Monday, January 15, 2018

The End of NAFTA?

Donald Trump has stated that he may just invoke the withdrawal clause of the North American Free Trade Agreement (NAFTA).  Something he said he would do during the 2016 US elections.

That has frightened more than a few of the ruling class in this country.  They have not begun to preach doom and gloom about it because doing so will not swing Donald Trump one way or another.  It would be different if someone in Canada was making these statements.

So, would the ending of the NAFTA really be that big of a deal?  Probably not.

Free trade existed between our countries before the NAFTA and it will continue to exist after it is gone.  At the time the NAFTA was ratified in North America over 85% of the trade between Canada and the United States occurred without any government interference.  The NAFTA and the previous Free Trade Agreement were designed to create free trade for the remaining 15%.  Since then the amount of trade that now takes place without any government interference is greater, although not as much as the NAFTA proponents would have us believe.  It is now around 90%.  

In other words the impact of the NAFTA on the Canadian economy has not been that great and its demise would not be such a disaster for the Canadian economy.  Certainly, those sectors of the economy that are most vulnerable to American protectionism would suffer somewhat but over all things would proceed pretty much as business as usual.

In fact, there might even be some hidden benefits to the end of the NAFTA. With the NAFTA, an individual company can sue the Canadian government if it believes that a government is pursuing policies or laws that interfere with the ability of that company to sell its goods or services in Canada.  In effect, that has hamstrung Canadian governments when they might have wanted to pass more strigent environmental, labour, health and safety laws and regulations.  Further, the more conservative elements of our society have been slowly eroding our single payer health care system and the more progressive elements of our society have not been able to reverse them because once a part of the health care system was privatized it became subject to the NAFTA.  So, reversing the privatization was impossible because American or Mexican firms could sue a government, under the NAFTA, to prevent it.

Without the NAFTA progressives in this country would have more freedom to reverse some of economic policies and laws pursued by conservatives without having to worry about running afoul of the treaty.

Which brings me to one of the reasons why the ruling class in this country is so frightend of the end of the NAFTA.  I am certain they realize that the actual negative impacts on the Canadian economy would be manageable.  What really frightens them is some progressive government may just decide to use its new found freedom in ways that they would not like.

Friday, January 12, 2018

The Republican Tax Plan and the Western Position in the World

Just before Christmas the Republicans in the US Congress passed a tax plan that by all accounts was grossly unfair to ordinary Americans by taking money from them and giving it to corporations and the wealthy in the form of huge tax cuts.

They did this despite the fact that all accounts also indicate that the plan was hugely unpopular, not just with Democrats but with Republicans as well.  Some would ask why they did this as it would seem to be political suicide.  However, I would point to the fact that Roy Moore only lost his election bid by 22,000 votes even though the final few weeks of that campaign occurred at the height of the debate about the Republican tax plan.  In other words Republican voters in Alabama knew what was coming but they still voted for the Republican candidate in droves.  If Mr. Moore had not had accusations of being a sexual predator hanging over his head the would have won in a walk despite the fact that his voters would have been voting to screw themselves.

The deeper question I have is why the Republicans decided to head in this direction at all?  It seems very mean spirited and shortsighted.  I think a clue to a reason why can be found in a previous post of mine here.

I have argued in this space before that a change is coming to the economic pecking order in the international community.  China is slowly but steadily gaining on the US economy and it is on track to overtake it within the next decade or so.  It was slowed by a recent recession but that was only a temporary delay in progress and not a permanent slowdown.  Further the actions of the American government and business are only accelerating the change.

I have further argued that once China overtakes the US as the largest economy in the world things are going to change drastically in world politics.  There have been many changes in which country has dominated the world economy over the last five to six centuries but the one thing that they all had in common was the change was always from one Western country to another.  That is, countries with similar outlooks with regard to religion and philosophy took over from each other.  Hell, the last changeover was from Great Britain to the United States, two countries that were similar in many ways including speaking the same language.

The next change is going to be from a Western country to an Eastern country, which has totally different outlooks on the world and world history.  As well, there is a history of the West abusing China in the not too distant past that I am certain is on the minds of a few leaders in China.  

For this reason I believe as China gains power it will change the way the world economy and world politics works and it will change them in ways that will be detrimental to Western countries.  It will not be vindictive it will just be China centric and since it will increasingly be in a position to call the economic and political shots there will be very little that the Western countries will be able to do about the Chinese approach.

