictatorship

A prime minister of Canada who has a majority government is the absolute dictator of Canada.  Jean Chretien was the dictator of Canada for many years.  However mostly he did nothing with his power, so Canada was able to survive.

Now we have Harper as majority PM of Canada and it is much worse for two reasons:

+  Harper is following an insane ideology.  According to Macleans's magazine.  Harper became furious about the Trudeau National Energy Policy and resolved to punish eastern Canada for this policy.  To this end he entered politics and gained the power to exact revenge.  In comparison, Chretien had no ideology.  Maybe he stole some money and gave it to his friends.  These actions in hindsight look warm and cuddly compared to Harper.

+  The Liberals and NDP have no leaders.  So Harper is even more free, in comparison with previous majority prime ministers, to be the absolute dictator of Canada.

In the recent Federal election, some Conservatives were elected to Parliament for the first time, i.e., completely new to politics and completely new to Parliament.  It is amazing how fast these people became parrots of Harper's most ill-advised policies.


Canada a World Policeman?

Over the last 10,000 years, there has been one common thread.  The king, potentate, monarch, kaiser, tsar, queen, caesar, prime minister, pharaoh, president, emperor, has been largely uninterested in improving things within his or her own country.  Foreign affairs and especially foreign wars have always been more exciting.

This phenomenon has been the curse of mankind and womankind for 10,000 years as it is the cause of 99% of the wars.

In light of these facts, maybe I shouldn't be shocked or surprised by a news story I heard today.  I have not verified this story in any way.  The story is that Canada is working with Germany to begin creation of a set of forward bases so Canada can intercede in hot spots more quickly.  This idea is also related to developing a method of dealing with Afghanistan.  (I though we were winding down with Afghanistan.)

First of all, here we have another way to waste billions of dollars.  I thought our budget is very tight.  We have to cut cut cut.  Now we are told we have billions available for foreign adventures. 

Has Harper consulted Parliament on the advisability of this scheme?  No, of course not!  He is the absolute dictator and despot of Canada.  Does Harper want to get into "hot spots" more quickly to reduce even further the possibility of any Parliamentary input into decisions?



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Senior Threat

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Note added February 8, 2012, to enlarge on a point made toward end of this post.

Let's say hypothetically that country XYZ buys $35 billion worth of manufactured goods from Canada in 2011.  We then say to country XYZ that in 2012 we will allow free entry of your manufactured goods up to a value of $35 billion.  Beyond that level, no imports allowed.

Result:  Canada demonstrates belief in free trade up to the point of equal amounts of manufactured goods in each direction.  But nothing beyond that!  No more trade deficits.  No more devastating hemorrhage of a net $80 billion per year, pouring out of our country, amounting to over $2300 for every man, woman, and child in Canada.

This is what we have to do to get employment going again.  This is the only way to get employment going.  Cut imports and increase domestic manufacturing.  This is Canada's most critical need and there is virtually no discussion of the issue in government or in the media.


Seniors Scare Harper!

Prime Minister Harper says seniors threaten social programs.   He is concerned that senior numbers will increase to the point that by 2030 there will be only two working-age people for every retired person (as opposed to the current four people).

But like most politicians, Harper is thinking about one issue at a time. Why don't politicians think in terms of interrelated issues?

Obviously the real issue here is that working-age people in 2030 need to actually have employment and therefore income, so they will be paying taxes, to help support retired people, among the many things governments do with our money.

At the rate we have lost jobs in 2011, can anyone say with any certainty that we will have enough employed people in 2030 to provide tax revenue for any purpose?


The Harper record

Prime Minister Harper has been in office for almost six years.  This amount of time provides a fully adequate basis for evaluating his performance.  The fact is that Harper has compiled a record of complete mismanagement of the economy and especially jobs.

If we continue our present policies, long before 2030 there will be an economic crisis and an unemployment crisis beyond anything we can imagine now.

Harper and his ministers go around bragging about the wonderful state Canada is in.  Actually, Canada is in bad shape as indicated by a real unemployment rate of probably 20%.

The Canadian economy looks good superficially because we have raw materials and resources that we are selling to an enemy country, China, and to other countries, at giveaway prices.  Harper cannot take credit for the raw materials and resources.  He didn't put them there.  It is happenstance that the resources are there, making Harper look good.

It is only through manufacturing that we get mass employment and the ripple effect creating employment openings in many other fields.


Disastrous trade deficit

Our trade deficit in manufactured goods with all foreign countries was $81 billion in 2010.  (The figure for 2011 will be available in due course.)

The trade deficit has nearly tripled since Harper took the helm.  This comparison alone demonstrates Harper's complete mismanagement and complete lack of understanding of what is going on.

The trade deficit is determined by the equation

trade def = exports of manufactured goods minus imports of manufactured goods

There are different ways exports and imports could move, and still give the same figure for trade deficit.   During Harper's reign, exports remained essentially level.  They certainly did not go up.  The great increase in trade deficit is due to a great increase in imports.

The increase in imports means that many hundreds of thousands of Canadians are no longer working.  The goods these Canadians could be making have been replaced by imported goods.

So if Harper is really concerned about the effect of increasing numbers of seniors, he should be concerned about all the working-age people who are losing their jobs due to his misguided policies.


A theory gone wrong

The word "free" attached to any other word makes that word sound better.  Free trade, free love, free enterprise, free will, free markets.

Unrestricted free trade and a continuing increase in the number of international trade deals is a theory that sounds good on paper.  But in practice this theory leads to an insane result:

+  Steadily increasing outpouring of wealth, a net $81 billion in 2010, to pay foreign countries to do our manufacturing for us, while steadily increasing numbers of our own workers stand in line at unemployment and welfare offices.

In the 1960s, the Canadian government cooperated with business "leaders" to obtain justification from think tanks to the effect that we no longer need to worry about "smokestack" manufacturing.  Manufacturing can be done anywhere.  Canada will move ahead with "knowledge-based" industries.

We have had 50 years of propaganda based on this theory. Ninety-nine percent of our authority figures, in government and in business, and many ordinary Canadians, believe in this theory.

However the unfortunate fact is that this theory is completely wrong!  It is leading Canada, and all other western countries, USA, UK, Australia, EU, to destruction.  The only way to properly support our seniors in 2030, and generally to have a viable economy, is to change course completely.

We have to limit imports of manufactured goods to the amounts foreign countries buy from us, on a country by country basis.  No more trade deficits in manufactured goods. 

We  have to get the phrase "compete with China" out of our minds completely.  The allegedly lower prices of foreign goods are fantasy.  If the true hidden costs are taken into account, it becomes clear that it is much cheaper to manufacture here at home!