Canadians are forever being informed, explicitly or implicitly, that the solution to the crisis of the day, or decade, is a freedom-sounding word called “privatization”.  This, the free-marketeers tell us, will solve our problems.

The reality is invariably the opposite.  “Privatization” – also known as bailed-out, highly subsidized corporatism – is in fact the problem, not the solution.

Furthermore, the crises being addressed are often manufactured for the express purpose of rolling out a parasitical regime of corporatization that profits from calamity, even as its “host”, the public, is fleeced.

Exploiting the commons

Canadian author and social activist Naomi Klein identifies the process as the “shock doctrine” and/or “disaster capitalism”; author, environmental activist, and economist Winona LaDuke calls it “predator economics”; writers call it neoliberalism, and corporate media pretends it doesn’t exist.

A tattered thread is woven into a seemingly endless series of crises, and it is the public sector, the commons, that is invariably being exploited.

Neo-conservative strategists disguise  the real problem, and deflect attention from it, using a myriad of strategies, all of which serve to instil what insurance whistle-blower Wendel Potter calls FUD – Fear, Uncertainty, Doubt—in the collective mental landscape of the masses.

Instead of identifying the real problem – neoliberalism/predator capitalism/shock economy—neo-cons typically scapegoat other polities.

Canada’s emblematic instituions being undermined

According to neo-con politicians, union bosses and their minions, as well as public servants, and public institutions, are the causes of our economic woes, even as these are some of the few remaining polities that mitigate the damages caused by predator capitalism.

Two of Canada’s “emblematic” institutions, currently being undermined so that they can be replaced by inferior models, are “universal” health care, and Canada Post.

Canada’s public healthcare system is in distress.  Community hospitals are closing, wait-times are long, and the public is dissatisfied.  Corporate messaging proclaims that since the status quo of public universal healthcare is failing, then the answer must be privatization/corporatization.  Consequently, the 2004 Health Accord has not been renewed, and the federal government will be cutting $36 Billion over ten years from its Canadian Health Transfers (CHT’s) to the provinces.

Manufactured health care crisis

The manufactured crisis in health care is chronic under-funding, and the solution is more comprehensive public funding, not corporatization.  Since 1981 hospital funding has decreased significantly as a share of Canada’s  health care budget.

Corporate health care is less efficient, and more expensive, than public health care.  The more it is corporatized, the more expensive (and less accessible ) health care becomes.

A CUPE article entitled, “Public Health Care Costs Less, Delivers More”

clearly shows that the “private” components of health care far exceed its public counterparts in costs even as they deliver less. Listed below are some (of numerous) examples identified in the article:

• Ontario paid 75 per cent more to for-profit labs than it had to non-profit community labs over the    previous 30 years, for the same tests.¹⁰

• Public-private partnerships are 83 per cent costlier to finance than public projects.¹¹  * (Canadians) spend roughly half of what the private US system spends per person,¹⁶ and we get better coverage and outcomes.

• Studies comparing US and Canadian outcomes for heart attacks, cancer, surgical procedures and chronic conditions show that Canada does at least as well, often better.²¹

• A recent Canadian study found that expedited knee surgery in a for-profit clinic costs $3,222 compared to $959 in a public hospital (with worse return-to-work outcomes)²⁴

Clearly, the false “solution” is making a bad situation (under-funding) worse.

These two important examples are, nonetheless, the tip of the iceberg. The list is long, but the strategies are consistent: create a crisis to undemocratically impose inefficient, expensive corporate models in domains best suited to public funding.

Internationally, the same strategies are being used, and the descriptors are the same: predator economics, shock doctrine economics, neoliberalism.  But, when supranational polities such as the World Bank or the International Monetary Fund (IMF) impose these strategies on other countries, the process is called colonialism.

by Mark Taliano

Sometimes, the simplest solutions are the best ones. Unfortunately, though, Canada’s extreme concentration of corporate power often precludes the solutions from ever seeing the light of day.

The first step towards resolution of this problem is nomenclature. We need to free corporate-fashioned words from their false meanings.

Here are some examples:

Trade deals, including the so-called ‘free trade’ deals which have crippled North American manufacturing, are more accurately described as ‘corporate empowerment’ deals. Invariably, these deals empower transnational companies to relocate where wages are low (or in the case of prison labour, non-existent), where collective bargaining doesn’t exist, and where unions are impotent or non-existent.

Corporate empowerment deals, including the North American Free Trade Agreement (NAFTA) and the as yet unratified Foreign Investment Promotion and Protection Agreement (FIPPA), a bilateral agreement with China, empower corporations to the extent that government legislation becomes subordinated to corporate profits.