The ability of the Western world to generate wealth at its current rate will probably be greatly reduced and many of these Western countries will fall out of the top tier of economies in the world. I believe the US is one of those countries.  Certainly it will remain the largest economy in the Western world but it will not have the heft it has now in the broader world economy.  In other words, the Western countries are poised to become 2nd world countries.

As a reminder of what that means I will explain.  Since the end of the Second World War the big Western economies were the First world countries.  They called the economic shots and established (imposed) the Bretton-Woods system on the world economy.  

The Second world economies were relatively wealthy countries within the world economy but they were completely beholden to the First World for that wealth.  It was only through the liberal trade practices of the First World that the Second World countries could maintain their wealth generating capability for they had no power to affect the world economy in their favour on their own.  That is the direction the West is currently heading.  In the not to distant future they will no longer be in a position to impact the world economy to the same extent they now can.

There were two things that were very common about 2nd world countries in the past.  The first is that, although they were relatively wealthy that wealth was heavily concentrated in the hands of a very small political and economic elite.  The ordinary citizens of these countries tended to be poor, often desperately so.  The second feature of these countries is they tended to have authoritarian political systems were these very same elites used the power of government to continually concentrate what wealth their countries generated into their hands.  

That appears to be the direction the West, in general, and the US, in particular, are headed.  The political and economic elites are taking steps in the US to contentrate power and wealth into their hands at a prodigious rate.  They are not even trying to disguise it anymore.  As well, authoritarianism is becoming more rampant in the US and it is spreading from the top down.  It was not surprising to see a teacher being hauled away in handcuffs for questioning the salary of a school superintentant when it should have been.  It should be noted however that this is not just a US phenomenon.  We are seeing it happening in other Western countries, just not as enthusiastically as in the United States. 

A big change is coming in the economic and political pecking order in the international community.  A change whose magnitude has probably not been seen in centuries.  It is going to have a profound negative impact on the wealth generation abilities of many of the countries that are currently on the top rung of the world economy and it is likely going to knock them off of that top rung.  In other words the economic pie is going to become much smaller in these countries which means there will be much less to go around.  I believe some in the West have already seen this and they are taking steps to be certain that they will have a much bigger portion of that pie once it begins to shrink.  That might explain the actions of the Republican Party in the United States.

Tuesday, December 12, 2017


I have not read any of the commentary on the results of the four by-elections last night but I do know that the Liberals won three of four.

So, if the MSM is true to form many of the political pundits in this country will be claiming that the Liberals had a terrible night last night.

I have stated many times before in this space that by-elections really do not have any predictive power for what will happen during the next general election but it does my heart good to know that that media pundits will always find a way to make any result look bad for the Liberals, regardless of the outcome.  It injects a certain constancy and predictability into an otherwise chaotic life.

Friday, November 17, 2017

Is Freedom of the Press obsolete?

A provocative question to be certain.

However, I believe it needs to be asked.

One of the key requirements for a healthy democracy is a well informed citizenry.  It is quite simple. If they are well informed about what is happening in their country citizens will be better equipped to keep those who would govern them on the the right path and they will be better equipped to make certain that their governors are working for the greater good.

The opposite is true.  If they are not well informed then citizens are very vulnerable to the words and actions of charlatans who are only in politics for their own very narrow self interests.

The key function of the media or the press is to provide citizens with the information to help them discern fact from fiction.  To help them identify the charlatans, avoid electing them and safeguard their rights and freedoms

For more than a couple of decades the main stream media has failed in this very important task.  They long ago gave up any semblence of informing their audiences of what is really happening in the world preferring to "inform" their audiences of faux scandals and fake controversies in the effort to make profits.  Infotainment has replaced real news and we and our democracies are much poorer for it.

That was bad enough but currently many in the main stream media have begun to act more like propaganda vehicles for individual political parties instead of objective observers of events.  This is not a favourable development for democracy.  Propaganda, its latest incarnation being faux news, by its very nature is a direct threat to democracy.  Propaganda is what autocrats use to legitimise their rule.  Propaganda is what those who would curtail our rights and freedoms use to convince us to allow them to do just that.  

Freedom of the press was created as a method of keeping our governors honest and to prevent them from setting themselves up as kings.  It was created to safeguard democracy.  If the press is no longer willing or able to perform that function then the whole concept of a free press is called into question.   If the press is going to become an enabler of those who would take away our democratic rights then the concept of a free press might need to be eliminated all together.  At the very least controls may need to be applied.

