This post is a bit of a rant. Please bear with me.
I submit that each of the world’s economies, and all of the international corporations, are in effect a Ponzi scheme. They all assume that future growth will justify present and continual expansion. Their currencies, or their stocks, are high supported by belief in those assumptions being true.
Governments borrow to finance paying their debt. I’m not making this up. Corporations borrow, and sell stock, in order to expand. In both cases the assumption is that the number of new participants (citizen taxpayers, customers) will continue to grow – forever.
That is just like the core of a Ponzi scheme: use new investors to pay older ones off.
Now for the dumb question: who is running this Ponzi scheme? I submit that the large corporations are in control.
One recent example: Health Canada was unable to force (or convince) Apotex not to import and sell pharmaceuticals which were already banned in the US due to FDA inspections, whose results (unlike Health Canada’s) are public. This only changed when the Toronto Star’s reporting made Apotex reconsider its position. However, Health Canada did not make a list of the affected products available. It probably doesn’t have one.
Let me put this in another light: a company imports questionable, health-related goods and refuses to co-operate with a federal government agency until publicly named for doing this; at which point the co-operation becomes limited to a secret list of products.
So, the corporations are in control. Pharmaceuticals is a special case, perhaps, due to the large profit margins and weak Canadian oversight. But this is not a unique case.
Meanwhile Canada is in the throes of a secret trade deal with the European Union. This deal would allow corporations to sue governments and potentially change or override laws. The opposition to this comes from Germany, where at least some politicians aren’t in thrall to the transnational corporations.
It is worth noting that our Prime Minister is negotiating this deal in secret, with its text still not public, and with no objection to the loss of sovereignty involved.
Meanwhile, there’s the set of projects to move liquid natural gas (LNG) from the British Columbia (BC) coast to Asian markets. Here is one article on this. Essentially the Malaysian firm Petronas is threatening to kill the project unless BC says what its tax plans are.
Unfortunately I cannot hotlink to today’s (September 16, 2014) Toronto Star as it is a current article. However I can relate to you that BC is being told to accept 2 or 3 percent of something rather than 7 percent of nothing. Keep those numbers in mind, and recall that Evo Morales of Bolivia renegotiated the royalties from transnational oil companies operating there, and multiplied the revenues by some seven times (this from memory). At the time the oil companies all said they could not operate profitably under these new rules; told put up or shut up, they agreed to operate under these new rules. The implications for Bolivia were profound: a lot of oil revenue became available for public works.
Clearly BC has an interest in getting a similar share of royalties, for LNG exports. Clearly Petronas has an interest in keeping the discussion between 2-3% versus 7% threatening ‘of nothing’ in the latter case.
I remind you that we, Canada, have a free trade agreement with Columbia – because this helps our mining companies there. I’ll bet Columbia isn’t getting much royalties from that.
What’s really happening in the Canadian economy, imho, is this:
- people with ‘some’ money are buying foreign goods: they’re cheaper.
- free trade increases importers’ and retailers’ profits.
- people with ‘less’ money are losing their menial jobs.
- Government thinks this is just fine.
- Transnational corporations agree with them.
- Inequality is growing.
We don’t have an Evo Morales to put some of the export-of-resources money into the hands of the poor, or even the shrinking middle class.
We don’t have a Uwe Beckmeyer to complain about foreign control of Canadian law and practices. (Uwe Beckmeyer is the German mentioned in the EU deal opposition above.)
We don’t negotiate, we concede.
Meanwhile, the Ponzi schemes of Governments and Transnational Corporations, keep assuming we can be in growth mode forever – even as all economies continue to creep along with high unemployment and unwon ‘wars on poverty’.
To answer the dumb question: the transnational corporations are running pretty much everything, except where there is an Evo Morales to shake up their historical entitlement. The Canadian Federal Government’s continual attempt, imho, to shrink itself away from accountability lets corporations do more of what they want, not less.
We will become an exporter nation: of wood, water, oil, natural gas. At declining benefit rates. (Remember the softwood lumber disputes? Didn’t NAFTA look after our Canadian interests? lol.) We will continue to import cheap goods while exporting every possible job – call centre, clothing/sports equipment manufacture, oil into gasoline, LPG into energy, et cetera. Our wines are made from Californian and Chilean grapes, here in Ontario.
May I note that the EU deal could allow manufacturers of, say, automobiles, to no longer need to have a significant factory presence here. This is just one example of the dangers of this deal: the Ontario Liberals’ wind turbine deal with Samsung could be shifted – one of the promises being, the turbines would be made in Ontario, as I recall.
Eventually the medium-rich will also run out of cash. Meanwhile they are part of the Ponzi scheme of importing cheap goods while exporting half-decent jobs. The rich, being directors of corporations and having stock options, will only notice when the entire Ponzi scheme fails: when nobody can buy their products. Those exporting resources will probably last until the resources are exhausted – countries like China will need energy for the foreseeable future, with no upper limit there.
I said this was a rant, so I’d best get to the point here:
- the Toronto Star changed some of Apotex’s behaviour when Health Canada could or would not.
- a German politician questioned the EU trade deal while our Canadian Prime Minister still keeps all details secret.
- Petronas seems to think it can stampede the BC Government into tax (royalties, eh?) promises before proceeding with a project that will be profitable to them. BC does not have a Uwe Beckmeyer to question foreign deals, nor does it have an Evo Morales to take control.
Free Trade may be the biggest Ponzi scheme of all – growth based on current wealth holders sending jobs in a downward spiral to the poorest of the poor.
It’s time for anyone with a voice to try to be heard. Write your newspaper; that seems to have some clout here in Canada. Write your PM, your provincial premier, your MPP and your MP. Call them up if you can.
We need to turn our resources into our resources. We need to source our goods from our manufacturers. We need to control our laws for our citizens.
Speak out. Please.
We all need to speak out.