Corporate power deals are all shrouded in secrecy, but at least NAFTA arbitrations have pretensions of  transparency (and Canada has yet to win a case), but the FIPPA arbitrations will likely not even be made public. If Canada determines that its sovereignty, economic, or environmental needs are more important than Chinese state-owned corporate profits, the case will be heard outside Canadian law, and in private.

Free trade is not free

The ‘freedom’ being exercised by these deals is clearly corporate freedom from the shackles of democratically legislated rules, regulations and laws. The false notion that they are ‘free’, or that ‘liberalized’ trade agreements are ‘liberal’ for anyone but the corporations, should be put to rest. Trade agreements negotiated over the last 30 years or so have been neither free, nor liberal, for the people of Canada.

‘Globalization’ is another corporate-engineered word that is intentionally deceiving. The globalization being described is not ‘democratic’ globalization, nor is it the globalization of improved human rights, or a globalized respect for the environment. In fact, it is the opposite. Corporate globalization, a more accurate description, has led to top-down corporate rule, diminished respect for human rights as defined by the United Nations, and reckless destruction of the world environment.

The word ‘capitalism’ is also wearing new clothes, thanks to corporate messaging of the ‘free marketeers’, and those who profess a love for ‘free enterprise’. Now the term more often refers to state-subsidized ‘monopoly capitalism’ (think Walmart, Monsanto, etc.). The new ‘capitalists’ are the speculators who drive up world prices of food and fuel, as they trade in commodities, derivatives, and hedge funds. In the world of these boom/bust/starvation-creating ‘capitalists’, the term is divorced from production, and it is too often divorced from the notion of the ‘public good’ as well.

Hyper-privatization

The term ‘privatization’, a hallmark of neoliberalism/neoconservatism, has also been crafted to mislead the public. Now the term more accurately describes anti-public ‘hyper-privatization’.

In many instances, hyper-privatization means that para-private interests are making in-roads into the public sphere to the detriment of the public. One such instance would be Public Private Partnerships (P3 arrangements). Evidence clearly shows that P3 hospitals cost more and are, therefore, an unnecessary burden on the public. This, however, has not stopped them from gaining a foothold in Canada.

Another example of hyper-privatization would be healthcare. Once the insurance lobbies persuade the public of the false-logic that privatized healthcare is the way to ‘move forward’, we will be stuck with a multi-tiered, inefficient, and costly healthcare system, (similar to the U.S. system) that will be an unnecessary disservice to the public.

The deconstruction of the corporate nomenclature gives us a clearer view of what is happening, but there are still huge impediments, or firewalls, to achieving a better economy and a better world.

Self-Interest lobby groups

Some of these firewalls include self-interested lobby groups that have disproportionate influence over public discourse and legislative polities. A list of these powerful organizations, as described by award-winning investigative reporter Nick Fillmore, in  “It’s high time the Liberals or NDP challenged our ‘corporate elite’” includes:

• Canadian Council Of Chief Executives
• Canadian Bankers Association
• Canadian Association of Petroleum Producers
• Canadian Chamber of Commerce

Once past the nomenclature and the corporate-media supported ‘firewalls’, the list of better alternatives reveals itself.

The Bank of Canada advantage

One of many glaring examples, as described by George H. Crowell in his article,”An Urgently Needed Change in Monetary Policy: Borrowing from Bank of Canada would make governments debt-free” is brilliant in its simplicity.

Crowell argues that we should do what we did until about 1974 — instead of paying billions of dollars in interest on debts to private banks, the federal government should resume the practice of borrowing from the publicly-owned Bank of Canada, interest free. The benefits that would accrue, including the elimination of government debt, would empower the government to spend money on public institutions, improve the economy, and so on.

This change to monetary policy, endorsed by the Committee on Monetary and Economic Reform (COMER), is self-evident, but largely ignored by corporate media, since such a policy wouldn’t serve the immediate self-interests of their corporate owners.

Getting past the nomenclature and the lobby groups are the first steps to opening up the dialogue for a better Canada. Powerful special interest groups, such as the ones listed above, will not be our partners in the endeavour, but unearthing the seemingly simple solutions is a necessary step to rebuilding this country and the global community.

Mark Taliano is a writer, an activist and a retired teacher. 