Of course, that does create the paradox of attempting to safeguard democracy by eliminating or severely curtailing a key democratic right.  How to square that circle creates a real conundrum.  One that I cannot solve in this space but there must be some big thinkers out there who could explore it.

However, it should be noted that with modern information technology there should be no real need for a media filter being placed over what governments do anymore.  A more robust use of the internet by government departments to inform citizens of what they are doing would go along way towards providing them with the information they need to keep their governors honest.  The same is true of those arms-length governent organizations set up to oversee governments.  They now have the ability to report directly to the citizens of their countries without relying on the media.  They should begin making much greater use of this capability.  There are a great number of details that would need to be ironed out to make certain that government organizations do not use this media in a self-interested fashion but it is doable.

The western democracies are being eroded away.  It is not happening quickly but it is happening.  A ban on what certain women can wear here, the right for labour to organize there, ever so slowly the rights that our forefathers fought for are melting away like the glaciers of the world. The press, the one institution that could help us to prevent and reverse that trend, is failing its duty at best and contributing to the erosion at worst.  

It is time to begin rethinking the sacred nature of the concept of The Freedom of the Press.

Friday, August 11, 2017

China Speaks

I read in the news today that the Chinese government made some public statements that they would remain neutral in any conflict between the United States and North Korea provided the United States did not initiate hostilities.

I was wondering if China would make these kinds of statements or not and now I know the answer.

Of course, China will not get involved in an armed conflict with the US even if the Americans initiate one with North Korea.  There is no way that China will endanger itself by getting into an armed conflict with another, bigger nuclear power to protect North Korea and/or Mr. Kim. It is not going to happen but they had to put that out there to provide the cooler heads, in Washington, with some ammunition to talk Mr. Trump out of attacking North Korea.

In private, I am certain that the Chinese government has told the North Korean government that they will be on their own during any conflict with the US and that they might even be telling Mr. Kim to tone down his rhetoric because the US is currently being lead by an moronic, unstable and unpredictable sociopath who cannot be trusted not to do something very stupid.  All of the Presidents before him were known quantities and predictable so Mr. Kim could twist the nose of the United States with virtual imputiny.  That is no longer true.

There is probably alot of diplomacy taking place behind closed doors at the moment. Although it is not beyond the realm of possibility I would be surprised if all of the heated talk we have been seeing in the past few days amounts to anything besides that.

Wednesday, August 09, 2017

Donald Trump and North Korea

Donald Trump has made some rather imflammatory remarks in recent days threatening North Korea with "fire and fury" should the North Korean government choose to attack the United States or its interests with nuclear weapons.

Predictably those who oppose him have come out against his statements, accusing him of warmongering, being unhinged and otherwise spouting the standard stuff that Mr. Trump's opponents have been spouting for almost three years.

Mr. Trump is an ass and he really has no business being in the Whitehouse as far as I am concerned but in the case of his statements to North Korea he is correct.

It is not a secret that North Korea possesses nuclear weapons.  The number is unknown but it is not very many.  It would now appear that they have perfected a vehicle that can potentially carry them great distances.  It is still an open question as to whether they have been able to reduce the size of any nuclear warheads so that they can fit on those missile.

Regardless we can probably now consider North Korea to be a nuclear power and it is questionable if it can be trusted not to use them.  In that situation it is appropriate for Mr. Trump to remind Mr. Kim of North Korea that it is not the only nuclear power in its region.  It is appropriate to remind Mr. Kim that any use of nuclear weapons would result in him being the leader of a nuclear wasteland instead of a country, assuming he survives any nuclear counterstrike by the US.  

The only effective method for controlling the use of nuclear weapons is the threat of a swift counterstrike by another nuclear power.  During the Cold War it was called Mutual Assured Destruction (MAD) and it is probably one of the biggest reasons we all came through that period with our lives and our civilization intact.  

Reminding Mr. Kim of the AD part of that acronym is not a bad idea.  It is true that Mr. Trump has done so in his usual ham fisted manner but the fact he has done it might just prevent real disaster, although it will probably lead to some more serious sabre rattling before this all dies down.

Monday, August 07, 2017

Book Review: Wages of Rebellion

I recently completed the book Wages of Rebellion:  The Moral Imperative of Revolt by Chris Hedges.  He is a Pulitzer Prize winning author and this particular book is quite interesting.

The book is provocative and Mr. Hedges is obviously a radical thinker in the sense that he not only believes the status quo is untenable but that we should be actively working to replace it.

