Its all about forests and trees

FTLComm - Tisdale - Tuesday, June 9, 2009

Primarily Canadian, American and Mexican economies have a tradition of being what we commonly refer to as capitalist systems. Government and business though sometimes cooperate with one another the system is not organised for business to run government or for government to be involved directly in business.

The fearful experience of the Great Depression which slammed the world hard in 1929 taught economists that in a crisis of that monumental proportions quick and substantial government intervention had a positive effect. With that knowledge North American economic advisors to government jumped to their feet and the government of the United States responded quickly with all sorts of threats bouncing off the halls of Congress and the Senate in the very midst of a presidential election. George W. Bush a right wing politician launched a massive bailout of the American banking system to the point that the United States has all be nationalised their banking industry. This was a shock because most folks consider that sort of thing to be "socialism".

With the new president in office the flow of public money into the private sector seems like a torrent. Here in Canada our own right wing government caught in an embarrassing minority position followed the lead south of the border with modest public money into private business although not into the banking sector as that part of the Canadian economy is remarkably sound.

The crisis that seemed to the Canadian and American politicians to be a clear and present danger was the collapse of the automotive industry.  Of the three major North American manufacturers two were far beyond help but that did not stop the politicians and money flowed to bankrupt Chrysler and General Motors. More money was given to these two failures than they were worth so that as of now the United States government, the government of Canada and the government of Ontario are partial owners of a bankrupt General Motors.

Comrade Obama and Comrade Harper have been able to follow this course despite the evidence that propping up failed businesses is bad business. Well, that is the case in a capitalist economic system. In a communist and socialistic system propping up ventures for the good of the masses is consider appropriate.

The problem is and it is massive, is that a little interference in the capitalist system is not an adjustment, it is a radical departure from all of the principles of the free market economy. Now if you are Ford Motor Company, Toyota or Honda, all of which produce vehicles in and for the North American market. The whole idea of fair and balanced marketing is totally screwed. But this problem goes far beyond the automobile industry.

The United States has poured billions and billions into almost every sector of their economy and that has been coupled with their "buy American" policies which ignore and break the free trade agreements the United States has with each of its neighbours both to the North and the South.

The actions of the United States government are a dire threat to the people of Canada. Canadians have moved into the integrated economy of the North American Trade agreement so that little piglets are born in Canada shipped to the US to be raised, the same with calves and a host of other products. To so many things the border is invisible, well up until the "buy American" deal pops up and US slaughter houses stop buying Canadian beef and hogs. Iron ore from Canada goes to Garry Indiana to be made into steel then comes to Canada to be made into pipe, but can not be sold south of the border because it was not made their.

Look at the Canadian industries in trouble. Stomp Pork declared bankruptcy yesterday, the former IPSCO plant in Regina is stone cold, everyone laid off and though there are promises don't hold your breath waiting for Chrysler and GM to re-open Canadian assembly plants.

One of the nastiest parts of the this dumbfounding story is the Canadian forest industry. Yeah, you remember the one that has been hammered throughout the Bush era with massive tariffs on Canadian softwood lumber because American wood lots simply can not compete with the vast forests of Canada. Wel,l Canada's forest products plants are mostly owned by American corporations and they have closed all their Canadian plants because of huge subsidies from the United States government. It is completely unprofitable to product wood products in Canada when the US government is pumping billions in the US industry.

At this point you have worked through with me that issue of being unable to see the forest for the trees. The emergence of socialism in a capitalistic economy is a big problem. There are many who think that the Canadian government should push money at the Canadian forest industry but they really can't because that money would go to the American owners.

If there is going to be money for help to the destroyed Canadian forest industry it has to come in the form of Employment Insurance and retraining. The money has to go directly to the people. Just consider how much further the billions of Canadian dollars that have gone to the US automakers, how much further that money would have gone if it had simply been handed out to individual Canadian auto workers.

If you keep on starring at this issue you will get a twig in your eye.

Timothy W. Shire

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Editor : Timothy W. Shire
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