Watch Robert F. Kennedy Jr.’s recent speech on the increased influence of corporations on the Canadian and US governments:

The crafting of a government budget is always fictional because it comes from the minds of politicians who are universally optimistic about the future.  All that needs doing is to determine if the exaggerations will be tolerable or drive us all into a deepening fiscal hole for no good purpose.

[quote]BC’s resource revenues have tumbled from $4.527 billion in 2006 to $2.473 in 2013.[/quote]

Exaggerating GDP

The first question we should ask is whether the BC Liberal government’s record of estimating the Gross Domestic Product (GDP) has been reasonably accurate. Unfortunately, this has not been the case. It has consistently expected greater growth than realized for at least 8 years running and is keeping with that narrative this year. Real GDP growth has been about 1.4% or less. Following the established pattern of exaggeration, this year and next year the government is looking for 2 and 2.3%, respectively. Switching to “Nominal GDP Growth”, the increases are 3.6 and 4.3%.

So where is the risk in this bullish outlook? It is, as always, in a false sense of future financial well being that it creates. If one wants to borrow and spend without inhibition, it becomes easier to do so when one self-deludes that there are better times ahead.

$125 Billion in new liabilities since 2006

This model of borrowing and spending has prevailed in BC since about 2006 and most of the fiscal consequences are only now showing up. Since 2006, the reported total liabilities of the province increased from $52 billion to over $75 billion a year ago.

In addition, there are liabilities that are indirectly backed by the provincial government and reported as “contingencies and contractual obligations”. They grew from close to zero in 2006 to $100 billion a year ago. These new liabilities must also be paid by us all and they are the principle reasons that budgets for health care and education have been so rubbished.

Just one example: BC Hydro has about $50 billion in contractual obligations that are not included on its balance sheet as liabilities. Because the corporation has not been collecting sufficient cash to meet its obligations since 2006, it has parked  $5 billion –  and growing – in  accounts receivable that will only begin to be paid off when electricity rates are increased by at least 35%.

This is only one example of money to be recovered from the disposable incomes of BC residents and businesses. It alone is the equivalent of removing $1.5 billion a year from our annual incomes.

You can’t fool the Baltic Dry Cargo Index

Much has been made of the recent national increase in quarterly GDP but caution should be the watch-word. Half of the increase comes from a build up of yet-to-be-sold inventory and the other half from consumer spending made possible by increasing debt.

So what should the government be using as an independent indicator of GDP growth? The only index that is held to be free of derivative “gaming” is the “Baltic Dry Cargo Index”.  Defined as “an assessment of the price of moving the major raw materials by sea”, it is the clearest, most honest indicator of global economic activity. Here is a link to Bloomberg’s interactive chart.

The Index fell off a cliff from its peak of over 11,000 in 2008 – and while it had recovered somewhat by 2009, it has been most downhill again since.  The evidence is clear that the global economy has been in a contraction since 2008.

Currently there are hundreds of freighters standing idle and we see some of them here on the west coast. You would think that those in government would look out their windows and see all this idle shipping and then have the penny drop that an economy that is mostly dependent on exporting primary commodities is going nowhere in a hurry until the world has finished correcting for credit excesses. This reality is not evident in this year’s budget.

Seeing resource revenues through rose-coloured glasses

Drilling further into the budget, it is instructive to look at the government’s outlook for “Natural Resource Revenues” (royalties, etc.). In 2006 it reported these revenues were at an all-time high of $4.527 billion. From that point on revenues decreased every year but one, arriving at $2.473 billion in 2013.

If this were a common share of a corporation, would you be an enthusiastic investor when the global economy is on life support? This trend line does not seem to bother our government, so they show revenues from natural resources in 2014 at $3.01 billion and in next year at $3.165 billion. Given the trend of the past 8 years, this revenue amount would more likely be $2 billion, which in turn means the government is expecting to collect $1 billion more than it will likely get.

Population growth cooling off

Since this is an examination of a moving target it is also instructive to look at other trends. The population values for the province give an indication of how many there are of us to pay the bills and use the infrastructure investments made by the government. Prior to the new century, the population of BC was increasing by 20% each decade. Since 2000, the rate of increase has fallen off to 12% per decade with further decreases expected into the future.  This is hardly a representation of a growing need for the level of borrowing and spending carried out in recent years nor for the rest of this decade.

Lacklustre employment figures

The record of those employed in BC is also hardly inspiring. As of August of 2006, there were 2.147 million people employed in the province. By 2012, in the same month, there were 2.348 million. That was a 9% increase over that period, in line with a population increase of 10%, but not in line with the growth in nominal GDP of 25% for the same period. This suggests that the population of BC did not fully participate in the growth of the general economy but were left with all of the liabilities.