The basic premise of the book is "the disasterous economic and political experiment that attempted to organize human behaviour around the dictates of the global marketplace have failed".  Instead of creating wealth for all as promised the global marketplace has created a "tiny global oligarchy which has amassed obscene wealth".  As a result of this situation there is a great deal of anger and unrest percolating below the surface, amongst ordinary citizens, which is one economic, political or natural disaster way from creating a level of unrest and instability sufficient to create the conditions for revolution.

He goes on to argue that the usual tools and mechanisms that can be used by ordinary people to keep the oligarchy in check, such as the courts and the government, have been completely co-opted to serve the new economic and political system of Corporatism and the oligarchy.  As well, he argues that this is not new and that it has been happening for most of the last century.

He spends much of the book pointing out different groups and movements that could have lead an effort to break the power of Corporatism who have been systematically broken by the courts, governments and a compliant mass media.  He points out that every movement from the Black Panthers to the Occupy Movement have been neutered so that they either disappear completely or become nothing more than a nuisance to the Corporatists.

He indicates that the only way to break the power of the Corporatists is revolution.  To replace one ruling class, that is steadily eroding our political and human rights, with another ruling class, which hopefully will restore those rights.  The author does admit that revolutions are a messy business and the replacement of the old order is not always better than the old order.  

Despite this the author does seem to be calling for just such a revolution.  

My thoughts is he is right an he is wrong.

Like alot of "radicals" who have called for revolution and the complete change in how humans organize themselves politically and economically Mr. Hedges has identified the problems with the current system very well.  I cannot argue with his basic premise.  The current system certainly is broken, it has lead to a tremendous amount of inequality and it has demonstratively lead to great unrest in the Western industrialized world.

However, like all "radicals" past and present the solution to the problems they identify are not grounded in fact.  They do not take into account human nature and the reality of the situations that we find ourselves in.

The author points to several historial revolutions as examples of successful revolutions and he is correct.  However, what he seems to overlook in these examples is the revolutionaries had a ready made alternative to the status quo ready and waiting.  The French and American revolutions had Republicanism to replace absolute rule.  Lenin and Trotsky had their brand of Marxism to replace abolute rule and capitalism.  

Is there an alternative to Corporatism?  The simple answer is no.  Corporatism grew out of Capitalism and no historical revolution has ever caused a society to go backwards. Capitalism as envisioned by Adam Smith is as dead as Communism and neither one of them is coming back.  Without an alternative for revolutionaries to rally around successful revolutions are not possible.

A second barrier to revolution is the fact that the Western world is largely democratic with a long and deep democratic tradition.  All of the historial revolutions have seen the replacement of autocratic and despotic regimes with something else.  Most of the time that something else was not much better but at least one lead to democracy, which spread to the rest of the industrialized world.  

I believe that democracy will prevent revolution but it will not prevent unrest and political extremism.  Mr. Hedges rightly points out that the current system has created a great deal of anger and unrest amongst ordinary people.  That is objectively correct and we are beginning to see the results in many places with the rise of right wing extremism.  From Brexit, to the election of Donald Trump to the near election of Marine Le Pen extreme right wing politicians are tapping into the anger and unrest to advance their view and their agenda.

This is troubling but in democracies there is usually a pendulum effect in politics.  Society will move from one end of the political spectrum to the next and back again several times within the lifetime of one individual.  As well, if that pendulum swings a great distance in one direction it will swing a similar distance in the other direction once that swing begins.  So right now the pendulum has swung far to the right, which makes it virtually guaranteed that it will swing a similar distance to the left once society begins to move in that direction.  Right wing extremism will be replaced with left wing extremism.

For those of us in the political centre the coming years will be very uncomfortable.  We will be just as leary of the left wing Donald Trump as the current right wing Donald Trump. We will be just as uncomfortable with the left wing Stephen Harper as we were with the original.

Wages of Rebellion is an interesting and provocative book that is very much worth the effort of reading, regardless of your particular political bent.  It very accurately describes the current situation and the fact that it is untenable in the medium to long-term.  However, I find his call for revolution to be premature.  Without something to replace the current system it will be virtually impossible for revolutionaries to be successful.  As well, although I agree with him that the current system puts a great deal of pressure on democracy we cannot yet right off the ability of democracy to correct the situation.  The next decade or so will probably be messy and chaotic but just like Corporatism evolved from Capitalism the next method in which we organize ourselves economically and politically will evolve from how we currently do that.  Corporatism will die like Capitalism did but what replaces Corporatism will still resemble both to a certain extent.