This condition is partially authenticated by an examination of electricity consumption, as reported by BC Hydro. All three categories of customers, residential, commercial/light industrial and heavy industrial, saw no change in total amounts consumed over the same period.

BC’s economic benefits flowing outside of province

From this record, it looks like the fiscal policies of the government have resulted in transferring a large proportion of the financial benefits from the economic growth of the past 8 years to folks other than those living in the province. The 2014 budget indicates no remediation of this condition.

Big spending continues, despite rising borrowing costs

If all of the above were not enough, the fiscal risk that comes with being a large borrower and spender is that of higher interest rates to come. Presented on page 81 of the budget is a “forecast “ of interest rates by the Bank of Canada, US Federal Reserve and the BC Ministry of Finance. It is clear that those folks all agree that borrowing costs are likely to increase, yet in the face of this expectation the government is proposing new capital spending including, but not limited to,  $8-10 billion for the Site C electricity generation dam. These projects, on top of the legacy of previous investments, will do much to squeeze the budgets for health care and education making BC ever more unaffordable to live in.

It is clear that the 2014 budget makes no provisions to remediate the excesses of the past 8 years that are adversely weighing on the province’s population in the form of increasing ferry rates, increasing electricity rates, increasing car insurance rates, increasing property taxes and increasing health care costs. Just like all addicted gamblers, the government shows every intention of using the province’s credit card to fund speculative investment initiatives as its way of making things right.

It is looking to make a “Hail Mary Pass” – and the only thing it has to offer is its LNG pipe dream, which is more about selling hot air than natural gas.

Governments, media and much of the public are preoccupied with the economy. That means demands such as those for recognition of First Nations treaty rights and environmental protection are often seen as impediments to the goal of maintaining economic growth. The gross domestic product has become a sacred indicator of well-being. Ask corporate CEOs and politicians how they did last year and they’ll refer to the rise or fall of the GDP.

It’s a strange way to measure either economic or social well-being. The GDP was developed as a way to estimate economic activity by measuring the value of all transactions for goods and services. But even Simon Kuznets, an American economist and pioneer of national income measurement, warned in 1934 that such measurements say little about “the welfare of a nation.” He understood there’s more to life than the benefits that come from spending money.

My wife’s parents have shared our home for 35 years. If we had put them in a care home, the GDP would have grown. In caring for them ourselves we didn’t contribute as much. When my wife left her teaching job at Harvard University to be a full-time volunteer for the David Suzuki Foundation, her GDP contribution fell. Each time we repair and reuse something considered disposable we fail to contribute to the GDP.

Sickness, disasters raise GDP

To illustrate the GDP’s limitations as an indicator of well-being, suppose a fire breaks out at the Darlington nuclear facility near Toronto and issues a cloud of radioactivity that blows over the city, causing hundreds of cases of radiation sickness. All the ambulances, doctors, medicines and hospital beds will jack up the GDP. And if people die, funeral services, hearses, flowers, gravediggers and lawyers will stimulate GDP growth. In the end, cleaning up the Darlington mess would cost billions and produce a spike in the GDP.

Extreme weather-related events, such as flooding and storms, can also contribute to increases in GDP, as resources are brought in to deal with the mess. Damage done by Hurricanes Katrina and Sandy and the BP oil spill in the Gulf of Mexico added tens of billions to the GDP. If GDP growth is our highest aspiration, we should be praying for more weather catastrophes and oil spills.

Robert Kenney hits nail on the head

The GDP replaced gross national product, which was similar but included international expenditures. In a 1968 speech at the University of Kansas, Robert Kennedy said:

[quote]Too much and for too long, we seemed to have surrendered personal excellence and community values in the mere accumulation of material things…Gross national product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl. It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities…and the television programs which glorify violence in order to sell toys to our children.

Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country. It measures everything in short, except that which makes life worthwhile.[/quote]

“Genuine Progress Indicator”

We deserve better indicators of societal well-being that extend beyond mere economic growth. Many economists and social scientists are proposing such indicators. Some argue we need a “genuine progress indicator”, which would include environmental and social factors as well as economic wealth. A number of groups, including Friends of the Earth, have suggested an Index of Sustainable Economic Welfare, which would take into account “income inequality, environmental damage, and depletion of environmental assets.” The Kingdom of Bhutan has suggested measuring gross national happiness.

Whatever we come up with, it has to be better than GDP with its absurd emphasis on endless growth on a finite planet.